The German Federal government has put forward its initial views on the Community's Fifth RTD Framework Programme, scheduled to commence in 1999, in a paper submitted to the Commission as part of the ongoing consultation process. The German government sees the Fifth Framework Programme as offering an opportunity for the reorientation of European research policy, preserving the strong points of the previous four Framework Programmes whilst avoiding existing weaknesses. In particular, it notes the need, due to financial restrictions, to increasingly focus resources on areas of priority importance. In this context, it supports the Commission's initiative in setting up Task Forces to identify research priorities and define urgent strategic funding objectives. Seven main priority areas are identified in the German paper: - Information Society; - Production: processes, materials, standardization; - Environment, climate, ocean; - Biosciences; - Energy; - Transport and mobility; - Socio-economic research. Within these areas, the German government suggests a number of priority research topics. Emphasis is placed on the need for a more problem- and task-oriented approach and on the importance of focusing funding systematically on topics of a European dimension while applying the principle of susidiarity. The need to support innovation in Europe is a priority area for the German Federal government which vigorously supports the debate triggered by the European Green Paper on Innovation and the Action Plan for Innovation in Europe. Within this context, the German paper calls for enhanced dovetailing with the EUREKA programme, which essentially develops initiatives from industry, as a means of improving Europe's innovation potential. The German position paper includes an evaluation of Community research support to date, underlining its perceived strengths and weaknesses. It sets out criteria of a new structure for the Fifth Framework Programme including suggestions for structural modifications, research priorities and more efficient implementation. With regard to the participation of small and medium-sized enterprises (SMEs) in European research projects, the German government believes that the special needs of SMEs should continue to be given particular attention in the future because of their paramount importance for economic and technological development. The following three measures are proposed: - Improved funding opportunities for "joint industrial SME research"; - Establishment of a favourable environment for the development of a European stock exchange for rapidly expanding technology-based enterprises (not however the provision of capital); - Support for the demonstration and pilot-type introduction of new, and therefore high-risk, technologies in SMEs. More generally, the German government supports a "variable geometry" approach, based on the assumption that not every research priority is necessarily equally interesting to all 15 Member States. It believes that a fair trade-off between different interests must be sought across the whole programme. The goal should not be that all Member States participate in all programmes, but rather that the specific strengths and interests of individual Member States be pooled and that the existing potential be focused.