1 00:00:00,240 --> 00:00:04,080 Welcome to St Anthony's College for yet another of the Chancellor's seminars. 2 00:00:04,590 --> 00:00:12,540 These are seminars of which we're particularly proud because they seem to us to exemplify very well what we do at this college and what Oxford does, 3 00:00:12,540 --> 00:00:18,030 and that is have very, very good conversations and we will again have a very good conversation this afternoon. 4 00:00:18,540 --> 00:00:22,200 For those of you who don't know the college and I suspect most of you do, 5 00:00:22,740 --> 00:00:29,760 we are without boasting the most international college in Oxford, both in the range of subjects that we cover. 6 00:00:29,790 --> 00:00:34,200 We have seven regional centres that look at much of the world. Not all that, but much of the world. 7 00:00:34,650 --> 00:00:40,200 We have fellows and students who come at last count from I think, 68 different countries. 8 00:00:40,740 --> 00:00:45,330 And so our reach, I think, is truly international and global. 9 00:00:45,330 --> 00:00:54,600 And wherever you go in the world, you will find an Antonen where I think more powerful and stay out of politics and perhaps slightly more liberal. 10 00:00:56,370 --> 00:00:59,670 Anyway, I'd like to you don't have to agree. 11 00:00:59,940 --> 00:01:06,420 I'd like to welcome you all. And and I'd like to ask Jane Caplan, who's a director of European Studies Centre, to start the proceedings. 12 00:01:08,160 --> 00:01:13,530 I'm welcoming you on behalf of the European Studies Centre, which is the proximate cause of today's event. 13 00:01:14,790 --> 00:01:20,850 The Chancellor's seminars, which are run by the European Policy Centre, are a semi-regular event in our calendar. 14 00:01:21,090 --> 00:01:28,410 They depend upon everyone's schedules, but they are always a high point of the of the European Studies Centre's academic year whenever they happen. 15 00:01:29,970 --> 00:01:36,690 Today's seminar is going to be on British EU policy after the election and I would like to just 16 00:01:36,690 --> 00:01:42,570 briefly introduce today's participants and whatever I don't say or pattern come out afterwards. 17 00:01:43,260 --> 00:01:48,940 The chair of the proceedings is Lord Patten, Chris Patten, who hardly needs an introduction in this company. 18 00:01:49,710 --> 00:01:57,330 Obviously he had a very long career nationally as a politician between 1979 and 1992, as a politician and a minister. 19 00:01:57,330 --> 00:02:04,140 Then he had further careers as Governor of Hong Kong and New South Wales and European Commissioner of External Relations. 20 00:02:04,740 --> 00:02:09,390 In between, he helped to bring peace to Northern Ireland, rather, in the news again today. 21 00:02:09,400 --> 00:02:12,690 If anyone knows what's going on in relation to Southern Report, 22 00:02:12,690 --> 00:02:17,420 please have a word with me after it because I'm keen to know when you meet his partners. 23 00:02:18,030 --> 00:02:20,879 Sorry. I should also say, of course, that he's more locally speaking. 24 00:02:20,880 --> 00:02:27,720 He's the chancellor of this university, and even how could I forget even more locally, but more centrally, 25 00:02:27,720 --> 00:02:34,200 from a parochial point of view, he's the patron of the European Studies Centre and we welcome him in all his capacities today. 26 00:02:35,160 --> 00:02:39,300 His partners in conversation today are Lord Hannay and Sir Stephen Wall, 27 00:02:39,660 --> 00:02:45,250 who are both distinguished diplomats with long records of official engagement with the European community. 28 00:02:45,990 --> 00:02:54,630 Lord Hannay, who is on the right of all Patten, is a diplomat who had responsibility for European communities at the Foreign Commonwealth Office. 29 00:02:55,020 --> 00:03:04,200 He was then British ambassador to the U.S., ambassador and Permanent Representative to the UN and later a Special Representative for Cyprus. 30 00:03:05,880 --> 00:03:13,050 So Stephen Wall, immediately to my right, his principal offices have also included ambassadorship to Portugal. 31 00:03:13,170 --> 00:03:21,390 He was a permanent representative for this country to the EU, head of the European Secretariat in the Cabinet Office, an EU advisor to Tony Blair. 32 00:03:22,290 --> 00:03:29,820 Today's topic British EU policy after the election could barely be more timely and riveting given our current by ARC. 33 00:03:30,570 --> 00:03:36,370 Nor could today's speakers, I think, be buttered as guides to what to expect, or at any rate, what to look out for. 34 00:03:36,370 --> 00:03:40,349 If they're not in the business of prediction, they can at least tell us what we should keep our eyes on. 35 00:03:40,350 --> 00:03:45,570 So thank you very much, gentlemen, for coming today. And I'll hand over to our chancellor, our patron. 36 00:03:47,020 --> 00:03:54,790 Thank you very much, Professor, and many thanks to the European Centre and Saint Anthony for your hospitality. 37 00:03:55,600 --> 00:04:06,250 When we originally had the idea of holding this seminar and inviting David Hannay and Stephen Ward, 38 00:04:06,850 --> 00:04:14,829 and I was just a tad concerned about the timing for this reason that it's sometimes erroneously 39 00:04:14,830 --> 00:04:22,239 thought that diplomats don't have strong opinions or that if they have strong opinions, 40 00:04:22,240 --> 00:04:33,010 they don't express them strongly. But both these colleagues today who've had stellar diplomatic careers not only have strong opinions, 41 00:04:33,010 --> 00:04:39,639 but do express them ferociously, strongly and eloquently and convincingly. 42 00:04:39,640 --> 00:04:51,400 And I have to say that the the few sparks of political life left in me made an uneasy glow when I thought about holding this seminar, 43 00:04:51,400 --> 00:04:55,629 either during the election campaign or just before the election campaign, 44 00:04:55,630 --> 00:05:01,970 with a great deal of possibility of people getting the wrong end of the stick. 45 00:05:03,940 --> 00:05:12,610 But we had no idea when we when we chose this time after the election, that we would be fetching up with a kumbaya government, 46 00:05:12,610 --> 00:05:25,090 with a government of of all the talents, which seems intent on on showing the rest of Europe how nice and decent, decent and congenial it is. 47 00:05:25,390 --> 00:05:33,490 I don't think that will actually stop David or Steven expressing some robust views this afternoon. 48 00:05:34,240 --> 00:05:36,520 And what we will do, if I may, 49 00:05:36,520 --> 00:05:45,550 is is ask David to speak for about 10 minutes and then Steven and then allow ourselves to be provoked into some conversation. 50 00:05:45,700 --> 00:05:56,950 David, you might start your. Thank you very much, Chris, and for inviting me down for this splendid occasion. 51 00:05:57,130 --> 00:06:02,740 And as you said yourself, quite a lot has changed since you set the examination paper. 52 00:06:03,520 --> 00:06:06,610 When I was asked if it was called, it said options. 53 00:06:06,610 --> 00:06:14,970 What are the options for you policy for the new government. And at that time, I think it was sometime like back in February or March, 54 00:06:14,980 --> 00:06:19,719 it was sort of fairly reasonable for anyone who was an observer of the British 55 00:06:19,720 --> 00:06:24,400 political scene to surmise that there was going to be a hung parliament. 56 00:06:24,790 --> 00:06:28,809 But I have to say that I didn't. And nor, of course, 57 00:06:28,810 --> 00:06:33,910 to the two leaders of that coalition government at that time believe that there was 58 00:06:33,910 --> 00:06:38,770 even the slightest chance that there would be the coalition government we now have. 59 00:06:39,550 --> 00:06:45,250 And of course, they both campaigned in a sense that made it very seem very unlikely. 60 00:06:46,050 --> 00:06:58,190 And so the fact that we've now got a fully fledged coalition is a complete role that saw this alliance since the time this this lecture was scheduled. 61 00:06:58,210 --> 00:07:05,380 And the other thing that's happened since the time the lecture was scheduled is that we have a full blown sovereign debt crisis in Europe, 62 00:07:05,380 --> 00:07:09,550 which was only very faintly discernible at the time. 63 00:07:10,270 --> 00:07:21,360 I was invited. We were invited down here. It was really a cloud the size of a man's hand, a Greek man's hand, of course, at the time. 64 00:07:21,730 --> 00:07:25,390 And now, of course, it dominates EU discourse. 65 00:07:25,930 --> 00:07:33,000 And so it's a good reminder of Harold MacMillan's great saying about events steered by events. 66 00:07:33,190 --> 00:07:38,740 The thing that he really worried about and in this case, things have changed a lot. 67 00:07:39,370 --> 00:07:43,160 And he's trying to answer the question. I'll try and answer it in two different ways. 68 00:07:43,180 --> 00:07:53,050 Firstly, from what I would call a narrow British political perspective, and then from a wider European perspective, 69 00:07:53,410 --> 00:08:03,340 from the narrow British perspective, I would sort of divide the possibilities up into four options, not all as likely as the others. 70 00:08:03,760 --> 00:08:08,020 The first pair are the totally conflicting, 71 00:08:08,020 --> 00:08:16,720 contradictory options set out respectively in the two parties manifestos, and they are now allied in government. 72 00:08:17,860 --> 00:08:27,970 The Conservative Manifesto option was really little more than a long list of the things the EU should not do or should stop doing, 73 00:08:29,140 --> 00:08:35,260 or at least stop doing them in the UK. There was almost nothing constructive. 74 00:08:36,100 --> 00:08:40,900 Repatriation referendum locks on the transfer of powers to the EU. 75 00:08:41,410 --> 00:08:51,069 The Sovereignty Act, likely to challenge the primacy of EU law were the order of the day and the EU was to be dragged back into the long, 76 00:08:51,070 --> 00:08:59,110 dark tunnel of institutional bickering from which it had only just escaped with the entry into force of Lisbon. 77 00:08:59,950 --> 00:09:04,960 Down that road, in my view, they very little except confrontation, 78 00:09:05,380 --> 00:09:13,420 isolation of the UK and probably ultimately humiliation of the sort we suffered in the 1970 475 79 00:09:13,420 --> 00:09:22,059 renegotiation when a an outcome was reached which had to be dressed up as a mighty victory, 80 00:09:22,060 --> 00:09:30,310 even though it wasn't anything of the sort. Luckily, little of this agenda apart from the referendum lock, 81 00:09:30,790 --> 00:09:38,590 which I have to say I suspect is just as likely to lock in the people who introduce it as to lock out the people in Brussels. 82 00:09:39,310 --> 00:09:45,460 Nevertheless, nothing apart from that has survived the triage of the coalition agreement. 83 00:09:46,180 --> 00:09:54,820 But but where one thing and that is the possibility that much of that agenda will simply be stored away in a cupboard, 84 00:09:55,390 --> 00:10:00,700 a club in the closet to be brought out again at the time of the next general election, 85 00:10:00,940 --> 00:10:10,840 whenever that may be to use against both the Lib Dem partners in the Coalition and of course to ward off the horrors of UKIP and the BNP. 86 00:10:12,430 --> 00:10:18,100 Now the second option, the Lib Dem manifesto was a pretty classical British pro-European one, 87 00:10:18,400 --> 00:10:25,540 such as either the Conservatives or the Labour Party might have espoused at different times over the last 40 years, 88 00:10:25,930 --> 00:10:28,190 but were no longer bold enough to do so. 89 00:10:28,210 --> 00:10:38,710 No, the only trace of Euroscepticism was the admission that joining the euro was not for tomorrow or even next year. 90 00:10:39,670 --> 00:10:48,580 That's Agenda two has not found much of a place in the Coalition agreement apart from a negative firming up of the self. 91 00:10:48,630 --> 00:10:52,070 Denying approach to the euro. 92 00:10:53,390 --> 00:11:03,450 The third and fourth options are more reactive than proactive and where I suggest a good deal more likely to transpire than either of the first two. 93 00:11:03,470 --> 00:11:10,880 The third will consist could consist of steering a zigzag course between the first two. 94 00:11:11,960 --> 00:11:17,210 Thus, any step deemed by any substantial Eurosceptic element in the Conservative Party as 95 00:11:17,210 --> 00:11:22,850 pro-European or integrationist would be matched by some step taken to please them. 96 00:11:23,510 --> 00:11:27,110 An opt out or a veto of something requiring unanimity. 97 00:11:27,710 --> 00:11:35,570 That sort of policy, if implemented, will infuriate our partners as being both unpredictable and unprincipled. 98 00:11:36,350 --> 00:11:43,610 The fourth option, and I think I could say I fear the most likely one to be adopted, 99 00:11:44,030 --> 00:11:48,740 will be effectively to have no general policy towards the EU at all. 100 00:11:49,730 --> 00:11:53,870 To elevate pragmatism into a defining principle. 101 00:11:54,470 --> 00:11:57,950 To give up any attempt to shape EU policy formulation. 102 00:11:57,980 --> 00:12:03,710 This approach, perhaps reflected in the void where EU policy should have been in the Queen's Speech, 103 00:12:04,190 --> 00:12:14,419 would amount to conceding that the two parties in the Coalition found it just too difficult to formulate an overall EU policy in advance of being 104 00:12:14,420 --> 00:12:22,880 forced to agree to elements of policy by the action of others the Commission or France or Germany or some other grouping of Member States. 105 00:12:23,810 --> 00:12:31,280 The other member states would live with this, but they would neither respect it nor would they pay very much attention to it. 106 00:12:32,480 --> 00:12:34,790 Well, turning now and you will gather, 107 00:12:34,790 --> 00:12:44,930 that's a slightly gloomy view of the narrow political prospect of the options in the narrow British domestic party terms. 108 00:12:45,320 --> 00:12:48,590 Turning now to the broader, more genuinely European agenda, 109 00:12:49,220 --> 00:12:58,340 what strikes me looking at the what surrounds us is by how much they buy is that that there is that 110 00:12:58,760 --> 00:13:05,900 this is a time when your British government could get its European act together and should be doing so. 111 00:13:06,800 --> 00:13:11,660 For one thing, there is a leadership vacuum at the heart of Europe. 112 00:13:12,170 --> 00:13:20,000 The French and Germans are frequently at odds, and the Commission has lost much of its lustre and influence. 113 00:13:20,810 --> 00:13:27,320 It's a pretty odd time if you look at it in a historical context, for the British to withdraw into the wings. 114 00:13:28,400 --> 00:13:33,530 Europe needs to regain some of the leadership role in climate change. 115 00:13:33,530 --> 00:13:40,129 And I'll go over here now what I would think a broad European agenda could be, 116 00:13:40,130 --> 00:13:45,500 it needs to to regain some of the leadership role in the climate change that slipped away from 117 00:13:45,500 --> 00:13:51,740 its grasp at Copenhagen and to complete the flawed and inadequate outcome of that meeting. 118 00:13:52,010 --> 00:13:57,470 And that's probably going to take longer than the period between now and the Cancun meeting in December. 119 00:13:58,040 --> 00:14:05,029 It needs to continue to press for freer and fairer world trade towards and to revive 120 00:14:05,030 --> 00:14:10,970 the Doha Round as part of a global exit route from the financial and economic crisis. 121 00:14:11,690 --> 00:14:18,860 It needs to persevere with its own enlargement as a key element of stabilising the Balkans and fulfilling 122 00:14:18,860 --> 00:14:24,590 the commitment to negotiate in good faith with non-member countries in the Balkans and with Turkey. 123 00:14:25,160 --> 00:14:29,569 It needs gradually to make a reality of its common foreign and security policy, 124 00:14:29,570 --> 00:14:39,080 both organisationally and by developing coherent, firm policies of engagement towards Russia and in the Middle East. 125 00:14:39,650 --> 00:14:46,760 It needs an effective commission to roll back some of the state departures of the crisis we are going through to 126 00:14:46,760 --> 00:14:53,810 complete the single market and to strike the right balance between regulation at the European level and free markets. 127 00:14:54,260 --> 00:15:03,920 It needs to work for a rules based international community with effective multilateral institutions and greater representation of the emerging powers, 128 00:15:04,220 --> 00:15:07,640 even if that has to be, in some cases, at Europe's expense. 129 00:15:08,090 --> 00:15:13,309 It needs to restore its credibility as a partner in the transatlantic dialogue 130 00:15:13,310 --> 00:15:18,260 with an American president who actually wants to see Europe punching its weight. 131 00:15:19,100 --> 00:15:22,040 So there you are. That is an agenda. 132 00:15:23,090 --> 00:15:34,040 Now, every one of those policy objectives is, in my view, entirely consistent with British interests and with the wider European interest. 133 00:15:34,580 --> 00:15:41,899 So should we not be arguing for a policy option for our new coalition government that weaves 134 00:15:41,900 --> 00:15:48,520 them together into a coherent whole and presents it publicly and presents it positively in. 135 00:15:48,570 --> 00:15:57,150 In public as a way in which in a way which does not leave the field clear to a heavily Eurosceptic press and to a by now, 136 00:15:57,720 --> 00:16:00,810 I would say rather mildly Eurosceptic public, 137 00:16:00,810 --> 00:16:09,150 albeit one the public that is that doesn't seem to find these European issues uppermost in their minds when they come to vote. 138 00:16:10,210 --> 00:16:14,400 Now, I admit I have so far flunked two important issues. 139 00:16:14,910 --> 00:16:20,640 The first is Britain's role in the European financial crisis, the sovereign debt crisis. 140 00:16:21,690 --> 00:16:27,570 I think that because I really cannot see how Britain can or should hope to play much of a role 141 00:16:27,840 --> 00:16:34,290 in the debate now raging on how to tighten the disciplines of the Eurozone institutionally. 142 00:16:34,590 --> 00:16:40,290 This is, I would guess, more likely to play out in some use of the Lisbon Treaties provisions for 143 00:16:40,290 --> 00:16:46,349 enhanced cooperation rather than in any attempt to have overall treaty change, 144 00:16:46,350 --> 00:16:53,130 which in any case, judging by the time it took to get Lisbon ratified, would at the very best take quite a few years, 145 00:16:53,370 --> 00:17:05,400 by which time you would know very well whether or not the crisis had come to a bad or a reasonably benign end institutionally. 146 00:17:06,570 --> 00:17:12,270 So I think the enhanced cooperation line is what is more likely than the other. 147 00:17:12,960 --> 00:17:14,790 What we cannot afford. However, 148 00:17:14,970 --> 00:17:25,560 during the period when the members of the eurozone are working out just how far they're prepared to go in the sense of greater discipline is carping, 149 00:17:25,560 --> 00:17:35,730 criticism or schadenfreude. As our closest international trading partners go through what will be what is a pretty agonising experience? 150 00:17:35,940 --> 00:17:41,490 They will be very sensitive during this period and we ought to be sensitive about their sensitivity. 151 00:17:42,360 --> 00:17:49,220 The second issue I ducked is an old friend, or if you can call anything to do with the EU budget a friend. 152 00:17:49,230 --> 00:17:51,719 It is something we are all, alas, 153 00:17:51,720 --> 00:18:02,190 all too familiar with on which important negotiations and decisions will take place in 2011 and 2012, i.e. not very far away. 154 00:18:02,790 --> 00:18:05,910 They won't be at all easy. They never are. 155 00:18:06,060 --> 00:18:09,990 Why are they not easy? Because this is a zero sum game. 156 00:18:10,770 --> 00:18:15,000 If you pay more, if you pay less, somebody else has to pay more. 157 00:18:15,780 --> 00:18:19,230 It is an AR rule of EU budget negotiations. 158 00:18:19,830 --> 00:18:23,940 All talk about larger cakes and that sort of thing goes for nothing. 159 00:18:24,810 --> 00:18:34,890 Of one thing we can be pretty sure they will not in the present and prospective fiscal climate be any effective pressure for a much larger EU budget. 160 00:18:35,700 --> 00:18:40,590 I hope we will moderate our language about CAP reform. 161 00:18:40,980 --> 00:18:46,470 The normal British tone on that being that of rage and incomprehension. 162 00:18:46,980 --> 00:18:53,520 And that upsets our partners no end and does not actually influence them in a helpful way. 163 00:18:53,790 --> 00:18:59,430 It just directs their attention even more obsessively towards our rebate. 164 00:19:00,420 --> 00:19:09,180 There is quite wide support for reducing the proportion of the budget that goes on agriculture steadily but not dramatically, 165 00:19:09,720 --> 00:19:14,550 and increasing what goes into areas such as research and energy security. 166 00:19:14,850 --> 00:19:19,469 And that would be very much in our interest and I hope therefore that we will approach this 167 00:19:19,470 --> 00:19:27,660 negotiation in a much more calm and collegiate spirit than we have done on past occasions. 168 00:19:27,960 --> 00:19:31,170 Some hope, you might say, but nevertheless I'm going to express it. 169 00:19:31,680 --> 00:19:37,319 And I believe a relatively low key budget negotiation without excessive histrionics would be a 170 00:19:37,320 --> 00:19:45,480 better option for our interests than in the organising another year or two of trench warfare. 171 00:19:46,170 --> 00:19:57,059 Now, perhaps all this is a bit unrealistic, but I do feel it is time, as Chancellor Chris Patten has said and is doing to ask, 172 00:19:57,060 --> 00:20:03,510 that we look at all the options and not stay stuck in the old grooves along which we've run too 173 00:20:03,510 --> 00:20:09,060 long and which are well summed up in the four narrow options which I spoke at the beginning. 174 00:20:14,420 --> 00:20:22,100 What I would like to add my thanks very much to to Chris Patten and his Anthony for the invitation and to all of you for for being here. 175 00:20:22,130 --> 00:20:27,920 I think there's been actually a pretty fair continuity in British policy towards the 176 00:20:27,920 --> 00:20:33,140 European community in the European Union since we since we joined the rhetoric changes. 177 00:20:33,150 --> 00:20:38,960 But the reality is not the one that sometimes caricatured by our partners that all we want is a trading area. 178 00:20:39,260 --> 00:20:44,840 I think we do want a political Europe as well as an economic Europe, but we want a Europe that is run by governments. 179 00:20:45,290 --> 00:20:47,230 The view of successive British prime ministers. 180 00:20:47,240 --> 00:20:55,580 It was Tony Blair's view and I worked for him and John Major's when I worked for him is that basically the European Union should be run by France, 181 00:20:55,580 --> 00:21:00,680 Britain and Germany and the European Commission, of which Chris Patten was a distinguished member, 182 00:21:00,860 --> 00:21:07,220 is there is a kind of super bureaucracy and I don't think this Government will be any different in that view. 183 00:21:07,820 --> 00:21:13,910 Just to be look at a few of the things that are in the joint programme of the Coalition. 184 00:21:14,270 --> 00:21:21,930 First of all, that there should be a referendum on future transfers of sovereignty from Britain to Brussels. 185 00:21:21,950 --> 00:21:27,170 I think the Government's aim is hopefully to have legislation enacted by next 186 00:21:27,560 --> 00:21:32,660 spring that would obviously encompass any future moves to change the Treaties, 187 00:21:32,660 --> 00:21:39,770 with one notable exception, which is the governments. It is not the Government's intention to include in the requirement for a referendum. 188 00:21:40,580 --> 00:21:48,799 Future treaty change is devoted solely to enlargement, which means they remain committed to the same enlargement agenda as their predecessors, 189 00:21:48,800 --> 00:21:55,160 including to Turkey, of which I think the three of us certainly are strong supporters. 190 00:21:55,430 --> 00:22:04,350 That means that the Government may actually, when it comes to the ratification of of the most likely imminent enlargement treaty, 191 00:22:04,370 --> 00:22:10,190 namely to Croatia, may find itself having a row about Europe with its own Eurosceptic backbenches, 192 00:22:10,490 --> 00:22:16,399 because one of the things that will be in the Croatian Treaty of Accession are all those protocols to the Lisbon Treaty, 193 00:22:16,400 --> 00:22:19,490 which the Irish secured as the price for getting the second yes. 194 00:22:19,490 --> 00:22:25,280 In that second referendum. And I think a lot of people on the conservative backbenches will argue that because 195 00:22:25,280 --> 00:22:29,719 the Lisbon Treaty bits of these protocols form part of the Croatian accession treaty, 196 00:22:29,720 --> 00:22:33,230 there should be a referendum. But the government, I gather, are determined to resist that. 197 00:22:34,190 --> 00:22:38,149 The other area in which they will promise referendums is that of the Lisbon Treaty, 198 00:22:38,150 --> 00:22:43,309 which basically enables what would previously have been done by treaty change 199 00:22:43,310 --> 00:22:47,299 to be done by agreement of the Member States and ratification by parliaments. 200 00:22:47,300 --> 00:22:50,540 And there are two areas where the Government will say that ratification by 201 00:22:50,870 --> 00:22:54,680 Parliament alone is not enough and that there would have to be a referendum. 202 00:22:55,340 --> 00:23:03,590 One is if there were to be a move on the part of our partners to move towards majority voting in foreign policy, 203 00:23:03,770 --> 00:23:08,450 and the other is on setting the overall level of the European budget. 204 00:23:09,500 --> 00:23:13,010 So that's one area and that's part of the most important. That's the thing the Coalition are agreed on. 205 00:23:13,160 --> 00:23:20,120 Second area where there is still a resolution to be had between the Lib Dems on the one hand and the Conservatives on the other, 206 00:23:20,840 --> 00:23:31,070 is the notion of a law enshrining sovereignty in in British law for the for the first time. 207 00:23:31,430 --> 00:23:34,340 Now, there are various ways in theory that you could you could do this. 208 00:23:34,610 --> 00:23:42,650 Some of those within the Conservative Party have advocated a sovereignty bill, want in some way to replicate the German constitution. 209 00:23:43,790 --> 00:23:49,969 Another two problems with that. One is, of course, that we don't have a written constitution in the way that the Germans have or the 210 00:23:49,970 --> 00:23:54,290 German constitution was there as a fact before Germany joined the European Union. 211 00:23:54,650 --> 00:24:01,220 The second is that whenever there has been a potential conflict between European law and the German constitution, 212 00:24:02,930 --> 00:24:07,220 the German body politic has moved to remove that possible friction. 213 00:24:07,940 --> 00:24:12,800 That was the case, which are this and will be much more than I do in the mid seventies, 214 00:24:13,190 --> 00:24:22,549 where a German trader found himself at loggerheads with European law but was supported by the German courts on the basis that he has 215 00:24:22,550 --> 00:24:30,230 certain human rights that European law was infringing and because there wasn't a corpus of human rights law in the European Union, 216 00:24:30,620 --> 00:24:33,860 the human rights should, under German constitutional law should prevail. 217 00:24:34,160 --> 00:24:38,120 Now, the Commission said, you've got to be joking, and if you persist in that view, 218 00:24:38,120 --> 00:24:42,350 we will clobber you, the Germans, as being in breach of your European treaty obligations. 219 00:24:42,680 --> 00:24:48,230 And the Germans backed down and in the mid-eighties regularise the position. 220 00:24:48,380 --> 00:24:53,750 And of course, one of the motives behind Germany's wish to see a charter of fundamental rights 221 00:24:54,020 --> 00:24:57,979 was that there would be a body of human rights law within the European Union. 222 00:24:57,980 --> 00:25:02,120 So in other words, the whole motivation in Germany is to avoid that conflict, 223 00:25:02,120 --> 00:25:09,830 whereas one has to reckon that in our system quite a lot of the motivation would be to have as much Ashgrove as possible. 224 00:25:10,220 --> 00:25:14,000 I think the kind of work that's being done at the moment within government. 225 00:25:14,070 --> 00:25:21,420 It would be on a piece of legislation that would basically restate in one legal document, in one law, 226 00:25:21,750 --> 00:25:30,750 existing European case law in terms of sovereignty versus national sovereignty versus shared sovereignty if. 227 00:25:31,680 --> 00:25:37,770 And that, I think, is the way the conservative base of the coalition will want to go if they get agreement from their Lib Dem partners. 228 00:25:37,770 --> 00:25:45,540 It remains to be seen how that again can be massaged and managed in terms of opinion on the backbenches within the Conservative Party. 229 00:25:46,080 --> 00:25:52,860 The other area, which was an area of potential conflict in the Conservative Manifesto and much less so under the Coalition Agreement, 230 00:25:53,160 --> 00:25:58,500 is the whole business of Britain opting in or opting out of cooperation in justice and home affairs, 231 00:25:58,980 --> 00:26:09,270 in particular the fight against international crime, terrorism and and so on, where the Government have decided to take an ad hoc approach. 232 00:26:10,080 --> 00:26:18,000 And I think the probably that we will find over time that policy doesn't much change between this government and its predecessor. 233 00:26:18,240 --> 00:26:21,780 But there is a five year rendezvous under the Lisbon Treaty at which a decision 234 00:26:21,780 --> 00:26:26,940 has to be taken as things move towards the full operation of community law. 235 00:26:27,180 --> 00:26:31,500 As to whether you opt in on that basis, giving full jurisdiction to the European Court or opt out, 236 00:26:32,220 --> 00:26:35,460 and that's obviously an issue further down the track. 237 00:26:36,630 --> 00:26:44,459 Just briefly, one other area which is confronting the new government and it touches on the things 238 00:26:44,460 --> 00:26:48,270 that David was was talking about in terms of where a government might position itself, 239 00:26:48,570 --> 00:26:55,410 is the whole formulation of the European External Action Service under Cathy Ashton. 240 00:26:56,040 --> 00:27:04,889 And this gives me the I don't know if any of you heard Cathy Ashton's European view of good will because there are not many good European jokes. 241 00:27:04,890 --> 00:27:08,220 But this is one and I heard it from Cathy Ashton herself. So it's from the horse's mouth. 242 00:27:08,640 --> 00:27:12,480 As you know, Henry Kissinger always said, you know, who do I bring up in Europe? 243 00:27:13,290 --> 00:27:20,969 There's not one single person I can ring up. So Cathy Ashton says to Hillary Clinton, look, now you Americans, here is I am the person. 244 00:27:20,970 --> 00:27:25,470 If you want one person to bring up in Europe, I am that person and I'll give you my mobile phone number. 245 00:27:25,950 --> 00:27:29,519 So Hillary Clinton goes back to Washington, then she goes to see President Obama, says, look, 246 00:27:29,520 --> 00:27:33,930 we've finally got the thing you've always wanted for this, this one European phone number. 247 00:27:34,500 --> 00:27:37,200 So Obama says, right, well, let's ring it. 248 00:27:37,920 --> 00:27:44,790 So Hillary Clinton does a number and she gets the voicemail and it says this is the voicemail of Cathy Ashton, 249 00:27:45,000 --> 00:27:50,250 European High Representative for Foreign Policy for French European Foreign Policy Press one for German. 250 00:27:55,390 --> 00:27:58,890 To literature anyway, I think. 251 00:27:59,100 --> 00:28:04,139 I mean it's a lot of argy bargy going on and as usual as the argy bargy over turf is between the commission, 252 00:28:04,140 --> 00:28:08,640 on the one hand, the Council on the other the European Parliament on the other. 253 00:28:09,420 --> 00:28:16,530 Britain has its own particular position, which is for again reasons of perception and sovereignty. 254 00:28:17,320 --> 00:28:26,430 These these European representations, these European embassies should not have anything to do with providing consular services, 255 00:28:26,430 --> 00:28:31,260 at least not for British subjects, which seems to me to be totally daft. 256 00:28:31,800 --> 00:28:36,629 You don't expect if you have a crash in France to be whisked off to a British hospital? 257 00:28:36,630 --> 00:28:42,660 It seems to me that if you're in need of consular services, particularly in some area where Britain isn't itself represented, 258 00:28:42,870 --> 00:28:47,100 to be able to rely on European consular services would be very sensible. 259 00:28:47,310 --> 00:28:53,670 And it's also the British position that on those residual areas where there is still a national six monthly presidency, 260 00:28:53,940 --> 00:29:03,450 then in international dealings, that presidency should take the lead, which again seems to me to be a triumph of ideology over over pragmatism. 261 00:29:04,560 --> 00:29:09,240 I think, like David, it's my final point that there are two issues that will really bedevil the government. 262 00:29:09,240 --> 00:29:17,040 One is the next round of negotiations on the European budget and the whole British rebate, the famous Margaret Thatcher rebate. 263 00:29:18,210 --> 00:29:21,780 And I think the Government's position, not least because of our own financial position, 264 00:29:21,780 --> 00:29:30,090 will be that we're not prepared to pay a penny more and they will certainly try in advance of that to get a group of countries, 265 00:29:30,330 --> 00:29:33,600 including Britain, to be what is known as the 1% club. 266 00:29:33,600 --> 00:29:38,940 In other words, that you maintain the ceiling of the European budget at its present level rather than increase it, 267 00:29:38,940 --> 00:29:40,410 there's likely to be support for that. 268 00:29:40,680 --> 00:29:47,190 But within that, most of our partners, for the reasons David gave, will want us to be reducing the amount of our rebate. 269 00:29:47,400 --> 00:29:50,340 And the other is the whole question of the future of the of the Eurozone. 270 00:29:50,350 --> 00:29:58,840 I mean, this government is nervous about economic governance done by the members of the Eurozone to the exclusion of of Britain. 271 00:29:58,860 --> 00:30:02,060 So far that they've avoided that. 272 00:30:02,070 --> 00:30:06,030 And obviously it makes a lot of sense on many issues from the perspective of our 273 00:30:06,030 --> 00:30:11,429 partners to have Britain as a of one of the biggest European economies inside the tent, 274 00:30:11,430 --> 00:30:15,810 although we can't be both inside the tent and not not paying. 275 00:30:16,110 --> 00:30:18,569 But I think one of the things that this government will be nervous about, 276 00:30:18,570 --> 00:30:23,490 as its predecessor, was, was the possibility of more things in governance terms, 277 00:30:23,490 --> 00:30:32,910 in institutional terms, in terms of economic governance being done within the Eurozone to the exclusion of of us as non-eurozone members. 278 00:30:33,090 --> 00:30:39,059 The main reason why John Major decided when he was prime minister to allow the single currency to go ahead, 279 00:30:39,060 --> 00:30:46,379 albeit with an opt out opt in for Britain was because he was advised correctly that there was nothing to stop those who wanted to 280 00:30:46,380 --> 00:30:52,680 go ahead and create a single currency to have a separate treaty outside the European Union treaties in which we would have no part. 281 00:30:52,890 --> 00:30:56,610 And it's perfectly possible for the eurozone countries to do something similar again. 282 00:30:56,610 --> 00:31:01,620 So I think that would be one of the things that that most whereas them other than that 283 00:31:01,620 --> 00:31:05,879 I suspect that this government and I think this is very much the Cameron psychology and 284 00:31:05,880 --> 00:31:09,450 certainly William Hague psychology will try on some of the areas that David has mentioned 285 00:31:09,450 --> 00:31:17,489 like climate change to try and put themselves in a in a in more of a leadership role, 286 00:31:17,490 --> 00:31:23,490 not least because they will be conscious of the deficit in terms of all the things which we find it difficult to participate in. 287 00:31:26,990 --> 00:31:37,910 Thank you both very much indeed. I wonder if I could start with what you regard as almost an inevitable row that is over the budget and the rebate, 288 00:31:38,750 --> 00:31:50,420 and given the views of others like the French on the budget and given the fact that public expenditure in every Member State, 289 00:31:50,420 --> 00:31:54,200 not least this one, will be being squeezed over the next few years. 290 00:31:54,950 --> 00:32:03,770 And given the usual calm and relaxed way in which the tabloids in this country deal with these issues. 291 00:32:04,100 --> 00:32:10,130 Is it really possible for any government to deal with the budget and the rebate in a low key way? 292 00:32:12,050 --> 00:32:18,410 Well, I think those. Low key and low key. I mean, of course, you're quite right. 293 00:32:19,010 --> 00:32:28,100 There will be screaming headlines and much beaching of press and so on about what's the 294 00:32:28,790 --> 00:32:33,980 united view of 26 member states that the rebate should either disappear or be much smaller. 295 00:32:34,490 --> 00:32:37,010 So difficult for them to come to that view because as I said, 296 00:32:37,010 --> 00:32:43,100 this is a zero sum game and if it disappeared or became much smaller, they would pay less. 297 00:32:43,640 --> 00:32:45,290 So of course they'll be in favour of it. 298 00:32:46,190 --> 00:32:55,580 But the most important thing to hang on to I've always found in these negotiations is to ensure that the rebate is a residual, 299 00:32:55,670 --> 00:32:57,560 which is what it in fact is. 300 00:32:57,950 --> 00:33:07,910 It is merely the consequence of a failure to reform the budget in a way which would make its impact fiscally more more equitable. 301 00:33:08,770 --> 00:33:14,570 And that's to say that people would pay according to their means and receive according to their needs, 302 00:33:14,990 --> 00:33:17,720 which it doesn't do at the moment, a transfer union. 303 00:33:18,470 --> 00:33:27,590 Well, anyway, it's something, but since they're not going to move that way, then it is very important that it is a residual. 304 00:33:27,590 --> 00:33:35,210 And isn't that we do not get into a situation where she's the first item on our agenda to get all 27 countries 305 00:33:35,420 --> 00:33:41,900 to swear in not going to touch the rebate because they won't swear that they will go for it if they if we. 306 00:33:42,110 --> 00:33:53,569 And also, as I say, I think if we adopt a somewhat less warlike approach to things like cap reform than we have in the past, 307 00:33:53,570 --> 00:34:00,170 which has been completely unrealistic, a lot of it, and we should not be supported by the British farming community at all. 308 00:34:00,170 --> 00:34:07,370 Anyway, then I think there is some chance that although tempers will get a little bit frayed, 309 00:34:07,700 --> 00:34:11,390 the temperature can be kept under sort of manageable proportions. 310 00:34:13,580 --> 00:34:21,649 Yeah. I think I mean, one of the reasons for not having too much of a go at the CFP is that actually you have to decide what your priorities are. 311 00:34:21,650 --> 00:34:27,650 And on most realistic scenarios, the continuation of the British rebate is worth more to us in financial terms of the 312 00:34:27,650 --> 00:34:31,250 kind of reform we might get in the short term on the Common Agricultural Policy. 313 00:34:31,250 --> 00:34:36,830 And in any case, I think I'm right in saying that historically we've achieved more CFP reform through 314 00:34:37,520 --> 00:34:42,120 the gas and now the WTO than we have by the kind of internal machinations of the EU, 315 00:34:42,120 --> 00:34:47,390 except those machinations that in turn respond to the requirements of the of the WTO. 316 00:34:47,750 --> 00:34:53,120 I think there are two things we want. One is I think it is it is quite important to have a narrative. 317 00:34:53,120 --> 00:34:59,720 I mean, our original narrative I mean, David knows better than me here he invented it was that you had of the nine member states, 318 00:35:00,410 --> 00:35:03,980 you had all but two who were getting more from the budget than they put in. 319 00:35:04,730 --> 00:35:12,740 And of those, the two who were net contributors, Germany and the UK, Germany was wealthy and the UK in relative terms was not. 320 00:35:13,310 --> 00:35:14,600 That's no longer the case. 321 00:35:14,600 --> 00:35:24,860 But the other bit of the of the rhetoric invented by Margaret Thatcher was that countries of like prosperity should more or less pay the same. 322 00:35:24,980 --> 00:35:26,270 Tony Blair used to say the same. 323 00:35:26,270 --> 00:35:31,759 In other words, I mean, I used to say to Tony Blair when I worked for him that this wonderful rebate that Margaret Thatcher got and he said, Well, 324 00:35:31,760 --> 00:35:36,050 if it's so wonderful, why is it that ever since we got it in 1984, 325 00:35:36,230 --> 00:35:40,220 we have still being paid more, even with the rebate into the budget than the French, 326 00:35:40,520 --> 00:35:46,099 even though for most of that period the French have been on in GDP per capita terms more prosperous than us in this financial period, 327 00:35:46,100 --> 00:35:52,540 for the first time ever in the history of the European Union, France will be paying net rather more than that, but it will be to be pretty marginal. 328 00:35:52,550 --> 00:35:58,550 So the first thing is to say that that the rebate simply deals and continues to deal with the historical inequity. 329 00:35:58,850 --> 00:36:01,999 Now, the other thing I think is to look at yes, again, I mean, 330 00:36:02,000 --> 00:36:05,239 I've always looked at in the past whether there is some kind of generalised 331 00:36:05,240 --> 00:36:10,340 scheme and not a specific British scheme that might nonetheless deliver results. 332 00:36:10,340 --> 00:36:14,540 Every time you've done the calculations in the past, the Treasury I've done the calculations. 333 00:36:14,540 --> 00:36:18,200 The general scheme applying in theory to all member states hasn't really deliver the goods. 334 00:36:18,680 --> 00:36:23,020 One of the disadvantages, though, of the present system is that we don't just have a rebate for the UK. 335 00:36:23,030 --> 00:36:31,309 There are enormously complicated mechanisms whereby the Germans don't contribute some of our rebate, 336 00:36:31,310 --> 00:36:36,590 the Dutch have some rebate, the Swedes have a rebate, so nobody apart from the experts can understand it. 337 00:36:36,590 --> 00:36:42,170 So if you could devise a generalised scheme which continued to deliver for us while not being totally British specific, 338 00:36:42,530 --> 00:36:51,740 that would again be a good part of a narrative to have rather than it just being 26 countries against us and the eurozone. 339 00:36:52,430 --> 00:37:00,260 And does it matter to us if the countries and I rather doubt this will happen, 340 00:37:01,070 --> 00:37:13,250 but if the members of the Eurozone adopt a Van Rompuy approach to economic governance in the Eurozone, I mean, 341 00:37:13,250 --> 00:37:21,209 if they want to share if the Bundestag wants to share management of the German budget with the assembly, 342 00:37:21,210 --> 00:37:27,050 and as you know, that's not something we would necessarily get excited about, is it? 343 00:37:28,220 --> 00:37:36,500 No, I don't think so. I mean, I've been I've been rather wrong on this whole issue because I was in Brussels when we when we joined the 344 00:37:36,500 --> 00:37:41,659 single currency and we did we did a paper from the UK representation for the benefit of the Labour government, 345 00:37:41,660 --> 00:37:44,360 which basically said and this was our prediction, 346 00:37:44,570 --> 00:37:48,469 that within a very short space of time the eurozone countries would be cooperating intensively across 347 00:37:48,470 --> 00:37:52,790 the whole range of policy and then we would find ourselves excluded and and at a disadvantage. 348 00:37:52,790 --> 00:37:59,420 And of course it simply hasn't happened. One reason is that, of course, the politics haven't followed the economics. 349 00:37:59,540 --> 00:38:01,100 I mean, Margaret Thatcher's objection, 350 00:38:01,400 --> 00:38:08,060 a part of our objection to the single currency was that she said you can't have a single currency without fiscal transfers from the rich to poor, 351 00:38:08,270 --> 00:38:12,440 and you can't have those fiscal transfers without political union. And the political union is unacceptable. 352 00:38:12,740 --> 00:38:17,540 And of course, one of the conditions of the establishment of the euro was no fiscal transfers within it. 353 00:38:17,840 --> 00:38:22,520 And so you had that gap between a monetary union on the one hand, and a real economic and political union on the. 354 00:38:22,910 --> 00:38:28,040 On the other. Now, maybe because of what's happened in Greece and elsewhere in a rather messy way, 355 00:38:28,040 --> 00:38:32,780 the European Eurozone will lurch towards that economic governance. 356 00:38:32,990 --> 00:38:39,590 I don't myself think that that means that we automatically lose out if it leads, which is, again, 357 00:38:39,590 --> 00:38:43,700 to be the fear so far unrealised that you then get beggar thy neighbour policies, 358 00:38:43,700 --> 00:38:48,290 i.e. why should you who are outside the eurozone not taking any of the responsibility for it? 359 00:38:48,290 --> 00:38:49,819 Enjoy the benefits of the single market. 360 00:38:49,820 --> 00:38:55,100 Then you are off to the races and you're off to something which potentially leads to the breakdown of the European Union as a whole. 361 00:38:55,100 --> 00:38:58,550 But we haven't had that. We haven't had that so far. 362 00:38:59,390 --> 00:39:06,379 The only the only thing on this where I think I've been right is where I followed the wise advice of one of the then British commissioners who said, 363 00:39:06,380 --> 00:39:07,700 as far as Britain is concerned, 364 00:39:08,630 --> 00:39:14,510 British public opinion will not be in favour of the euro unless unless we get to a situation where there is absolute crisis, 365 00:39:15,290 --> 00:39:20,299 in which case, you know, we'd be we would be rushing to join it and any government would change its policy as a result. 366 00:39:20,300 --> 00:39:28,670 But I do at the moment and again, I don't put faith in my predictions, but at the moment I don't see the circumstances in which that would happen, 367 00:39:28,670 --> 00:39:32,150 providing we do the things domestically that we need to do to put our economy straight. 368 00:39:32,870 --> 00:39:36,290 Yeah, I would I would respond more or less the same way. 369 00:39:37,370 --> 00:39:44,300 Adding this I fear, I mean, someone like me would like to see Britain join the euro one day. 370 00:39:44,780 --> 00:39:54,530 Of course, if the eurozone members on their own go ahead and adopt large elements of European governance, 371 00:39:54,890 --> 00:39:59,720 economic governance, then it just makes it even less likely that we will ever join. 372 00:40:00,260 --> 00:40:06,390 I think that could be extremely attractive to those who don't ever want us ever to join. 373 00:40:06,410 --> 00:40:12,260 So I think that one part at least of the Coalition will find that quite comfortable 374 00:40:13,040 --> 00:40:18,469 because it will seem to them to remove beyond any bounds of possibility, 375 00:40:18,470 --> 00:40:21,830 beyond referendums, beyond anything else, the fact that we will join. 376 00:40:22,250 --> 00:40:33,560 So that's the reason why I think we should we will take it fairly calmly, though I would say I would take it calmly, but with sadness. 377 00:40:34,790 --> 00:40:42,380 The other thing is that there are institutional difficulties down the road or could be. 378 00:40:42,830 --> 00:40:50,600 It really depends on whether if you're like to take the Merkel approach, you want to change the basic treaties, 379 00:40:50,600 --> 00:40:57,920 in this case the Maastricht Treaty, or rather the consolidated treaty that now exists with Lisbon and all the rest rolled into it. 380 00:40:58,580 --> 00:41:06,530 In which case, even though the British opt out would probably mean that Britain did not and certainly did not apply 381 00:41:06,530 --> 00:41:12,130 the provisions you were writing in to itself in the same way as they were applied to the eurozone. 382 00:41:12,500 --> 00:41:15,049 I suspect that would be very difficult here indeed, 383 00:41:15,050 --> 00:41:24,260 particularly given the referendum law in which the Eurosceptics would insist that since we were theoretically subscribing to this increase of powers, 384 00:41:24,470 --> 00:41:28,310 then we had to have a referendum on it and presumably they would campaign against. 385 00:41:28,310 --> 00:41:38,630 I don't. However, that's why I said I think myself that the way this will go is is is a way in which either they use the enhanced cooperation. 386 00:41:39,140 --> 00:41:47,900 Sorry for the jargon provisions of the Lisbon Treaty which and other earlier treaties which say that if a group of members 387 00:41:48,110 --> 00:41:55,040 want to go ahead on their own in a direction which is consistent with the overall objectives of the basic treaty, 388 00:41:55,310 --> 00:42:03,290 they can do so within the scope of the existing treaty and can subject themselves to tougher laws and so on. 389 00:42:03,530 --> 00:42:07,879 I think that's the most likely way the German lawyers and constitutional court 390 00:42:07,880 --> 00:42:12,320 will have a field day over all that about whether it can or can't be done. 391 00:42:12,590 --> 00:42:19,489 And I suspect one of the reasons why Shively and Merkel talked about treaty change was because they they are 392 00:42:19,490 --> 00:42:24,170 probably about as frightened of the German constitutional court as we are frightened of more treaty change. 393 00:42:24,800 --> 00:42:29,820 But I guess that that will be the direction. In which he's more likely to go. 394 00:42:29,840 --> 00:42:33,640 In which case I don't think he does pose great problems for us. 395 00:42:33,650 --> 00:42:38,120 I think we would, of course, be excluded from these mechanisms. 396 00:42:38,960 --> 00:42:48,070 But that exclusion might not prove to be particularly meaningful, since, in any rate, we are, strangely enough, there. 397 00:42:48,090 --> 00:42:56,540 You don't hear that in the Chancellor of the Exchequer speech that what he's going to stand up next week and do is to say by the end of this 398 00:42:56,540 --> 00:43:10,850 Parliament I will have bought Britain into conformity with the Maastricht criteria and waited to say it for a variety of slightly eccentric reasons. 399 00:43:11,870 --> 00:43:23,240 I found myself listening to indeed watching John Edwards speech in the Queen's Speech debate a couple of weeks ago. 400 00:43:24,020 --> 00:43:29,810 And John Redwood, as you know, is is limited in his enthusiasm for the European Union. 401 00:43:31,220 --> 00:43:38,870 And he made his speech saying how much he wanted to see the Eurozone crisis ended speedily, 402 00:43:38,870 --> 00:43:44,870 that the only way of doing that effectively was through fiscal union and the union of labour markets. 403 00:43:45,560 --> 00:43:49,910 And of course, he would support that happening for the eurozone countries. 404 00:43:50,390 --> 00:43:51,890 And of course, if that happened, 405 00:43:52,310 --> 00:44:02,510 then we would need to repatriate a number of powers from Brussels and and regard ourselves as part of a customs union and no more than that. 406 00:44:02,810 --> 00:44:09,080 So I think there is a I think on the Eurosceptic side, there is a certain enthusiasm for Europe heading in that direction. 407 00:44:09,320 --> 00:44:20,180 Let me ask you both one more question before inviting questions and comments from from all of you, or at least some of you. 408 00:44:20,670 --> 00:44:35,390 And it's generally an accepted observation of the commentariat that Germany has changed fundamentally in the last few years, 409 00:44:36,140 --> 00:44:39,260 and that Germany now behaves in the European Union, 410 00:44:39,500 --> 00:44:40,760 just like France or Britain, 411 00:44:41,840 --> 00:44:53,690 that Germany no longer regards its own national interest as synonymous with whatever other people say is Europe's interest. 412 00:44:54,620 --> 00:44:55,970 Do you think that's true? 413 00:44:56,840 --> 00:45:06,200 And if it is true, what are the implications for our relationship with Europe and for Europe's development over the next years? 414 00:45:07,580 --> 00:45:15,890 Well, I don't actually think it's true in its most simplistic form, as you put it, and as the tabloids would put it at all. 415 00:45:16,490 --> 00:45:31,070 I think there is an underlying truth that Germany has moved away from a kind of almost automatic support for things that the European institutions, 416 00:45:31,310 --> 00:45:40,520 Brussels, the European Parliament, the European Commission wanted to taking a fairly critical view of any proposal that 417 00:45:40,520 --> 00:45:45,110 comes forward and deciding whether it was in the German interest to do that or not. 418 00:45:45,110 --> 00:45:56,360 That to that extent I believe they have moved into a position which is more like the position of Britain and France, although the British position, 419 00:45:56,360 --> 00:46:04,729 oddly enough, particularly when Euroscepticism is in the ascendant, has had an extraordinary capacity to be ideologically driven by. 420 00:46:04,730 --> 00:46:08,180 Some of my friends in Brussels used to say to me, but I was there. 421 00:46:08,180 --> 00:46:13,130 We were brought up school to believe that the British were pragmatic and that we were a lot of ideologues. 422 00:46:13,140 --> 00:46:18,230 And now we find ourselves living in a European community in which you're the ideologues and we're the pragmatists. 423 00:46:18,950 --> 00:46:20,270 There's a lot of truth in that. 424 00:46:20,600 --> 00:46:30,150 But where I don't think the the story about Germany is true is I don't think that they are in exactly the same position as Britain and France. 425 00:46:30,170 --> 00:46:35,150 Take, for example, the vexed issue in the common foreign and security policy area of the use of force. 426 00:46:35,450 --> 00:46:39,890 There quite clearly not in the same position as Britain and France over the use of force, 427 00:46:40,400 --> 00:46:46,940 whether they might agree in theory, in the particular circumstances, that force had to be used. 428 00:46:46,940 --> 00:46:51,559 It wouldn't necessarily mean they would want to be the people who used it, whereas the British and the French, 429 00:46:51,560 --> 00:46:53,810 if they came to the conclusion that force had to be used, 430 00:46:54,110 --> 00:46:59,270 would have less difficulty about deciding that they were the people who should be part of using it. 431 00:46:59,870 --> 00:47:04,160 So there is there are quite big, big differences there. 432 00:47:04,820 --> 00:47:11,780 And I think the whole German scene is far more complex than anything that is perceived by the British tabloid press. 433 00:47:11,780 --> 00:47:18,200 But that's not a big change since The Daily Mail was attempting to tell us what German policy was in 1895. 434 00:47:18,200 --> 00:47:24,799 I remember rightly and contributed heavily to the run up to the First World War by by its efforts. 435 00:47:24,800 --> 00:47:28,390 In so doing, though, they were given plenty of help from. The other side, too. 436 00:47:28,960 --> 00:47:32,230 So I'm afraid the British press is not going to be a good guide to this. 437 00:47:32,230 --> 00:47:38,080 But I think we ought to be very, very careful about stigmatising German policy in that way. 438 00:47:38,440 --> 00:47:47,200 And also, quite honestly, the person who is who is always compared to is Helmut Kohl. 439 00:47:47,860 --> 00:47:51,400 And Helmut Kohl actually was quite exceptional, even as a German chancellor, 440 00:47:52,180 --> 00:48:02,920 Helmut Schmidt did not take that particular sort of line of, you know, of what comes what is done in Brussels is good for Germany. 441 00:48:02,950 --> 00:48:08,050 He was much more critical and there were other German chancellors who who were too. 442 00:48:08,650 --> 00:48:15,210 And Schroeder certainly didn't. So I don't think I really don't think I think it's oversimplistic. 443 00:48:15,950 --> 00:48:18,999 Yeah. I mean, I remember being in meetings between John Major and Helmut Kohl. 444 00:48:19,000 --> 00:48:24,309 Helmut Kohl said, you know, that I and Francis Mitterrand are the last generation who will have what, 445 00:48:24,310 --> 00:48:29,049 in effect you might call the money vision of Europe. And it might survive for one generation after us. 446 00:48:29,050 --> 00:48:32,530 But after that, it will it will go. I mean, I think two things happened, obviously, 447 00:48:32,530 --> 00:48:40,570 which which affected German interest in European Union in the money sense and diminished German interest in the European Union. 448 00:48:40,930 --> 00:48:47,559 One, of course, was the collapse of the Soviet Union and therefore the collapse of the government in terms of across its borders threatened Germany. 449 00:48:47,560 --> 00:48:58,420 And the other was German reunification. But it seems to me that that Germany is no more self-interested than any other member state. 450 00:48:58,420 --> 00:49:03,040 And Angela merkel had an element of self-interest, 451 00:49:03,490 --> 00:49:11,750 given that the German banking sort of the Greek banking crisis would also have been a German banking crisis if the Greek economy had collapsed. 452 00:49:11,770 --> 00:49:12,520 But beyond that, 453 00:49:12,520 --> 00:49:19,300 it seems to me that actually a German sense of leadership responsibility within the European Union and commitment to it is still very strong. 454 00:49:20,350 --> 00:49:23,020 But David, just just before bringing in others, 455 00:49:23,290 --> 00:49:35,080 let me take some of your examples of what would constitute a positive leadership role for Britain in the European Union. 456 00:49:35,720 --> 00:49:39,790 And we want to go further and faster on climate change. 457 00:49:40,990 --> 00:49:42,850 How does German industry feel about that? 458 00:49:43,540 --> 00:49:53,110 We want to go we want to press for completing the enlargement agenda, particularly involving, of course, Turkey. 459 00:49:53,440 --> 00:49:56,950 How does Germany and France feel about that? 460 00:49:57,250 --> 00:50:02,860 We want a more effective and coherent policy on Russia. 461 00:50:03,970 --> 00:50:08,290 How does the German energy industry feel about that and about the Middle East? 462 00:50:08,710 --> 00:50:20,170 How does Germany feel about that? And aren't those all examples where what you would regard as a very effective leadership 463 00:50:20,170 --> 00:50:26,470 agenda for Britain in the European Union comes smack up against what Germany, 464 00:50:26,500 --> 00:50:30,220 as well as in some cases France would be arguing in the council. 465 00:50:30,850 --> 00:50:35,800 Yes, I think you've you've identified quite a few problems down that road. 466 00:50:36,460 --> 00:50:39,730 It would depend, of course, on the tone in which it was pursued. 467 00:50:40,030 --> 00:50:48,190 What I was pleading for, in a way, was to try to weave together these elements of policy into a coherent approach to the future of Europe, 468 00:50:48,940 --> 00:50:54,340 one which we don't need to be ashamed of, in which we don't have to simply approach on a piece by piece basis. 469 00:50:54,610 --> 00:50:59,860 But has in fact, it is what our German friends would call a gazumped concept. 470 00:51:00,700 --> 00:51:08,680 And why not? Now we the things you've identified, for example, for example, the climate change. 471 00:51:09,580 --> 00:51:22,150 It is, of course, a bit of a dirty little secret that if we went to 30% now after the after the recession has lowered our emissions quite sharply, 472 00:51:22,480 --> 00:51:27,820 the amount we would be going to would be much less than if we had gone to 30% two years ago. 473 00:51:29,350 --> 00:51:31,930 So the figures are all now out in the open. 474 00:51:32,170 --> 00:51:39,100 In fact it's a little bit beyond what 20% would have been if the recession hadn't come, but not a huge amount. 475 00:51:39,430 --> 00:51:45,280 So I think it's worth doing and I can't believe that it can't be managed in some way or another. 476 00:51:45,580 --> 00:51:51,880 Turkey, I think, is a moving is a moving subject both in France and in Germany. 477 00:51:51,890 --> 00:51:58,900 I don't think they're going to have a kind of conversion to Turkish membership overnight. 478 00:51:59,410 --> 00:52:05,440 But I think some of the things that are going on in Turkish foreign policy now illustrating both how important 479 00:52:05,440 --> 00:52:13,270 Turkey could be if it joined an enlarged European Union and also how risky it could be if we rejected it. 480 00:52:13,630 --> 00:52:15,880 And I think that may have some effect. 481 00:52:16,300 --> 00:52:27,310 The re-election or long re-election of President Sarkozy could be another one because he is really very far out in his opposition to this, his own. 482 00:52:27,450 --> 00:52:30,720 Prime Minister doesn't agree with it. His own Europe minister doesn't agree with it. 483 00:52:31,410 --> 00:52:35,910 The Socialist Party doesn't agree with it and could well be in the Allies in 2012. 484 00:52:36,330 --> 00:52:41,920 And the German position is much more nuanced than the French position on this, particularly the SPD. 485 00:52:42,480 --> 00:52:48,990 And of course, the steadily increasing, but still not huge numbers of ethnic Turks who vote in Germany. 486 00:52:49,230 --> 00:52:53,550 So I don't know. I think I think that that would be manageable. 487 00:52:53,790 --> 00:52:59,699 Similarly, on the Middle East, I think the former German position has, 488 00:52:59,700 --> 00:53:07,739 like so many other aspects of Israel's foreign policy being systematically destroyed by the Netanyahu government and 489 00:53:07,740 --> 00:53:14,010 is making it very difficult to sustain a position which says that we will never put the heat on Israel on anything. 490 00:53:15,150 --> 00:53:24,270 So all these all these things and on Russia, as long as we what we need to, I would argue, get away from is two schools of thought. 491 00:53:24,300 --> 00:53:30,900 One is you've got to be really tough with the Russians and behave as if it was the Cold War all over again and really sock it to them. 492 00:53:31,170 --> 00:53:38,610 And the other which says you can't possibly say a single word of criticism to the Russians to they might turn the gas taps off tomorrow. 493 00:53:39,270 --> 00:53:44,510 I think you could you could you ought to be able to produce a policy which is neither of those. 494 00:53:44,790 --> 00:53:50,969 But you will not do so unless Cathy Ashton quietly gets together with the French, the Germans, 495 00:53:50,970 --> 00:53:57,270 the British and the Poles and works out what that policy might be before public debate on it starts. 496 00:53:57,570 --> 00:54:02,840 I don't think it's impossible to do. I think elements of it are probably coming along now. 497 00:54:02,850 --> 00:54:10,140 We're going to see later this year whether the financing for Nabucco transpires or doesn't transpire. 498 00:54:10,350 --> 00:54:14,940 If it does, we will have moved a big step towards diversifying our energy supply. 499 00:54:15,240 --> 00:54:21,030 The whole question of interconnectors between member states, I believe quite a lot of them are now being built in fact, 500 00:54:21,030 --> 00:54:27,659 and will make the member states much less vulnerable in this country, which only will need to get on with producing much greater gas. 501 00:54:27,660 --> 00:54:34,590 Storage is absolutely ridiculous. We've only got about four days supply when the Germans have, I think 50 or 60 and so on. 502 00:54:34,590 --> 00:54:40,200 There are many of these elements which could make that a less difficult to deal with and it's always a moving scene. 503 00:54:41,310 --> 00:54:46,920 Stephen I just want to say one point on Turkey, which is I think I mean, I think if I if I'm right and I am right, 504 00:54:47,030 --> 00:54:53,580 that the government's intention is not to offer a referendum on treaty change for the purposes of of enlargement. 505 00:54:54,060 --> 00:55:01,320 That means there will be not only consistency of of British policy, in particular on on Turkey, but I think I mean, 506 00:55:01,980 --> 00:55:07,740 it's one area where the Blair government showed real leadership in Europe and hopefully a Cameron government might do likewise because I mean, 507 00:55:07,770 --> 00:55:13,350 I think it's one of those areas where both the Labour Party and the Conservative Party are 508 00:55:13,410 --> 00:55:17,730 sadly way out ahead of public opinion in terms of their support for enlargement to Turkey. 509 00:55:17,740 --> 00:55:23,790 And I think if we had a referendum in this country on Turkish accession, it would be very difficult to to win. 510 00:55:23,790 --> 00:55:30,180 And I happen to believe that it is a very important national as well as European interest, that we should continue to encourage Turkey's accession.