1. What are the key issues to do with the European Union which the new Labour government is going to have to face?

As the new Labour administration settles in, it is finding issues to do with the European Union pressing in for decisions from all directions. What is to be done about the euro? How are all the questions raised by the Treaty of Nice to be handled? What is to be done about the Rapid Reaction Force? How is reform of the Common Agricultural Policy and the Common Fisheries Policy to be tackled, or are they both to be left substantially in their present form? If enlargement of the EU is to take place, what impact is this going to have on the EU finances, and in particular on Britain’s net contribution to the EU budget? How is the UK government going to react to the proposals, currently on the table, for the adoption of an EU constitution in 2004 - unquestionably a major step towards the creation of a European state? What is going to be done, if anything, to reform the EU’s administrative processes, and to improve democratic accountability within its institutions? How, above all, is the new government going to avoid being distracted by all these pressing matters from doing what the electorate really wants to see happen, which is to see improvement in our own public services?


2. Will there be a referendum on the euro?

Those who believe that Britain should join the euro know that if this is to be done, a decision on holding a referendum needs to be taken quickly, so that the process of taking Britain into the Single Currency could be completed during the life of the current parliament. Current indications, however, suggest that the Labour leadership is not going to succumb to these arguments - and for good reason. If there was a referendum, the government would have to throw its full weight behind a "yes" vote. There is no guarantee, however, that this would be sufficient to achieve the result they wanted, as the recent referendum in Ireland on the Nice Treaty has shown. Here was yet another case - mirroring the referendum on the euro in Denmark in September 2000, and the recent vote in Switzerland on applying for EU membership - when almost the entire political establishment favoured a pro-EU course of action, only to find themselves on the losing side. Opinion - and the media - are far more evenly divided here than they were especially in Denmark and Ireland, much increasing the likelihood of a "no" vote.


3. What impact would a lost referendum have on the Labour government?

There are big risks for the Labour Party even if the government were to hold a referendum and to achieve a "yes" vote. It is clear from opinion polls that a large proportion of the electorate is against the Single Currency, many of them Labour voters, so a referendum could hardly fail to be a major divisive issue. These problems pale into insignificance, however, compared with the downside impact of a "no" vote. The credibility of the government might then suffer as fatal a blow as the one sustained by the Conservative government when sterling was ejected from the Exchange Rate Mechanism in September 1992. What is the sense for the Labour Party in taking the risk of handing to the Tories an opportunity to revive their fortunes by being on the winning side in a major confrontation such as this?


4. What is now to happen about the Treaty of Nice?

In typical undemocratic fashion, it appears that the EU Commission is going to ignore or try to reverse the result of the referendum on the Nice Treaty in Ireland, which showed a 54% to 46% majority in favour of rejection - and this in a country which, certainly compared to Britain, has done relatively very well out of the EU. It seems likely that if a referendum was held in most other EU countries, the same results might materialise. Nevertheless, despite such latent democratic opposition, Parliament is being pressurised into endorsing the Nice Treaty, even though many of its provisions are deeply unpopular, and dangerous to Britain’s interests. Of particular significance are the green light which the Nice Treaty gives to a "two speed" EU, marginalizing those who do not want a European super-state; the abolition of the veto in favour of Qualified Majority Voting in a large number of areas; anti-democratic muzzling of political parties which are not enthusiastic about the EU; the development of EU wide police and legal systems with very different traditions from our own; and, of course, the development of a centralising EU constitution, due for endorsement in 2004. There is little doubt that forcing all these provisions through will make the EU even more unpopular here - and elsewhere - than it is now.



5. How about the Rapid Reaction Force?

The development of the EU’s own armed force is not covered by the Treaty of Nice, but arrangements for its establishment have been proceeding in parallel. The Rapid Reaction Force has put the Labour government in an impossible position. On the one hand, Britain has been telling the Americans that we have no intention of undermining NATO. On the other, we have been promoting the Rapid Reaction Force in the EU among people, particularly in France, whose main intention is to disengage from NATO and to develop EU forces to a point where they can act independently. The dangers here are obvious. In the first place we may encourage American isolationism while at the same time running the risk of promoting the militarisation of the EU, thus encouraging a further arms race. Alternatively, in the light of current reductions in defence expenditures and the reluctance of the electorates in the EU to see arms expenditure rising, we may finish up with largely ineffective EU forces, with no other alliances in place on which we can fall back. It is hard to believe that any of these scenarios represents an improvement on the present position.


6. Is there to be reform of the Common Agricultural and Fisheries Policies?

Of much more immediate concern to most people in Britain is that the hugely wasteful, damaging, expensive, fraudulent and inefficient Common Agricultural Policy and Common Fisheries Policy should be reformed. It was clear at Nice that reform, particularly of the CAP, was the key prerequisite for enlargement of the EU, since Eastern Europe has huge farming communities. There are more farmers in Poland, for example, than in the whole of the existing EU. Nothing, however, was done to promote reform, largely because all the EU Member States which benefit from EU subsidies refused to contemplate seeing them reduced. The result is that the CAP and CFP are to continue substantially in their present form, consuming half the entire EU budget, and enraging all those who care about the countryside, the environment, and the effect of EU food dumping on Third World agriculture. No doubt the government will continue to declare that reform of the CAP and the CFP are important policy aims, but the chances are that in the foreseeable future, virtually nothing will be achieved.


7. What is to happen to Britain’s net contribution to the European Union?

Closely related, particularly to the future of the CAP, is the issue of Britain’s contribution to the EU budget. Britain has been a massive net contributor to the EU budget every year since we joined - with the single exception of 1975, the year when - by one of those curious coincidences which sometimes happen - the referendum took place on whether we should stay in what was then the Common Market. Proposals for enlarging the EU are going to demand reform of the EU budget, to enable subsidies to be paid to poorer East European applicant countries. No Member State, however, is prepared to have its current net receipts cut, while Germany, still the EU’s main paymaster, wants to see its net contribution reduced. In these circumstances, despite pressure from Berlin to cut the EU budget, there is a risk that Britain will become an even larger net contributor.


8. What impact will all these problems have on Enlargement?

The process of further enlarging the EU, which was originally timed to come to fruition, at least for the first wave of applicants, in 2004, is now looking increasingly unrealistic. There simply is not the political will among existing Member States to undertake the reforms necessary to make enlargement work. At the same time, a familiar pattern is reasserting itself. While the political elites among applicant countries are strongly in favour of joining the EU as soon as possible, generally almost regardless of the cost, their electorates are becoming increasingly unenthusiastic. The reasons are the same as those which have caused disenchantment among existing Member States - the EU’s remoteness, its lack of democratic accountability, and the relentless selfishness with which Member States promote their own interests at the expense of others. In the meantime, the real requirement of the East European applicant states is ignored. It is not subsidies which they need from the EU but the opportunity to export to it - precisely what is denied in far too many cases by the EU’s protectionist stance, particularly on agriculture.


9. What about Democracy?

Above all, the Labour government, in dealing with the EU, is going to be up against the EU’s main shortcoming, which is its lack of democratic legitimacy. Everyone agrees that there is a "democratic deficit", but there is no agreement about how to remove it, and no clear way ahead towards replicating, at an EU level, the sophisticated ways in which genuine democratic forms of rule work. It is no wonder that in these circumstances, particularly in Britain, with our longstanding and unbroken tradition of democratic self-government, there is such reluctance to see our well tried institutions being undermined and weakened by proposals for further integration into the EU. Our parliamentary democracy may have its failings, but it is infinitely more accountable than the EU Commission. The resounding electoral victory which the Labour Party has just won has provided the new government with the opportunity to fulfil the electorate’s expectations, particularly by delivering the improvements in public services which are so evidently needed. This is democracy in action, despite EU criticism of the Chancellor's increased public expenditure, which underlines the need for powers to be recovered from Brussels rather than more of them being ceded. The danger is that endless distracting and unproductive wrangling over EU issues in the coming years will undermine the new Labour government’s capacity to deliver on its promises. We must make sure that this does not happen.


Published by the Labour Euro-Safeguards Campaign

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