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European Council: Agenda 2000

3.58 p.m.

Lord Richard: My Lords, with the leave of the House I shall now repeat a Statement made in another place by my right honourable friend the Prime Minister on the European Council in Luxembourg on 12th and 13th December, which he attended with my right honourable friends the Foreign Secretary and the Chancellor of the Exchequer, and my honourable friend the Minister of State at the Foreign and Commonwealth Office. A copy of the conclusions has been placed in the Library of the House. The Statement is as follows:

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    criteria as other candidates. Turkey herself recognises that time and changes are needed before actual accession negotiations can be envisaged. But full recognition of her eligibility for accession is a marked step forward for Turkey, and I welcome it.

    "I wrote immediately to Prime Minister Yilmaz to encourage him to take full advantage of this opportunity. I understand Turkish disappointment at being treated in an apparently different way from others. But I continue to hope they will come to see the advantages for them of participation in the European conference as a further step towards eventual membership.

    "The House will recognise the significance of these decisions. A giant step has been taken towards the elimination of the divisions in Europe left by the Cold War. Although the negotiations themselves will inevitably take some years, we have a historic opportunity to secure freedom and prosperity across our continent. This has been a longstanding British objective. I am delighted that this process will be launched during the British presidency. We will ensure it gets off to a flying start. I know the whole House will welcome this.

    "Reform of EU policies will of course be essential if enlargement is to be successful. In July the Commission circulated its proposals for this reform and for the future financial framework. These envisage further desperately needed reform of the common agricultural policy, reform of the structural and cohesion funds and maintenance of the current 1.27 per cent. ceiling on own resources. The European Council agreed that these ideas represented a good working basis and called for formal legislative proposals from the Commission as soon as possible. We will push this vital work as far as we can during our presidency, although the timetable for final decisions is necessarily longer than that.

    "This was an important meeting of the European Council. We agreed to launch enlargement negotiations and set a strong framework for all the potential candidates, including Turkey. We gave real impetus to the process of CAP reform. We ensured that the position of the UK in economic policy co-ordination is fully safeguarded. This is an excellent launch-pad for our presidency in the first half of next year. Our priorities will be those which can help transform people's lives, above all jobs.

    "The Luxembourg Summit showed again that this Government are both positively engaged in Europe as a leading and influential player and resolute in the defence of our interests and what is right. I commend the outcome of the summit to the House as good for Britain, good for the European Union and good for the wider interests of Europe, too".

My Lords, that concludes the Statement.

4.5 p.m.

Viscount Cranborne: My Lords, the whole House will be grateful to the Leader of the House for repeating the Statement today. We welcome much of what was achieved in Luxembourg, in particular the maintenance

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of the ceiling on own resources. We also welcome the recognition which the Statement gives to the benefits of the agreements on enlargement. Nevertheless, the Leader of the House will recognise that the weekend was overshadowed, in particular for this country, by the Prime Minister's demands for what we were told must be a seat for Britain in any discussion about the euro.

Despite my best efforts, I cannot help but conclude that that seat has not been secured and that, on the very test which the Prime Minister set for the summit, it was not entirely the success which predictably he returned from Luxembourg claiming to be the case.

The Prime Minister wrote an article on the Euro-X issue in today's edition of The Times in which he also claimed a considerable success. The words which he employed--for instance, references to "new rhetoric" and "new substance" on Europe--have a particularly empty ring today. I am sorry to have to say to the Leader of the House that they ring to me as tortuous, repetitive and self-justifying. They remind me more of an excuse from a guilty schoolboy than of a Prime Minister returning triumphant from Luxembourg.

If the Prime Minister's influence is so great, how did he fail so completely to convince even the foreign minister of Luxembourg, with whom he played out a somewhat embarrassing tiff for the benefit of the media, that Britain must have a seat on Euro-X? Furthermore, can the Leader of the House explain an issue which is not entirely clear to me even now having heard the Statement repeated and having read the Prime Minister's article in The Times today? Is this country now a member of Euro-X? If not, when precisely can we attend the committee? Is it when we decide or when our partners invite us to do so? Are there any limits on Britain's power to speak and vote at such meetings? By what mechanism precisely will this country play a part in decisions in Euro-X on the introduction of the euro? Who precisely decides whether matters discussed by Euro-X are of common interest?

The Statement refers to a dispute. If there is a dispute, is only one person--one disputant--required in order for the matter to be transferred to ECOFIN, or is some agreement or common conclusion necessary? If it is one reference, we should be very much happier.

Will the matters of common interest include the exchange rate between the euro and the dollar and the yen, and, indeed, the exchange rate between the "ins" and "outs"? Does the Leader of the House agree with the French Foreign Minister that Euro-X will be able to discuss European Union tax harmonisation and budgetary matters without the presence of non-EMU members? If that is so, is this country not going to be presented with a fait accompli on key matters affecting the future of the Community? Is it not the case that in Amsterdam the Government sold out British business on the social chapter and surrendered our veto in 15 areas? It seemed to me that, as a result of that treaty, they have given away a mass of hard-won British positions and asked nothing in return. Is it not equally clear that in Luxembourg, on the euro, the Prime Minister thought he could demand a pay-off for his Amsterdam surrender and got a brush off in return?

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On enlargement, on this side, we welcome the decision to enlarge the frontiers of the Union. That was something for which the last Prime Minister, Mr. Major, fought long and hard and the success of this agreement is in no small measure due to the foundations laid then. We fully support the opening of membership talks for 10 East European countries and Cyprus next year and we support the decision to fast track negotiations for the five so-called first-wave countries.

Does the Leader of the House recognise, as I am sure he does, that there is a genuine common interest across this House to see a wider Europe come to pass? But will he also accept--I am sure he will--that the position of Turkey is extremely delicate? After all, Turkey has been a stalwart member of NATO. It has a free market and a functioning government who, for all their imperfections at times, are far older than some of the other aspirants to European Union membership. It plays a responsible and pivotal role in an increasingly unstable area of the world which shares a common frontier with a number of nations in which war and dictatorship sometimes seem to be endemic. Therefore, will the Leader of the House assure us that Turkey will be treated with the respect it deserves and will be judged no more harshly than other aspirants to membership?

Will the noble Lord outline what plans the Government have to bring Turkey into the enlargement process? Will he explain a little more precisely what is planned at the conferences proposed with Turkey as an alternative to membership talks and what response, if any, there has been from the Turkish Government to that idea?

The Statement also refers to CAP reform. That is something which is very dear to noble Lords on this side of the House, as I am glad to see it is to those on the government side. However, I wonder whether the Prime Minister used the excuse of discussion on CAP reform to discuss the even more urgent matter of beef. If he did, did he manage to secure any concrete assurances in relation to the early lifting of the ban on British beef in view of the precipitate and draconian action against beef farmers which the Minister of Agriculture has announced in the past few days?

Despite the Prime Minister's presence at the summit and what Mr. Blair called in The Times with perhaps--and I hope I am not being unduly rude--a touch of Walter Mitty, a new understanding in Europe of Britain's influence and determination, will the noble Lord also confirm that only today the European Union has deferred action for another three months to bring its rules on the slaughter of cattle in abattoirs into line with UK practice? Is it not also the case that, while those events were unfolding in Luxembourg, the Minister of Agriculture was outvoted by 14 votes to one this morning on the proposal to ban the sale of beef on the bone?

In view of all that, I wonder whether the Leader of the House, on second thoughts, is really so pleased with the effectiveness of "the new presentational style" in Europe. If he is, I wonder whether he should be. Should he rather not ask himself whether the Prime Minister

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was not in error in thinking that such a style would be all that would be required in order to change the difficult realities of international diplomacy?

4.15 p.m.

Lord Jenkins of Hillhead: My Lords, I too thank the noble Lord the Lord Privy Seal for discharging his duty to this House and repeating the Statement. The last time I attended the European Council in Luxembourg, the noble Baroness, Lady Thatcher, threw away a settlement which the noble Lord, Lord Carrington, then had to labour throughout a whole night a month later, nevertheless with a great deal of loss of goodwill, in order to put it together in almost exactly the same shape. I mention that partly retrospectively and partly because we must remember that in some ways that Ruritanian city of Luxembourg of high plateaux and deep gorges is not always a happy terrain for British Prime Ministers.

I have asked myself whether the Euro X battle was a wise or necessary one in which to engage. As I think Mr. Blair has, retains and deserves a good deal of goodwill in Europe, a face-saving compromise was achieved. But I believe that the battle which could not have been won was unnecessarily elevated as an issue.

There is also a paradox as the Government, following the Chancellor's statement in October, are now generally recognised to be set on a course towards entry into the single currency. As that will necessitate a referendum, it will inevitably be one of the most powerful arguments which the Government will have to deploy that you cannot have full influence without full participation. If we had been given full participation in the management committee without membership of the club, a good deal of ground would have been cut from under the feet of the Government in that important argument which is to come.

We are now embarked on a great programme of enlargement which leaves the first enlargement, which brought Britain, Denmark and Ireland into the Community--and at least one of those three has been a very popular member of the Community--the second enlargement when Greece came in, the third for Spain and Portugal and the fourth for Sweden, Finland and Austria looking minor and easy compared with that on which we are now embarked. I welcome that course. It is necessary and appropriate to discharge our duty to unify Europe. But it is also somewhat hazardous. If the outcome of between 20 and 30 members is not to be an amorphous mass, it certainly requires the strengthening of the sinews of decision-making in the existing Community.

Turkey is put in a special category. I retain certain doubts. Turkey is clearly a country of great strategic importance. It was one of the hinges of that old board game, which never lasted as long as Monopoly, called Diplomacy. There were about three countries and if you secured them, that almost always determined the result. Consequently, the United States, as the one remaining world power, is strongly in favour of Turkish entry. I am certainly not in favour of being against the United States for its own sake. In general, I tend to take the contrary view. But America is not a member of the

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European Union and does not have responsibility for its internal cohesion. I have always believed that three criteria were necessary for admission: first, the country should have a settled will to join; secondly, it should clearly be European in nature; and thirdly, it should be indisputably a democracy with all the human rights which go with that word. Spain and Portugal in the late 1970s--although only fairly recently democracies--with which it fell to me to open negotiations clearly fulfilled all three criteria, and very good members of the Community they have been.

With the best will in the world, I am not sure that Turkey fulfils more than one of the three--the first. It cannot change its geographical position or its ethnic composition. But I think it must at least fully meet the third criterion on democracy and human rights before membership arises.

4.20 p.m.

Lord Richard: My Lords, I am grateful for the part of the noble Viscount's contribution which welcomed the Prime Minister's Statement. I am also grateful for the broad welcome which the noble Lord, Lord Jenkins of Hillhead, gave it. I have to tell him at the outset that I do not accept his magisterial rebuke about Euro X. I shall say a few words about that in a moment.

The noble Viscount criticises what the Prime Minister said when he returned from the European summit. I cannot help but recall the phraseology of Mr. Major when he returned from Maastricht. Your Lordships may remember that he said, "Game, set and match". I believe that was the exact phrase that he used. The game went wrong; the set was not in his direction; and as far as the match was concerned, he certainly lost it. Compared with that it seems to me that what my right honourable friend the Prime Minister stated in his article in The Times today is extremely moderate and exceedingly accurate.

I begin with Euro X. Of course those countries that are "ins" are entitled to meet. Not only are they entitled to meet but I cannot forbear from reminding the noble Viscount that the right of the "ins" to meet is enshrined in the Maastricht Treaty which his party negotiated when in government. It seems to me that in those circumstances the one thing we cannot do is to prevent that kind of meeting. What we can do on the other hand is to make sure that decisions which affect the future of the euro are not taken in that meeting but are taken in ECOFIN. We can also ensure that in circumstances where they are discussing matters of common interest, Britain will have the right to be represented. I do not think, with respect, that the noble Viscount can have had the opportunity yet of reading the conclusions. When our positions were reversed, he will remember that the theme I reiterated to him and to the House was that they should read the conclusions and not merely the Statement.

I am happy to say that the conclusions are clear. They state:

    "the ECOFIN Council is the only body empowered to formulate and adopt the broad economic policy guidelines which constitute the main instrument of economic co-ordination. The defining position of the ECOFIN Council at the centre of the economic co-ordination

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    and decision-making process affirms the unity and cohesion of the Community. The Ministers of the States participating in the euro area may meet informally among themselves to discuss issues connected with their shared specific responsibilities for the single currency ... Whenever matters of common interest are concerned they will be discussed by Ministers of all Member States. Decisions will in all cases be taken by the ECOFIN Council in accordance with the procedures laid down in the Treaty".

The noble Viscount asked me who could take a matter to ECOFIN if there was an argument as to what was a matter of common interest. Any one country can do that. As the noble Viscount will know, ECOFIN is the only place where the decisions can be taken. The noble Viscount asked for some reassurance on Turkey. The noble Lord, Lord Jenkins of Hillhead, also referred to Turkey. The Presidency conclusions state:

    "The Council confirms Turkey's eligibility for accession to the European Union. Turkey will be judged on the basis of the same criteria as the other applicant States. While the political and economic conditions allowing accession negotiations to be envisaged are not satisfied, the European Council considers that it is nevertheless important for a strategy to be drawn up to prepare Turkey for accession by bringing it closer to the European Union in every field".

The conclusions then set out what that strategy should consist in:

    "development of the possibilities afforded by the Ankara Agreement; intensification of the Customs Union; implementation of financial co-operation; approximation of laws and adoption of the Union acquis; participation, to be decided, case by case, in certain programmes and in certain agencies provided for in paragraphs 19 and 21".

It goes on in some detail. I hope I may quote one other sentence on the attitude of the European Council towards Turkey. It states:

    "The European Council recalls that strengthening Turkey's links with the European Union also depends on that country's pursuit of the political and economic reforms on which it has embarked ... The European Council endorses the guidelines that emerged from the General Affairs Council ... on future relations between the Union and Turkey and asks the Commission to submit suitable proposals".

I hope that I have been able to give the noble Viscount some reassurance on that. However, if I have managed to reassure him as regards Turkey, I suspect that I have not reassured the noble Lord, Lord Jenkins of Hillhead.

I accept that the position of Turkey is delicate. However, almost all members of the Community, with the possible exception of Greece, believe that Turkey should be encouraged to get its policies and affairs into a state where it is eligible for accession negotiations to start. In some ways it is perhaps unfortunate that--one can see that this is what the Turkish Government might feel about it--it cannot be treated in precisely the same way as the others at this stage. My right honourable friend wrote to the Prime Minister of Turkey immediately after the conference urging him to recognise that from the Turkish point of view this was a considerable step forward. I have not yet seen a response to that telegram, although I think it is probably fair to say that the position of the Turkish Government at the moment is not one of unalloyed enthusiasm for the Statement as it emerged from Luxembourg.

When the noble Viscount sat down I was not sure whether he thought we had achieved a good deal on Euro X or a bad deal. I was not sure whether he thought

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we should have said, "If you want to talk, go ahead and talk, and we shall have nothing to do with it", or whether he thought that a situation in which we took one view and the other countries took another view and they arrived at a sensible accord in the middle is not the way in which negotiations should be carried to--as in this case--a successful conclusion.

4.28 p.m.

Lord Garel-Jones: My Lords, will the noble Lord the Leader of the House accept that while the Prime Minister may have failed to obtain a seat at the Euro X Committee, some of us at least are generous enough to recognise that he has achieved a little standing room at the back? Is it not really the case that what comes out of this kerfuffle is that being outside the institutions of the Union, whether they be formal or informal, as the noble Lord, Lord Jenkins of Hillhead, pointed out, is an uncomfortable position for Britain to be in?

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