Examination of Witnesses (Questions 20-39)
TUESDAY 10 DECEMBER 2002
.DR DENIS
MACSHANE
MP, MR PETER
RICKETTS AND
MR SIMON
FEATHERSTONE
Chairman
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.
Chairman
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?
Chairman
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.
Chairman
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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