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Speech at LSE
Speech by Europe Minister Denis MacShane MP. London School of Economics. Nov 4th, 2003.
In 1989, Europe dissolved from the stolidity of the post-1945 settlement and became a continent in which too much history was being made too quickly. Economic and political life has not settled down neither in Britain nor in the rest of Europe.
The US Defence Secretary caused a stir earlier this year by speaking of old and new Europe. By that he meant a geographical division or one based on positions taken over the Iraq conflict.
Poland as a nation sees its constituent date - in the sense of Poland declaring itself a nation - as being in 966, a full century before the French colonised England. So if anything the new nations of Europe are its oldest members.
The real division between old and new Europe is one of visions and values, between the old 20th century vision of a European Union - statist, regalien, elitist, self-satisfied and centralised - and the new 21st century values of a European Union based on networks and nation, cities and citizens, open and willing to learn. The old Europe was Jacobin, the new Europe will be Girondin.
The old argument between so-called federalists and so-called nation-firsters, between a Spaak Europe and a de Gaulle Europe belongs in the history books. But the old Europe is not yet dead and the new Europe is struggling to be born and in the intervening period there is much confusion and uncertainty.
What is clear is that for the first time since the Congress of Vienna, Britain can play a central part in the shaping of Europe. And we can do so by the decision of the British people in 1997, reinforced in 2001 to reject the isolationism of those who say Britain should not play a leading role in Europe. On the contrary, we should be in Europe and running Europe.
Churchill famously remarked to de Gaulle that if our country had to choose between the continent and the oceans we would always chose the latter. But the empire has gone and it was Churchill himself who made the point when he launched the movement to greater European integration with his famous Zurich speech of 1946.
I have just been reading the diaries of Harold Macmillan for the 1950s and it is amazing to see how keen the then Conservative Party was on building up Europe. So many of the issues that worry us today are old themes from the 1950s.
Macmillan noted for example that people feared 'isolationism or "Asialationism" in America' and how keen the French were on a 'European army (as) a guarantee against German military domination of Europe.'
I quote Macmillan not to indicate agreement but to highlight that the European question has to been seen from different vantage points and above all set in a historical context. Those who forget history are condemned to repeat it. I am amazed at the amnesia of those in our country who have forgotten what ills have befallen our nation when we disengage from shaping Europe and fall into the trap that island isolationism is a sensible policy for the British people.
When I became Minister for Europe almost exactly one year ago I decided that I would spend as much time in the other capitals of Europe - please note the deliberate use of the plural - in order to promote British thinking and policy and to learn for myself the direction that Europe wanted and needed to go.
I think the old Europe that is making way for the new was too focused on Brussels. I read a headline in the excellent Belgian newspaper, Le Soir, the other day which read 'Plus d'Europe, plus des batiments à Bruxelles' - more Europe means more buildings in Brussels.
Yet the notion of Brussels as the federal district of Europe belongs to the 20th century concept of the European Union. The idea of a European federal superstate is over. Dead. Covered in garlic with a stake through its heart.
There may be some Dracula politicians who need to keep threatening the children with the vision of a European federal superstate but they do so more to cheer up their own anti-European supporters than because they believe it is going to happen.
BRITISH ANTI-EUROPEANISM
One of the fundamental dishonesties about British political discourse on Europe is the refusal to discuss European reality rather than to whip up populist fears by making extravagant claims about what Europe is about to do.
Like Glendower in Henry IV, the anti-Europeans pretend 'to call spirits from the vasty deep' and I suppose all Europe Ministers have to be like Hotspur and point out the cold truth that these fearful imaginings exist in the recesses of the anti-European psyche and are not based on reality.
Take for example the present discussion on the EU constitutional treaty currently being discussed at the Intergovernmental Conference.
The draft text put forward after 18 months discussion by the Convention on the Future of Europe should be called the 'British' constitution said Robert Badinter, the former French justice minister and Europe's leading legal constitutional expert.
M. Badinter made his argument because he said the text was thoroughly impregnated with British ideas and common sense values.
But to read the reports in the anti-European press with the lurid headlines of 'Blue print for Tyranny' or the end of a 1000 years of British sovereignty was to go straight through the looking glass into the world of the anti-Europeans where everything is distorted to make the facts fit the myths of anti-European ideology.
Some of the scare stories were wonderful. The crowned heads of Europe would lose their status wrote some papers. Nelson would be removed from the top of Nelson's column to be replaced by Napoleon. Britain and France would lose their seats on the UN Security Council. British and French nuclear weapons would be placed under the control of the European Parliament. British, and by implication, French and German constitutional arrangements would be superseded by an all-powerful European legal system.
And so on. I have a simple test. Would a mass-selling newspaper publish such scare stories and maintain credibility in other capitals? I doubt it. Yet it is taken for granted that we should wake up each morning to such fairy tales.
Of course, there are proposals in the draft text that the UK wants to change but so do many other of the EU 25 nation states. Each is sovereign. Each is democratic. Each is proud of its independence - none more so than the nations recently out of communist tyranny. The notion that they are all conspiring to suck Britain into a federal super-state is palpably absurd.
Yet such absurdities are commonplace in our discussion on Europe. I have been surprised on how many issues Britain is one of many, or part of a major group of EU member states that wants changes in the Giscard text mainly, though not exclusively, to uphold national authority in key areas. I am confident that we will bring back to the country and to Parliament a new constitutional treaty which will strengthen the role of national institutions.
Britain is also in the majority of EU member states in resisting calls for a referendum. Instead I believe we should uphold parliamentary democracy. Britain is sigNATOry to many international treaties in which we relinquish part of our national legal sovereignty in order to gain the wider strength of rule of law applied across national borders. I am elected by the voters of Rotherham to uphold parliamentary democracy and to legislate in the interests of my constituents.
It was Hegel who noted that 'out of the crooked timber of humanity, nothing straight was ever constructed.' Can we not learn that Europe is not architecture but something living and changing all the time? Once the present Intergovernmental Conference is over can Europe close the files of the nation-firsters and the federalists and get back to high quality economic growth that transformed Europe between the Berlin airlift and the fall of the Berlin Wall?
THE ECONOMIC GAP BETWEEN EUROPE AND THE USA
The new Europe will be defined by its ability to answer the issue of the growing economic gap between the EU and the US. Between 1993 and 2002, EU growth managed on average 2.4 per cent a year compared to 3.3 per cent for the United States. To anyone familiar with compound interest that means an ever widening gap between EU wealth creation and US wealth creation.
The wealth gap between the EU and US today is already 2 trillion euros. If current trends continue and the EU fails to grasp the mettle of economic reform to improve productivity, raise skill levels and generate higher future growth then this gap will only widen further. According to France's Institute of International Relations, if European growth potters along at its current low levels then by 2050, Europe will have 'exited the world stage as a serious economic and political actor.' The IMF chief economist said last month that if Europe wanted to see growth in the near future it would have to watch television.
All these points were highlighted in the Sapir report presented to the European Commission in the summer. It seems to have fallen into a black hole of Brussels oblivion. Mr Prodi should worry less about more power for Brussels and worry more about more jobs for Europe.
The United States has higher total employment rates and higher productivity per employee. The total employment rate in the United States is almost 10 per cent higher than the EU. Total productivity rates in the US are 20 per cent higher than EU productivity per worker. The disincentives to women, older workers and workers with disabilities being able to take paid employment if they so wish to in Europe need to be removed.
Returning work to the working class should be a priority for the trade union movement in Europe and all who care for social justice. One can list all the nominal social rights one would like in an EU constitution or in national law but if workers are not at work their social power is undermined and their trade union strength is reduced to union leaders giving press conferences.
That is why Gordon Brown is right to insist that a new Europe must embrace the high employment, high productivity road to wealth creation. But we need to take this message to Europe, in Europe and persuade our partners not just ourselves. The Prime Minister sought to do this in his article on the need to avoid tax harmonisation in the Financial Times on Monday and the Chancellor has been spreading the word at ECOFIN today.
THE NEED FOR REFORM
But we need to do more. All UK ministers should be arguing the case for European reform in Europe. That is why I hope we can end the ICG quickly on the basis of the amendments to the draft Giscard text upholding unanimity in areas like tax, treaty change, own resources, as well as foreign policy and defence where Britain and nations wanting to build a new Europe are standing firm and return European energies to helping the citizens of Europe to have jobs, incomes and thus allow government fiscal receipts to spend on the good things Europe wants to do.
To build the new Europe we have to make Europe home to the world's knowledge revolution. We are living with the strains of massive changes in our economies, which are no longer based on land and industry. The race to be the locus of the world's knowledge revolution is now on. Europe needs to play to its strengths.
The idea of a university was invented in Europe but today Europe's universities are losing their clout. According to the OECD the United States invests 2.3 per cent of its GDP in universities. In Britain, France and Germany the figure is 1.1 per cent. In Britain, according to Chris Patten, Chancellor of Oxford University, only two universities would win a place in the list of America's top 150 universities in terms of endowment income.
The British have a golden opportunity to take a lead in Europe and begin to match the United States investment by supporting the government's proposals, now under discussion, aimed at getting more private money into our universities. Relying on the taxpayers of my constituency of Rotherham, most of whose children do not go to university, is not enough. It is obviously for education ministers to discuss how the correct balance can be found between ensuring that Higher Education is properly funded by the state, but with affordable payments made by graduates once they are earning. We also need to ensure access for bright young students from poorer backgrounds. From the point of view of being Minister for Europe I welcome any country that is prepared to reform university finance so that we match or exceed the best of America and make Europe a world centre for the new knowledge economy.
Some of my best friends are professors and I amazed at how they put up with such low salaries - 35 per cent lower than their equivalents in the United States. If I were negotiating for them I would be campaigning for current government proposals in order to get more money into the university sector.
We also need a step change in Europe in terms of our approach to science. Between 1900 and 1921, France obtained 18.3 per cent of the Nobel prizes in science and the United States obtained 3.3 per cent. Between 1980 and 2003, the United States won 57.9 per cent of all Nobel prizes in science and France won 2.6 per cent. The number of Nobel prizes in science for Germany went down by two-thirds and in Britain by half for the same years. In short, Europe which once revered scientists like Louis Pasteur and Marie Curie now cowers before the anti-science peasant poujadisme of a José Bové or the superstitions of those who reject nuclear energy as part of our energy matrix.
Too many of our best brains go across the Atlantic because they have access to funding. Too many of tomorrow's Nobel prize winners from China, India and Korea do their PhDs in North America and stay there to contribute to that region's growing wealth disparity in relation to Europe. Too many of our companies are moving some or all of their research including the vital business of patent registration to the United States. Europe is debating itself to death on its constitution when what we should be doing is smashing through the barriers to create great and properly funded universities in Europe and effective mechanisms to win economic benefits from the knowledge revolution.
BUDGET REFORM
These are all tasks for the new Europe. Another challenge to face after the IGC is over is the need to reform the EU/s budget. It is absurd that nearly 80 per cent of the EU budget is spent in just two areas - agricultural protectionism and regional aid. Nearly 80 billion of the EU's total spend of 100 billion goes in just these two areas of expenditure.
This may have been justified forty years ago when Europe needed self-sufficiency in food production or 20 years ago when the devastation wrought to part of Britain by bad economic policies so reduced standards of living that South Yorkshire or Merseyside became so poor they became eligible for help from Brussels.
But in the 21st century a new Europe cannot be based on old and counter-productive budget arrangements.
I am glad to see that Ireland now supports decoupling of agricultural support and again we have to take the argument for CAP reform to those countries still wedded to protectionist subsidies. We can only do that is we are fully engaged in Europe. We also need to divert European aid to the new countries so that their citizens feel they have a stake in their own economies and societies.
EU/US RELATIONS
Another big question is what relationship the new Europe should have with the United States? Of course, the question can be posed the other way around. Some of the language used in this debate seems designed more to irritate then provide analysis of clear lines on policy.
The view of Tony Blair, Jack Straw and myself is clear. We see Europe as a partner for the core values that animate the people of America irrespective of the administration in office. Chancellor Schröder has said he is against the concept of a 'Gegenpol' arguing that there can be only one pole - the pole of freedom and democracy. He is right. It was the Chinese communists in the 1950s who invented the concept of 'multipolarity' and the references to a multipolar world seem to hark back to 19th century concepts of sphere of influence or the disasters of the 20th century block mentality in foreign policy.
The best way Europe can become an effective partner to the United States is for us to develop our economic strength and to make sense of our disparate, over-lapping and poorly coordinated defence capabilities.
Europe needs to spend more money, more effectively on defence and I welcome the commitment of Spain and France to increase defence spending. Even without higher defence expenditure it should be possible for the EU to redesign its military profile to overcome the proliferation of competing weaponry and systems. That is the real challenge for the IGC - to send out a message of strength to the world about Europe's commitment to NATO and to making ESDP work. We need more flexible forces in Europe able to do work on the ground - not new operational headquarters in Brussels rivalling NATO.
Because far from America being a hyper-power, as the former French foreign minister, Hubert Vedrine argued, it would be better to see the United States as being more vulnerable than at any time in her history. Fifty years ago America was far richer relative to the rest of the world than today. Pearl Harbor took place thousands of miles from mainland America. 9/11 killed more in an hour than Hitler's bombs managed in a month of the London blitz. America looks east and sees the challenge of China and other rising Asian powers. It looks south and sees the narco-terrorism of the FARC and ELN in Colombia sending drugs to kill young American boys and girls.
It looks at nuclear proliferation threats in North Korea and Iran and sees new worries. It looks at the flash points of Kashmir or the occupied territories of the West Bank and sees only seething hatreds which express themselves in a vicious, violent anti-Americanism.
America looks at the hatred of all those who demand the destruction of the state of Israel and the strident anti-Americanism which is the political-cultural norm in the European intelligentsia and much of the Muslim world. It looks west and sees a growing European Union which has different perspectives on issues like Kyoto, the death penalty, trade policy and which uses its clout to stop American companies from merging or erecting tariff barriers to trade in steel.
The US sees its economy dependent on the rest of the world lending it money - financing the deficit to use economic speak - and even then 3 million jobs evaporate in as many years causing distress in heartland US cities. The Americans know that the resulting imbalances have to be unwound somehow. We Europeans have an interest in ensuring this happens in a coherent way, without sudden swings in exchange rates and capital flows. If the US adjustment takes place through a huge depreciation of the dollar, Europe will be the first to suffer.
The day the US brings all its troops home from Europe, the Balkans, Korea and elsewhere, will Europeans feel any safer? The greater danger is surely a reversion to US isolationism in a modern form. That is why Tony Blair is right to argue for Europe to remain engaged with America. The failure of Europe to stand united against Saddam was just that - a failure.
FOREIGN AND DEFENCE POLICY
Europe as a whole sent the wrong message at the wrong time in the wrong way to the wrong people. Saddam thought a divided Europe would protect him. Americans wondered if the half century of supporting European unity from Truman to both Bushes was a good investment. Thankfully, we are moving forward. European soldiers from eleven EU member states are now playing their part in Iraq.
The foreign ministers of Britain, France and Germany travelled jointly to Iran to deliver a united message from Europe that we will not accept nuclear proliferation on our doorstep.
Europe needs to give its full support to Turkey's EU ambitions in the interests of Europe, Turkey and the eastern Mediterranean. This EU support must be extended to resolving that long-standing blight on Europe's unity - the division of Cyprus. Three years into the 21st century Nicosia remains the last divided capital in Europe. The European Union needs to do all it can to promote a just, viable and comprehensive settlement to the Cyprus problem ahead of the island joining the EU next May. Turkey for its part needs to send a clear message to the Turkish Cypriot community that the UN Secretary General's plan, the so-called Annan Plan, is the only realistic basis for such a settlement. Negotiations should resume as soon as possible so that it is a united, rather than a divided, Cyprus enters the EU next May.
Europe needs to sharpen up its Balkans policy. Chancellor Schröder has made an important visit to the region underlining the need for the Western Balkans to look to Europe.
We need to move forward on Kosovo so that standards and status are discussed and the people of the region accept their responsibilities rather than assuming the UN will be forever present.
But in all of these issues the two great regions of the democracy and rule of law in the world must act as partners. The Gaullist vision of hostility to the United Nation and the need for supranational rule of law must be overcome. We all need to learn to speak Volapuk - to use de Gaulle's contemptuous dismissal of the language of international treaties and post-national cooperation and rule of law.
As Tony Blair argues again and again, the best answer to unilateralism is partnership, the best response to 9/11 is solidarity, the best answer to the difficulties in Iraq is to get stuck in to help the Iraqi people. In the process of constructing Europe I have long argued that this cannot be done without France or against France, without Britain or against Britain. Similarly, a safer, fairer world will not be built without or against the United States.
For nine years as an MP, now a minister, I have had to do political battle in Britain against anti-Europeanism. Europe needs to combat anti-Americanism as both anti-Europeanism and anti-Americanism are twin faces of the politics of negativity that will take us nowhere.
Jean Monnet was once asked if he was optimistic or pessimistic about the future of Europe. He replied: 'Neither. I am determined.' It is that determination to strengthen British interests by making a safe, and secure and prosperous Europe that should like at the heart of any British policy towards our common continent. The EU will never be under the domination of one or two or even three countries.
THE FUTURE OF EUROPE
The Europe of 25 - and shortly to be 27 - will be based on networks. It will divide into two biggish groups. Not old and new but rather EU member states that embrace reform, create the new economy, are open to the world in contrast to those who think Europe should be based on the acquis of the status quo and protect out-of-date arrangements such as the Common Agricultural Policy.
British must be at the head of the Europe of change and reform and modernisation. The Europe of movida, to use a Spanish expression, not a Europe pantoufflarde or a Europe of Stillstand. At some stage, British politics will stop tearing itself apart over Europe. We should be in Europe and helping to run Europe. In Europe and shaping Europe. Britain always makes a mistake when it turns its back on Europe. And today our new partners in the enlarged Europe need and want Britain to be active in Europe. We will not let them down.
We will shape a new Europe in which membership of the European Union adds value to what nations do and nations willingly and freely share sovereignty to allow Europe to do best what is best done at the European level. And it will be a new Europe because the old Europe has run out of steam. Today's generation of people leaving universities have a chance without precedent in the 2,500 years of European history. It is to build a continent of peace and prosperity, of rule of law and social justice, or cooperating internationally under enforceable rules.
It is to show by example and self-discipline and tolerance that different nations, religions, culture, ethnicities and beliefs can co-exist rather than hope for national or religious or ideological supremacy.
A big challenge to be sure but a world I want to live in. Welcome to the new Europe. It is ours to build.
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