AbstractFusion has the potential to become one of the long term options for the supply of electrical energy with a moderate impact on the environment. This is particularly important for Europe because of our comparatively scarce natural resources, our high population density, and our dependence on large-scale industrial production.The European approach to the development of fusion is by toroidal magnetic confinement: Tokamaks as the main line, and Stellarators and Reversed Field Pinches as alternatives. The results achieved in the Joint European Torus (JET) and other European Tokamaks have put Europe in the frontline of worldwide fusion research. The plasmas produced in JET are now less than a factor 2 from break-even and only 7 from ignition. Promising steps towards controlling the impurities have been made.In parallel to the efforts in plasma physics, the NET (Next European Torus)-team and a substantial technology programme are now in place. This will prepare the ground for the Next Step device, conceived as an experimental Tokamak test reactor. The programme includes plasma facing components, superconducting magnets, the fuel system, remote handling equipment, nuclear components such as the shielding blanket, completion of the data base on structural and insulating materials, and the assessment of the safety and environmental impact of the Next Step. In addition, R&D on the breeding blanket and on advanced materials are targeting the demonstration power reactor.The workplan for the next five years will take in due consideration the recommendations of the Fusion Review Board which has just completed an assessment of the European Fusion Programme. This workplan is likely to include a major effort to control plasma purity in an extended operational period of JET; expanding the physics and technology effort towards the Next Step; initiating the engineering design of the Next Step; pursuing investigation of the reactor potential of alternative lines; strengthening the long-term research in materials and other areas affecting the environmental, safety related and economic potential of fusion; undertaking conceptual design studies of a commercial reactor.Based on the very positive experience in international cooperation, particularly with the United States of America, the Union of Soviet Socialist Republics, Japan and Canada, there are good prospects for the Engineering Design of the Next Step to be undertaken in the frame of an International Thermonuclear Experimental Reactor (ITER).