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Lord Howell of Guildford: I am glad to accept the noble Lord's intervention. He carries enormous experience on these matters. I am sure that his intervention is in line with all the procedures and customs of this House, as I understand them. I am quite a new boy as well.

The provisions in the protocol—and this is why I am moving a probing amendment—are important for the enlargement process to go forward. However, the noble Lord used the phrase "if it [the Treaty of Nice] had gone wrong". I hope that the Treaty of Nice will go right, but at present it is an undisputable fact that one country has refused to ratify by a referendum. Until that can be unscrambled, the Treaty of Nice will not go forward. If we had had a smaller treaty—a plan B—with such provisions in the protocol it might by now be all over and done with. There would have been no objections in Dublin or anywhere else. Unfortunately, the decision, supported by Her Majesty's Government, was that the Nice Treaty should include other provisions which have nothing to do with enlargement and which have greatly weighed down the treaty-making process. Those issues to do with enlargement did not feature very much.

What will be the result? Those of us who want to see enlargement are entitled to raise these questions with some firmness. It is perhaps a cause of anger that far from helping enlargement, clumsy treaty making is getting in its way. What is happening? In Warsaw we see that hostile europhobe parties—they are not merely euro realists or sceptics—are gaining more influence and now have 15 per cent of the votes. There is enormous concern about the acquis provisions on borders and about Schengen. Poland has huge difficulties when considering how to transfer its border

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from the west, the old Schengen border, to the east, vis-à-vis Russia, which has always presented a porous and different kind of border. That will require vast upheavals and social changes.

In the Czech Republic we find growing disenchantment and worries expressed over whether Slovakia will be included. I hope that it will be, otherwise the Czechs will have to consider putting a Schengen border between the Czech Republic and Slovakia; namely, a border erected between two nations which, until only a few years ago, were one country. That border is particularly permeable.

I had an opportunity to put questions to the Prime Minister of Hungary, Mr Orban. We met on a public occasion and there is no harm in repeating his comments. He made it perfectly clear that he seeks a flexible Europe. He is uneasy about centralisation and the growth of qualified majority voting. The Hungarians also face nightmarish problems as regards the Schengen provisions vis-à-vis Romania if that country remains outside the EU. The above are immensely difficult problems which we shall address with all our energies.

I turn now to the brave Baltic states, which I have visited on many occasions and for which all have a soft spot. It is often forgotten that Estonia was founded, in effect, by British actions taken in the 1920s before that country entered the long dark night of absorption into the Soviet Union. Those states have been asked to put up tariffs. I understand that they are not worried about it, but that is what joining the European Union means. However, they are concerned that they may become second-class members of the common agricultural policy. That concern also applies to other countries.

The Cyprus problem is beginning to burn. No noble Lord is better qualified to comment on that than the noble Lord, Lord Hannay of Chiswick, who is not in his place. However, the problems with Turkey and Greece are extremely dangerous. There is a real threat that Greece may veto and obstruct the entire process if membership for Cyprus is delayed. Equally, Turkey may cause all the trouble it can if the situation turns the other way around; namely, if Cypriot membership is accelerated. Furthermore, smaller countries such as Latvia insist that they want to see a Europe of nations.

The cause of Europe has been damaged by the botched nature of the treaty proposals and evidence of the big boys ganging together over them. That is why the famous Euro-barometer records waning enthusiasm. At the beginning of this year it recorded that some 44 per cent of the EU was in favour, but I gather that the percentage is now much lower.

We agree with the Minister, who commented yesterday at the Dispatch Box that considerable benefits will be enjoyed in an enlarged market. Ironically, we seem to be moving to a situation in which the applicant states, whose position would be assisted by this protocol if only we could move it forward and it was not bogged down in the rest of the treaty, are set to grow faster than the near stagnant member states of western Europe; in particular they

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will grow faster than Germany. Luckily, however, for the moment the British economy seems to be doing well.

When we are told that unless we tick the boxes on the Nice Treaty enlargement will be held up, then we are entitled to be more than cynical and to say that, on the contrary, if we were to tick all the boxes in the Nice Treaty we shall find ourselves in deeper trouble. Indeed, that is the case already. If, as many advised at the time, we had concentrated on the simple mechanical changes needed to correct the weighting, distribute properly the seats in the European Parliament, get the structure of the Commission right and so forth, we would now be moving ahead on the process of enlargement.

It is deplorable that enlargement has taken so long. It should have taken place after the fall of the Berlin Wall and the liberation of Czechoslovakia soon after. Those of us who visited those regions at the time told our dear friends in Prague—it may have been misleading—that in only a matter of months, or perhaps a year or two, they would join the European Union. That was 12 years ago. So much for enthusiasm about enlargement.

Lord Lea of Crondall: I am grateful to the noble Lord for giving way. Is he seriously suggesting that all the problems he has adumbrated—the 10,000 pages or so of the acquis communautaire, the challenges of economic adjustment, abolition or reformation of the CAP, and questions about the budget—could have been dealt with far more quickly had we not put in place a treaty along these lines? That appears to be the burden of the noble Lord's argument.

Lord Howell of Guildford: I do not suggest that. If that is how my comments have been perceived by the noble Lord, then mea culpa, it must be the inadequacy of my presentation. I had thought that I made it clear that these are the obstacles and issues and thus the areas to which energies should be directed. I was going to go on to say that perhaps, when looking back over the past 12 years—and, I confess, here moving to the very edge of the amendment—if we had spent less time on manufacturing endless treaties and more time on addressing the issues I have outlined in my remarks—and perhaps building treaties around their resolution—we would be a little closer to the goal of enlargement than, humiliatingly, is now the case.

I hope that it takes place in 2004, which will mark 15 years since the fall of the Berlin Wall. That is far too long, but when enlargement is secured, it will reunite the Europe for which a previous generation fought and gave their lives. That is a fine objective. I should hate to see bureaucracy and the machinations of certain treaty arrangements get in its way. I beg to move.

Lord Watson of Richmond: The noble Lord described an eastern Central Europe which is barely recognisable. If it is truly the noble Lord's conviction that in the capitals of the applicant states governments hold their heads in their hands in despair when confronted by the complexities of the acquis

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communautaire—for which they must buy large computers to scan an unforeseeable future; although one noble Lord is strong on prophecy and it might be cheaper to hire him—that they perceive as an absolutely unalterable barrier, then that conviction is, frankly, quite unreal. The truth is that the acquis communautaire, although complicated, provides an important blueprint and plan for the modernisation of eastern Central Europe.

It is greatly to the good fortune of Europe at this historic moment that the treaties are in place, that the acquis communautaire is a single body and that, therefore, a proper negotiating agenda has been agreed; namely, a road map by which the enlargement of Europe can proceed. If all those achievements were wished away, which clearly is what many Members of the Committee desire, then to be frank, Europe would be in turmoil. We would certainly be dependent on prophecy and even the biggest computer would not be able to solve our problems.

The fact is that membership of the European Union is the great driving force for modernisation in the eastern Central European states. Far from enthusiasm waning for membership of the EU—I do not know which polls the noble Lord has consulted; they differ from the ones I have seen and from the evidence of my own visits to some of the capitals—it is clear that determination to proceed with enlargement is formidably strong. Are we to say that the populations who will that and their governments which express that are foolish, nai ve and misled? Have they not listened to the prophecies, and thus do not believe in the conspiracy theories? Should we in some way educate them in a new clarity and realism? No, that is not the right approach.

The fact is that the Nice Treaty, although somewhat inelegant in parts, is essential to the enlargement process. It has clarified the important question of weighting of votes in the Council. It has introduced an element of legitimacy to the voting system, which is extremely important because it would be difficult to proceed if that had not been achieved. As Europe stands at present, it is vital that the three larger countries of the present Union hold their positions. That was not easy to negotiate at Nice, as we all know. However, it was achieved.

We must distinguish between the endless and multiplying problems foreseen by the noble Lord, Lord Howell. He has examined every aspect of the European Union for grandmother's footprints, or someone else's footprints; there are always more footprints in the snow. Every time one of them melts, it is replaced by dozens more. Indeed, it would be possible to become positively hectic, even neurotic, in the pursuit of those footprints. I sometimes wonder whether, on occasion, that might be the case.

But the truth is that the vast majority of opinion expressed by the applicant states is clear: enlargement should take place. The Treaty of Nice has been welcomed as a necessary step. The Government are absolutely determined to go ahead with it. I do not think that it is right, for this Committee or those

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elsewhere in the United Kingdom, to stand in the way of what is clearly the historic right of the applicant countries and an unarguable demand that we should move forward.

7 p.m.

Lord Willoughby de Broke: I rise to speak to my amendment, which is Amendment No. 34A. I believe that it goes to the heart of the enlargement process. The protocol on enlargement deals with institutional reform in some detail, including the re-weighting of votes, the number of members of the European Parliament and members of the Commission. To that limited extent it is about enlargement. Perhaps it is one of the few parts of the treaty that is actually about enlargement.

That is all very well. I accept what the noble Lord, Lord Watson, has said. I am sure that there is a groundswell of desire in the candidate countries to join the European Union. But the real barrier to enlargement in the end, apart from the reforms which are being carried out, is the common agricultural policy. It seems to me that without reform of that policy within the treaty there will be more barriers to enlargement. It will be harder for the candidate states to enter the European Union.

Of the five candidate countries at the moment, Poland and Hungary have two very significant and highly important agricultural sectors. Indeed, I believe that Poland has more farmers than the whole of the rest of the European Union together. I agree that most are small farmers, but farming represents about 20 to 25 per cent of Poland's GDP compared with about 3 per cent for this country. So for Poland it is a very serious problem.

Therefore, it seems somewhat irrational to make preparations to receive new members before we have decided what the ground rules are, how they are going to be accepted and how the CAP is to be reformed to allow the candidate countries to join the Union. In the way the CAP is currently constituted there does not appear to be any provision by which the candidate countries can be admitted, because there is no appetite for reform. Indeed, the President of the Commission has gone on record as saying that there will be no reform or even review of the CAP before 2006. He has been supported in that view by the French Prime Minister.

It is astonishing that, given their importance, the chapters on agriculture have not been opened for discussion with the candidate countries. But the agriculture Ministers of Poland and Hungary have made it perfectly clear that they expect that their farmers will enjoy all the benefits, if I can call them that, of the common agricultural policy.

So how is that circle to be squared? How can we meet the legitimate expectations of the agricultural sectors of the candidate countries without reforming the CAP? How is it to be reformed? How is it to be dealt with? As I have said, there is no prospect of real reform. It has been tinkered with at the edges in the past few years. It has been watered down and

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proposals have been made but nothing significant has happened. Certainly, nothing is going to be done to radically reform the CAP, which is necessary.

It appears to me that there are three possible scenarios. The first is that some of the current recipient countries—France is the largest—will volunteer to give away some of their receipts to the candidate countries. I do not know whether that has been proposed, but we have not been knocked over in the rush for that to happen.

Secondly, the other proposal, which is equally unlikely, is that the CAP budget of the European Union will be enlarged to accommodate the new entrants and their agricultural sectors so that they can receive the subsidies that the current members receive. The third scenario, which seems to be on the cards at the moment, is that the candidate countries are to be told that they will have to comply with all the rules and regulations of the CAP but that they will not receive subsidies because there is no money and they will have to make shift with that scenario. It is rather like being an off-peak member of a tennis club where one pays one's dues, obeys the rules without being able to change them but can use the hard courts only on weekday mornings.

I do not believe that that is acceptable to any of the aspirant countries with such large agricultural sectors. My noble friend Lord Howell was absolutely right that a smaller treaty, perhaps beginning with the title "Protocol on the Enlargement of the European Union", encompassing the reform of the common agricultural policy, would have made the enlargement process much more speedy. I did not realise that it had taken quite as long as my noble friend said, namely, about 15 years. That seems astonishing. I gather that the first countries to join will not do so for another three years, if then, and only if the CAP is reformed. I believe that application and reform of the CAP should be coterminous and therefore should be included in the treaty; hence the reasoning behind my amendment. If the treaty is to be about enlargement, surely it has to include agriculture and the CAP.

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