Select Committee on Foreign Affairs Minutes of Evidence

Examination of Witnesses (Questions 20-39)




  20. It is important for us to give a very firm example to our EU colleagues in terms of contacts with Zimbabwe. What is the government's view in terms of the English cricket team's visit?
  (Dr MacShane) I remember hearing in days long ago—and perhaps my predecessor as Minister for Europe would be a more appropriate person to reply to that question—about politics and sport not being mixed up. I hope that the England cricket team, keen as it must be to search for victories, takes cognisance of the fact that if it goes to Zimbabwe it will do so in very odd, peculiar circumstances that may not redound to its credit; but I am not yet ready, as an old-fashioned libertarian, to call for a specific ban.

Sir John Stanley

  21. The comforting words you offered to Sir Patrick a moment ago, suggesting that the British Government wanted to see Zimbabwe on the front pages of the newspapers in European capitals, do seem to be somewhat at variance with the memorandum which you have submitted to this Committee for this evidence session. Forgive me if I have missed it somewhere but on going through it there appears to be no reference whatsoever in your memorandum[7] headed "Prospects for the European Council, Copenhagen", to Zimbabwe at any point. Are we therefore, as a Committee, entitled to conclude that, contrary to what you said, the British Government's position is that it is not going to raise Zimbabwe at the Council? If that is not the case, perhaps you can explain why there is no reference to Zimbabwe in the memorandum. If it is going to be raised could you tell us what the British Government is going to propose to the other European premiers?

  (Dr MacShane) It was raised last night at dinner and at the last Brussels General Affairs and External Relations Council that I attended there was discussion on Zimbabwe. You are also right to say it is not formally on the agenda and there was a colleague in the House this afternoon from the Scottish Nationalist Party who asked me why his particular problem, which I fully accept he is very concerned about, is not on the agenda. The Council cannot deal with every single issue every single time. Zimbabwe is much discussed, to use the jargon, in the margins because we press the Government, as Ministers, constantly to maintain the strongest, firmest stand on the Zimbabwe issue. You are right also to note that when things are on the front page of the national and international media it is a lot easier to get a political head of steam behind them. When they are not, people move on to the next big story or issue but I can assure the Committee that, in as much as I will be having talks with my opposite numbers, the European ministers at Copenhagen, I will continue to press the case for a very strong line on Zimbabwe.


  22. I would like to turn to enlargement. Our Danish friends are justly very proud that the process began at the Copenhagen Council in 1993 and hopefully will be concluded satisfactorily at Copenhagen this month, 2002. Are you able to give us some hot news from the front? What, if anything, is happening now? Have any decisions been made in closing the chapters or are discussions still continuing?
  (Dr MacShane) The latest reports I had were that discussions continue but in a good spirit. People still want to take these issues to the table at Copenhagen itself, some in the hope of one last extra bit of benefit in terms of the terms under which they will accede to the European Union, others, I think reasonably, in the hope that even in the last 24, 36 or 48 hours some people might change part of their mind and be more generous. It is the normal negotiating process. My firm impression from the talks I have had with at least six of the applicant countries which I have been able to visit since becoming Europe Minister was that people also saw the larger picture and the need that Copenhagen will be a moment of celebration and a coming together of the European Union.

  23. The applicant countries may see the larger picture but they are concerned that perhaps the existing EU nations may not see that larger picture. You will recall the letter in today's Financial Times from the prime ministers of Hungary, Poland, Slovakia and the Czech Republic[8], effectively saying that there was a real danger that they would reach a cash flow crisis as they would be expected to pay without the speed of receipts from the EU and asking that this be seen as a key point of history. Do you share the apprehensions of those prime ministers?

  (Dr MacShane) I read the excellent essay in The Financial Times which placed the accession in the much bigger picture of European history. It talked of an historical moment that never comes twice in the lifetime of a couple of generations of political leaders of each nation. I have heard these points made in my own discussions with Poles, Czechs, Slovakians, Hungarians and others. The European Union was right to announce a package of a total amount of money and leave it up to the Danish Council team—and I pay tribute to the extraordinary professionalism with which they have handled these very complex, technical, end-game negotiations—to come to final deals. I do not have the impression, looking at the budget positions of some of the major contributors to the European Union, principally that of Germany, the largest net contributor, that they feel that they have any extra money to give at this stage. I am also not convinced that an extra per cent here or half a per cent there makes such an overwhelming difference. We have looked to address specific points that are relevant to each nation's agricultural or manufacturing or wine and drinks culture. I am very confident that, out of Copenhagen, governments will go back pleased with the fact that no one will be other than a net beneficiary as a result of joining the European Union in the first period. An important technical point is that, whereas all of them will be in full receipt of what they would get from the European Union from 1 January 2004, they only have to start paying in from 1 May. This accounting technique means they get yet more money from the EU and pay less in the first year of membership.

  24. The prime ministers were well aware of that when they expressed their apprehension. You know the Polish situation well. There is a possibly unstable coalition. Is there a serious danger that public opinion might be turned against the European Union in a referendum unless the major contributors are prepared to be more generous?
  (Dr MacShane) The danger of public opinion in any country being turned against the European Union by demagogues and anti-European charlatans is something that we have to live with in the existing EU Member States. There is a significant amount of money coming from the European Union to each new applicant country. Candidates will receive on average 4% of their GDP from EU funds in any one year. That, if you think just how much 4% of GDP would mean in this country, is a very substantial flow of cash in the right direction and I hope that governments will highlight this. Within each country, there are different balances of opinion on the popularity of the EU, different people who seek a political profile by campaigning against it, but all the leaders I have met, including representatives of the four governments whose prime ministers signed today's article in the FT, have made very clear that they are going to go all out to win the support of their people for a "yes" vote in the accession referendum.

Mr Pope

  25. Could you try and pin down the figure for the amount of euros that are going to be spent to ease the transition of the new members into the EU. Is 5.5 billion euros by 2004 an accurate figure?
  (Dr MacShane) We know that the budget for all ten candidates in 2004 to 2006 will be less than one thousandth of the EU's total GDP. The current total GDP of the European Union is 7.8 trillion euros or dollars, since the euro and the dollar are about the same at the moment. If somebody would like to divide a thousand into that, I think it comes to 700 million[9]. It is a significant transfer west-east. On average, candidates will receive 4% of their GDP from EU funds in any one year.

  26. The reason I came up with 5.5 billion is that there is about 2.5 billion accounted for in deferring payments from January to May 2004, an increase in aid of two billion and a one-off reimbursement of one billion in 2004 which brings you to 5.5 billion. Do you think that is an appropriate figure or do you think, as some people who are already in the EU have suggested, that it is too generous?
  (Dr MacShane) Those who do not want to give think it is too generous. Those who would like more think it is not generous enough. I think it is about right because what has not been put into the equation is the fairly generous, pre-accession amount of money that the EU has given to the candidate countries. It is also right in terms of their capacity to absorb money too, because if one moves straight away to 100% direct payments under CAP not only will that bust the CAP budget wide open, but I very much doubt if any of the applicant countries would be able to handle that amount of money into what is still a not very modernised, reformed, high tech or low employment agricultural sector. These things are a matter of balance. I am confident that we have struck it about right. A point I constantly made in my discussions was that, if the EU's budget did not spend just short of 50% on the Common Agricultural Policy, there is likely to be more money all round; or if the EU with 370 million citizens had the same GDP as the United States with 250 million citizens—ie, $10.1 trillion, $2.5 trillion more than the EU—again, if we have been growing faster, creating jobs in the way that perhaps only this country has shown the way forward on, Europe would be richer and it would be possible to be more generous.

  27. My final point is about Poland. Some people are unhappy with the package on offer. One of the groups of people who are very unhappy are the junior partners in the coalition that makes up the Polish government. Whenever I have spoken to people from Poland, they have expressed real concern and sometimes anger about the agricultural proposals that have been put forward. They feel that they are going to be short changed. Are you concerned, as I am, that first of all this could destabilise the Polish government and secondly it could even threaten a referendum in Poland on accession?
  (Dr MacShane) Where one has a large peasant population—though the definition of the Polish farming community is not like one would see in other countries because there is a large number of people employed in other sectors who produce agricultural products, not on a full-time basis—people look to the EU for a great deal of financial support. If that is not available, they may be discontented. We had 400,000 people marching in the streets of London two months ago, the Countryside Alliance, most of whom, it seemed to me from their posters and those I saw, wanted more money spent in the agricultural economy; yet we are all agreed on a cross-party basis that the Common Agricultural Policy does not work and needs reform. It will always be a difficult question but I hope the broad interests of the Polish people have to be more satisfied by the fact of enlargement, of free movement of people, of investment, of developing their new, value added industries, encouraging the creativity of their people, allowing them to travel and have two way trade and investment right across this new, 500 million strong market. That I hope will outweigh the fears and misgivings, which I fully understand, of elements of the Polish agricultural economy and peasant community.

  Andrew Mackinlay: Can I join in welcoming the new Minister of Europe? He is the sixth Minister of Europe in just over five years, which is a great pity. I wish him a long time in this job, not for him but in the interests of the United Kingdom because I think the Prime Minister has been very fickle on not having a consistent Minister of Europe. I think it is bad form, frankly, and I hope you stay there a very long time.

  Chairman: Do you agree with that?

Andrew Mackinlay

  28. It is a very serious point. There are no relationships built and it sends all the wrong signals. Having laboured that point, it struck me that the great danger is that the Iraqis have put what weapons they have, to use a phrase used in Ireland, beyond use. They would have destroyed or dismantled their weapons but that would only be half the requirement of the United Nations because the requirements are that we know exactly what they had, what they procured in the past and where it has gone. Has the British Government anticipated this, because it seems to me that there could perhaps be disagreement between the United States and the United Kingdom, which I think has proved to be a very successful scenario. That kind of relationship with firm resolve has brought us to this position where there has been a very false admission made. There will be those in the Defence Department in the United States, and probably in the White House, who will see a material breach as something relatively small; whereas we and others who have been less resolved than ourselves will consider that this was a major step down by Saddam. I hope I am trying to paint a scenario. The likely thing is not going to be black and white. There is not going to be a blatant material breach by Saddam. Equally, he is probably going to, as a matter of pride, self-esteem, arrogance, call it what you like, have put his weapons beyond use but not given full disclosure. Have we anticipated that kind of scenario? How would we deal with it?
  (Dr MacShane) You raise a whole range of issues that are coursing through everybody's minds. I hope the answers will come, both from the analysis of the documents presented and the continuing reports from the inspectors on the ground. There is undoubtedly quite an important role for the inspectors who are in two way communications with the UN to help precisely to try to answer some of the points that you have made. I am not seeking to dodge the question but it is genuinely quite hard to speculate at this stage on where we will be on the Iraq question even in a relatively short time, let alone in the two or three days that remain until the European Council.

  29. Has there been agreement between the President of the United States and our Prime Minister, or between the State Department and the Foreign Office, that in order that there will not be a public breach there will at least be some joint examination? What I fear is that the United Kingdom's threshold as to what constitutes compliance may be different from the United States. It is not unreasonable to assume that we might have a different assessment. Surely, there ought to be at least a mechanism to discuss that before either side claims?
  (Dr MacShane) Mechanisms exist in the sense that there are continual, bilateral contacts between the Foreign Secretary and the Secretary of State, between the Prime Minister and President Bush, as indeed there are between American government officials right up to the highest levels and their opposite numbers elsewhere in Europe. I accept exactly the thrust of your argument but I think we have some time to go yet. I got the impression, listening to President Bush's radio broadcast, that he wanted time to examine these documents. We have the inspectors on the ground who are reporting continually. I would be very happy to come back to the Committee—I am sure the Foreign Secretary would—to discuss the next stages of the unfolding Iraq crisis, but as of today all I can say is we have the resolution. That was a good result for diplomacy. Europe and the United States are united through that. I think the European Council will adopt a strong resolution in Copenhagen. Now we must get on with going through in detail the 12,000 pages of documents and encourage the inspectors to maintain as thorough an inspection regime as possible.

  30. Can I move to the European Union and Copenhagen? Romania and Bulgaria: presumably they are coming up at Copenhagen with regard to giving them some targets for accession. Also, a relatively small but nevertheless important issue: the vexed issue of us still requiring of a country which is likely to come to the European Union in a few months' time visas from Slovakia. It seems to me unnecessarily spiteful and rather silly and if it is going to be okay on the night two months down the road why is it not this evening? Why are we insisting upon visas for folk from Slovakia?
  (Dr MacShane) On Bulgaria and Romania, we did at the last European Council in Brussels express support for those two countries and their efforts to achieve the objective of membership in 2007. The Prime Minister has also repeated that we believe 2007 is an achievable target date for their accession. I understand again there was discussion in Brussels where the Foreign Secretary has been since yesterday afternoon on this issue. My hope is that at the end of the Council in Copenhagen 2007 Bulgaria and Romania will stay firmly on the agenda. On Slovakia, I was there in Bratislava recently myself and it is undoubtedly an issue. We are keeping it under the closest review—that is to say, the visa regime. We want to lift it as soon as it is no longer needed, but all honourable members of this Committee will be aware from their surgeries of the problem of people who arrive and then claim asylum. Unfortunately, there were some difficulties emerging.

  31. It is what they call a `white' country now, is it not?
  (Dr MacShane) It was to do with transit and some minorities within Slovakia. You are absolutely right: once in the EU, it goes. There is free movement of people.

  32. It is the same humbug. When Mr MacShane was elected to the House of Commons, to the credit of the Major government, he lifted the visas on Poland and there were all the same silly people in the Foreign Office and the Home Office who shouted, "Foul" and unfortunately there was a political decision taken.
  (Dr MacShane) The very positive announcement made by the Foreign Secretary today is that Britain is going to extend free movement of people's rights to all EU candidate countries on their accession. I think that puts us in a good club of liberal, open countries that see value in the Poles and the Czechs coming to Britain as soon as they are in the European Union, just as our Spanish, Greek and Portuguese friends can do at the moment.

  33. The question of corruption in the EU is coming up. We have some evidence here from the Budapest Open Society Institute but we do not just need it from them. There is a feeling that not only is corruption a problem in some of the applicant states but also in the existing states. There is a feeling that there has been insufficiently robust homing down by the existing governments on corruption. Is that coming up at Copenhagen with a view to it being dealt with in a very substantive manner? I realise it is probably always on the agendas but in the United Kingdom in particular where, by and large, we consider ourselves, not in an arrogant way, to be pretty good on minimising corruption, there is a feeling that that is not the norm or pattern in existing arrangements, quite apart from what might exist in applicant countries.
  (Dr MacShane) Chairman, I am repeating now an exchange in a debate on Europe earlier last month in which the Hon. Member was listing the cases of fraud and corruption involving the Common Agricultural Policy, which are there in the auditors' report. I noted that day that our own National Audit Office had referred to a £150 million VAT fraud, which will be tinged with corruption inside the UK. I thought the question of motes and beams might be applied when we get into CAP fraud and corruption. Everybody is concerned about the whole justice, rule of law, corruption aspects of some parts of the applicant countries but, again, 15 members of the European Union might want to look into some of their own corners of behaviour. The UK in particular has sought to provide considerable expert advice to the candidates to do with organised crime, money laundering and strengthening of their police services. We have a very good record in some of these countries, notably Estonia and Slovenia, and we are to help more. I chaired myself ten days ago a big conference of countries from principally South East Europe, attended by foreign justice and security interior ministers, on how to combat organised crime, people trafficking, money laundering but, again, I do believe that entering the European Union will oblige all those countries to step up their game to improve the quality of their work in this field because the Single Market and the single Community of the European Union cannot work if it is affected by corruption in any area.

  34. The issue, of course, is not so much the scale which exists, it is the determination and having the institutional mechanisms to both find, detect and prosecute which in the United Kingdom we are strong on, even if we find something wrong. Can I move to Cyprus. If there is an agreement based on the plan which the United Nations are pushing at the moment and we are supportive ourselves of two component states, reading the documentation if the two component states exist the franchise for local government and for the component states must exist, must it not, for whoever is residing in the component state regardless if one has citizenship of that component state? There is going to be, I understand, a common citizenship for the union of Cyprus and then you have citizenship of a component state. But under the European Union law a citizen of the European Union can vote in Rotherham Council elections and Thurrock Council elections, so if I am not a citizen of the Turkish zone component state by happening to be Greek I will, will I not, be able to vote in those elections? Discuss.
  (Dr MacShane) Certainly the theoretical position is quite clear. All European Union Member State citizens have the right to vote in municipal elections. I do not see why that should alter particularly in the case of Cyprus but we see, for example, in Belgium, where there are two quite distinct Flemish and French speaking communities, really quite separate approaches.

  Andrew Mackinlay: It works. You and I are in agreement, Minister, you and I are in agreement, I am talking about whether or not that is in the plan? Has it been thought about otherwise it will be a major departure from what are the existing European Union Treaties, will it not?


  35. You can reply in writing, Minister, if you want.
  (Dr MacShane) I am always reluctant to set functionaries off on another paper chase so if I can deal with it verbally, Chairman.

  36. Yes.
  (Dr MacShane) I am not aware that the Annan plan is in any way going to allow a derogation from European Union norms and practices so, yes, if Cyprus, which is one state, will adhere to the European Union it will have to conform to European practices in terms of electoral law. That requires, also, people taking residence, buying property and the rest of it because much as at times I wish many Europeans would vote in Rotherham, they are not allowed to unless they actually live there.

  Andrew Mackinlay: Chairman, other colleagues might want to come in. I want to come in on other things: Macedonia, Kaliningrad, Belarus, Ukraine, there is the question of the collective doctrine of defence, restitution of law and poverty.

  Chairman: I will come back to you. I will let other colleagues come in, Sir John and Mr Pope, and then I will come back to you.

  Andrew Mackinlay: That is excellent. Can I just say on Poland though, I listened and very much agree with Denis MacShane, it does seem to me the day Poland comes into the European Union that puts to bed the outrage and the war which started for them on 1 September 1939.


  37. Minister, you have a special interest in Poland.
  (Dr MacShane) I think all Poles have been dreaming of this day for a long, long time.

Sir John Stanley

  38. Minister, as you know, last week the President of the EU Commission, Mr Prodi, made a far reaching speech in which he proposed the abolition of national vetos, possibly in their entirety but over pretty well all the remaining areas where the veto applies, including taxation. Could you now tell the Committee, as far as the British Government is concerned, where the British Government considers currently the subjects are which must be reserved in future for unanimity?
  (Dr MacShane) The Prime Minister in a speech in Cardiff on 28 November set out the Government's current position, and I would be happy to circulate that speech for all Members of the Committee. He stressed that we need to move away from a sterile debate between so-called inter-governmentalism and communitisation. In my phrase "Europe is not a zero sum gain" and in his phrase "we need both strong national governments and strong European governance". The issues that we think still are important to remain under the control of unanimous voting remain defence, foreign policy, taxation, social security, and I was very interested to read in the French press yesterday that the French Government was looking to see VAT on its hotels and restaurants reduced to 5.5 per cent, which of course is a major shift that would require the support of other countries. It seemed to me, reading what the Prime Minister, Monsieur Raffarin, was quoted as saying, that the French understand also that harmonising or having single tax rates across Europe does not make much sense.

  39. To the list you have just given to the Committee, do you add treaty change?
  (Dr MacShane) Of course, and treaty change, forgive me.

7   Ev 1-3. Back

8   One step away from making history, Financial Times, 10 December 2002. Back

9   Note by witness: The figure comes to 7.8 billion. The final outcome of Copenhagen was a sum of 40.4 billion euro over the period 2004 to 2006. Back

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