Questions for Europe

Chatham House Speech
Minister for Europe, Denis MacShane MP. September 23rd, 2003.

Thank you for giving me an opportunity to speak with you today. One of the more frustrating aspects of my job is to hear the reproach - and I heard it over the weekend at the excellent UK-Italy annual conference at Pontignano - that the British Government does not explain its position and thinking on Europe.

What that really means is that ministers do not make speeches that command the front pages of the tabloids. It was an editor of the Economist who once wrote that the task of journalism is 'first simplify, then exaggerate.' But that golden rule cannot apply to Europe. Britain's relationship with the European Union is complex, nuanced, changing and has to be painted in different shades.

There are clear moments of light which illuminate. These include the massive vote in Latvia on Sunday to say Yes to Europe. While politicians of the anti-European right in our country are saying No to Europe, the voters of Poland, the Czech Republic and the Baltic States are saying Yes, Yes, Yes.

It is to the honour of our country that we have led the way in arguing for this new Europe. Today Europe is 'whole and free' to quote President George Bush Senior and Britain must never again turn its back on our responsibility to make this new Europe work for a safe, prosperous and fairer 21st century. Today's conference will discuss these themes and I congratulate Chatham House on organising the event. The two papers on European migration and the analysis of how the eight east and central European states will fit in are timely and important.

London is now the ideas capital of Europe. Partly it is because of Britain's diversity, and there are many existing and forthcoming EU member state citizens who have made their home here. I welcome their contribution. But the ferment of debate about the EU in our country is healthy and it is right that we constantly ask questions about Europe.

In the past 12 years there have been more questions asked about the European Union than ever before. Questions in referendums and in parliament - we had a No to the Euro in Sweden - but an historically important, resounding public and parliamentary Yes from the ten accession states on joining the EU. Questions at the Convention and endless questions about the constitutional treaty. Questions all over the world about Europe and Iraq. Questions in our Parliament and questions in the scores of thousands of articles, pamphlets and books about Europe.

In essence all these questions boil down to the one posed by the great Polish novelist, Sinkiewicz: Quo Vadis? Where is Europe going?

Some in my country would prefer not to answer that question. Others will say the answer is anywhere Brussels wants to take us.

There are two rather boring alternatives being created where really none exist as we seek to answer the question Quo Vadis Europa? The first is that we can break up Europe into a disaggregated conglomeration of nation states each maintaining national controls over environmental, economic, social and investment policies. There cannot be a businessman in Britain who wants to negotiate his or her way through 25 different currencies or competing, conflicting rules on economic activity. Yet without sharing sovereignty to shape common rules it is our business community which now trades more with Europe than any other region of the world which will suffer.

The second is that we are on our way to a superstate in which Brussels replaces national capitals and we subsume our British, or Polish or Irish or French identities into a united states of Europe.

There are advocates of both visions and there are those fearful of both concepts.

Yet if we are realistic, neither is on the agenda of today's Europe.

Instead the challenge is to see if we can hold a sensible conversation about Europe. The task is to move Europe from declaration to discussion.

This is exceptionally difficult in Britain where we are trained only in the adversarial tradition of debate. If a minister says Europe is not black and white but endless shades of grey, every phrase, tone, or nuance of what he says can be splashed into a headline or hurled about in insults across the despatch boxes of the Commons.

Britain deserves better. One striking aspect of the north London by-election last week was the very low turn-out. I do not think Europe featured much in the campaign. Though the excellent Labour candidate, who will win the seat back at the general election is of course the able Labour MEP, Robert Evans. Just as the winning candidate represents the most pro-Brussels of all our main political parties. The anti-EU candidates who stood for Mr Arthur Scargill's and Mr Iain Duncan Smith's parties of course got nowhere.

But when nearly seven out of ten voters stay at home, it may be time to ask if the British political tradition of rant and insult, hyperbole and know-all assertion is what people want. I would like as Europe Minister to see if it is possible to hold an adult conversation in our country and I would like to start today by asking my own questions about Europe.

1) What is the right balance between economic or material Europe, on one hand, and political or constitutional Europe, on the other hand?

My own feeling is that people are tired of the long decade that began with the Maastricht Treaty, and is still going on, of endless debate about constructing a single united European political space or identity. Instead people want Europe to return to its Jean Monnet roots of being a material project - aiming at delivering jobs, good wages, and the chance to lead a decent, fulfilling life.

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?

2) Can Europe make a success of the Intergovernmental Conference? In a sense Europe is condemned to make a success of the IGC. The Convention chaired by M. Giscard d'Estaing produced a good document. It was an open, transparent process.

Jack Straw outlined the case for a constitution for Europe in the Economist last year. The French constitutional expert, Robert Badinter, writing in the Nouvel Observateur, said the Convention draft text should be called 'La Britannique' so thoroughly was it imbued with British down to earth empiricism. It anchors the authority of the European Union in the nation states of Europe.

That is why the people of the accession states have voted so strongly to join the EU. They rightly see that Europe guarantees their independence and national identity in a way without precedent in the previous history of some of them. In discussions with Russia, for example, the Baltic States now speak as part of a union of 25 nations. No wonder the Latvians on Sunday followed the Estonians a week previously in saying Yes to Europe.

At the moment there is a campaign to have a referendum on the constitutional treaty. At times I feel like Alice hearing the chant of 'Sentence, first, Verdict later.' I do not know the final shape of the treaty that will provide the new rule-book for the European Union will be.

But I am confident it will be good for Britain. Each country has some changes it wants in the Giscard text. The key provisions of the constitution are clear and concise but Part 3 of the text contains a great deal of important detail and therein may lie the devil for all 25 nations. I stress 25 nations. Each country has a veto. Each country has perspectives and interests and traditions it wishes to see secured. Yet each nation wants to see Europe succeed. It is not Europe versus the nation state, Brussels versus the national capitals. Instead European Union membership adds value to what nations do and nations in cooperating with and under the common rules of the EU strengthen their own interests.

3) Can Europe become 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 2 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. 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.

3) My next question is can Europe address 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 week that if Europe wanted to see growth in the near future it would have to watch television.

The sarcasm aside, it is worrying that economic policy making in many EU countries still rejects the need for job creation at the kind of rate that generates growth and fiscal revenues.

4) What relationship should Europe 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.

Britain's view 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 its 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. 50 years ago America was 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 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.

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. Europeans from a number of countries are now playing their part in Iraq. I welcome the decision announced in Berlin by Chancellor Schröder that Germany will engage with its allies in training up security forces and police in Iraq. I welcome the statement from President Chirac that France will not use its veto when the UN Security Council draws up a new Resolution on Iraq. We are moving forward.

The people of Iraq deserve security other than that provided by a Saddam or fundamentalist dictatorship. The way ahead will not be easy but Europe must be present. We should have no illusions. As Douglas Hurd writes in the current issue of the RIIA's World Today, America pursues its objectives 'without regard for sentiment or gratitude.' The EU needs to do likewise and the new security ideas outlined by Javier Solana take the EU forward in the right direction.

But 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 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.