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Mr. Edward Leigh (Gainsborough): Will the Foreign Secretary give way?

Mr. Cook: I will happily give way, but if the hon. Gentleman had waited for the next paragraph, he would have got his answer.

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Mr. Leigh: Is it the Foreign Secretary's personal opinion that the euro needs a withholding tax to prosper?

Mr. Cook: No. Britain famously has differences with our partners over the draft directive on the taxation of savings. The directive was conceived long before the euro came into being.

Sir Michael Spicer (West Worcestershire): In that case, would the Foreign Secretary veto the introduction of such a tax?

Mr. Cook: I am happy to assure the House that we have no intention of agreeing to a tax on savings that does not protect the eurobond market in London. We believe that it is in the interests not only of Britain but of Europe that the market remains in a European location. It is not only Britain but our partners and other financial markets throughout Europe that would lose if the eurobond market in the City of London became uncompetitive aroundthe globe. Therefore, we will resist taxation of the international bond market to protect not just our interests but those of Europe.

We have put forward proposals to meet the objectives of the directive without applying a tax to the bond market. We believe that there are reasonable and sensible ways of meeting both the German concern over the evasion of tax on savings and the British concern to protect the City of London as an international market. My right hon. Friend the Chancellor will continue to maintain that position at a special meeting of ECOFIN that will be held in the margins of the Helsinki summit.

Sir Teddy Taylor (Rochford and Southend, East): On the subject of the code of conduct committee, does it not worry the Government that the report of the Primarolo group for the meeting on Wednesday will not be made public, although copies can be obtained if one telephones Brussels? Why do the Government say that the United Kingdom has undertaken to make the code of conduct principles apply in places such as the Channel Islands when, under the protocol, tax measures cannot be made to apply in the Channel Islands by the British Government? Do the Government believe that they have the power to implement those proposals or not?

Mr. Cook: We are clear with the European Union about the limits of our constitutional responsibilities and, therefore, any commitment that we give with regard to the Crown dependencies or the overseas territories, for which I am personally responsible, is clearly limited by our constitutional capacity to oversee the relevant areas of competence. I stress to the House that the code of conduct is a British initiative, and, indeed, as the hon. Member for Rochford and Southend, East (Sir T. Taylor) admits, the committee has a British chair. Together with British business, we are keen to ensure the acceptance of the principle that there should not be unfair competition in the form of special tax breaks for our competitors. It is in the interests of British industry that we see that through to success.

I turn now to the main items on the agenda of the summit for leaders. Britain goes to Helsinki with three strategic objectives for the discussions--first, to obtain agreement to the next major wave of enlargement; secondly, to obtain terms for the next intergovernmental

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conference which will keep it focused on enlargement and enable it to be completed in a reasonable time frame; and thirdly, to obtain a commitment to a stronger security system in Europe and a more effective capacity for Europe to handle crisis management.

Let me take enlargement first. There are already six countries in negotiations for accession to the European Union. That is a major undertaking, but progress has been good. By the end of the Finnish presidency, we will have opened negotiations on two thirds of the chapters of community law. In about half of those chapters, negotiations are now completed. Those negotiations have been co-operative, not confrontational. Both sides to the negotiations have a common interest in securing the success of enlargement.

At Helsinki, Britain will argue that we should now expand negotiations to include the remaining six countries in the accession process.

Dr. Norman A. Godman (Greenock and Inverclyde): I offer my compliments to my right hon. Friend on his work in ensuring that the enlargement programme proceeds as smoothly as possible. However, is it not the case that the Commission's target date of 2002 is now, to put it bluntly, unrealistic until certain institutions of the European Union have been reformed?

Mr. Cook: My hon. Friend is right to point out that we have to reform the institutions of the European Union to prepare it for enlargement. I shall deal with that point more fully when I reach the subject of the intergovernmental conference. I disagree that 2002 is an unrealistic objective. It is possible for us to complete the intergovernmental conference in the next year, but only if we keep its terms tightly focused on the issues necessary for enlargement. In the meantime, we are keen to get agreement that the other six countries should start negotiation.

Latvia and Lithuania have made good progress, and Slovakia would have been included in the first wave had its previous Government observed the standards of democracy and pluralism achieved by its current Government. Malta is well placed to join negotiations following the election of a Government committed to reviving that country's application.

My right hon. Friend the Prime Minister visited both Bulgaria and Romania during the Kosovo conflict and gave them our pledge that at Helsinki we would support the opening of negotiations for their countries. We do not underestimate the work that both countries have to do before they are ready for membership, but both Governments are realistic and recognise that the steps that they must take to prepare their countries for the EU are the same as those that they need to take to improve their citizens' prosperity and quality of life.

Mr. Tam Dalyell (Linlithgow): If Bulgaria and Romania are to improve the life of their citizens, has not something to be done about unblocking the Danube? There was a debate in Westminster Hall this morning about the whole Balkan problem, but is not unblocking the Danube of great importance for those two countries?

Mr. Cook: I agree absolutely, and the only country blocking the unblocking of the Danube is Serbia.

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We continue to make proposals that would allow the unblocking of the Danube to take place. We are willing to help and to provide the technical and financial help to remove the objects that block the river. The only obstacle to that at the moment is Serbia. However, both Bulgaria and Romania loyally supported the NATO and EU position throughout the Kosovo conflict. We owe it to them to open negotiations for membership at Helsinki.

Mrs. Alice Mahon (Halifax): I take the point that my right hon. Friend makes about the support that Bulgaria and Romania provided during the war. However, is he aware that, at a recent meeting of the North Atlantic Assembly in Amsterdam, a Member of the Romanian Parliament said, in a very regretful tone of voice, that 2,500 jobs had been lost in his constituency because the Danube was blocked? Given that NATO bombed those bridges, is there no way that assistance can be provided towards rebuilding them?

Mr. Cook: My hon. Friend is absolutely right. Both Romania and Bulgaria face real financial and economic costs as a result of the support that they gave us throughout the Kosovo conflict. Those costs arise because traffic is disrupted and because both countries have barges stranded on the wrong side of the bridges in Serbia. Those two countries have made real sacrifices to support the objectives that we pursued in Kosovo.

I can assure the House that we are ready to assist in unblocking the Danube. We want the river to be restored as a free international waterway. We are not prepared to help President Milosevic to claim credit that he does not deserve for the reconstruction of his country.

Mr. Bowen Wells (Hertford and Stortford): Ah.

Mr. Cook: I am slightly surprised that the hon. Gentleman should be surprised at that. If the Opposition want to give credit to President Milosevic, it would be helpful if they would come out into the open and say so.

Mr. Wells: My amazement at what the Foreign Secretary said stemmed from the fact that it seems that the condition for unblocking the Danube--of which I am very much in favour--is that Milosevic should be removed from power.

Mr. Cook: No.

Mr. Wells: That is what I was seeking assurance about.

Mr. Cook: The only person putting a condition on unblocking the Danube is President Milosevic, who is saying that he will not permit it unless we rebuild all the bridges. The Government cannot accept that bargain. I should be very surprised if any Opposition Member recommended that we accept it.

Britain will also be working at Helsinki for a declaration that recognises the status of Turkey as a candidate for EU membership. Negotiations on membership with Turkey will not be possible until it has made progress towards meeting the Copenhagen criteria on human rights. We welcome the improvements in human rights that are being made by the new Government, such as the removal of military judges from the security

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court, the amnesty for journalists convicted under the media laws, and the proposed removal of immunity for police and prison officers against prosecution.

Much more needs to be done, but we should recognise that the political forces in Turkey working for greater freedom and stronger human rights are also the political forces that look to Europe for their inspiration, and to which Europe should be holding out encouragement.

On Friday, talks begin at the United Nations to resolve the long-standing division of Cyprus. Progress in those talks will help create a climate in which it would be easier to gain support for the recognition of Turkey as a candidate country. Britain believes that Cyprus's accession to the European Union would be easier with a settlement that enabled it to join as a single, united island, but we do not believe that a solution to the division of the island should be a precondition for membership for the Republic of Cyprus. No third country has a veto on the accession of any candidate.

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