EU and Georgia: EU and Moldova

The Committee consisted of the following Members:

Chair: Annette Brooke 

† Barwell, Gavin (Croydon Central) (Con) 

† Clappison, Mr James (Hertsmere) (Con) 

† Elphicke, Charlie (Dover) (Con) 

† Evans, Jonathan (Cardiff North) (Con) 

Gapes, Mike (Ilford South) (Lab/Co-op) 

† Hopkins, Kelvin (Luton North) (Lab) 

† Horwood, Martin (Cheltenham) (LD) 

† Jones, Susan Elan (Clwyd South) (Lab) 

† Lidington, Mr David (Minister for Europe)  

Qureshi, Yasmin (Bolton South East) (Lab) 

† Rees-Mogg, Jacob (North East Somerset) (Con) 

Shannon, Jim (Strangford) (DUP) 

† Thomas, Mr Gareth (Harrow West) (Lab/Co-op) 

John-Paul Flaherty, Committee Clerk

† attended the Committee

The following also attended ( Standing Order No. 119(6) ) :

Barron, Kevin (Rother Valley) (Lab) 

European Committee B 

Monday 9 June 2014  

[Annette Brooke in the Chair] 

EU and Georgia: EU and Moldova

4.30 pm 

The Chair:  Does a member of the European Scrutiny Committee wish to make an explanatory statement? 

Kelvin Hopkins (Luton North) (Lab):  Thank you, Mrs Brooke. It is a pleasure to serve under your chairmanship this afternoon. 

It might be helpful to the Committee if I explain some of the background to the documents and why the European Scrutiny Committee recommended the debate. The four Council decisions are the legal instruments for authorising the signature and provisional application, and for authorising the conclusion, of the association agreements between the European Union and Georgia and the EU and Moldova. The EU’s European neighbourhood policy—in this case through the Eastern Partnership—seeks to achieve the closest possible political association and the greatest possible degree of economic integration short of accession. The partnership also seeks to promote democracy and good governance. The new association agreements are central to the partnership. 

The agreement with Ukraine, which was debated last November and is now being provisionally applied, is the first of its kind. The proposed agreements with Georgia and Moldova would likewise deepen and broaden the political and economic relationship with each country, with a deep and comprehensive free trade area—DCFTA—as a key part, to support and encourage reform in both countries, to bring them closer to EU norms and to provide gradual access to parts of the EU internal market. The agreements were initialled at the Vilnius Eastern Partnership summit in November 2013. 

The Committee has retained the proposals under scrutiny for two reasons. First, they are politically controversial. Not all members or all of the wider community agree with the Government that the EU and member states were wise to press ahead with the agreement with Ukraine in the face of Russian opposition. Therefore, given the Russian response, to do so now with Georgia and Moldova, especially as they both have protracted conflicts on their territories in which Russia is centrally engaged, is also subject to question. 

Secondly, there are a number of legal concerns, the first being on the division of competencies between the EU and member states in those aspects of the agreement that deal with political co-operation, an apparently dry issue, but central in the context of the EU’s common foreign and security policy, which remains under member state control, and its relationship with other related areas where “competence” is shared between the EU and the member states. The Committee is concerned that the EU should only exercise competence and provisionally apply those elements of the agreements where it has exclusive competence. 

In the Minister’s most recent letters—of 2 and 4 June —he says that the Government have negotiated “declarations” in respect of provisions that they accept either are not matters of exclusive EU competence, or are matters where the EU is provisionally applying matters where member states have competence. The declarations alleviate our concerns, but they cannot entirely remove them. They may assist in preventing the matters becoming unhelpful precedents, but they are not legally binding. The Government, however, have arranged the debate before the European Scrutiny Committee has been able to report and comment on that further information, which it would have done via the report that it will agree at its normal weekly meeting on 11 June—although the Foreign Affairs Council meeting at which the documents are due to be adopted will not take place until 23 June. 

In respect of the Government’s assertion that the UK opt-in applies to certain aspects of the agreements, the clarifications provided by the Minister as to the exercise of competence mean that the issue only arises in relation to readmission and mode 4 services. The Minister has now indicated a wish to opt into both. The Committee, however, remains of the view that the opt-in will not apply—therefore, the provisions automatically apply to the UK—unless the proposals are given a title V legal basis, which the Government have failed to secure. 

It is therefore a matter of concern that the Government, in arranging the debate in this way, ahead of the next Committee meeting and two weeks before the Foreign Affairs Committee, have compromised the scrutiny process. All in all, it is difficult to escape the conclusion that, in order to comply with what the Council regards as a political imperative—which in itself is not entirely uncontroversial—chances have been taken with important legal considerations. 

The Chair:  I call the Minister to make an opening statement. 

4.35 pm 

The Minister for Europe (Mr David Lidington):  Mrs Brooke, it is a pleasure to serve under your chairmanship. 

The Georgia and Moldova association agreements are being dealt with together in Brussels and in our own parliamentary scrutiny process. The two agreements share many things in common, but it is also important to recognise that they are two distinct agreements, with some details where arrangements with the countries differ. 

Georgia and Moldova are independent and sovereign states. They have decided of their own free will to sign the agreements in order to seek closer political association and economic integration with the European Union. The Government fully support the Governments of Georgia and Moldova in those objectives. It is not that the EU is trying to pull Georgia and Moldova away from Russia against their will. Nor is this a zero-sum game: we believe that both countries should have—and, indeed, need—good relations with Russia and that the agreements will have a positive effect on the entire region, including on Russia itself. 

Having said that, it is true that Russia’s actions in Ukraine present a fundamental challenge to a rules-based international system. That challenge has to be met, including by supporting those nations that wish to forge

a new path and new relationships that differ from those of their past as Soviet republics. The Georgian and Moldovan Governments have made it clear to me and to my ministerial colleagues that it is their wish to sign the association agreements as soon as possible. Our view is that we must try to meet that request and should not allow any third country to pressure or veto our bilateral relationships with Georgia, Moldova or any other state. 

The association agreements constitute a reform agenda for Moldova and Georgia, which they will need to implement. It is based around a comprehensive programme to align their legislation more closely with EU norms, focusing on support for core reforms including economic recovery and growth, governance and co-operation in a wide range of sectors. I believe not only that that will help to ensure a more stable and prosperous eastern neighbourhood for the European Union but that the reforms will be in the national interest of the United Kingdom. 

Both association agreements contain provisions to set up deep and comprehensive free trade areas. The DCFTAs will help to stimulate economic growth and to create business opportunities and jobs. Georgia and Moldova will be expected to align their technical regulations and standards with the EU acquis, meaning higher standards for their own domestic consumers. Of course, signing the agreements is one thing; it is their implementation that really matters. In practice, the DCFTAs will result in the immediate elimination of EU import duties on the vast majority of Georgian and Moldovan goods, opening the door to the world’s largest marketplace. 

Implementation will provide some challenges. The European Union has recognised that by making the provisions asymmetric. Important Georgian and Moldovan industries will be protected—for example, the agricultural sector in Moldova will be subject to phased liberalisation over a period of several years, to enable domestic reforms to continue and to allow the competitiveness of Moldovan products to increase before EU products have full access to Moldovan markets. 

The Commission’s original draft Council decision proposed a wide scope for provisional application. Articles of the agreements that are subject to provisional application are implemented immediately after signature, so that the benefits are realised without the need to wait until ratification. Where an article is subject to provisional application, it is the EU that is exercising competence. 

It is true that the original proposal from the Commission tested the post-Lisbon competence boundaries. We have since worked to limit the scope of provisional application and have now reached a position that meets our competence concerns across Government. That position is set out in the latest Council decisions. Importantly, provisional application will allow for the immediate application of the trade elements of the association agreements, meaning that Georgia and Moldova will be able to take immediate advantage of those aspects. 

Even within the agreed narrower scope of provisional application, the Government still had a number of concerns about competence, particularly over the rule of law provisions and common foreign and security policy. In order to mitigate those concerns, the UK gained agreement for a joint declaration by the Council,

the Commission and the High Representative to clarify the situation and avoid any ambiguity over the meaning of the agreements. 

Article 2 in each agreement sets out the standards to which Georgia and Moldova will be held in terms of democratic principles, human rights and fundamental freedoms. The provisional application of article 2 means that the EU can invoke 

“appropriate measures in case of non-fulfilment of these obligations” 

should either country waver in its commitment to democracy or human rights. Clearly, that is important, but the Government were concerned that some aspects of article 2 were areas in which member states, rather than the EU, should exercise competence—for example, in international organisations. The joint declaration mitigates that concern by making it clear that provisional application of article 2 is without prejudice to the division of competence between the EU and member states and is necessary only to allow the EU to take appropriate measures as outlined before. 

The scope of provisional application also includes articles 7 and 8 of both agreements, as well as article 9 in Georgia only. Those articles concern political dialogue and co-operation, particularly on protracted conflicts—a point that is important to both Georgia and Moldova and on which they were keen for provisional application to take place. Again, although we were sympathetic to that objective, we argued that member states, rather than the EU, should act in relation to political dialogue and co-operation and therefore gained agreement, again, to include this question in the joint declaration, to make it clear that provisional application is without prejudice to the division of competences between the EU and its member states. 

Both association agreements also include a provision on crisis management and conflict prevention. I know that the European Scrutiny Committee took a strong interest in that area, so I reiterate that the crisis management provisions in the association agreements relate to Georgian and Moldovan participation in EU civilian and military crisis management operations, such as Georgia’s commitment of 160 troops to the EU mission in the Central African Republic and the invitation to Moldova to participate in EU missions in the horn of Africa and Mali. It is a codification of co-operation already taking place; it does not represent a defence or military co-operation treaty. 

Finally, we have agreed to the provisional application of articles concerning co-operation in relation to the rule of law and the administration of justice. Article 12 in the Georgia agreement and article 13 in the Moldova agreement deal with those matters. Making progress on judicial reform is important in both countries. We have used the joint declaration again to clarify that the provisional application of those articles does not constitute an exercise by the EU of justice and home affairs competence pursuant to title V of the treaty. 

Let me turn briefly to JHA matters. We considered the question of the UK’s JHA opt-in in relation to both association agreements. Taking into account the views of the scrutiny Committees, the Government will opt into the articles concerning readmission and mode 4—trade in services—obligations. In respect of the articles on readmission, we have continuously pushed for the citation of article 79(3) of the treaty on the functioning of the

European Union and the splitting of the Council decisions into JHA and non-JHA decisions. As the hon. Member for Luton North pointed out, we have not achieved that aim. 

Given the wider geopolitical importance of getting these agreements in place, the Government consider that we must reluctantly accept the absence of a title V legal base. We will register our dissatisfaction through a minute statement making clear that we have opted into the relevant JHA provisions and that we consider that article 79(3) should have been cited in relation to the readmission provisions. However, the Government continue to take the view that our opt-in is triggered not by the citation of a title V legal base, but by the content of the measure that we are considering. On that matter, we have a long-standing difference of view with the European Scrutiny Committee. 

We have carefully considered the other JHA provisions in the association agreements and concluded that in those cases it is either the member states that are entering into the obligations, or the nature of the provisions themselves does not trigger the opt-in. 

As I said at the start of my remarks, we consider the signature of the association agreements with Georgia and Moldova to be an important step and something that will help both countries to prepare themselves for the challenges of the future and bring greater political stability and prosperity to all their citizens. 

The Chair:  Thank you, Minister. We now have until 5.30 pm for questions to the Minister. May I remind hon. Members that questions should be brief? Subject to my discretion, they may ask related supplementary questions. I would like to ensure that we keep moving and do not just get stuck. If someone asks a couple of questions, there should be plenty of time for them to come back and ask further questions, because we will go from one side of the Committee to the other. I will now call Gareth Thomas and suggest that we start with four or five questions. We will then go to the other side of the Committee and then come back. 

Mr Gareth Thomas (Harrow West) (Lab/Co-op):  Thank you for that guidance, Mrs Brooke. Will the Minister set out for us the attitude of the Parliaments in Georgia and Moldova to the two association agreements? He will remember that the last time the Committee discussed an agreement such as this was the EU-Ukraine agreement. Shortly after our discussion, revolution occurred on the streets of Kiev. I do not know whether it was related to our discussion, but it was clear at that point that some forces in the Parliament in Ukraine were certainly not committed to the agreement. It would be helpful to hear his assessment of parliamentary support in Georgia and Moldova. 

Mr Lidington:  It is a good point and it is important to make a distinction between the two countries. When it comes to Georgia, both the Government and Opposition are in favour of the association agreements. When I was in Tbilisi earlier this year, I discussed this with the Prime Minister of Georgia, who assured me of Georgian dreams of continued commitment to the association

agreement. Of course, it was under the leadership of former President Saakashvili that the work started toward this objective, so in Georgia there is a very wide consensus. 

In Moldova, the matter is more complicated. The governing coalition is strongly in favour of the association agreement, as Prime Minister Leanca reiterated to me in Chisinau in January. There is opposition from at least some parts of the Communist party, which is the main Opposition in the Moldovan Parliament, but again it was actually a Communist-led Government that first commenced the process that led to this association agreement. There is a general election taking place—I am sure the hon. Gentleman knows—in Moldova later this year. Obviously, it will ultimately be for the people of Moldova to decide whether they want to continue with this. I certainly argued, when I met the leader of the Moldovan Communist party, that what was being proposed was very much in the interests of everyone in Moldova, no matter what political party they happened to support. 

Mr Thomas:  Linked to the question about parliamentary support is the question more generally about possible opportunities to destabilise the political situation in Georgia and Moldova, perhaps linked to a deeper relationship between the EU and those two countries, and potentially with Russia as the driving force behind those attempts. What assessment has the Minister and his Foreign Office colleagues made of the risk of further destabilisation of that sort taking place? 

Mr Lidington:  The precedent of Ukraine shows that the risk exists. One does not even have to look at Ukraine. Georgia, of course, was subject to Russian military aggression in 2008 and, to this day, Abkhazia and South Ossetia remain outside the de facto jurisdiction of the Georgian Government. In Moldova, there are significant numbers of Russian troops in Transnistria, and there are certainly suspicions on the part of the Moldovan Government that Russian influence has been behind some of the discontent in the autonomous region of Gagauzia as well. 

I need to emphasise to the Committee that we, and the EU as a whole, do regard it as important to continue to say to the authorities in Russia that they ought not to see these agreements as a threat to them. It is inevitable that small countries living quite close to Russia will need to have a decent relationship with Russia. They do a lot of trade with Russia, in any case. If we look at the precedent of Poland, for example, greater prosperity, growth, and economic and political stability in Moldova and Georgia will lead to greater commercial opportunities for Russia as well. It has been a win-win for Russia with regard to its relationship—commercial in particular—with Poland. The same should apply with Moldova and Georgia. 

Mr Thomas:  May I raise a question of energy supply? Russia’s threats to withhold energy by shutting off the supply were an issue at various points in the discussions between the Ukrainian Government, as was, and the UK. To what extent does the Minister see that as an issue in the cases of Georgia and Moldova? 

Mr Lidington:  I will take some advice on the detail of that question and come back to it in my concluding remarks. The evidence we have seen both with Ukraine

and, already, with Moldova and Georgia is that the Russian Government have been prepared to use a number of different levers, not only energy. In the case of both Moldova and Georgia, the Russians have imposed restrictions on the free export of wine and other agricultural produce into Russia. There are also significant numbers of Moldovan and Georgian citizens working in the Russian Federation who remit large parts of their earnings back to their home countries. Any Russian threat to make it more difficult for those people to work in Russia and remit their earnings would also be a significant source of political pressure at Russia’s disposal. 

Mr Thomas:  The Minister may want to reflect on this question, but the Committee has explored a little of the impact that the new agreements might have on the work of the EU’s special representative for the south Caucasus, who, as the Minister has alluded to, is looking at some of the protracted conflicts in Transnistria, South Ossetia and Abkhazia. Is the Minister able to give us a sense of how he thinks the work of the special representative may change as a result of the signing of these association agreements? 

Mr Lidington:  That is something that we will need to keep under review, but the special representative’s work is more about the search for political agreement on the unresolved conflicts in Abkhazia, South Ossetia, Nagorno-Karabakh and Transnistria than about the detailed matters covered by the association agreements. I probably should not be drawn into talking in detail about the various unresolved conflicts. Each conflict is different, and the EU special representative has a role to play, but there are other processes for each of those conflicts. The co-chairs of the Minsk group, for example, take the lead on Nagorno-Karabakh. There are the Geneva 5+2 talks for Transnistria and Moldova. There are low-level practical contacts across the lines between the Georgian Government and the de facto authorities of the breakaway regions on things such as health. Those conflicts are being addressed in a number of different ways. The EU’s special representative is working to co-ordinate the EU’s overall response and to feed back to Brussels and member states on what is going on in those three parts of the world. 

The Chair:  I will now move to Jacob Rees-Mogg, who will keep his two questions brief and to the point. 

Jacob Rees-Mogg (North East Somerset) (Con):  It is a pleasure to serve under your chairmanship, Mrs Brooke. 

What is the legal basis for the United Kingdom’s agreeing to the parts that are provisionally applied but are not European Union competences? 

Mr Lidington:  We think that the joint declaration protects our position because the language makes it possible to say that there is ambiguity about what the article might mean. The joint declaration means that it is not only the United Kingdom saying this; the institutions of the European Union themselves are saying that they agree with our interpretation that the articles refer to those powers for which, under the European treaties, it is the EU that has the right to act, rather than competence lying with member states. The issue about the opt-in is

slightly different. That relates, as I said earlier, to a difference between the European Scrutiny Committee and the Government in the interpretation of the treaties. 

Jacob Rees-Mogg:  I am grateful to my right hon. Friend, and I will come back to the opt-in issue in a later set of questions, if I may, but I want to concentrate specifically on the competence issue. If the European Union does not have competence in certain areas, and it says it does not have competence, what is the legal basis for making an agreement provisionally with a third country? How can such a treaty be enforceable or enacted if there is no legal basis for that competence to be exercised? This nation has not exercised it, because we have not gone through our own constitutional processes. 

Mr Lidington:  Those articles of the association agreements address in broad terms a number of issues that, when it comes to the outworking of the detail, sometimes fall to the European Union and sometimes fall to member state action. We could have said that we were going to block the agreements entirely and that we would go through not just every existing interpretation, but every hypothetical, future interpretation of the articles to state in detail which would fall to member states and which would fall to the European Union. I honestly do not think that would have been a sensible way to proceed. By definition, of course, we would not have been able to predict how, in the future, new proposals might come forward. The point of principle we have established is that the existing understanding of where the competence boundary lies is being acknowledged publicly and respected by all sides. That seems to be the most sensible way to address this. 

Kelvin Hopkins:  One element of the opening statement was the process that has been adopted. There is a suggestion that we are being bounced too quickly into agreeing this without time to have discussions in the European Scrutiny Committee and the Foreign Affairs Committee. If it is the case that we are being bounced, is the pressure from the Commission or the Foreign Office? 

Mr Lidington:  There are a couple of aspects to that point. First, it is no secret that the Heads of Government agreed in the European Council in January that they wanted to have these agreements signed in June. Equally, there is no secret about the fact that the worsening crisis in Ukraine, and the fears that existed in Georgia and Moldova that they were next on the list for Russian intervention, drove the sense of urgency among Heads of State and Heads of Government. 

On the parliamentary process, I think I am right in saying that the European Scrutiny Committee formally referred the matter for debate on the last sitting day of the 2013-14 Session. It is not the fault of the members of that Committee or the Foreign Office that we then had a period of recess. Decisions will have to be taken, in line with the European Council’s agreement, in June. We therefore wanted to bring the debate forward to the earliest possible date, and that has, sadly, led to a tight time scale in this particular instance, because of Prorogation and the forthcoming deadlines. However, on the same day the Committee of Selection agreed the date of the debate, I wrote to the Chairman of the European Scrutiny

Committee to tell him about it and about the expedited scheduling process. I agree that that is not perfect, but we have tried our utmost to make sure that proper time was allocated for the debate and, critically, to have the debate before the decisions were taken. The Committee would have had stronger cause for complaint had we delayed matters until a future slot could be found, with the risk that the Foreign Affairs Council had been and gone. 

Kelvin Hopkins:  The Minister suggested that Russia should be supportive of the proposals for Moldova and Georgia, and used the example of Poland, which has apparently, because of its better economic development, been of help to Russia. It is all very well saying what Russia should feel, but has the Minister got any information on what the Russians actually feel about these developments? 

Mr Lidington:  In public statements, the Russian Government claim that association agreements are an aggressive attempt by the west to draw the former Soviet republics away from Russia. They also argue that membership of a deep and comprehensive free trade agreement with the European Union is incompatible with membership of the customs union that Mr Putin has established. The members of that customs union are Russia, Belarus and Kazakhstan. 

I take some of those Russian protests with a pinch of salt. My starting point is that these are independent countries. This is not some post-Soviet space where we should simply accept that Moscow or anyone else has the power or right to come in and limit the freedom of Governments in Chisinau or Tbilisi. Secondly, as the Polish example shows, there is much from which Russia could benefit through such closer association. Nothing in the association agreements stops the two countries from continuing to have close relationships with Russia if they choose to do so. Where the Russian Government are right is in saying that a DCFTA is incompatible with membership of the customs union. It is the Governments of Georgia and Moldova, however, who have said that they do not want to join a customs union. They want DCFTAs, and they should be free to make that choice. 

Mr James Clappison (Hertsmere) (Con):  What assessment has my right hon. Friend made of the views of the Transnistrian population on these agreements? Will he say a few words about how he sees Transnistria fitting into these agreements as they unfold? 

Mr Lidington:  It is very difficult to make any objective assessment of the views of people in Transnistria. Our embassy in Chisinau maintains a range of contacts in Tiraspol and other towns in Transnistria, but the idea of an independent opinion polling process in Transnistria is not within our grasp at the moment, particularly as there are significant numbers of Russian troops stationed there. 

The factual response to my hon. Friend’s question is that the EU-Moldova association agreement—assuming that there is agreement on it—will apply to the territory of Moldova. However, since the Moldovan Government do not at present exercise jurisdiction over Transnistria

as a matter of fact, the benefits and obligations that flow from the EU agreement will not as a matter of practice be implemented within Moldova. If I wanted to draw an analogy with a current EU member state, Cyprus is a full member of the EU and is subject to the acquis, but the situation is slightly different, because the acquis is formally suspended for northern Cyprus. The agreement would in theory apply to the whole of Moldova, but in practical terms, unless or until there is reconciliation and agreement on the dispute, Transnistria would be outwith the terms of the agreement. 

Mr Thomas :   I want to explore a little further the point of substance that the hon. Member for North East Somerset was trying to explore. The Minister alluded in his opening remarks to some disappointment that he was not able to get a title V legal basis. Will he explain to the Committee why that was not possible? 

Mr Lidington:  We have a pretty long-standing argument with some elements of the Commission about this matter. While our approach varies from one measure to another, the Commission tends to take the view that there is a need to cite a treaty basis or bases only in respect of the principal areas covered by a particular EU measure. In the case of these two agreements, the justice and home affairs content is very small. In those areas that are subject to provisional application, we are really only talking about mode 4 and the readmission agreement. 

I should be cautious about trying to put words in the mouth of the Commission, but the approach it would take is that the treaty bases we cite cover the main objectives of the association agreement, so there is no need for a title V basis to be specifically cited. We have had that argument with it about a number of measures. 

There is an extra element that applies in terms of the readmission agreement. The Commission argues that there is a JHA element there, but that the JHA obligation lies not in the association agreement, but in the underlying self-standing readmission agreement itself between the EU and Moldova, to which we are already a party—we have already decided to opt in to that. The Commission therefore goes on to argue that all that the provision in the association agreement does is to reaffirm a binding political commitment to that underlying previous readmission agreement between the EU and Moldova. It is a fairly complicated legal argument. 

We take a different view. Not just in respect of the Moldova and Georgia agreements, but generally, we say that any JHA content, wherever it is found, should be supported by the explicit citation of a title V legal basis. 

Mr Thomas  rose—  

The Chair:  Order. I will take one brief question from the hon. Gentleman and one brief answer because other hon. Members have indicated that they wish to ask questions. 

Mr Thomas:  It might be a complicated legal discussion, but essentially it would appear that the Minister has caved in to the Commission. He has accepted that there is not going to be a title V legal basis and given up the effort to fight for that. Would that be a fair summary? 

Mr Lidington:  No, because our argument is that while it would be right to cite title V, whether or not title V is cited has no effect on whether opt-in applies. Our consistent argument is that the opt-in applies when there is JHA content to a measure, rather than if a JHA treaty basis has been cited. 

Jonathan Evans (Cardiff North) (Con):  In the context of the troubles we have seen in Abkhazia of late, does my right hon. Friend agree that it would be inappropriate for us to proceed on the basis of intimidation from Russia because it is concerned about what is happening within Moldova and Georgia? With the breakaway republics of South Ossetia, Abkhazia and Transnistria, there is a history of the Russians issuing a significant number of passports without any consultation with the international community that I am aware of. More recently, we saw in Abkhazia the overthrow of the President because he had apparently not taken steps quickly enough to align the country as an integral part of Russia. Against that background, surely we should not hesitate too much to endeavour to assist countries such as Moldova and Georgia that are trying to improve their economic situation by having a closer alignment with their European neighbours. 

Mr Lidington:  I agree completely. It is right, as a matter of principle, that we stand up for the freedom of Moldova, Georgia and other post-Soviet republics to make their own decisions about their future. We must also have regard to the precedent that would be set were we simply to acquiesce to the idea that Russia has some sort of veto over what those countries can and cannot do. Even in countries such as the Baltic states, which are now full members of NATO and the European Union, real fears have been awakened by what has happened in Ukraine—particularly in Crimea—and by the Putin doctrine that Russia has the right to intervene anywhere it chooses in support of Russian speakers or Russian nationals. That doctrine, pursued to its logical conclusion, would give Russia the right to intervene in almost every country that was once part of the Soviet Union. We cannot accept that principle, which flies in the face of the sort of law and rules-based international system that we want. 

Jonathan Evans:  Will my right hon. Friend confirm something I thought I heard him say? Moldova and Georgia are both full members of the Council of Europe. In the Council of Europe, I deal with worthwhile colleagues from Moldova and Georgia who have strong views on these issues, and contribute on matters of parliamentary democracy and human rights. I seem to recall my right hon. Friend making it clear that the association agreements will in no way cut across the role that Moldova and Georgia play as full members of the Council of Europe. Will he confirm that that is correct? 

Mr Lidington:  I am happy to confirm that. 

Martin Horwood (Cheltenham) (LD):  It is a pleasure to see you in the Chair, Mrs Brooke. 

On the subject of timing, I have criticised the Government on a number of occasions for not allowing this Committee to consider business in a timely manner, so it is refreshing

to see the Government defending themselves against the accusation of undue haste for once. It is good that we are discussing this issue before the crucial decisions are made in the Council. However, there is a suggestion that things are being rushed, and I share the Government’s dissatisfaction that we have not resolved all the legal details and that they are having to take a pragmatic approach by accepting that those issues are not significant. 

There is a suggestion that there is some kind of external political driver and the Minister talked about the geopolitical context. We all know about the position on our side, but will he confirm that the Governments of Moldova and Georgia have agreed to proceed as fast as possible, and that they are committed to a rapid conclusion of the association agreements? 

Mr Lidington:  Not only are both Governments keen that the June timetable is adhered to, but each would regard delay at this stage to be a significant reverse. 

Mr Thomas:  I want to come back to the issue of the timetable. The concern is that the Commission is able to say, “This is such an important issue that it must go to the 23 June meeting, so it is tough luck, Britain, because even though the legal competence issues have not been sorted out, do you really want to give a great victory to Mr Putin?”—that seems to be the gist of the Minister’s argument. The competence questions continue to run. Will the Minister explore with us why a little more time might not be useful to help the Commission and the Foreign Office to resolve the question of competence once and for all? 

Mr Lidington:  The issue of competence has been sorted out, as I explained in my opening remarks. The joint declaration that commits the institutions to a shared interpretation of the articles provides exactly that safeguard. 

Mr Thomas:  What will be the role for the European Parliament in scrutinising the association agreements? 

Mr Lidington:  The European Parliament will take the opportunity to debate this. It, like national Parliaments, has to ratify the association agreement. In the case of Westminster, affirmative resolutions with regard to Moldova and Georgia will be required at the stage of ratification. The European Parliament will have a debate, and, if necessary, a vote. 

Jacob Rees-Mogg:  Is it the case that the competence of the nation states is being delegated to the European Union for the purpose of the provisional application? 

Mr Lidington:  No. The joint declaration ensures that the actions that are undertaken through provisional implementation touch only on those things that are properly within the competence of the European Union. 

Jacob Rees-Mogg:  But on the issues that are the competence of the nation states that are also subject to provisional application, by what legal mechanism are they being agreed? 

Mr Lidington:  The provisional application can apply legally only to those things that are within the competence of the EU, not to those things that are within the competence of the member states. 

Jacob Rees-Mogg:  If that is the case, why do the Government need a declaration that certain parts of the provisional application are still the competence of the nation states if the only things that can be agreed are those that are the competence of the European Union? 

Mr Lidington:  In part to provide the reassurance, which my hon. Friend and others would expect, that we have the language that shows that the institutions themselves accept our interpretation of what the words of the agreements actually mean. 

Kelvin Hopkins:  I have one more important question. The east of Ukraine and Russia is a very delicate and potentially dangerous situation. Like an iceberg, we see only the tip of what is actually being discussed behind the scenes, no doubt involving other major nations such as the United States. Negotiations are going on, perhaps in a disguised way. Will the Minister tell us whether there will be implications for those negotiations due to these developments in Georgia and Moldova? Will the developments advance or hinder the negotiations? 

Mr Lidington:  The question of future talks on Ukraine will not be fundamentally affected one way or the other by the provisional application of these two agreements. I hope that Russia accepts that Moldova and Georgia have the right to determine whether they agree to such an agreement with the EU. The lesson I have drawn from events in Ukraine since the presidential election, and in the light of the meeting between Presidents Poroshenko and Putin last week in France, is that the possibility for de-escalation looks a bit better than it appeared a month ago, but that we are still quite a long way from seeing a satisfactory state of affairs. It is important that the Russian Government are prepared to talk directly and in detail to the elected President of Ukraine, and to use their undoubted influence to stop the violence that is taking place in Donetsk, Luhansk and a number of other eastern Ukrainian cities. 

Several hon. Members  rose —  

The Chair:  Order. We are running out of time for questions. That time can be extended, which will cut into the debate, but we will see how we get on. 

Jacob Rees-Mogg:  The Minister’s letter of 2 June states: 

“The joint declaration we secured clearly sets out that the exercise of competence by the EU, in respect of these provisions and in the specific cases in Moldova and Georgia, does not represent a precedent.” 

There would be no point in saying that it did not represent a precedent if the competence being exercised was one that the European Union has anyway. The only reason for saying that is because the EU is exercising a competence that belongs to the nation states. I come

back to my point: on what legal basis is the competence of the nation states being delegated to the European Union? 

Mr Lidington:  The particular reason why we needed to deal with Georgia and Moldova is that the protracted conflicts in those countries mean that member states need to authorise the EU, as happens normally under the treaties, to talk about things such as political co-operation for the resolution of those conflicts, but without prejudice to the underlying delineation of competence. The question is how the areas of shared competence are exercised. As my hon. Friend knows, in a case of shared competence, an area of policy making can be described in the treaties where action can be taken either by the member states or by the European Union. In the case of common foreign and security policy, because of the requirement for unanimity, the common EU position exists only if every member state has signed up to it. We wanted to make quite sure that we could assure the Committee and Parliament that agreeing to that work on political co-operation under the aegis of the association agreement did not set a precedent for the accretion of new competencies to the European Union that did not previously exist. 

Jacob Rees-Mogg:  I am extremely grateful for that answer. Does it therefore follow that on this occasion the British Government are using the unanimity achieved for a common foreign policy to agree to a treaty, and does that require any domestic legal approval? 

Mr Lidington:  We are not operating on the basis of any new powers. We and previous Governments have agreed to association agreements before. The two agreements will be laid before Parliament, and affirmative resolutions will be required in each House for Parliament to approve the ratification by the United Kingdom of the two treaties. That is the further check that Parliament has on the matter. 

Mr Thomas:  The Minister alluded to the geopolitical benefits of the association agreements. Does he believe that they will have any short-term or medium-term benefits for British business? 

Mr Lidington:  I think that for the most part, the benefits will be in the medium term. As Georgia and Moldova become more prosperous, they will be able to afford to buy more British goods and services. Our trade with both countries is relatively modest at the moment. I would like to see our trading relations expanded, but that depends on greater prosperity in those countries. The asymmetric nature of provisional application means that the exercise has been designed quite deliberately to deliver the first benefits to people in Moldova and in Georgia. That, in part, is needed because as they apply EU standards in their economic life, they will have to go through a period of quite challenging transition. Therefore, having access to that big EU market of 500 million plus people will deliver some immediate benefits to them, such as greater prosperity, which will make it easier for them to carry out those adjustments. 

Mr Thomas:  The Minister alludes to the asymmetric nature of the agreements. Will he reflect on the possibility, which we are obviously hoping for, of an EU-US trade deal and the extent to which that would have an impact

on Georgia and Moldova? Will the asymmetric provisions give Georgia and Moldova sufficient time to deal with the potential impact of exposure to US competition as well? 

Mr Lidington:  It is true that if a third country is in a customs union with the European Union, it is then affected by a subsequent free trade agreement that the EU negotiates. Turkey, for example, has to give access to its markets to those countries with which the EU has negotiated a deal. It does so on the same basis as the EU—it does not have to go beyond the terms of that EU agreement. 

I am a strong supporter of the efforts to get a trans-Atlantic trade investment partnership. I think we are some way off from doing that deal; we hope to see the deal done next year, but the process of signature and full ratification and implementation would take some time. It is too early to say exactly what impact that might have on Georgia and Moldova. For those sitting in Government in Chisinau or Tbilisi, the prospect of being able to sell freely into not just the European Union, but the United States market as well, would be very attractive. 

Several hon. Members  rose —  

The Chair:  Order. The hour allotted for question time is now almost over, but I can see that hon. Members have more questions. Under Standing Order No. 119(9), I am extending question time for no more than half an hour to allow the remaining questions to be asked. Any extra time that we take means we have less time for debate. This sitting will end, at the very latest, at 7 o’clock come what may. We can now legitimately proceed. 

Jacob Rees-Mogg:  I only have one last question on the issue of title V legal base. I accept what my right hon. Friend said earlier about the disagreement with the Commission, but do the Government now accept that a title V legal base does not exist unless it is stated in the text, following Court of Justice rulings? 

Mr Lidington:  No, we do not accept that. There is, as my hon. Friend knows, a Court of Justice judgment that is expected fairly soon in the case of the EU political co-operation agreement with the Philippines. Once we have seen that and can take stock of it, we may want to return to this subject, but at the moment we have no idea of what will be in it. The position at the moment remains that the Government believe that the opt-in is triggered by the content and not by the treaty base cited. 

Mr Thomas:  Which commissioner in the new Commission is likely to have lead responsibility for the implementation of these two agreements? 

Mr Lidington:  To say the least, that is inviting me to make an extremely premature statement. We do not yet know who is going to be proposed to serve in the next European Commission. As the hon. Gentleman knows, the delineation of portfolios within the college of commissioners is determined under the treaties by the president designate of the Commission. At the moment,

we do not know neither who the individuals are going to be nor exactly how the portfolios will be divided up, but to give some kind of answer, whichever commissioners have responsibility for trade, and for enlargement and the eastern neighbourhood are likely to play a part. The High Representative on foreign policy and the Commission vice-president, responsible for external affairs, will have a role. Insofar as the provisional application of the agreements concerns matters to do with judicial reform or governance, the commissioners who will, in the next college, fulfil the roles played by Commissioners Malmström and Reding the current Commission would also have a part to play. Quite a number of commissioners could be involved in the process. 

Martin Horwood:  My final question, which follows on slightly from that of the hon. Member for Harrow West, relates to the impact of the association agreements on the territorial disputes. Association agreements and application processes have a beneficial effect on many of the states involved—promoting judicial reform, increasing transparency, strengthening the rule of law and so on. The EU’s record of resolving territorial disputes is not quite so good. We have mentioned Cyprus, but we could add to that Macedonia and, actually, Gibraltar; it would have been rather convenient if Spain had been asked to sign up to British sovereignty over Gibraltar before becoming a member of the EU. 

Does the Minister perceive anything in the association agreements that might enable the EU to support Georgia and Moldova in trying to resolve some of the outstanding territorial disputes in their legal territories? Could the good officers of the European External Action Service help support that process? 

Mr Lidington:  There is no doubt that all EU member states and the European External Action Service would want to see an end to those long-running conflicts. It will be no surprise to the Committee if I say that the solution does not lie solely in the hands of the EU or even the Governments of Moldova and Georgia. The Government in Moscow will have considerable influence over what happens. 

I will deal with the two countries in turn. First, on Transnistria, the EU is an observer to the so-called five-plus-two talks involving the Organisation for Security and Co-operation in Europe, Moldova, Transnistria, Russia and Ukraine. The United States sits alongside us as an observer at those settlement talks. Under European neighbourhood instruments, the EU sponsors a number of confidence-building measures that seek to foster greater understanding and co-operation between people in Moldova and Transnistria. 

With regards to Georgia, the EU is one of three co-chairs—with the United States and the OSCE—of the Geneva talks, which is an international mediation process focusing on Abkhazia and South Ossetia. Georgia and Russia also take part in that process. The EU operates an unarmed civilian monitoring mission, which was created to monitor compliance with the agreement originally brokered by President Sarkozy and Medvedev after the 2008 war. That mission focuses on stabilisation, normalisation and confidence-building. Sadly, the mission is not allowed access to South Ossetia or Abkhazia at the moment, so there is a job of work for the monitoring mission to do and, as we debated earlier, there is an EU

special representative for the South Caucasus. I made the mistake of implying that his remit covered Moldova; it does not. That EU special representative addresses the conflicts in Abkhazia, South Ossetia and Nagorno-Karabakh, and works on conflict prevention and efforts to allow the return of internally displaced persons. The EU is doing quite a lot already; I am sure there may be other opportunities in the future. 

Mr Thomas:  The reason why I asked the Minister which commissioner might have responsibility in the future is that the degree of emphasis placed on particular parts of the association agreements matters. 

To take the applicability of any EU-US trade agreement, for example, concerns exist even here in the UK about a couple of aspects of the negotiations, such as the investor-state dispute settlement and the potential for US companies to take over the running of public services. If they are concerns here in Britain, one could imagine that they would be even more significant among some quarters in Georgia and Moldova. If the Trade Commissioner has responsibility, the EU-US trade deal and its agreement will be a big thing and they may not be that worried about Georgia or Moldova being hard hit by its provisions. If it is the commissioner for the eastern neighbourhood, they may be more willing to prioritise the concerns of Georgia and Moldova. Can the Minister say a little more about the Government’s hopes for the lead commissioner? 

Mr Lidington:  The way in which the proposal will work will depend in part on what actually happens on the ground in Georgia and Moldova and how their Governments want to take things forward. 

I would be sorry if the hon. Gentleman is signalling through his question a diminution in his party’s support for the transatlantic trade investment partnership, because that is the message that I took from his words. The Government, however, remain strongly of the view that there are huge opportunities for the United Kingdom. If the deal is successful, it could be worth some £10 billion a year to the UK. 

I cannot add much more to what I said earlier. What has happened under the current Commission in relations with eastern partnership countries is that the Enlargement Commissioner has come forward every year with a report on the state of play. There is debate in Brussels about whether there will be an Enlargement Commissioner with that specific job title in the next Commission, but I cannot really get into guessing whether whichever man or woman heads the next Commission will distribute portfolios in a particular way. Last time around—five years ago—portfolios were reallocated, such as financial services being included with the single market in one portfolio, and when Croatia joined the EU, which was during the lifetime of this Commission, portfolios were reallocated again to provide the 28th slot for the Croatian Commissioner. It would not be sensible for me to get into guessing exactly which commissioner with which responsibilities should have the lead, but the practice up until now has been for the Enlargement Commissioner to come forward with a report that draws the different strands together and member states have commented and contributed by debating that report. 

Mr Thomas:  The Minister alluded to discussion in Brussels about the abolition of the position of eastern neighbourhood commissioner. If he will not offer any more insight into discussions about the future Commission, will he at least tell the Committee which commissioner, whether an external eastern neighbourhood commissioner, the High Representative or the Trade Commissioner, would be the ideal commissioner to take forward delivery of the two agreements? 

The Chair:  I think we have probably pursued this matter quite enough. Does the Minister want to add anything? If not, we should move on from the questions. 

Mr Lidington:  We will be able to make such a judgment when we see who the President of the Commission is, who the nominated commissioners are and we have some sense of the allocation of portfolios. 

The Chair:  As no more Members wish to ask questions, we will now proceed to the debate on the motion. 

Motion made, and Question proposed,  

That the Committee takes note of European Union Documents No. 7941/14 and Addenda 1 to 13, a draft Council Decision on the signing, on behalf of the European Union, and provisional application of the Association Agreement between the European Union, European Atomic Energy Community and its Member States and Georgia, No. 7942/14 and Addenda 1 to 13, a draft Council Decision on the signing, on behalf of the European Union, and provisional application of the Association Agreement between the European Union, European Atomic Energy Community and its Member States and Moldova, No. 7943/14 and Addenda 1 to 14, a draft Council Decision on the conclusion of the Association Agreement between the European Union, European Atomic Energy Community and its Member States and Georgia, and No. 7944/14 and Addenda 1 to 14, a draft Council Decision on the conclusion of the Association Agreement between the European Union, European Atomic Energy Community and its Member States and Moldova; and supports the Government’s aim of using the Association Agreements between the EU, its Member States and Georgia and Moldova to embed sustainable reform, security and prosperity in Georgia and Moldova and the eastern neighbourhood.— (Mr Lidington.)  

5.40 pm 

Mr Thomas:  As the Committee will be aware, relations between the EU and Georgia and Moldova are currently based on partnership and co-operation agreements signed in 1999 and 1998 respectively. The proposed new association agreements would extend the existing political and economic relationship and, as my hon. Friend the Member for Luton North alluded to when he introduced the debate, include a deep and comprehensive free trade area. 

I should make it clear at the outset that the Opposition support these two association agreements and welcome in particular the potential for a deeper trade relationship. We recognise the geopolitical benefits of these two association agreements and the signal of support from the European Union to the Governments of Georgia and Moldova that signing these two agreements would offer. I hope that the Minister can assure us that he, perhaps through the embassy in Moldova and in other ways, will continue to encourage all parties in Moldova to want the association agreement to come into force. The political turmoil that continues to reverberate in Ukraine as a result of the last-but-one Premier’s reluctance to accept an agreement with the EU is a cautionary tale. 

The questions about which future Commissioner will have lead responsibility for the agreements matter, not least because ensuring that there is follow-through on all the commitments that the EU is signing up to as part of these association agreements will continue to send a strong message of support. When there is a shake up in Cabinet positions—or in Commission positions in this case—there is always concern that what might seem like small things to us in the UK matter hugely on the EU’s eastern flank and they might lose a little of the attention that they are currently getting. I hope that the Minister will ensure that this issue continues to loom large in not just the portfolios of the Commissioners in general, but one Commissioner in particular: the co-ordinator of policy in this regard. 

It would be helpful to hear a little more from the Minister, if possible, on any intelligence as to Russia’s attitude—and what it will do in practice—to the signing of these agreements. Perhaps he could give us a time scale. If the Foreign Affairs Council approves these association agreements in a couple of weeks’ time, what is the next stage? He alluded to a formal vote in both Houses here. What is the time scale beyond that for getting the agreements locked down? 

It is a shame—let me put it like that—that the title V agreement was not secured, but I recognise that the Minister sought to do the best job he could in the given time scale by securing a declaration. It would be good to hear from him whether, going forward with similar agreements, there is more that the Foreign and Commonwealth Office might be able to do to secure title V agreement in future. 

One of the big concerns that seems to have motivated the European Scrutiny Committee’s decision to refer the association agreements for debate is about the opt-in arrangements under the JHA provisions. Perhaps that concern was motivated by the lack of a further debate on the Government’s decisions about the applicability of European co-operation measures on justice and home affairs. Perhaps to avoid us having to rush to hold a further European Committee, will the Minister give us more sense of the time scale for such a debate, which I assume that the Home Secretary would lead? As I indicated, Labour Members support the two association agreements and will not divide the Committee. 

5.46 pm 

Jacob Rees-Mogg:  My real concern is that, as always, my right hon. Friend the Minister is too gentlemanly, too kind and too gentle to our friends in Europe. We are in a position involving unanimity regarding an association agreement that will not make the people of North East Somerset rich. It might be a nice thing to do and it might have many benefits, but my constituents are not waiting with bated breath to find out if on 23 June—that hallowed day—it will be agreed that Moldova and Georgia will have association agreements with the United Kingdom and the European Union. The agreements will not change this country’s GDP by more than a farthing, and probably not even a brass farthing at that. We are negotiating things that have legal importance and significance on which we can use our power, because they are subject to unanimity, to establish things that do set some sort of precedent. 

I am in considerable agreement with the hon. Member for Harrow West about title V, which is a happy position to be in, although I agreed earlier with my hon. Friend the Member for Cheltenham when he said that Spain should be forced to agree to Gibraltar being British, and that was about the first time we have agreed on a European issue. On the title V matter, my right hon. Friend the Minister said that the Commission does not like the basis to be cited unless it is the essence of the agreement—it likes to keep it out—but this is an occasion when Britain is in a very strong negotiating position, as there is no agreement unless we sign up to it. It is on such occasions that we should ensure that the i’s are dotted and the t’s are crossed. We should say to the Commission, “Unless the title V basis is in this document, we will not agree to it,” because then when the next document that fails to mention the title V base for a subsidiary matter comes along, we can say to the European Union, “You agreed to it last time.” We should always use instances subject to unanimity when we have a veto to ensure that the British position is enhanced through the negotiations that take place. 

The same applies to the issue of competence. We know that the European Union has accreted power to itself through regular competence creep. We know the effect of the ratchet. We know that many assurances have been given over the decades saying, “This isn’t really the European Union taking power; it is really remaining with member states,” but then one suddenly finds that qualified majority voting in the European Union has been established, backed up by the European Court of Justice. 

Now, for a couple of weeks, we are essentially agreeing to delegate our competence—I dragged that as gently as I possibly could out of the Minister after rather lengthy questioning. The essence of it is that we have delegated our competence to the European Union for this particular instance so that the agreement can be done with great urgency. However, it is quite hard to see why we need that great urgency. A month here or there, or six months here or there, are not of the greatest consequence for such long-term agreements. If the Minister would cast his eyes upwards, he would look not just to the sky, but to the picture over your head, Mrs Brooke, of Alfred the Great fending off the Danes. He should be a little bit less gentlemanly, a little bit less communautaire and a little bit bolder, please. 

5.49 pm 

Martin Horwood:  I shall not detain the Committee for very long. On a political basis, this is a no-brainer. The agreements are crucial to Moldova and Georgia. They are of mutual benefit to them and to the whole of the European Union, including us, and they clearly send an important diplomatic and political message to the region that we will not be discouraged by what is going on in Ukraine from forming mutually beneficial association agreements with independent sovereign states that want to do so. 

However, it is important to underline, for the Governments in the region, that it is obviously also in their long-term interest to maintain good relations with Russia, and that ultimately we want a network of such agreements that will include Russia and be part of a peaceful region in the east of Europe. 

I would not want the hon. Member for North East Somerset to get too excited, but there may be a morsel of agreement between us on something else, which is that I share slight discomfort about what looks from the UK’s point of view like a slightly incomplete legal position, as we proceed with the agreements. 

It may be that the justice and home affairs elements of an association agreement with Moldova are not of massive significance, and that the Government were therefore right to take a pragmatic view and not create what would in effect have been technical blocks to the conclusion of important agreements. Nevertheless, I hope that a precedent is not being set for a rather casual approach to the fine legal detail, because when it comes to something as significant as the Transatlantic Trade and Investment Partnership with the United States it will be very important to have all the legal i’s dotted and t’s crossed and to make sure we do not accidentally concede competencies or fail to get agreement by the UK Parliament to those things that should be agreed by it. 

It is important that the Government should send a clear message to the Commission, whoever is on it. I think the hon. Member for Harrow West was stirring a little when he raised the question of who the Commissioner should be—that is probably a completely unjustified accusation—but whoever the new Commission is, they should understand that the legal detail is important. From my perspective as a pro-European—and, I am sure, from a slightly more sceptical point of view—it is important that the legal agreements that the EU concludes should enjoy the confidence of Parliament and the British people. 

With that caveat I support the conclusion of the politically important association agreements, and wish the Government and the Union well in concluding them. 

5.52 pm 

Kelvin Hopkins:  Yet again I say—as I have many times in the Chamber—that those of us who take a sceptical view are not anti-European; we are anti the European Union. I am very pro-European and passionate about Europe as a place—as a wonderful group of countries, and of great peoples; but I am not passionate about the European Union and I hope that the hon. Member for Cheltenham will refer to the European Union the next time he talks about people being pro and anti. 

5.53 pm 

Mr Lidington:  I thank hon. Members who have taken part in the proceedings. From the Government’s point of view Moldova and Georgia are small but important international and European partners. This country would benefit from the increased co-operation with the European Union under the agreements. 

A more stable, secure and prosperous Moldova would mean a more secure region in south-east Europe, with an improved ability to tackle organised crime and smuggling. Moldova also has a great deal of unfulfilled potential to act as a bridge between the European

Union, Russia, Turkey and beyond. A more stable, secure and prosperous Georgia—and south Caucasus region more generally—would be of strategic importance, helping to secure our own prosperity and energy security objectives. 

The United Kingdom is committed in its support for the aspirations of both countries. The Foreign Secretary visited both during his visit to the region in May. I visited Georgia in April and Moldova in January, and we continue to work closely with both countries bilaterally as well as through the European Union and through the medium of other international organisations. 

These association agreements are two of the most far-reaching and comprehensive that the EU has ever agreed with third countries. They are a tried and trusted tool of policy that can deliver greater security, democracy and prosperity and commit both Moldova and Georgia to far-reaching reform in a number of sectors. Of course, a great deal depends on the engagement of the Georgian and Moldovan Governments, and both the Foreign Secretary and I, when we went to Moldova, made a point of talking to the Communist party opposition as well as to the Government, so the commitment is certainly there—and demonstrably there—from the British Government to talk to all representative political parties in Moldova and Georgia. We say to them all that we believe the agreements are in the best interests of their people. 

Both Georgia and Moldova have already begun to introduce reform in preparation for signature, and signature is not the end of the process. In terms of the next formal steps, signature is planned to take place on 27 June at the June European Council. Ratification would then be needed by the Georgian and Moldovan Parliaments. On the current timetable, that would happen later this year. It is also probable that the European Parliament would consider the agreements and vote for ratification later this year. We will consider the timetable for United Kingdom ratification thereafter. Being realistic, it may take some years for all 28 EU member states to ratify under their various national constitutional procedures. The urgency about the measures we are debating today, providing for provisional application of important elements of the two agreements, comes from Georgia and Moldova, supported by all EU member states. As I said earlier, the Prime Minister gave his personal commitment to the June target date for signature at the January European Council. 

The association agreements will also be supported by continuing financial and technical support from the EU and there will be an annual monitoring process of how that support is being applied. The EU already provides funding to both countries under the European neighbourhood instrument. On current Commission planning, the indicative allocation foreseen for each country in the period from 2014 to 2020 would be between €610 million and €746 million, which is a significant increase on the previous multi-annual budget period for both countries. For Moldova, the EU support will focus on the reform of public administration, on agricultural and rural development, on police reform and on reform of the educational system. Support for Georgia will be focused on the reform of public administration, on agricultural and rural development and on reform of the judiciary and prosecution systems. 

In addition, on 6 May this year, the European Commission announced an extra package of support to Georgia and Moldova of €30 million each to help with the modernisation of public institutions linked to the implementation of the association agreements to help with competitiveness of rural business and trade opportunities with the EU, and to provide support for measures to protect the rights of minorities and other vulnerable groups. 

Mr Thomas:  Before the Minister moves on to another aspect of his speech, he raised in questions the applicability of mode 4 to part of the agreement. I wonder whether—if not now, perhaps after the sitting—he might be able to give some estimate of the numbers he expects on an annual basis to take advantage of the mode 4 provision, in terms of Georgians and Moldovans coming to the UK. 

Mr Lidington:  I will certainly write to the hon. Gentleman, but I think I need to be clear that the association agreement and the DCFTA do not provide for any change in the current immigration and visa arrangements. As he knows, when we talk about mode 4, we are talking about movement of staff already working for a company to a different location. The Government have no plans to alter the visa regimes for either Moldova or Georgia. 

The implementation of the association agreements will bring significant benefits to Georgia and Moldova, although we also need to be clear that that will not happen overnight. Georgian and Moldovan businesses will have opportunities for access to EU markets, with a transitional period to protect their economies from sudden changes. The gradual alignment of rules and standards will mean that businesses both large and small will eventually be able to compete effectively in EU markets. Companies from Georgia and Moldova will be able to participate directly in EU tender processes in goods and services. 

As I said, we should not be naive. This is a complex region, where there are several protracted conflicts and disputed territories. The hon. Gentleman asked me in particular about the role of Russia and the possible use of energy as a political weapon. In response to his question, the circumstances of Moldova and Georgia are quite different in respect of energy. In Moldova’s case, its room for manoeuvre is limited—it relies heavily on Russia for imports of natural gas—but its energy strategy has two main strands: first, to reduce demand overall; and, secondly, to establish an interconnector with Romania to diversify its sources of natural gas. In August last year, construction started on a Moldova to Romania gas interconnector. When that is complete, it will be able to supply 17% of Moldova’s gas needs. 

Russia clearly has potential energy leverage over Moldova, but it is worth reminding ourselves that Russia has an interest in maintaining supply. Not only do the Russians want the revenue from Moldovan users, but the pipelines to Moldova are an important transit channel to take Russian gas further west to other European countries, with a potentially significant loss of revenue were Russia to disrupt or restrict those supplies. 

Georgia is in a very different position, and Russia has limited ability to use energy as a means of influence. Hydroelectric power already supplies 92% of Georgia’s

domestic energy needs, and the Georgian Government have plans eventually to become a net exporter, rather than importer, of energy. 

Overall, the benefits that will accrue from the association agreements will have a positive impact in the region and indeed on the protracted conflict as Georgia and Moldova become more economically successful and politically stable. The United Kingdom, the EU and our other international partners, however, will need to stay closely involved to ensure that progress continues to be made. 

My hon. Friend the Member for North East Somerset asked about competence, and he and the hon. Gentleman both asked about the particular issue of title V. To deal with the title V question first, this is not the first occasion on which we have had to decide whether we were going to block a measure outright—a measure that is in the United Kingdom’s national interest and for which there is solid support throughout the European Union. Our interpretation of the treaties is that, while we believe that it is right to cite title V, citation is not the key factor in determining whether our opt-out applies. We came to the view that I set out earlier, that we have protected our position and our interpretation of the JHA provisions of the European treaties through the minute statement that we have planned. We are working towards what we hope will be a joint minute statement with both Ireland and Denmark. That would obviously be a more powerful statement than one from us acting on our own, but we will act on our own if necessary. 

Jacob Rees-Mogg:  The Minister says that it is another case where there is widespread support. Is that not exactly the time to say, “Let us have our title V stated clearly”? If everyone else is in favour they will gently agree to it and everything will carry on smoothly. If there is so much support, there is no reason for the others to block us, thus allowing us a clear statement of our position. 

Mr Lidington:  The judgment we have to make is this: given that we do not believe that the citation or non-citation of title V makes a difference to the existence of the opt-out, is this the battle on which we want to expend political capital at a time when, on a whole variety of issues—both those within my purview and those for which other Whitehall Departments have the lead responsibility—we are engaging in negotiations in support of our national interests? That is a political judgment that Ministers face all the time, and one that I am sure my hon. Friend will face one day, before very long. What we have not done and would not do is to concede a point of principle about the application of the opt-in. It has been the consistent position of the Government that the opt-in derives from the content of a measure and not from the treaty base cited. 

Before I move on to the broader question of competence I should say to the hon. Gentleman that the vote on protocol 36 has been promised before the United Kingdom formally applies to rejoin those measures that we consider to be of importance to the UK. I am sure that my right hon. Friend the Home Secretary is looking forward to bringing that debate forward in Parliament in due course. 

There are a couple of areas in the agreements where the question of competence arose. It might help my hon. Friend the Member for North East Somerset and

the Committee if I refer to those in slightly more detail. They deal with conflict prevention and crisis management and with the rule of law and respect for fundamental rights and freedoms. 

To deal first with conflict prevention and crisis management, articles 7 and 8 in both agreements and article 9 in the Georgia agreement are clearly related to common foreign and security policy, and under our normal policy we would not agree to them being included in provisional application. But because of the political context—including, critically, the fact that with the full support of all member states including ourselves the EU is already involved in the work to try to resolve those conflicts, for example, through the EU monitoring mission in Georgia and the observer status at the 5+2 talks on Moldova-Transnistria—we agreed on this occasion to include them in provisional application, but with a joint declaration to make it clear that this exercise of competence arises from those specific circumstances in Moldova and Georgia and does not establish a precedent that would apply elsewhere. 

Article 13 in both agreements is on the rule of law and respect for fundamental rights and freedoms. The provisions require that in their co-operation in the areas of freedom, security and justice the parties attach particular importance to further promoting the rule of law. The agreement requires parties to co-operate fully on the effective functioning of institutions in the areas of law enforcement and the administration of justice. 

Getting a better quality of justice and taking effective action against corruption and organised crime in both Moldova and Georgia would clearly benefit the United Kingdom and our other partners. But we also had in mind that there might be concerns in Parliament and outside that those words were not talking simply about efforts to reform the internal systems of Moldova and Georgia but might amount to an extension of the power of the EU collectively to monitor and enforce judicial independence, legal aid and other domestic matters. That could establish a precedent that might in future give the EU such powers in relation to its own member

states. It was because we were alert to that concern that we obtained the joint declaration making it clear that the words in article 13 are not about the EU exercising competence pursuant to title V of the treaties. It is not just us saying so; the EU institutions are saying so, too. The institutions themselves have said that article 13 on the rule of law and respect for fundamental rights and freedoms does not involve title V but involves the EU assisting Moldova and Georgia with their domestic work to improve their own law enforcement systems. 

We have had a good, thorough debate this afternoon. Having been to both countries and talked to both Governments at length in the past few months, I know that they are strongly committed to these agreements and want to see them brought into force as soon as possible. For the reasons I have set out, I believe that the closer relationship between Moldova and Georgia and the countries of the European Union is in the United Kingdom’s national interest. I hope the Committee will support the motion before it this afternoon. 

Question put and agreed to.  

Resolved,  

That the Committee takes note of European Union Documents No. 7941/14 and Addenda 1 to 13, a draft Council Decision on the signing, on behalf of the European Union, and provisional application of the Association Agreement between the European Union, European Atomic Energy Community and its Member States and Georgia, No. 7942/14 and Addenda 1 to 13, a draft Council Decision on the signing, on behalf of the European Union, and provisional application of the Association Agreement between the European Union, European Atomic Energy Community and its Member States and Moldova, No. 7943/14 and Addenda 1 to 14, a draft Council Decision on the conclusion of the Association Agreement between the European Union, European Atomic Energy Community and its Member States and Georgia, and No. 7944/14 and Addenda 1 to 14, a draft Council Decision on the conclusion of the Association Agreement between the European Union, European Atomic Energy Community and its Member States and Moldova; and supports the Government’s aim of using the Association Agreements between the EU, its Member States and Georgia and Moldova to embed sustainable reform, security, and prosperity in Georgia and Moldova and the eastern neighbourhood. 

6.12 pm 

Committee rose.