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The autumn Presidency lunch - Friday 4 November 2005
at The White Hart, Ardingly Road, West Hoathly

Sir Stephen Wall
on the British Presidency

There could be no-one better equipped to talk about Britain's key role in 21st century Europe.  Sir Stephen Wall joined the Diplomatic Service in 1968 and was Private Secretary to the Foreign Secretary (1988-90) and to the Prime Minister (1991-93).   He headed the Foreign Office EU Department for the five years 1983-88.  He was Ambassador to Portugal, 1993-95, then UK Permanent Representative to the European Union for the next five years.  In 2000 the Prime Minister appointed Sir Stephen to be the head of the European Secretariat in the Cabinet Office.  There he was responsible for co-ordinating official advice on EU issues to ministers.  After four years he left the Downing Street Cabinet Office European Secretariat to take a job as adviser to Cardinal Cormac Murphy O'Connor, the head of the Roman Catholic Church in England and Wales.

Sir Stephen Wall speaking at the UK Presidency lunch

The British Presidency inherited a sour mood after the campaign on the European Constitutional Treaty. There had been every hope that public opinion in the UK towards Europe would have changed after the acceptance of the Constitution. Prime Minister Tony Blair had presented the Constitution as an opportunity, not a threat. Everything went pear-shaped when the French and the Dutch, two nations at the heart of Europe, voted no, and that was a dramatic change the British Presidency had to face from July. The ‘no’ votes in both France and The Netherlands came mainly from domestic factors, but it was serious because they are both so central to Europe as founder members.

Tony Blair had expected that if the structure of the EU institutions were right, as the Constitution aimed to do, then integration would follow eventually. But the problem has been the economic policy of the EU towards globalisation. The French have wanted to keep their traditional social model, free trade inside, closed to the outside. However, in the global economic context, the costs of new investment into the EU are at the moment too high, so investment tends to go elsewhere in the world. The UK is unlikely to make much progress in resolving difficulties in the European social fabrics, and at the same time modernise the economy.

The summit at Hampton Court had set out to find common ground for action. Topics on the list were to

find more funds for research and development at European level
invest in higher education
improve international competition
develop co-operation in the energy field, and reach common decisions on the effect of climate change and on nuclear power.

José Manuel Barroso is different from the previous Presidents of the European Commission - he wants to take European enterprise forward, and develop the economy rather than the institutions. But he does not have French and German support in this, and it is unlikely to feature as a priority during then UK presidency.

Rather more of a success has been opening enlargement negotiations with Turkey. The reluctant consent of Austria was in effect ‘bought’ by allowing negotiations with Croatia. Further delay in starting negotiations would have fuelled the ‘anti’ tendency in Turkey, and it is a great chance to have on board a democratic country with a Muslim population.

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The European Council, which the UK has been chairing, dealt with negotiations over the European budget 2007-2013, and what should happen to the UK rebate. It was justifiable under Thatcher because we were the 2nd highest contributor, and the 8th in terms of wealth. Our position has now improved economically and we must find a compromise. The French on the other hand must meet our demands for agricultural reform, essential in the face of globalisation. It may be difficult to reach a compromise, implying a climb down by the French, during the British Presidency, and the chances may be better under the next Presidency – Austria.

The real issue for the EU is how to create an inspiring vision for a new generation, partly seen as political, partly economic. With the Soviet Union ended and enlargement into the main part of ex-communist central Europe achieved, the political ‘glue’ of Europe has gone. France, The Netherlands and Germany are no longer supporting further enlargement as wholeheartedly as before. We have a weak Germany and a France likely to become more nationalistic and protectionist than ever. However, there are success stories too – mainly in foreign policy. This aspect of success was not highlighted in the Constitution campaign. We have got several post-Soviet democracies in eastern Europe, and people actually willing to make economic sacrifices to meet EU criteria.

It is the Europe intergovernmental perspective that interests the UK. Our position being out of the Euro is a weakness, because the impulse must come from inside the Eurozone. Greater progress is needed in economics and in transfer of resources to the less wealthy. If no progress is made on this, there is a risk of drifting into irrelevance, as our economic prosperity declines. The EU needs political leadership and there is no evidence of this at present.

Pressed during question time on what could hold the EU together in the future, Sir Stephen suggested that the threat from Asia could become the future ‘glue’. The economy is only held together by willpower. To be anti-European was not a political option. In a global or supranational context it would in the future be a question of the survival of the fittest.

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