TUESDAY 30 NOVEMBER 1999 _________ Members present: Mr Donald Anderson, in the Chair Ms Diane Abbott Mr David Chidgey Sir Peter Emery Dr Norman A Godman Mr Eric Illsley Mr Andrew Mackinlay Sir David Madel Mr Ted Rowlands Sir John Stanley _________ MEMORANDUM SUBMITTED BY THE FOREIGN AND COMMONWEALTH OFFICE EXAMINATION OF WITNESSES THE RT HON ROBIN COOK, a Member of the House, Secretary of State for Foreign and Commonwealth Affairs, MR EMYR JONES PARRY, CMG, Political Director, and MR NIGEL SHEINWALD, Director, European Union, examined. Chairman 1. Secretary of State, can I again welcome you on behalf of the Committee and your two colleagues, Mr Jones Parry, who was with us very recently indeed, and Mr Sheinwald, director of the European Union. This is our traditional meeting on the eve of a European Council and equally it informs, we would hope, the parliamentary debate which will follow tomorrow. It had been assumed -- and this was covered in the helpful paper which the FCO supplied to us as the background to the Council -- that the key themes would be enlargement, the intergovernmental council and the European defence identity with Turkey obviously linked to the enlargement process; since when an amendment may have been moved. That is that the withholding tax now, it is said, threatens to not only affect the atmosphere of the Council in the sense of souring the atmosphere and turning some of our colleagues against the British position, but also it is said that there are problems with Spain in relation to Gibraltar and Spain is digging in on that. Let me ask first about your assessment of the extent to which the conflict over the withholding tax will eat up time which might have been used perhaps more productively and will also lead to a souring of the atmosphere at the Council. (Mr Cook) It certainly is not we who are saying that the issue of the withholding tax will sour the atmosphere at Helsinki. Our understanding is that the presidency currently envisages that there should be a special meeting of ECOFIN either on the first day or on the eve of the Helsinki Summit to look again at this issue. The issues of substance are well known. We are concerned that a withholding tax must not affect the attractiveness of the City of London as a place for international bond dealing. This is an issue not of competition between us and the rest of Europe; it is a competition between Europe and the rest of the world. That market came from New York in the 1960s when a similar tax was imposed by the Americans. We would not wish to see it leave Europe because of such a European tax. That is why we have proposed a number of different ways in which our concerns on the withholding tax will be met without undermining the objective of the Germans and others who wish to make sure that tax is not avoided by people putting it in other countries where they cannot tax the interest. 2. Will you propose a working paper showing ways in which the taxes generally can be harmonised and evasion avoided while still retaining the benefits to the City of London of that tax? (Mr Cook) We have made a number of proposals of other ways of handling it. If I can go back to first principles, we believe that the better way in which the problem identified by Germany could be handled is by increased banking transparency. The problem for Germany is that it is unable to work out where deposits may be by German savers and therefore unable to reassure itself that they are properly taxed. Greater banking transparency between the members of the European Union would therefore be one, in our view, practical way of tackling that problem. If the alternative route is favoured of imposing a Europe wide withholding tax, there are measures by which we can make sure that the international bond market in London is exempted and saved from the effect. We have put forward a number of proposals for that. They are still before the Committee. We will continue to work with the Committee to try and find a solution. 3. If there is no movement, we would veto any proposal? (Mr Cook) We are not going to agree to a directive that will impose a tax on the international bond market in London, no. 4. The assumption is that this will go to heads of government? (Mr Cook) As far as I understand at the present time, it will certainly go to an ECOFIN meeting in the March of the summit. In what shape or form or when it will appear on the heads of government summit, I myself at the present time do not know. 5. This course has already been covered without any serious compromise being acceptable. (Mr Cook) It is not unknown within the European Union for discussions to continue to the last minute. Chairman: I would like to turn to another area which may be souring relationships. Mr Mackinlay 6. I think there is growing concern right across the political spectrum in the House of Commons about the interests of Gibraltar and the feeling that they are not sufficiently being considered by Her Majesty's Government in relation to EU matters. Also, there have been recent reactions of the Spanish Government and perhaps too great a robustness by the Foreign and Commonwealth Office and probably of Parliament here. To what extent are Gibraltar's interests going to be raised at this conference and what opportunities have been there for the Gibraltar Government to make representations to you about this agenda? (Mr Cook) There is no part of the European continent which receives more of my attention per capita than Gibraltar. I would vigorously rebut any suggestion that its interests are in any way neglected. Secondly, we have made very strong representations to both Spain and the European Commission on behalf of Gibraltar and we will continue to do so whenever there is an appropriate cause to do so. Thirdly, there is nothing directly on the agenda at Helsinki which would have the word "Gibraltar" on the agenda item. We are of course pursuing our request to become incorporated in certain aspects of Schengen, and it is a limited application. We have made good progress on that with the Commission and with other Member States. As you are aware, Spain has concerns about the extent to which Gibraltar can be incorporated in Schengen. We have been engaged in negotiations with the Spanish Government for some months now. I cannot be certain we will reach agreement before Helsinki. It is a possibility but the Committee will understand that there is a limit to how much I can be drawn on what at present are the confidential negotiations between us. 7. I accept as a fact that you spend, in terms of energy, a disproportionate amount of time on Gibraltar. (Mr Cook) I would not say a disproportionate amount. It richly deserves it. It does get a lot. 8. Nevertheless, the fact is, as we speak, there is a continuing affront to the rights of United Kingdom citizens and the people of Gibraltar as well in one part of the European Union, namely on that border. I do not think it is a matter of dispute between us and the Foreign and Commonwealth Office that it is not the normal border controls; it is a standard hour. It does not matter if there are a lot of people going there or a small number of people going through in vehicles. That simply is not tolerable, is it? Did there not really ought to be this being raised at this because it is affecting our interests in a very substantial way? It is the gravity of it that I am trying to flag up. (Mr Cook) I absolutely agree with you on both the objectionable character in principle of what has happened at the border and on the practical effect on the people not just of Gibraltar but also of tens of thousands of Spanish citizens who live on the Spanish side of the border who also wish to have free movement to Gibraltar. You will be aware that many of the local communities have protested to Madrid about the impediment to trade and to the free movement of people that results from the obstructions at the border. We are seized of that matter. We are committed to pursuing it. I would only advise the Prime Minister to raise it at the Summit if I felt that that was the best way of unblocking the problem. In the meantime, we have pursued it first of all with both the previous and the new Commission. Indeed, it has been raised with Commissioner Vitorino who is responsible for this aspect of Commission law. We will continue to press the Commission to take action against Spain for what, in our judgment, is a clear default on the European Union law. Secondly, we continue to be in dialogue with the government of Spain and are looking for ways in which we can find a political solution, in the absence of which we will have to consider a legal one. 9. If I can move on to enlargement, Slovenia probably could be absorbed into the European Union and could fit it like a glove now. Estonia certainly could be absorbed because it is very small. Is there any likelihood of Slovenia and Estonia being given admission accession in advance of Poland, Hungary and the Czech Republic and would you consider that desirable? (Mr Cook) I would want to see as many countries admitted as quickly as possible but the answer to your question is it is possible. When we identified the first six countries, Poland, the Czech Republic, Hungary, Estonia, Slovenia plus Cyprus, we were quite explicit that this was not a block process. In other words, they would not proceed at the rate of all six together and they would not necessarily all be admitted as all six together. It was open to whichever of the applicant countries made the most and the swiftest progress to get in ahead of the others. Equally, ones who were not in that first wave would have the right to overtake if they made progress in catching up. In principle, the answer to your question is yes, any two of those six could come in before the others, but it would be invidious to try and speculate at this point which they might be. 10. When the pre-ins are approved, is there a difference between them and Poland, Hungary, the Czech Republic, Slovenia and Estonia? Is it not just a bigger group, as it were? Should we think in terms of that tranche? (Mr Cook) I would try and dissuade people from thinking in terms of a group and rather to think in terms of what are 12 individual countries with different characteristics. For instance, Slovakia, in terms of economic reform, is as well placed as, say, the Czech Republic. Slovakia was not included in the first wave of six because at the time the government of President Murcia was one which did not abide by the Copenhagen criteria. The new government has made very rapid progress on remedying some of that democratic deficit and that brings Slovakia hard on the heels of those earlier ones. In the case of Malta, which is likely to be approved also at Helsinki, Malta put its own application into abeyance as a political decision which has now been reversed following their general election. It is possible that some of those six, with application, could catch up on some of those who were ready in the first place. 11. The other area which the Committee are concerned about is Ukraine. I see at this Summit we are going to have the strategy for Ukraine. Why has it taken so long? I wonder what your thinking is about the pivotal nature of Ukraine, both in terms of the market, but also politically because I think amongst many colleagues here there is a feeling that there is a danger of it literally being left out in the political and commercial cold and this could have profound consequences for both Ukraine and Europe in years to come. I am expressing concern really. (Mr Cook) I would dispute, first of all, that it has taken a long time. If I recollect rightly, the concept of common strategies only stems from the Amsterdam Treaty and therefore since May of this year it has only been legally possible to draw them up. The first one we decided was in relation to Russia and I am sure that was the right priority. Ukraine is quite high up in the queue as we move quite quickly to adopt a common strategy, but on the substance of your question I have a lot of sympathy. I think we have to try and perform a feat of imagination, of looking at how the map of Europe will be drawn after enlargement and at that point Ukraine becomes our next neighbour. That is why it is important that as the process of accession for those who are in the process of application goes forward we should also look at ways in which we can strengthen and deepen our ties with those who would then be our neighbours. There are some highly relevant questions about movement across the borders between Poland and Ukraine which will need to be resolved as part of that. Mr Chidgey 12. I want to talk to you a little about some of the concepts of enlargement with the smaller states. I have had some feedback from those countries -- particularly, for example, Estonia -- that they are finding in the electorate at large in those countries there is some reticence now about the benefits to those smaller countries of joining the EU. I wondered whether you had come across this in your good offices and what reaction you might have to it, particularly the concern about loss of sovereignty and the loss of their independence in terms of currency. They have only recently recovered from their escape from the other empire to the east. I wonder whether this is an issue that has been brought to your attention or the Foreign Office's attention and what reassurance we can offer for the benefits to the Union, apart from defence of course. (Mr Cook) Membership of the European Union does not of course produce a commitment to collective defence. That would be a matter for NATO. I cannot say that any of the applicant countries at any level have expressed concern to me about joining the single currency because to most of them, quite rightly, that is a second stage. Membership of the European Union would not necessarily imply membership of the single currency and frankly I would have thought it unlikely in the early stages for many of these countries to do so. Of course in some countries there are those who have concerns about what it is necessary to do in order to become a member of the European Union. 13. Changing their legal system and their laws? (Mr Cook) The process of economic reform is not an easy one and some of it is painful and there are casualties along the way. In the case of one or two of the countries, of which Estonia is one, we have had to require quite substantial changes in the treatment of ethnic minorities, particularly in their case the Russian speakers. I think that has been good for Estonia. There are a lot of people in Estonia who would argue that for their country to succeed a third of the population of Russian speakers must feel part of that state and it has helped to reduce tensions with Russia, but I do not deny that there are people in those countries, including Latvia for instance, who are not best pleased at what the European Union requires by way of the Copenhagen criteria. Sir David Madel 14. Enlargement will be expensive. Will we have to give up our rebate as a consequence of enlargement? (Mr Cook) No, we have no intention of giving up our rebate. Indeed, the whole point of the Agenda 2000 exercise at Berlin was to try and create the headway for enlargement. That is why we sought to reduce the spending of both structural funds and the CAP. Your Committee will recall that as part of that package the British rebate was rolled forward for another financial perspective, so it is not technically possible for anybody else to reopen the question of the British rebate until 2006. 15. When Mr Prodi was asked about this by Der Spiegel as to whether we would have to give up our rebate and he said, "I assume so" that is faulty journalism? (Mr Cook) No. I am perfectly prepared to believe that Mr Prodi said such a thing. Mr Prodi would probably be against the rebate whether or not there was enlargement. The rebate does not have much continental support but it is important to Britain and we succeeded in keeping it at Berlin. 16. When we talk to countries who wish to join, are we making it clear to them that the European Union is economics and politics and there is no defence on the agenda; it is entirely an economic and political organisation? (Mr Cook) I think that is well understood. Indeed, a number of these countries -- I think probably the majority, if not all of them -- also have parallel applications to NATO so they understand the distinction. Mr Illsley 17. Could I ask whether there has been any movement in the application on the part of Cyprus and whether the difficulties still exist in relation to the divided island? Could I further ask you to expand on the points you put in your paper to us regarding the Commission perhaps recommending Turkey to become a candidate country and proposing a programme for Turkey in relation to accession partnership, screening and so forth? (Mr Cook) We will be strongly supporting the recognition of Turkey as a candidate for membership of the European Union. We had a very full discussion of this among the foreign ministers of the European Union at our informal meeting in Finland in September. I think it is fair to say that the great majority view there was that Turkey should be recognised as a candidate, but that it would not be possible to proceed to negotiations of accession until Turkey was in conformity with the Copenhagen criteria on democracy, human rights and the treatment of ethnic minorities. To be fair to the new government of Turkey, in the last few months some very interesting things have happened on that front. For instance, there has been a release of a number of people who were imprisoned under the media laws. There have been moves to restrict the passage of banned political parties, to remove the military personnel from the judges in the security court and also the proposal to remove the immunity of officers of the government, particularly police and prison officers, from prosecution has actually been very helpful. These steps are encouraging. There is a lot further to go, but we and Europe need to encourage those who are doing it and they look to Europe for their inspiration and their aspiration. I think the package by which we offered Turkey candidate status but only offered negotiations following further movement on these issues of democracy and human rights is one that would be valuable to Turkey and sensible for Europe. Cyprus remains very much the related question. Talks will commence on Friday in the United Nations about the division of the island. We have worked hard to get those talks started and it was very much Britain that pushed in the G8 for that initiative to be started rolling earlier this year. I hope they are successful and in our judgment it would be easier to absorb Cyprus into the European Union as one single, undivided island and that is what the Cypriots want for themselves. At the same time, we are quite clear that an end to the division of the island must not be a precondition of Cyprus's membership of the European Union; and that it would be unfair to the government of the Republic of Cyprus not to consider their application on its merits if we are unable to get agreement with the Turkish Cypriot sector as to an end to division. 18. Is there any cause for optimism for the Council that Turkey might be persuaded over its opposition to Cyprus's membership, thereby alleviating the Greek situation as well? (Mr Cook) We would certainly expect all candidate countries not to stand in the way of the application of any other candidate country. Dr Godman 19. How important is the question of the death sentence imposed on Abdullah Ocalan? If that were to be carried out, would it not strengthen the hostility of numerous Member States with regard to Turkey's candidacy? (Mr Cook) Britain and I think most of our partners individually and all of us collectively have stressed to Turkey our principal opposition to the death penalty in all circumstances and in all cases. Mr Ocalan currently has now lodged an appeal to the European Court of Human Rights. It is likely to be some time before that case is disposed of. I would just plead with the Committee a little bit for understanding here because we have all made very clear our position to Turkey and to the Turkish government. We none of us want to see Ocalan executed. It would be unhelpful in achieving that objective if we were to shout that message from the rooftops. 20. That makes good sense, if I may say so, but until that hearing at the European Court of Human Rights would it not make good sense to suspend Turkish candidacy, to take away its status as a candidate for membership of the European Union? (Mr Cook) It is well understood by many in the government in Turkey that, in applying the full Copenhagen criteria and in the European Union judging whether those criteria are being met in full, one of the issues we assess is whether there is continued use of the death penalty. 21. There is outright hostility amongst the peoples of the Member States. (Mr Cook) Absolutely. None of us applies the death penalty and we would all expect Member States not to apply the death penalty. Ms Abbott 22. I take it from what you have said that the decision of the Turkish Appeal Court on 20 November to uphold the death sentence on Abdullah Ocalan did not have any effect on the plans to start renegotiation? (Mr Cook) There are no plans to start negotiation. Perhaps I should stress again to the Committee that what is intended at Helsinki is that we recognise Turkey as a candidate country but we do not start negotiations until it is in compliance with the Copenhagen criteria on democracy, human rights and the treatment of ethnic minorities. 23. Despite what you have said about steps being taken, there was concern about the general human rights issue in Turkey just this weekend. I had a very good meeting with members of the Kurdish community who are very concerned about this issue. What specific undertakings about human rights are you seeking from Turkey in return for a declaration regarding its candidacy? (Mr Cook) First of all, can I stress that we are well aware and share those concerns about human rights within Turkey. As I said, there have been steps towards progress but there is a long way to go yet. We have to understand that the political forces in Turkey that seek recognition by Europe of Turkey's candidate status are the same political forces who are arguing in Turkey for reform of human rights and on democracy. I visited Aden Bodahl in hospital after he had been shot 14 times by those who were trying to stop his advocacy of democracy and fair treatment of the Kurdish population and he said to me in the hospital bed, "It is those of us who are arguing for more human rights and more democracy and freedom in Turkey who are the true Europeans and must be encouraged." That is why I think it is right to send a signal of support to those who are arguing for Turkey's European application whilst at the same time making a claim that that support cannot be taken further forward unless there is a modern approach to human rights democracy and ethnic minorities in Turkey. 24. What specific undertakings will you be requiring? (Mr Cook) In return for a recognition of a candidate status, no. In terms of starting negotiations, they would have to meet the full Copenhagen criteria which are very broad and very detailed. 25. You will be aware of the concern of the Kurdish community here and in the rest of Europe that in the US inspired drive to get Turkey in the human rights initiatives in relation to the Kurdish people may be swept to one side. (Mr Cook) First of all, the United States was not represented among in the discussions among ourselves; nor did anybody say, "What shall we do about Turkey to please the United States?" Secondly, on the question of neglecting it, quite the reverse. I think that the best guarantee for proper treatment of ethnic minorities in Turkey is for its application for membership of the European Union to be taken forward. We discussed earlier with Mr Chidgey the question of the Russian speakers within Estonia. They certainly were achieved only because it was a requirement for membership of the European Union. There will be similar, very strong requirements required of Turkey. Mr Chidgey 26. A few minutes ago you were talking about Cyprus and I think I am right in saying that you mentioned that the Foreign Office view was that the division of Cyprus should not be an obstacle to its application for membership of the EU. I want to question you on that because it would occur to me that it is difficult to say that the principles of democracy set out in the Copenhagen agreement are being followed if a divided country, which many of its citizens would say was not a democratically governed country, was allowed to join the EU in that state. There are questions of stability and also principle. (Mr Cook) I do not think anybody is questioning the quality of democracy in the Republic of Cyprus -- that is to say, the Greek Cypriot sector. It has fair and open elections and a vigorous political system. Nor is anybody arguing -- I most certainly am not -- that it would be better for Cyprus to remain divided. Indeed, the Greek Cypriots themselves are keen that the division should be resolved. Equally, I do not think it would be fair to hold the government of the Republic of Cyprus, which is that part which has de facto government of the Greek Cypriot part of the island, responsible for a failure to reach agreement if it was not their responsibility. 27. Is it not the case that it will take both sides to reach the agreement in the end and the incentive to do that will be the membership of the EU rather than already being members of the EU? (Mr Cook) That may well be an incentive that applies equally both ways. Indeed, one of the ironies about the present situation is that the Turkish Cypriot part of the island has actually a lot more to gain from membership than the Greek Cypriot part. I therefore regret that its political leadership is not supportive of the idea of the island joining the European Union as a single, integrated entity. Sir David Madel 28. If Turkey met the Copenhagen criteria and we were satisfied that Turkey had and yet Turkey said, "Nevertheless, we still wish to stay in northern Cyprus", what would the government's view be of that? (Mr Cook) We are looking some way down the track now. It is going to be quite a while before Turkey is able to start up negotiations on the basis that it has satisfied us on the Copenhagen criteria. I personally would be disappointed if by that point we had not resolved the question of the accession of Cyprus to the European Union, at which point Cyprus itself will be able to safeguard its own interests. It is certainly the case that it would greatly assist in progressing Turkey's negotiations at some future date if there was a resolution to the division of the island of Cyprus. 29. In interpreting the Copenhagen criteria, we are looking for peaceful withdrawal of Turkey from Cyprus? (Mr Cook) I would want to see a solution to the division of Cyprus and that requires Turkey to play its part, yes. 30. And withdraw? (Mr Cook) I am getting drawn here onto statements which are of a character on which I would wish to take legal advice before I could say whether that was necessarily a requirement of the Copenhagen criteria, but politically I have no doubt whatsoever that if Turkey wishes to play a full part in the European Union Turkey must assist in finding a solution to the division of the island. 31. In free elections in the north of Cyprus or in a referendum in the north of Cyprus, they might say, "Fine, we should join the European Union but nevertheless we wish Turkey to stay here." The northern Cypriots might say that. (Mr Cook) If they do, I would find it very hard to see how we are going to achieve a resolution of the division of the island which is what the talks are starting on on Friday. With respect, I do not think, given that those talks begin two days from now, it would be right to speculate on the position some years from now in which they are refusing to envisage a future without Turkish occupation. Dr Godman 32. Back to enlargement. The Commission's target date of 2002 for first accessions is looking, to put it mildly, a little unrealistic in, say, the light of the abject failure to reform the Common Agricultural Policy. Is it not the case that that failure means that Poland is unlikely to join before 2006? (Mr Cook) No. As I recall the outcome at Berlin and the associated discussions with Poland and the other candidate countries, it is not envisaged that there will be direct subsidy payments to farmers before 2006. In other words, Poland can become a member of the European Union but the extent of its direct participation in the Common Agricultural Policy beyond 2006 will be a matter for separate negotiation. (Mr Sheinwald) No direct payments before 2006 but they can participate otherwise in the CAP. (Mr Cook) On the general principle that you raise, I am absolutely with you. We felt that the Berlin Council could have gone further in reducing the costs of the CAP and we pressed to go further. It requires unanimity at the summit meetings and we were unable to get the agreement of one major country. 33. Given this failure to reform the CAP -- and let us not forget the satisfaction that many farmers' leaders expressed after the mild reform that took place, especially in countries like the Irish Republic, Germany, France and in the United Kingdom -- is it not the case that if you do not return to the radical reform of the CAP with some of these new members, if ever they enter, we are likely to end up with a two class system of membership, are we not? (Mr Cook) That would be very unsatisfactory and I think you are right to warn of that danger. We ourselves would be very strongly motivated to argue against the two tier structure because enlargement is one of the levers we can use to push through the greater reforms of the CAP that we favour ourselves for other reasons. I do think that with the passage of time it will become more difficult for those who resist reform to continue to do so, partly because of the pressure of enlargement, but partly also because of developments within world trade. The Seattle Round began this week and we have all seen the extent to which the developing countries have been insisting that there should be movement on agriculture if they are expected to move on manufactured goods. It is difficult to see how Europe can indefinitely maintain a structure based on free trade in manufactured goods and protectionism in agriculture. 34. Yet the farmers' lobby throughout the European Union is a formidable political lobby, is it not? (Mr Cook) In Britain it is a formidable lobby; never mind throughout the European Union. 35. If we have extended, enlarged membership without this kind of reform, how can we ever talk about a greater degree of integration? Would we not finish up with a loose kind of combination? (Mr Cook) No, I do not think we will necessarily end up there, but it is going to be a tough battle and it will take time. Looking beyond 2006, there will need to be substantial changes to the CAP. We certainly would not want to see beyond 2006 a two tier arrangement on agriculture between the existing and the new members. Sir Peter Emery 36. Would you accept that when Mr Rowlands and I on behalf of the Committee were in Cyprus Mr Denktash and the vast majority of the majority party were saying they would rather see unity with Turkey than join the EU? That is very worrying. Back to the Common Agricultural Policy. We have been talking about reforms, have we not, since the mid-seventies? What specific areas is the government going to pursue at Helsinki to try and press forward with a greater degree of reform? (Mr Cook) The reform of the CAP will not be on the agenda at Helsinki. 37. At all? (Mr Cook) Only in the most general sense in that people can refer to it if they wish in an introduction, but it is not an agenda item. The reason for that is because the reform of the CAP was the central issue of the Berlin Special Summit earlier this year and that summit did agree to quite a large amount of reform in the CAP with significant reductions to all costs. The saving, we believe, to the average British household therefore will be some œ65 per annum, but it did not go as far as we would have wished and that was because some of the reforms that had already been agreed in the Agricultural Council were rolled back at the meetings of heads of government. 38. Does this mean therefore that we cannot expect any new initiative until 2006? (Mr Cook) The Berlin package was about the financial perspective of the European Union which is a seven year perspective. It includes for instance the reforms of the structural fund and the question of the British rebate. We would need to make a very delicate judgement as to whether we uncork the whole of that package because it would uncork issues that we regard as settled, such as the British rebate, for that seven year period. Long before we get to the end of that period, there will have to be an evaluation as to the future financial perspective and indeed whether the figures actually add up. 39. Would you accept that certain farmers in this country -- particularly in the west country -- are slightly concerned at seeing Poland and Hungary coming into the European Union and obviously financially obtaining very considerable benefit out of the Common Agricultural Policy as it applies to them, as our farmers would say, when we have not received anything like as fair a deal? (Mr Cook) You beg two separate questions there. Let me focus, if I may, on the question relating to Poland. First of all, as I have said, there will be no direct payment to the farmers in Poland until 2006 and what happens thereafter depends on the reform of the CAP. Secondly, the main gain in financial terms from the European Union for the new applicant countries is more likely to be in the area of the structural funds rather than any direct payment out of the CAP. 40. That is to many farming people slightly discouraging, but you will understand that, I am sure. (Mr Cook) I fully recognise that the farmers in the west country and elsewhere do face serious problems with structural adjustment at the present time, but in fairness to the farmers of Poland I do not think the problems can be related to that. Sir Peter Emery: I will forward that to the Minister of Agriculture. Chairman 41. May I wind up this section on enlargement in this way: is there any doubt that the Helsinki Council will endorse the recommendations of the Commission in relation to the six new countries? (Mr Cook) There must always be a question mark until the decision is taken formally but I am not aware at the present time of any Member State which is against the proposals by the Commission. Britain has taken a position first of all that we support in principle the recommendations of the Commission in relation to enlargement because that is the product of their objective and independent judgment and we are content with their recommendations. Secondly, we have always made clear we are a leading advocate of enlargement. The Prime Minister when he was in Romania and Bulgaria gave them a very firm commitment we would support them proceeding to negotiations at Helsinki and we intend to do that and we are hopeful that will be agreed. 42. Can there equally be any doubt that there will not be entry by countries one by one, simply and if only because of the ratification processes, and one would therefore expect a cluster of countries and it would be politically very difficult not to have Poland in the first group of countries? (Mr Cook) Those are two separate questions. First of all, any country has to prove it is ready for membership, that it has made the necessary reforms to its economy, that it matches the standards of democracy and human rights, and that it has assimilated European law into its domestic law. No country can short-circuit that process on whatever political basis. In relation to your other point, in practical terms of course ratification will be an easier process if we are doing it in groups of countries rather than 12 separate times - indeed, I would anticipate some problems with the business manager if I asked for 12 separate Bills on this question. That said, each country will be assessed on its own individual merits and if we do end up in a position in which there are a few countries ready, I do not know it will be necessarily right to hold them back for ease of ratification. 43. What is your working assumption about the date when the first cluster of countries would be able to join? (Mr Cook) I have no working assumption, because it is not really down to the work I do, it is down to the work they do. What I do think is important is that we fulfil the European Union's own target of being ready to absorb them by 2002. Chairman: I would now like to turn to the Intergovernmental Conference. Mr Rowlands 44. In the run-up to IGCs, Foreign Secretary, there are reports, some of them more important than others. I assume the Wizsaecker-Dehaene-Simon report is of at least some significance and therefore I wonder if I could probe you on your position on some of the suggestions they have put for the IGC? (Mr Cook) All the contributions are of significance but they are not necessarily determined. 45. I know, that is why I am seeking where you stand on this issue. One of the most interesting and rather far-reaching proposals is to split the treaties and have a large part of one of the existing treaties no longer subject to IGC changes but subject to qualified majority, leaving just the basic core text of the treaties as subject to future IGCs. Where do you stand on that, Foreign Secretary? (Mr Cook) Can I take one step back before I respond to the particular point? First of all, we see the IGC as about preparing the European Union for enlargement and we therefore want it to be focused on those questions. We also want it to be completed in a timescale which is relevant to enlargement. IGCs have the capacity to go on for several years and the wider we let the horizon go, the further it will take us to cover the ground, therefore we will be arguing at Helsinki for a very focused IGC tackling the essential question of enlargement. 46. The left-overs? (Mr Cook) Yes. That is not a term I find particularly attractive but, yes, certainly the Amsterdam left-overs would be a prime candidate for them. Therefore we would in any event be inclined to resist that particular proposal and some of the others as a matter for this IGC because they are quite capable of adding a year or two on the timescale. As it stands at the present time, we are not persuaded of the case for what is proposed and we are rather hopeful it may not be on the agenda at the IGC. 47. I welcome that. What will be on the IGC is the question of expanding qualified majority voting. We have seen Mr Prodi's statement that everything, the norm, in European decision-making should be QMV, will we be going along with that idea? (Mr Cook) We made it perfectly plain that we think issues of key national interest which touch on the identity of a nation should always be resolved by consensus, and in practice you would find it caused difficulties and friction if you tried to do it any other way. That is why we have said we intend to see consensus retained for issues such as border controls, defence, treaty amendments, the decision on own resources, taxation, social security. Once you have looked at those issues, where not only Britain but quite a broad range of Member States see these continuing to be solved by consensus, you are left with the conclusion that actually already most of the remainder is by and large settled by QMV; QMV is the norm for that. We are willing to look at the remaining areas on a case by case basis --- 48. Could you identify those for us? (Mr Cook) I am not sure I could give an exhaustive list but perhaps I can give some examples of where we might entertain a case where it might be in our interest to agree to QMV. For instance, the articles relating to transport which are subject to unanimity although in many ways they are as much part of the single market structure as other parts of the single market legislation. At the present time, for instance, railway liberalisation through Europe is held up by the veto of France which does not wish to allow liberalisation of its railway system. We see no reason why those kind of single market issues should not also be dealt with by means of qualified majority voting. The European Court of Justice is essential to policing the single market. Without it, the rules would not be commonly applied, yet any reform of its procedures has to be resolved by unanimity which makes it very difficult to get agreement. So we would like to see reform of procedures of the Court of Justice and perhaps one or two other institutions subject to QMV rather than unanimity. These are changes where we can see a case for it and we can see a British advantage in agreeing to it. 49. Would we be more relaxed over QMV if we had a re-weighting of the votes? Do you see there is a trade-off one way or the other? (Mr Cook) I would not say we would be relaxed unless we saw there was a case for change, and the onus of proof has to be on the case for change, but the re-weighting of votes will be a prime British interest in the IGC. The present system of weighting provides that smaller countries get a disproportionately larger vote in the Council and the larger countries get a disproportionately smaller vote. Nobody actually is arguing that is a construct. The practical problem is with every new enlargement with smaller countries the smaller becomes the weight of the larger countries. We now face the arithmetic nonsense that if enlargement was to proceed on the basis of the present weighting, Germany, France and Britain added together would not even be a blocking minority by qualified majority voting. So all of us, and Italy, feel very strongly there must be some shift in the weighting which restores something more of a balance to the larger population countries. 50. How shall we build up a consensus around that, given in fact there is not much of an interest in very large numbers of the members of the Union actually wanting that change? (Mr Cook) It is going to be tough and that is why we did not solve it at Amsterdam. 51. Has anything changed since Amsterdam which leads you to be more optimistic on this matter? (Mr Cook) We concluded the discussion at Amsterdam at 4 o'clock in the morning with the Agreements of Protocol, which Britain had proposed, which was that before enlargement takes place there must be a change to the Commission and to the weighting, so if countries wish enlargement to take place, they have to bite on this bullet. As to what is in it for the smaller countries, to the smaller countries retaining their seat on the Commission is actually much more politically important than the size of their vote in the Council. What we are offering is an outcome in which every country keeps one seat on the Commission, we as a larger country will give up our second seat on the Commission but only in return for a more serious vote within the Council of Ministers. That is not a bad package. It gives us what we are looking for, which is a more serious vote in the Council, and it gives the smaller countries what they find most important to them, which is retaining a single seat on the Commission. 52. Do some of the Fins go along with that? (Mr Cook) This would not itself be negotiated at Helsinki, this would be on the agenda for the IGC and it would be for the IGC to resolve this. 53. I remember a predecessor of yours saying that there was a high tide of integration and Maastricht was the beginning of the ebb tide. Is the tide still ebbing on integration or is it coming back in? (Mr Cook) I cannot say that I identify anything in the agenda for Helsinki which I would see as further integration. The three main issues we are handling will be enlargement, about making the institutions effective and efficient, and we support many of the changes which are necessary there, and the European security initiative, which I anticipate we will be turning to next, is a British initiative and one which we are putting forward because we believe Europe needs a stronger security system. 54. You said you wanted to get the next IGC very focused on the Amsterdam left-overs; the three institutional issues which are left over from Amsterdam. Will that be decided in Helsinki? Will that be determined in Helsinki? (Mr Cook) The agenda will be resolved at Helsinki. 55. And that will determine whether it is a left-over issue or a broader IGC? (Mr Cook) More or less, yes. 56. How confident are you that you will be able to confine this? (Mr Cook) It is very difficult to predict with accuracy. We will be arguing for a focused IGC on the three main questions of the Commission, the re-weighting of votes and the question of the system of voting. There may be some other issues which it may be appropriate for the IGC to look at along the way, for instance it is possible that the development of European security will produce a need for some amendments to the treaty and the article on defence. It is possible there are one or two other things it may be sensible to do. For instance, there is a broad consensus in Europe that we need to have the ability to hold an individual commissioner to account if he or she is under-performing, rather than the thermo-nuclear option of sacking everybody which is the present treaty arrangement. So there are some other issues we would not resist, so long as they do not take us out to wider shores and speculation and considerable work. There is a lot of other countries which will be supporting us in that. Do remember the two countries which inherit the presidency next year are Portugal and France and they also see it in their interests to keep it fairly tightly focused because they will be the countries responsible for the treaty at the end of next year. Sir John Stanley 57. Foreign Secretary, I would like to continue on from where Mr Rowlands has just left off. I think you would acknowledge that though the British position is, as you say in your paper, "for a short and focused IGC", there are others who do clearly have a very different agenda, not least apparently Mr Prodi and the Commission. Certainly from what has appeared from statements made by Mr Prodi he would appear to have a really quite radical federal-type agenda in which we would be moving towards widespread tax harmonisation, a substantive defence competence and so on. What I would like to ask you is, do you envisage at Helsinki that this much wider agenda is going to be pressed hard by the Commission? If so, do you detect that there may be some degree of support from it from some of the significant other EU Member States? (Mr Cook) First of all, the Intergovernmental Conference, as the name suggests, is a conference between governments, and the Commission is not a party to it. Mr Prodi is of course at perfect liberty to set out a visionary agenda and has sometimes done so. There may be countries which may see attractions in individual parts of that package. I am not at the present time persuaded that represents the centre of gravity of thinking within the European Member States and we would hope that we can come away from Helsinki with that focused IGC that we require. 58. I certainly agree with you that the Commission does not have a central role in the IGC, but recalling what happened prior to Amsterdam, there was significant documentation by the then Commission putting forward the Commission's own agenda for the outcome of the IGC. Would you not agree that is likely to happen this time round again? (Mr Cook) The Commission will certainly play a role and it will put in proposals and submit papers but it does not have a vote at the IGC, which is a matter for the Member States. Although they may lobby for certain things, that does not necessarily mean that they are going to secure those objectives. I also do recall that in the opening of the report of the three people chosen by Mr Prodi to produce the report - I am trying to avoid the phrase "three wise men" which I do not think is terribly appropriate - they do themselves say that it is for the Member States to decide the content of the IGC and that is what will happen in Helsinki. 59. Can I come to the issue which was again touched on in Mr Rowlands' earlier questioning, the British Government's position on the retention of unanimity and therefore the retention of the right of veto of Member States? In answer to Mr Rowlands you gave a list of areas on which you said were essential for the British Government to retain unanimity and therefore our right to veto, the Prime Minister gave another list on 19 October. I should make it quite clear that I am not seeking to suggest there is any difference of view between you and the Prime Minister; both lists were illustrative. (Mr Cook) I would stress that where the Prime Minister and I have differed, the Prime Minister's list takes precedence. 60. But in the list you gave in answer to Mr Rowlands, you did include a very significant item which was not in the list that the Prime Minister gave to the House on 19 October when he said, "We shall not agree to any lifting of the veto in areas such as tax, defence, or our border controls." In reply to Mr Rowlands, you included in your list that the unanimity and therefore the British right of veto would be retained over treaty amendments and I would be grateful if you could confirm that the British Government's position is that all treaty amendments should continue to require unanimity? (Mr Cook) Yes. As you rightly and fairly said, both the Prime Minister and I were producing illustrations. These are not intended to be exhaustive lists and I am not entirely sure it would be sensible to declare where the bottom line might be. Yes, on treaty amendments we would wish to see that dealt with by unanimity, and on that, we are under no pressure, the great majority of other Member States will wish to see it dealt with by unanimity as well. 61. Following that, as you are aware, there have been some suggestions that at this IGC or possibly later there might be a division of the existing treaties into two parts in which unanimity would be retained for one part and QMV would go for the other. Given what you have just said to the Committee, that the British Government's position is firmly to retain unanimity on all treaty amendments, I hope we would be right therefore to conclude that this Government would resist any such proposal to divide the treaties into two halves in the way that has been suggested in some quarters? (Mr Cook) We are certainly of the view that it would be unhelpful to the present IGC if that exercise were to be included within it, because if you were to go through the whole of the treaty to make a judgment on every existing article you are most certainly not contemplating an IGC which can be completed within a year. So we will be resisting that as any part of the agenda for Helsinki. 62. Quite apart from the practical difficulties which I would fully acknowledge and accept, I hope you would also agree that that exercise would be in policy terms unacceptable because it would amount to a surrender of our veto over those areas of treaty amendment which fell into the QMV section of the treaty for the future. (Mr Cook) I must confess I do not think that the case for it has been well made and I have difficulty being confident that you could achieve the clear definition which would be necessary between what parts of the treaty were institutional and fundamental and what parts of the treaty were about policy, which is the distinction you are proposing. Frankly, without any greater clarity as to how you could distinguish which article of the treaty is not a legal requirement but a policy requirement, I find it hard to see how one could take forward this proposal. 63. The last point I would like to ask you is, what is your present thinking on the timing of the IGC White Paper? (Mr Cook) I do not have any date in mind. I do not know if I should. Should I have a date in mind? (After a pause) As early as is practical. 64. Are we talking about the year 2000? (Mr Cook) Yes, definitely, because we want to see the thing completed by the year 2000, so we would be hoping to produce it early in the New Year. Sir John Stanley: Early in the New Year. Thank you. Mr Chidgey 65. Foreign Secretary, do you foresee any further changes in the institutional balance between the Council, the Commission and the Parliament beyond the next IGC? You have already mentioned some this afternoon. Do you see the current balance we are moving towards now to be optimum? (Mr Cook) Those are not necessarily the only alternatives. As I said earlier, we would not want to embark on major structural changes which would delay agreement. I do not myself wish to see any particular shift in the balance between the Council and the Commission. There will be potentially some incidental changes in respect of the Parliament. For instance, one issue we will have to address in the course of the IGC may be the size of the Parliament. We cannot simply go on adding to the Parliament as 12 new countries come in, but if we maintain an overall ceiling then that of course has awkward questions about the distribution of seats among the existing Member States. Secondly, if there is some modest increase in QMV, that may in turn lead to a parallel increase in co-decision-making with the Parliament because co-decision-making is normally applied to areas where QMV applies. 66. Moving further on, do you feel the EU should be given a legal responsibility beyond the area of trade in goods, for instance? (Mr Cook) You mean an external personality? 67. A legal personality. (Mr Cook) The European Union already negotiates as a single entity and will be doing so with a common strategy, for instance, in Seattle. When this was last discussed around the Amsterdam Treaty, our position was that there was no requirement for that external legal personality and I do not see us likely to be asked the question again this time, but let me take advice on that. (Mr Sheinwald) I think it is one of the issues mentioned in the Dehaene Report to which you have alluded already, and it is also in the Commission's own report, but we would not see it necessary to discuss it next year at the IGC. (Mr Cook) It was not an issue on which there was any great pressure at the last IGC. Many countries share our own concern that external legal personality should be for Member States. 68. Do you see that there is any scope for introducing a Union-wide criminal offence to counter the abuse of EU funds? (Mr Cook) If by that you mean the corpus juris proposal which was for a Europe-wide prosecutor, then the answer is no and indeed we saw that off at Tampere. We certainly are in favour of greater co-operation within the prosecuting authorities of the Member States, but that is a different matter from a prosecutor with a cross-boundary remit. We are vigorous in our commitment to tackling fraud within the European Union and of course it has to be faced that most of that fraud occurs at Member State level rather than at Commission level, but those are matters best addressed through co- ordination of the national legal systems than the creation of a special prosecutor who, like the US marshal, can appear in any state. Mr Illsley 69. Foreign Secretary, I have three questions and the first follows on from Mr Chidgey's corpus juris point. A lot of the press reports at the time printed scare stories about the removal of habeas corpus, the Napoleonic legal system replacing our own legal system in this country and all the rest, but at the bottom of all that corpus juris was intended to combat fraud. Is there any role for corpus juris in the future or did Tampere, as you say, kill the whole of the document stone dead? (Mr Cook) No, it certainly saw, I hope, the end to a proposal that there should be a prosecutor with a pan-European remit as opposed to a national remit, but I would not want the Committee to understate the degree of progress that we achieved at Tampere. Tampere was a very successful summit which achieved three major strategic objectives. First of all, it increased co-operation between national police forces both in preventing crime and in tackling cross-border organised crime. Secondly, it achieved progress towards common standards on asylum and common programmes to tackle the pressure of migration in the countries of origin. Thirdly, there were some quite strong steps forward on mutual recognition of court decisions and co-operation between legal systems. That last point does provide openings which can lead to strengthen the work against fraud on the European budget, and I would myself see the way forward as taking advantage of those new openings for greater co-operation and co-ordination between prosecutors before we entertain the concept of a pan-European prosecutor. 70. Coming back to the question of enlargement which as you have pointed out is perhaps a justification for launching the IGC anyway, are there going to be any arrangements to seek the views of candidates for enlargement, or is there any likelihood that they might send representatives, particularly in view of the conference which you decided to boycott? (Mr Cook) It is a very fair and important question. The candidate countries cannot be a formal part of the IGC, they have no legal status to do so and in any case Member States would be jealous of their right to affect the decisions for the European Union of which they are currently the members. At the same time, the decisions we take will have a bearing on future member countries - for instance on the weighting of votes, the size of Parliament - all these are of relevance to them. That is why it is important that in parallel to the IGC, measures are taken by the presidency and by Member States to keep the applicant countries informed and, where appropriate, consult them, but they will not have a formal status in the process. 71. The third question relates partly to a conclusion from Amsterdam that there should be introduced more rapid and effective decision-making procedures for solving problems within the EU. Bearing in mind the problem we had with the beef crisis, where there was basically a resort to the European Court or the threat of legal action against countries despite the fact negotiations were continuing, is there any likelihood the IGC will look to improve those decision-making procedures? Also, I did notice in your submission to the Committee, the idea of a European Food Safety Agency which, in view of the problem with the beef crisis, would perhaps solve other problems. What are the prospects for a Food Safety Agency in Europe? (Mr Cook) It is a proposal that will need to be handled with care because Member States are not going to accept an agency which would result in any reduction of standards and therefore I think this particular proposal will require very careful exploration. But on your other point, I am whole- heartedly with you. I said earlier that one of the issues where we could see a case for majority voting would be in reform of the procedures of the European Court of Justice. Reform of its procedures ought to be part of this IGC and we would hope that we can achieve reforms and changes which will cut down the very long time it currently takes to take a full case through the European Court of Justice. Chairman 72. Just to wind up on this section on the IGC before we go on to defence, Sir Peter and Mr Chidgey, can we take it that in part because of the linkage with enlargement, you confidently expect the IGC to be concluded before the end of next year? (Mr Cook) "Confidently expect" is a hostage to fortune and I am conscious that I may be before this Committee a year from now, so I think I would be inclined to say that it would be our intent and that is what we would work towards. It is also the intent of the two countries that are taking up the Presidency next year, but none of us can guarantee that. 73. Apart from the United Kingdom, Portugal and France, is that, in your judgment, a consensus, that it should be concluded by the end of next year? (Mr Cook) I would certainly say that a comfortable majority of members would be in agreement with that. To be candid, not every country is as enthusiastic as the United Kingdom about enlargement and it is always possible that there will be a country which has reservations about enlargement which may express them by making sure that the IGC gives a considered, lengthy and exhaustive discussion to issues. 74. Finally, on what you do not like to be called the Three Wise Men report, the Dehaene-Weizsaecker-Simon report, are there parts of that comprehensive report to which you take exception, to which you would object? (Mr Cook) I think I have made it plain to the Committee already that we do not accept that as the agenda for the IGC. I do not think there will be any merit in going through ticking and crossing here and there because that is not our starting-point of reference. Sir Peter Emery 75. Foreign Secretary, I have no doubt you know the line of questioning that I might take on defence as I put two of the questions during the foreign affairs debate on the Loyal Address and did not get any answers. Firstly, though, may I ask you about the St Malo conference. Does this indicate that the United Kingdom is quite happy to go along with France, not only on the rapid reaction force but also in the taking over by the European Union of WEU? (Mr Cook) If we secure the changes that we are proposing to the European Union, it may then at that point become logical to fold the WEU into the European Union, but that is some fences down the track. First of all, we have to make sure that we have the structures within the European Union for sensible decision-making on security and crisis management. Secondly, we must make sure that we have satisfactory mechanisms for the transmission of those decisions to the military assets that we have committed to NATO, and thirdly, which is a point Britain keeps stressing, we must also make sure that we do have the effective military capability to carry out those security decisions. Therefore, if we achieve all that, then it would be appropriate to look at the WEU becoming part of the European Union and, indeed, to be fair, that has been a consensus position in the European Union since the Cologne summit this summer. 76. Would you not accept, however, that the restrengthening of WEU over the last eight years has been very much France's agenda, to have WEU play a greater part within European defence at the expense of NATO? (Mr Cook) I would hesitate to speak for the French government. I can only speak for the British government and I can say what our objectives are. 77. But you have ideas? (Mr Cook) I have lots of ideas which sometimes are wiser to keep to myself, but I appear before the Committee as the British not the French Foreign Minister. 78. We are asking to draw them out from you. (Mr Cook) May I be clear about this, though, and I think this really perhaps goes to the heart of the matter. We do not see the security initiative in Europe as in any way competing with or diminishing NATO. First of all, it is not going to be about territorial defence. In our judgment that is a job only for NATO. Secondly, it does not mean that NATO would not be involved in crisis management in the future. When we had the Anglo-French summit last week the wording of the agreed communique between both of us was that the European security mechanisms would only apply - I think I quote accurately - where the Alliance as a whole is not engaged; in other words, if NATO, the United States, chooses to be engaged, then that is the way in which the crisis management will be carried out. Thirdly, we are not proposing any standing European military army or military organisation. What we are proposing are mechanisms by which the European Union in crisis management can call upon assets which each of the Member States has committed to NATO. 79. But then the two questions that I did not get an answer to were: how do you stop neutral nations of the European Union having an input into the EU's decision-making on WEU, which may well slow military decision-making of those nations who are members of WEU? (Mr Cook) To be fair, those countries, if I am right, are already associate members of the WEU and so are very much involved in the WEU structures, but in the real world, frankly, if we have a crisis equivalent to Kosovo of this year or Albania four years ago, we will want all the help we can get and Finland and Sweden have a very good record in peacekeeping operations and we would like to see they are part of it and our understanding from their support of our initiative is that they also share that objective. 80. Then on the other side of the coin, what of the non-EU members who are members of NATO - the Norwegians, Iceland, etc.? (Mr Cook) With them we are clear that we would want them to feel that they can fully participate in anything that we may do through this mechanism. That is why Britain has constantly asserted that there has to be an opportunity for these countries to be involved in deciding upstream whether or not we should handle a crisis through these European mechanisms and then also involved downstream in carrying it out, for instance in participating in it. In practice, of course, most of these countries are themselves already candidates for the European Union and, therefore, over a period of time will be assimilated into many of them. 81. You do realise, do you not, Foreign Secretary, that in the North Atlantic Assembly the Americans were expressing some worry and concern over the way this was going and that their views might, in fact, be entirely ignored? (Mr Cook) I can assure you the American views are not ignored in any way. It is a matter I have regularly discussed with Madeleine Allbright. We know from our contacts in Washington that there was a degree of satisfaction at the communique from the Anglo-French summit. We have repeatedly assured our American colleagues that we will take care in the structure that we will not duplicate, discriminate or decouple from NATO and that continues to be the joint basis on which we approach it. I would also add that Washington, quite rightly and quite properly, has over a period of time frequently said that it would like Europe to do more and that is exactly what we are proposing. The headline commitment that we are proposing, which we expect to be endorsed at Helsinki, is that the European nations should set themselves a target of being capable of putting a corps level in the field within 60 days and sustaining it for at least a year and that is the kind of enhancement to Europe's capability that is actually welcomed in Washington. 82. Yes. Being a great friend of America we are not surprised that there is more than one opinion between the President and Capitol Hill and perhaps Mrs Allbright ought to begin carrying the views that she is expressing to you to the members of the Senate and the House of Representatives, but that is hardly your responsibility yet. (Mr Cook) But we do try ourselves to make sure we do have open channels of communication to the Congress and Senate and will continue to try and make it clear that this is not in competition with NATO, this is a development which can actually be supportive. 83. That is very good to hear, but as a last question, in pressing forward with the CFSP, you talked, I believe, about there being an interim committee. Is that going to be set up, when is it likely to be set up, what sort of representation will there be on this, who are we likely to nominate? We seem to know very little about this and any information you can give would be helpful. (Mr Cook) We anticipated that in the fullness of time as it developed there would be a political security committee of senior officials, a standing committee in Brussels parallel to the Committee of the Permanent Representatives. It would be there to discuss foreign and security policy as and when the case arose and, of course, if we are going to get into the business of crisis management, we need to have a body whom we can assemble quickly and who are on permanent standby. In the short run, leading up towards that, we will wish to see a committee in place that can be, if you like, a foreshadow to that, and I would hope that a number of countries may actually wish to appoint to that committee the people who may actually take over the job in full committee later on. 84. Will the Foreign Office or the Ministry of Defence take the lead on this? (Mr Cook) It will be the Foreign Office because this is a Common Foreign and Security Policy. Chairman 85. Foreign Secretary, to clarify an answer you gave to Sir Peter, you said that the new European apparatus or system would only come into operation when the Alliance as a whole is not engaged? (Mr Cook) Yes. 86. Does that imply that there is a prior stage during which the Alliance would be consulted, that is, the United States would be fully consulted, with an implied veto on the second stage? (Mr Cook) I would very much want to warn you off the use of the word "veto" because that creates all sorts of waves in so many different directions, but, of course, the United States would be consulted. Indeed, it would be impossible to conceive of any other way of proceeding because the mechanism which we are proposing depends upon access to NATO assets, both the national assets we have committed to NATO and also some of the joint NATO assets for planning and command of an operation. We can only obtain access to that with the unanimous agreement of all members of NATO, including the United States. Therefore, this has to be by a process of consent and agreement and it cannot be done by a process of defiance. 87. Does the proposal imply any end to the reduction in military expenditure by the European Allies? (Mr Cook) What we have focused on for Helsinki is not a target for input, namely, money to be put into defence, but a target for output, namely, how that actually produces a real military asset for us to deploy, and our own concern is that there needs to be more of a focus on rapid, flexible, mobile units which can actually be used in response to a crisis, and focusing on that is more important than focusing on the bottom budget line. It is for the countries themselves to draw the conclusion as to whether their budget needs to be re-assessed or whether they can do it within that budget. Mr Chidgey 88. Chairman, you have actually picked up some of the points I wanted to ask the Foreign Secretary, but to take it a stage further, this last issue about assets available to be used to strengthen the Western European Union, I think you said, and also the rapid reaction discussions with France: you very clearly made the point that these were assets that would be deployed rather than creating a standing army and one understands that, but given that our own armed forces are perhaps one of the leaders in the concept of rapid reaction, flexibility and so on, and, therefore, we are already doing a great deal more than other Member States, and the fact that we are already suffering tremendous overstretch in our own armed forces, is it not absolutely clear that if we are going to play an extra role here we are going to have to spend considerably more on defence in this country? There is not a lot of slack left here. (Mr Cook) No, is the answer to that. I would strongly put out a marker there, first of all, that we already spend more as a percentage of GDP than many of our European Allies. Secondly, we have already been through the Strategic Defence Review, which concluded on the budget for some time to come of our armed forces, but within that did give - and on this you are right - the priority to rapid, flexible, mobile forces which would be appropriate for crisis management, and that reflected the fact that the Defence Review was very much foreign policy-led. That Strategic Defence Review is actually widely admired among our other European partners and many of them are now seeking in the wake of Kosovo to absorb those lessons for themselves. 89. I understand that, Foreign Secretary, and I remember you speaking on the foreign affairs aspect of the Queen's Speech only last week and you spoke at some length stressing the point of the under-utilisation of the armed forces used in the European Union compared to the expenditure that goes in, but the point is that I got the very strong impression that through the Strategic Arms Review, for example, we are already much more efficient in the use of our defence assets than other nations, so I cannot quite see where the additional assets are going to come from that are being under-used at present in this country, because they are clearly not? (Mr Cook) I am not sure the word "efficient" is the right word here, but many of our partners have a different defence posture which does not give them that flexibility or that rapid mobile response. Indeed, I think it was an interesting experiment for a number of them to discover how difficult it was to move their forces to Kosovo. Without any change in the bottom figure on the budget, without raising any question of efficiency, I think there are things that they can do to change their posture which would give them a greater capacity to take part in such operations. 90. Does that include ourselves? (Mr Cook) I do not think that we are the prime problem here because, as you yourself said, we have made quite a lot of progress towards this, but we are not complacent and if there are other ways we can learn lessons from Kosovo we are certainly going to do so. 91. But the implication to me certainly is that we are going to have to put more in if we are going to drive the whole thing forward? (Mr Cook) No. First of all, I do not accept that in the case of Britain, which is one of the higher spenders, but secondly, I do think that we are approaching this from the wrong end. The important question is not how much you are putting in but what are you getting out. If you tot up the military budgets of the European Member States, collectively we are spending 60 per cent. of the American defence budget and it is not immediately apparent that we get 60 per cent. of the military assets. May I just add that I am advised, in response to Peter's question, that our intention would be to appoint our Deputy Political Director to the interim committee. Sir Peter Emery: Thank you, that is helpful. Mr Chidgey 92. I have two more questions, Chairman. The first one concerns the arms embargo agreed, I think, between European Union Member States to Indonesia for, I think, a three-month period --- (Mr Cook) Four. 93. Four, which I believe ends on 17 December? (Mr Cook) January. 94. The point, of course, is, Foreign Secretary, will there be, as part of the IGC, a meeting to extend that embargo? (Mr Cook) Not as part of the Helsinki IGC. This is a matter for the General Affairs Council to determine, probably at its January meeting. Of course, one should stress that it would require unanimity for a fresh period. It is for the General Affairs Council to decide, in the light of events in January. In some regards we have made very good progress since the embargo was introduced. At the time it was introduced Indonesia had still not accepted the international force to East Timor and had not voted for recognising the independence of East Timor. We have now had an outcome in which East Timor's independence is recognised and accepted by the Indonesian parliament. There is a multinational force there and it will shortly be superseded by a UN force under the UN Resolution. There is a new President of Indonesia, who has a fairly wide, popular mandate, and although it is early days, some of the things which have been done have been encouraging. For instance, Indonesia has its first civilian defence minister and he has also involved in the government some people who do actually have a credible record in human rights. So that is encouraging but the balance of judgment remains to be made. 95. My final question is in different territory. The Foreign Secretary, I am sure, has been following events in the Balkans in recent days, particularly in Croatia, where there appears to be a change of ruler, if not already certainly very soon. May I ask the Foreign Secretary what advice he has received from the posts in that area, what discussions he expects to be undertaking with our partners in the European Union, bearing in mind the importance of Croatia to the security of the region, and it seems to me a point of great import that from being almost favoured nation in the eyes of NATO a little while ago it is now being called a rogue state. I wonder if the Foreign Secretary might perhaps give us his views on how we should be helping Croatia run through the democratic process if it is going to change leader and government in the months ahead? (Mr Cook) I think I have to be careful about being drawn into speculation on the health of President Tudjman, but may I respond on the issue of substance. First of all, we have long had very real concerns about some aspects of the policy of the administration of Croatia, notably in terms of its commitment to refugee returns of those whom it expelled from Kryena and Slavonia; secondly, its co-operation with the War Crimes Tribunal, and thirdly, with the quality of freedom of the media and a pluralist democracy within Croatia. We also have reservations about the extent to which the government of Croatia has genuinely sought to carry through its commitments at Dayton to the free structure in Bosnia as one single pluralist entity. For all those reasons we would welcome the opportunity of a government in Croatia which had a more European orientation and was willing to work with us in the way that we want for the region and for Croatia itself. There will very shortly be elections within Croatia. We have ourselves expressed views about the extent to which those elections should be run on the basis of free and fair access to the media and I met two of the senior Croatian opposition figures last month when they were visiting London. We will want to monitor carefully the conduct of those elections and should it produce a change of government we will certainly seek to work with them to try and achieve a Croatia which is fully democratic and observes international obligations. 96. Would that mean that the outcome of the elections could enhance or detract from Croatia's wish to become a member of the European Union? (Mr Cook) Croatia is not at present one of the candidate countries within the accession process. It is anxious to secure some of the earlier agreements which prefigure that accession, such as the Trade and Co-operation Agreement or the Association Agreement. We have taken the view inside the European Union that so long as we have these difficulties with Croatia's conduct, particularly in relation to the international tribunal, it is not possible for us to take this forward. If we had a government that was adopting a different approach to its international obligations and the Dayton commitments, then I am sure we could try and make progress in some of these prefiguring steps, such as a partnership and co-operation agreement or a trade agreement. Ms Abbott 97. I have just two questions on European defence. In response to an earlier line of questioning from my colleague Sir Peter Emery, you said that Washington had long wanted Europe to do more in defence matters. Surely the point is that Washington has long wanted Europe to do more under United States leadership, but is it not true to say that there is a strand of opinion in the United Kingdom that is extremely sceptical of the military and security dimensions of the European Union which it cannot really cover? (Mr Cook) America is a richly pluralist society with many different views. 98. It sounds like the Labour Party. (Mr Cook) I can only offer the exchanges I have with the administration and the administration has been encouraging, not difficult, about this initiative. 99. My other question is this: the joint St Malo declaration said that NATO remains the foundation of our collective defence and will continue to have an important role in crisis management. NATO's role in relation to defence is very clearly established under the Treaty but, leaving on one side the merits of that, there has been some debate about the basis in law for NATO intervening out of area apparently at will, and certainly, of course, in some instances in Russia. Have you any comments to make on that? The thing about defence is one of crisis management out of area at will. What is the basis in the Treaty for that? (Mr Cook) I slightly resist the idea that NATO is intervening at will. We intervened in the case of Kosovo because of the pressing humanitarian catastrophe and that is the basis in law on which we took that action. That, of course, is a consideration which would apply to any organisation, whether it was NATO or the European Union, which was authorising that form of crisis management. So it is not NATO-specific. It is the case that there is a wider debate, not just at a European level but at a global level, on the basis on which on future occasions it would be right for the international community to intervene. It was the focus of most of the speeches at the United Nations General Assembly in September. That work continues and, indeed, Britain has recently submitted some ideas to the Secretary General. Sir David Madel 100. Foreign Secretary, earlier you said that the European Union needed a strong security system. Does it need a strong one or a stronger one? (Mr Cook) Let us go for stronger. I am not in any way seeking to express alarm or dismay about the present degree of security but if we look over the past decade at the number of crises we have had to manage within the Western Balkans, I think it is difficult to say that this provides a basis on which we can be complacent about our capacity to respond or to defuse such a security crisis. In particular in Kosovo, as I said in the House last week, it was striking that, although we had 2 million men and women in uniform in the European forces, it was a struggle to get 2 per cent. into Kosovo which, when all is said and done, is not far away. In these circumstances, it seems only right that we should look at how we both improve our decision-making and enhance the current capability we have to carry out those decisions. 101. But these decisions and this action if it came, we are only talking about what I would call the general European theatre. It is only in that particular area that this new system would operate? (Mr Cook) I do not think anybody is envisaging that the European Union is going to interfere out of continent. Do you wish to say anything? (Mr Parry) The Treaty does allow it. (Mr Cook) Realistically, we are looking at intervention in the case of the continent of Europe. Sir John Stanley 102. Could Mr Parry repeat what he said. We did not actually hear his intervention. (Mr Cook) His point is that there was no legal bar in the Treaty but I think that is a separate question from the political decision. Looking towards the future, who could say whether it might not be appropriate for us to respond to a UN appeal for some humanitarian intervention, but we are not looking at seeking crises to resolve elsewhere. Sir David Madel 103. A lot of people see this as America to some extent receding from European defence. Is that going to help our relations with Russia? (Mr Cook) First of all, may I stress that this is not territorial defence. I think actually if you were go to down the road of territorial defence then you would have sensitivity with Russia. We are not aware of any concern they have about the proposal we are making for crisis management. In relation to the United States, I would strongly dispute that what we are proposing is likely to produce any increased desire on the part of America to withdraw from Europe. Indeed, I think you can make a quite respectable case to the contrary, which is that if senators and congressmen continue to feel that Europe is not playing its full part and that America has to shoulder too much of the burden, as, for example, in Kosovo, that is more likely to promote impatience with Europe than the evidence that we are actually making a clearer, more focused contribution. 104. So really what this is about, what this change is about, and it is quite a big change, is really to reinforce American commitment to Europe? (Mr Cook) We would certainly wish in all we did to reinforce NATO and thereby reinforce the joint commitment of both Europe and America to each other. Dr Godman 105. You can anticipate assurances from the new occupant of the White House concerning America's continued involvement in Europe, can you? (Mr Cook) I do not know who that would be and it is for America to decide, but we would certainly want to have the same cordial and close relations with the new President as we have with the present one. 106. There is growing opinion, though, in America, is there not, that in addition to the belief that Europe should pay more towards its own defence, America's interests can be reduced in Europe, in the European theatre, in a physical sense? (Mr Cook) I am not aware that there is much pressure there at the present time and you have to set that against the backdrop in which there has already been a very substantial United States reduction in the wake of the collapse of the Cold War, but I am not aware of any current pressures for that. What I think our American friends wish to see is Europe able to play its part when needed and the kind of enhancement that we are proposing to Europe's capacity for crisis management will be very welcome. 107. Can I ask one question, Mr Chairman, regarding the Foreign Secretary's memorandum, paragraph 10, in which he states: "by 2003, Europeans to be able to deploy more effective forces for crisis management, either as part of a NATO operation or as an EU-led operation". Do you envisage the latter as some kind of operation being taken in the peace-keeping field, in response to a request from the United Nations? (Mr Cook) It could be. I would not wish either to preclude that or to limit us to that. 108. Am I right in thinking that all of the smaller Member States of the European Union - those which are eligible - have now signed up to the Partnership with Peace Initiative? (Mr Cook) Within the eligible countries, yes, they are all part of the Europe-Atlantic Partnership Council. 109. On this question of a European Union-led operation, there must be a lively debate about it amongst Member States. You mentioned crisis management. How do you define "crisis management"? Does the military intervention in Kosovo come within your definition of crisis management, or do you see crisis management as that which is taking place now in Kosovo in terms of the maintenance of peace amongst ethnic groups in that area? (Mr Cook) The locus classicus in this is the Petersburg declaration which was drawn up within the WEU in the mid-1990s and which does set out a range of what have since become known as the Petersburg tasks - that is, crisis management, humanitarian intervention, peace-keeping and also peace- making. Those tasks of crisis management were defined to distinguish them from territorial defence in the face of aggression. I would myself say that Kosovo was crisis management in some ways. 110. From the very start? (Mr Cook) Yes. You could certainly classify it as peace-making. That, of course, does not mean to say that on a future occasion such as that it will necessarily be the EU that will lead the response. We have repeatedly stressed that NATO will not only have the sole prerogative on the task of territorial defence, NATO also will have the option of leading the crisis management in future crises. If that were to happen, the work which we are proposing to improve the military capacity of Europe to be more rapid, more flexible, more mobile, will be a bonus, because those assets are initially committed to NATO and will be available to NATO. 111. Forgive me for my sparse preparation or research, but a European-led operation, can I assume, would not take place outwith Europe? (Mr Cook) I would not want to give an absolute guarantee, because as you yourself indicated earlier, Britain may receive a UN request. I frankly think it unlikely, and nobody at the present time is envisaging it. The models which we have in our minds for when we might be required are the kinds of models we have seen recently in the Western Balkans within our own continent. Chairman 112. Foreign Secretary, I think one can exaggerate the scope of operations of the WEU. I am correct, I think, in saying that at the moment the only operation which the WEU is involved in is the police operation in Albania, is that correct? (Mr Cook) Yes. I think we also had some small operation on the Danube at one stage too, connected with the problems of the Western Balkans, but you are absolutely right, it is clearly extremely easy to overstate the operational role of the WEU. 113. HMG clearly envisages for suitable safeguards the absorption of the WEU into the EU structures. You must have some plan as to how this will be done. Within that plan, what are our specific proposals to protect the interests of the WEU non-EU countries - Norway, NATO Turkey and Iceland? How do we envisage that their interests can be protected in the new structure? (Mr Cook) The interests of those countries, of course, arise equally and perhaps more sharply in the context of their status as members of NATO. As I said earlier to the Committee, we would anticipate the European members of NATO who are outside the European Union having an involvement in any early discussions about whether or not there was an EU-led operation and having the right to participate in it, and that at the point of participation they would have equal rights with other participants. 114. If NATO itself is not involved, though, we do envisage the membership of an enlarged EU committee to include countries like Norway? (Mr Cook) Not of a committee. We are not proposing, after all, a council of defence ministers. We would certainly envisage Norway and the other NATO members of the European continent - and also, by the way, Canada which has expressed an interest in participating in EU-led operations - being involved in the consultations earlier on. We are also explicit that where there is such an operation, the conduct of the operation will be in the hands of the participants, not necessarily the members of the European Union. 115. Foreign Secretary, mixing my metaphors, we have kept you in the field some time. I am going to call our sweeper, Mr Mackinlay, in a moment, but can I give the apologies to you of two colleagues who are most concerned that you should be aware of the reasons for their absence. Dr Starkey is at her daughter's degree ceremony, and Mr Wilshire is at the Parliamentary Assembly of the Council of Europe. Both of them particularly wanted their apologies for their absence to be passed to you. (Mr Cook) Both of them have excellent reasons for not being here, one of them perhaps more pleasurable than the other. Mr Mackinlay 116. I have three very swift questions which could have fitted in anywhere in our discussions this afternoon. On the Tampere justice and home affairs point, will we not have to amend our Official Secrets Act to provide a defence of public interest? The reason why I say this is in the light of the Schaler case in France in which we sought his extradition. I think the Schaler case is an illustration. We sought his extradition because he had fouled us, as it were, and the French court found that he could not be extradited because he could not advance a defence in the United Kingdom of public interest. The construction I was making is that that is likely to be a decision which will prevail in other European Union States. Is not this an area which you would have to discuss, because presumably the idea of Tampere is that it would be almost a presumption that extradition would follow, would it not? (Mr Cook) I can only say, in the well-hallowed phrase, we have no plans to do so. 117. I heard that from the Home Secretary. I am talking about the real world. I find it irritating. Why do we not recognise sometimes that there is a problem and fight it? (Mr Cook) There is an issue here. As you will be well aware, HMG sought the extradition, and we would wish to see that extradition proceed. It is not for me to query the judgment of the French court. Whether we would necessarily wish to embark on changing our law because of that judgment of the French court is something which I think we would want to look at. 118. No, it is the consequence of common justice and home affairs which is in question; that is why I was raising it. (Mr Cook) Yes. We have stressed the mutual recognition of court judgments. We have also sought to make sure that there is a swifter and quicker response to extradition on request between us, so that criminals cannot escape the law in one country by taking refuge in another country state. I would be hesitant about going further and commenting on how that impacts on a specific case. 119. Can I move to a quite separate matter. When we had Joyce Quin before us I remember her expressing some doubt about the extent of twinning. This is the arrangement under the European accession programmes whereby public servants at various levels should have a twin in a Member State, so that they could, by distance, link up, get advice and counsel as to how to handle things, particularly in relation to harmonisation as a gradual process. She was quite indignant at the suggestion that there was not enough being done. I recently had a Parliamentary Question which I circulated to my colleagues, and to be candid, I was disappointed about what the United Kingdom was doing in this regard. I wonder whether you can either amplify it or, indeed, look at it again, because it seems to me that this a very positive thing at minimal cost which EU states could be doing to a very large extent to advance. (Mr Cook) We currently have 23 cases of twinning. 120. Yes, but that is my very point, Foreign Secretary. The impression we got was that there were hundreds. (Mr Cook) Nobody has hundreds. 121. Why could it not be? This is at minimal cost. We are talking about the VAT inspector in a city in the Czech Republic having a linkage with the VAT inspector in Portsmouth, or something like that. That was the idea, was it not? That is what we were advised back in Brussels. Perhaps I pitched it a shade too low, but certainly the idea would be of growing one-to-one relationships, and people could be learning. They would not have to visit each other. They have invented the telefax and so on. (Mr Cook) Yes, there is a lot of electronic communication, but I think I am right in saying that in the great majority of the cases of twinning you are expected actually to provide bodies on the ground in the country. When I say 23 cases of twinning, that does not necessarily mean 23 people; in some cases it will be a multiple. Let me say, I think that Britain was not well prepared when we started out on this when the first round of twinning took place. We have sought in this Government to try very hard to catch up on that. If we take the last round - the second round, not the first round where, as I say, we were behind the mark - and if we take the number of cases of twinning allocated, we actually had more than any other country, at 16 compared with 14 for France and 11 for Germany. Chairman 122. Foreign Secretary, could you give us a note on the progress to date and the projections which have been made, which I am certain will help the Committee? (Mr Cook) I shall be very pleased to do so. One should also note that most of these are competitive - in other words, you are submitting a competitive bid with other countries, and it is for those countries to decide - but I would not want the Committee to think that what we are doing is undervalued. I frequently meet with foreign ministers who do actually speak very highly of what we are doing. Mr Mackinlay 123. I have a final question. We have had four ministers for Europe in 2« years. (Mr Cook) I have too. 124. Yes. You are the custodian of our profile and projection on European issues. What is the impact, what is the collateral damage of our interests in relation to Europe, of the fact that the Prime Minister has given us four ministers in 2« years? It seems manifest that the poor devils just get into their brief and they are moved to tramways and fine arts or whatever. It is really irritating to Parliament to find that this has happened. It might be very irritating for you, I do not expect you to tell us, but you might throw some light on what the damage is. (Mr Cook) I am a man of immense philosophy, and I am encouraged that the post of Minister for Europe is such a springboard to higher things. I do not honestly think, Andrew, that there has been any damage done. All the ministers we have had have been enthusiastic and energetic ministers. Mr Vaz has also attended the General Affairs Council meeting last week, and I know that he made a very favourable impression on many of my colleagues. Andrew, all I can assure you is that we are well regarded as a Foreign Ministry throughout Europe, and I am very happy to accept my role as it comes through to me. Chairman: We would not expect any different. Mr Mackinlay: Send it to the Prime Minister. Sir Peter Emery: I think the Foreign Secretary was meaning, speaking on behalf of the Government, that they are very disappointed that none of them have come from this Committee. Chairman: Finally, Foreign Secretary, can I think you and your colleagues on behalf of the Committee. If you are not blown off course by withholding tax, let us hope that the crowded agenda will be brought successfully to a conclusion. Thank you very much.