Press Release

Embargoeduntil 00:01 hrs

Monday21 April 2003

THE CONSTITUTIONAL TREATY

AN ISSUE THAT DEMANDS DEBATE,SAYS IoD

A new EU constitutionraises serious concerns for Britain, the Institute of Directors (IoD) saidtoday. Having been overshadowed by the situation in the Gulf, the draftEuropean Constitution is one of the most significant developments of thepresent time, the IoD said.

Head of the Policy Unit at the IoD, Ruth Lea, said:

There is a very real danger that this draftConstitutional Treaty will strip national self-government of all but residualmeaning. In other words, it would spell the end of independent, sovereign anddemocratic nation states. The Treaty iscreating a state and the Member States will be effectively reduced to having'sub-national' status. For Britain,this would mark the end of a thousand years of history as a free andself-governing nation."

Setting out itsconcerns in a policy paper the IoD said the new constitution has profoundimplications for Britain, regardless of whether we join the euro or not. Whatis more, few people fully understand these implications. There is a seriouslack of awareness amongst the electorate, amongst business and even inParliament.

/2

/2

The draft Constitutional Treaty paves the way for anew Union, separate from Member States and with its own legal personality andstatus. It will derive its powers notfrom Member States, but from its own constitution and its law will have primacyover the law of Member States. Inaddition, the current intergovernmental method of decision-making willdisappear.

Ruth Lea, said:

This Treaty is of far greater significance for thefuture of Britain than the euro and has the potential to be hugely damagingeconomically. But at least we arepromised a referendum on the euro.Alas, there seems to be no such referendum for the ConstitutionalTreaty, which will inevitably and fundamentally change the country. A debateshould now start on the implications of the Treaty and the appropriateness of areferendum.

The Treatys key points include:

Common Foreign andSecurity Policy (CFSP): would be an EU competence and no longer agreed on anintergovernmental basis.

Eurojust: this bodywould be set up to co-ordinate the Member States prosecuting bodies.

'Exclusive'competences: including the ability to negotiate and sign all internationalagreements, common commercial policy, monetary policy for the Eurozone and theconservation of marine biological resources under the Common Fisheries Policy.

'Shared' competences:including the internal market, agriculture and fisheries, transport, energy,social policy, economic and social cohesion, environment, public health,consumer protection and the area of freedom, security and justice.

The incorporation ofthe EU Charter of Fundamental Rights: the 'Charter' is very widely drawn andcontains an extensive list of social and economic rights. When these becomesubject to the jurisdiction of the European Court of Justice (ECJ), there willbe a new mechanism for the consolidating power at Union level. The Charterwill, for example, inevitably influence the ECJs adjudications on employmentlaw.

Dualcitizenship: every national of a Member State shall be a citizen of theUnion.

Theco-ordination of EU economic policies: whether in or out of the euro.

Ends 17.4.03 No.165

3

/3

Notes to Editors

1.                 For a copy of the IoD's policy paper, The Convention on the future of Europe and the Constitutional Treaty,contact the Press Office on

020 74513264 or email press@iod.com

.

2.                 The IoD (Institute of Directors) is a non-party politicalindependent organisation with around 55,000 members. In addition to its wide rangeof business services, the IoD provides an effective voice to represent theinterests of its members to government and key opinion-formers. It also bringshe experience of business leaders to bear on the conduct of public affairs.

Contact Points:

Ruth Lea, Head of thePolicy Unit, tel: 020 7451 3291

Richard Taylor, PressOfficer, tel: 020 7451 3264

mobile and out of hours: 07721 734886

David Marshall,Director of Public Affairs, tel: 020 7451 3263

mobile and outof hours: 0776 4883420

email: press@iod.com

web: www.iod.com