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The Prime Minister: I am sorry to disappoint the right hon. Gentleman, but I do not wish to say anything on the single currency other than what I have said many times before. The tests have to be met, and that is the position.

The UN mandate will be on a chapter 7 basis. The rules of engagement still have to be finalised, and they will need careful consideration to ensure that our troops are properly protected at all times. The Modernisation Committee will consider any proposals that the right hon. Gentleman wishes to submit on the scrutiny of European legislation. On the issue of enlargement and the simplification of the treaties, if the EU expanded from 15 to 25 or, in the end, to 30, it would obviously be necessary to simplify and change the process of decision making, which is one reason why the Conservative party's position is so ridiculous. That has to happen; otherwise Europe would be unable to take the necessary decisions.

Europe is trying to codify in a constitution exactly what the basic competencies of member states and the European Union are precisely because we need the right framework to develop in future.

As ever, the Conservative party asks completely the wrong question. The issue is not whether we have a constitution—we already have one through the treaty of Rome and other treaties. The issue is what should go into a constitution. That is where our main effort should be made. Rather than saying that we want nothing to do with the process simply because it is discussing the constitution, we should be focusing attention on how we manage to ensure that the constitution is drawn up in exactly the way that we want. We want a European Union of co-operating member states, not a federal superstate. The language of the Laeken declaration makes it clear that we are not going down the path towards a federal superstate.

Mr. Dennis Skinner (Bolsover): Rather than listening to the Liberal Democrats squawking about the euro, the Prime Minister should remember that if it is a good idea to allow nation states to have more power, there is no point in having a single currency covering 25 different currencies. It will not be a good idea to rush into the euro. Even if he succeeds in deciding that we enter, at the right time, and after a referendum of the people, that decision would have a damaging effect at any forthcoming general election. Many Labour Members will gladly travel down that road, but I think that it is very dangerous indeed.

The Prime Minister: There are two positions on the euro—indeed, there are more than two positions, but there are certainly the two positions that my hon. Friend mentioned. We are doing the right thing by saying that it is, in principle, sensible for Britain to join a successful single currency, but that, in practice, the economic tests must be met. The euro will be a reality in the European Union in a very short time when the notes and coins physically come into being. It would be foolish to take the position of the Conservative party and say that we

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should have nothing to do with the euro, that we should not even prepare for it and that never will Britain join. That foolish position might gain support in certain quarters, but it is not in the interests of the country.

Mr. Ian Taylor (Esher and Walton): The Prime Minister has come a long way since he stood on a manifesto in 1983 that offered to take us out of the European Union. That said, he is absolutely right that if we are in Europe, it must work effectively. Does he agree that when the Commission acts to uphold free trade in the single market, it acts in the British national interest? Does he agree that it therefore needs to be made more authoritative and that we need to know how it is controlled?

Does the Prime Minister also agree that the European Court of Justice, in enforcing decisions made by Ministers, is acting in the British national interest? Does he further agree that the Petersberg tasks in defence, which were agreed by Conservatives, are vital to Europe's interest and that it is therefore essential that Europe has a role in proceeding with them as part of a wider NATO commitment. On all those things, will the Prime Minister continue to raise his voice in Europe? We are in Europe, and we shall be run by Europe only if we do not use our influence in the sort of discussion that will culminate in the intergovernmental conference of 2004.

The Prime Minister: The hon. Gentleman is right to say that the Labour party has travelled a certain distance on Europe since 1983. I regret to say that his party has travelled a certain distance too, but in the opposite direction. [Interruption.] Well, look where it got us is all I can say to that.

On Court decisions and so on, the hon. Gentleman is right. It would not be possible for us to enforce our will on issues relating to the single market without the Commission and the Court acting in our national interest. The hon. Gentleman was also right to say that the European common defence policy was started under the previous Government. That was a classic example of a debate that, when we came to office, was proceeding without much British influence. Britain has since successfully shaped that policy to include two very important safeguards. First, it applies where NATO as a whole does not wish to be engaged.

Mr. Ancram: That is not true.

The Prime Minister: Secondly, there is not a standing army.

Mr. William Cash (Stone): Not true.

The Prime Minister: They keep saying that it is not true, but I can absolutely assure them that that is the precise position. The policy applies only where NATO as a whole does not want to be engaged. That is what the Council conclusions say.

Secondly, only in respect of each operation do we have to agree before our troops are used, so the policy is not a European standing army—it never has been and no one has ever wanted it to be. It is, however, for Europe to have the capability—where America, for example, does not want to be engaged—to undertake peacekeeping and

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humanitarian tasks. We can see from what happened in Bosnia in the early 1990s, for example, and from what happened recently in Macedonia how vital it is to have that additional string to our bow.

Mrs. Louise Ellman (Liverpool, Riverside): What action is the Prime Minister urging Europe to take to reduce the flow of financial and other support to Hamas and Islamic Jihad—terrorist organisations dedicated to ensuring that there is never peace in the middle east?

The Prime Minister: My hon. Friend is right to raise the issue of how support gets to terrorist groups—Palestinian or others—wherever they may be. During the past few weeks, the European Union has, of course, agreed further financial regulation provisions on issues such as money laundering, in order to ensure that we cut off the sources of funding for those groups. Part of the problem is that they have been extremely well financed during the past few years. We have to ensure that those sources of finance are dried up.

Sir Michael Spicer (West Worcestershire): As the Prime Minister has given way at Laeken on almost everything that matters, how can we trust what he says about "Corpus Juris"?

The Prime Minister: First, we have not given away what is in this country's interest. In the end, on all these issues, we have to ensure that we go in and argue our case. When the European Union enlarges to 25 members, it is inevitable that we shall have to change the method of proceeding. We will not be able to be in a situation where, for example—

Sir Michael Spicer: What about "Corpus Juris"?

The Prime Minister: I am coming to that in a moment. We shall not be in the situation where, for example, there is a rotating presidency every six months. We shall have to change the way in which we work. At present, the Council meetings are not properly—

Sir Michael Spicer: The right hon. Gentleman gave way.

Mr. Speaker: Order.

The Prime Minister: We are engaging in a debate. As for "Corpus Juris", again we have not given away anything. In respect of the debates in Europe, we have to make our views known.

I support the European arrest warrant. It allows us to get back from abroad criminals who have committed offences in this country and then fled abroad: literally scores of them are living in European countries. It takes us years to get them back and it is only today's Conservative party that could oppose such a thing.

Mr. Nigel Beard (Bexleyheath and Crayford): Does the proposal for an intergovernmental conference responding to the enlargement of the European Union and the preparatory convention chaired by Mr. Giscard d'Estaing imply that the treaty of Nice is, in essence, an interim measure?

The Prime Minister: No, it does not imply that, because the treaty of Nice said in terms that there should

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be an intergovernmental conference in 2004. It shows that there are two stages. First, certain changes were agreed at Nice in relation to, for example, the voting rights of the applicant countries. Then, there were a series of things that we agreed could not be decided at Nice but which needed a longer period of consideration, because the applicant countries will not come in immediately. That is the purpose of the intergovernmental conference. There are really two blocks of things. There are things such as voting rights and so on—the precise conditions under which applicant countries would come in. Secondly, there are the internal workings of the European Union itself—that is what the intergovernmental conference will consider.

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