Press Release

 

For immediaterelease

Wednesday 23July 2003

 

 

EU draft Constitutional Treaty -

IoD warns of dangers to business

 

The Institute ofDirectors warned today that the EU draft Constitutional Treaty, which hasrecently been finalised ahead of an Inter-Governmental Conference, has majorimplications for business and the economy as well as for the country as awhole.

 

In a paper The draft Constitutional Treaty: a summerupdate the IoD said that the draft Treaty, if implemented, would have thefollowing implications for the EUs powers:

 

       The Common Foreignand Security Policy (CFSP) (Maastrichts 2nd pillar) would cease tobe intergovernmental and would be fully incorporated into the new EU. Therewould be an EU foreign minister, whose policies would be decided by QualifiedMajority Voting (QMV) (although the European Council will identify the Unionsstrategic interests unanimously).

 

       Similarly Justice andHome Affairs (JHA) (Maastrichts 3rd pillar, now known as freedom,security and justice) would cease to be intergovernmental and would be fullyincorporated into the new EU. The issues covered would include theharmonisation of criminal justice procedures (including the rules of evidencein trials and the rights of the accused) and asylum and immigration. It wouldbe decided by QMV.

 

       There would beextensions of the EUs exclusive competences, including the signing ofinternational treaties, as well as competition policy.

 

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Ruth Lea, Head of thePolicy Unit and the author of the paper, said:

 

The draftConstitutional Treaty is a major step towards EU political integration. Theextensions to EU powers are very considerable indeed, not least of all in theareas of common foreign and security policy and justice and home affairs. It isclearly no tidying up exercise and the British people are entitled to areferendum on it.

 

The implications forbusiness and the economy are serious. Even though it is currently impossible toquantify the extent to which the EU would use its powers in crucial areassuch as Economic and Employment Co-ordination and the Charter of FundamentalRights, to name but two, the key fact is that the powers would exist and, giventhe EUs activist record, these powers would almost certainly be usedextensively. Or why else would these powers be created? They are virtuallylimitless enabling powers, which open doors to further integration. They are,therefore, of utmost significance. This is particularly bad news for Britishbusiness and the British economy because the EU is wedded to the discreditedEuropean Model which is failing Germany, failing France and will fail the UK ifthis Constitutional Treaty is accepted by the British Government.

 

Moreover, theuncertainty surrounding the interpretation of the Charter of Fundamental Rightsand the new tax powers, for example, is profoundly unsettling for business,which needs certainty in order to plan ahead and invest.

 

Further implicationsfor the EUs powers include:

 

       major extensions ofpowers in many economic and social areas through a new shared competencesfacility, where member states would only be permitted to legislate if the Unionchose not to.

 

 

 

 

 

 

 

 

 

 

 

 

 

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The areas coveredare:

 

o       The internal market (apparently little change but,crucially, increased powers over aspects of corporate taxes);

o       Freedom, security and justice (see above);

o       Agriculture and fisheries (little change);

o       Transport and trans-European networks (increased powers);

o       Energy (a completely new competence);

o       Social policy, including social security (increased powers);

o       Economic, social and territorial cohesion (as dischargedthrough various structural funds, and little change);

o       Environment (increased powers);

o       Public health (increased powers);

o       Consumer protection (increased powers).

 

       EU coordination ofeconomic and employment policies, which would go far beyond the existingtreaties. It would almost certainly cover the overall level of taxation,interest rates and public spending in each country (even if not in the euro),as well as pensions policy and employment taxes.

 

        The Charter ofFundamental Rights which, given an activist European Court of Justice (ECJ),could have major influence on employment and industrial relations issues. TheCharter covers a wide range of economic and social rights.

 

Ends 22.7.03 No.185

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Notesfor editors

 

1.      For acopy of The draft Constitutional Treaty: a summerupdate please contact the Press Office on 020 74513 264 or press@iod.com

 

2.      TheInstitute of Directors is a non-party political independent organisation witharound 55,000 members. In addition to its wide range of business services, theIoD provides an effective voice to represent the interests of its members togovernment and key opinion-formers. It also brings the experience of businessleaders 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