Select Committee on European Union Minutes of Evidence

Examination of Witnesses (Questions 20-39)



  20. So a balance between the formal and the less formal?
  (Peter Hain) Yes, not always to go for legislation, but if you are going to do it on a treaty basis being flexible about it as well.

Lord Hannay of Chiswick

  21. Can I ask three questions, one about the Court of Auditors, one about budget and one about the Stability and Growth Pact? On the Court of Auditors, do you not think now we are going to have 25 Member States it is really high time to have a Court of Auditors that does not have one member per Member State and thus be needlessly top heavy and over-bureaucratic, and would it not be time to take a leaf out of the Central Bank's book and get down to some rotation in the Court of Auditors? On the budgetary matters, do you think there is any realistic possibility of either abolishing the distinction between obligatory and non-obligatory expenditure or at least giving the European Parliament more say over the bits of the budget that are obligatory expenditure, and if so do you think it is desirable? On the Stability and Growth Pact, is the Government looking for substantial changes in the Stability and Growth Pact when the IGC meets? I am not asking so much about the Convention but when the IGC meets.
  (Peter Hain) On the Stability and Growth Pact, if I just do them in reverse, it has not figured in the Convention at all. As to whether it arises in the IGC it is not, I guess, primarily a matter for the IGC but I guess it could come up. There has been no encouragement from us to bring it up. On the question of obligatory and non-obligatory budgetary distinctions, provided that this falls within the financial ceilings set by Member States then it is something we are happy to look at and indeed did discuss that issue in a paper which we submitted. On the question of the Court of Auditors, I understand the point that is implicit, that every time you get a new Member State you have another member of the Court of Auditors virtually and it could prove very difficult to manage with 25 full time members. I think this is something that we are prepared to look at with an open mind.


  22. While we are on the financial questions, Secretary of State, can I ask you this? There seem to be some problems about who is going to adopt the budget. The Praesidium seems to be having a problem in that it does not appear to be able to reach agreement. How do you think that problem might be resolved?
  (Peter Hain) I think there is at the moment—it has just been set up and I think Lord Tomlinson is on it—a Budget Working Group to address these kinds of issues. It is not something that has engaged the Convention's attention or my attention with any priority, but if there are any considerations the Committee wants to put forward to me for that or to the Government in general I would be interested to hear them.

Lord Howell of Guildford

  23. Do you buy draft Article 13 which says that the Union "shall co-ordinate" the economic policies of Member States?
  (Peter Hain) No. It was one of the things I objected to when they were published, in that this is a matter primarily for Member States in the existing Treaty saying that and as currently phrased it could give all sorts of competencies to Brussels, for want of a better term, to effectively run Member States' economic policy which is not something we would entertain for a moment.

Baroness Park of Monmouth

  24. In considering institutional questions is the Convention paying enough attention to the overarching issue of inter-institutional interdependence? Can the fundamental balance of power in the institutional triangle survive enlargement? I would like to add to that, do you not think that it might complicate things even further to set up the European Congress which I see the UK and Spain supported? I know you said that it must be an informal political body, not a new institution, but if you are still saying it is worth considering and there is a useful role for it, do you not think there is a danger that it would create yet one more body and complicate things further?
  (Peter Hain) Yes, there is, and this is why we have not proposed this idea. It came initially from President Giscard himself and from members of the French national parliament who are particularly keen on it. It seems to have gained a bit of momentum but then others are opposed to it because it does give national parliamentarians representative rights— perhaps to hear an annual work plan by the European Union or conceivably to play the role of an electoral college in that. I do not think that need upset the institutional triangle or the balance there perhaps because we devoted a lot of attention to explaining our ideas on Council reform early on in the Convention, the impression was put about that we were opposed to a strong Commission or an influential parliament. That is not the case. It is in Britain's interest to have a strong Commission to make sure, for example, that the beef ban is complied with, to make sure that energy liberalisation is driven through, to make sure that the single market operates on a genuinely level playing field which in many respects it does not. For these kinds of things you need a strong Commission and any Euro-sceptic demand for a weak Commission is against Britain's national interests. I would argue that we need a stronger Commission than we have been unfortunate in having in recent years, possibly being reorganised, as President Prodi suggested, with fewer departments. The situation where you have to create a job for every country that joins is not a logical position to be in though I also understand and do not challenge the principle that each country should have right of admission, but there are ways of accommodating that principle whilst obtaining a strong Commission. I think that in a Europe of 25 or more a strong Commission is vital. To have a stronger Council, which has been weak up to now, does not mean to say that you want a weak Commission. On the contrary. Equally it does not mean to say you want a less influential parliament. In fact, in some of the proposals we have supported parliament would have a greater say than at the present time.

  25. If I could take that one stage further, how does that affect finance because we noticed when we did a recent report on the particular action that is going to happen in Macedonia they ran into great problems because the Commission was the only one who had the money. Would you say that sorting out the financial situation is going to be part of it too?
  (Peter Hain) Yes, I do. For instance, and it is perhaps not directly to your point but is analogous, Javier Solana gave very interesting evidence to the Working Group on Common Foreign and Security Policy where he described his frustration at not having any resources, and in fact the Balkans was the example he gave. I am not sure that I have covered this point previously in your hearings, Chairman, but he described how, even to the point where he needed a vehicle in Bosnia, I think it was, he could not get one because he did not have any resources as the High Representative and the Commission would not give it to him because he did not have the competency to do that, so he actually had to go to a private car manufacturer and say, "Please give me a four-wheel-drive vehicle to enable the European Union's peacekeeping operations to continue in some form", decided by the Council, approved by everybody in sight but no resources to implement it. Yes, I do think the question of resources has got to be looked at. The other side of it, of course, is that you have a situation now where I think I am right in saying that the Parliament has vetoed quite a large chunk of money for Afghanistan not because it was opposed to Europe making its contribution to rebuilding Afghanistan—and quite rightly it should not be opposed to it—but because it was involved in some other struggle and it sought to exert its power by refusing the rights of resources to be injected into the rebuilding of Afghanistan. This cannot be a sensible way of behaving.

  Chairman: It sounds to me a bit like Mr Berlusconi on milk quotas to me.

Lord Scott of Foscote

  26. I have a couple of questions I hope you can help us with on the subject of the co-decision procedure and qualified majority voting. I know the paper which you submitted jointly with Ana Palacio argued for an extension of the co-decision procedure with qualified majority voting into new areas but there was not any indication what areas you had in mind. Article 31 of the proposed new constitution, which supported the Freedom, Security and Justice title in Part Two of the new Treaty, suggests that with some unspecified exceptions legislation in this area will be adopted by the co-decision procedure and qualified majority voting. First of all, what were the areas that you had in mind for the extension of this procedure and, secondly, is the Government prepared to accept the co-decision procedure and qualified majority voting for the Freedom, Security and Justice area and are there any no-go areas so far as the Government is concerned which will have to be catered for by exceptions?
  (Peter Hain) We have to look at this on a case by case basis, as our paper indicated. For example, on asylum policy and immigration policy, it is in Britain's interest to have foreign policy particularly where there are procedures for accepting and handling illegal migrants or migrants to determine whether they are legal or not. On the other hand, unanimity will have to apply over other areas, for example, joint police operations or the operation of our criminal justice system. What we have to do is to approach it on a common sense basis, that, for instance, in the response to September 11 we agreed to extend qualified majority voting in the fight against international crime. Equally, on asylum policy but in other areas where national rights are pre-eminent we would not accept that.

  27. I have just been looking at a Green Paper from the Commission on proposed common procedures in criminal cases. Would that be an area where the Government would be prepared to accept qualified majority voting?
  (Peter Hain) We are looking at what this might mean for the cross-border implications, for example. Mutual recognition obviously is a very important principle. If the objective was to harmonise criminal justice procedures or laws then no is the short answer to that.

  28. Do you anticipate difficulty in reaching agreement on what will be the exceptions which will have to be clearly defined from the application of qualified majority voting in the Justice, Security and Freedom area?
  (Peter Hain) The existing Article proposed by the Praesidium as you know does have a number of exceptions and there are a lot of other Member States in exactly the same position as we are, saying that we have got to have some major bottom lines here, including the ones I have mentioned, and we intend to hold to that.

  29. It has been proposed that the European Court of Justice should have jurisdiction in this area, which at the moment it does not have, so that, for example, if a particular framework decision was not properly implemented the complaint would not be simply a matter between governments but it would be ventilated in front of the court. Is that something that the Government will agree to or are there are particular limitations of that which the Government would want to insist upon?
  (Peter Hain) I might, Chairman, after I have answered Lord Scott's point, bring in Nick Baird because he is the expert in this field, which I am not. In fact, he is so much of an expert that the Home Office to my chagrin is trying to poach him from the Foreign Office. As you are aware, ECJ jurisdiction already applies with certain limitations to both asylum and immigration and to the police and judicial co-operation in the Third Pillar. We want to retain limitations first of all in the carve-out for law and order and internal security which are matters for national governments and national courts, and then have a provision allowing Member States to apply to courts of appeal with the power to make preliminary references to the European Court of Justice on particular aspects of JHA to avoid clogging up the legal processes hearing asylum cases.
  (Mr Baird) That is right.

  30. For instance, we are in the process of implementing the European arrest warrant and if somebody wants to say that we have not done that properly will they be able to go to the ECJ or will the Commission be able to take that to the ECJ?
  (Mr Baird) Under the new Treaty we would accept jurisdiction for the ECJ with those exceptions so the answer is yes, but each Member State would have the right case by case to decide whether it was only the last Court of Appeal that could make the reference to the Court of Justice for an opinion within the system not at earlier stages in the process.

Baroness Harris of Richmond

  31. In a sense I am following on from Lord Scott and returning to QMV. You have explained carefully about the areas where legislation would be voted by QMV. Would that apply to the integrated management of external borders, and I think I know the answer to this, and where do you think the provisions for enhanced co-operation should be taken in those areas?
  (Peter Hain) We want greater practical co-operation between Member States on external borders. We do not want a single European border guard. We welcome the fact that the Treaty Articles do not suggest it, and we support QMV in areas where this will help push forward action that is in Britain's interest, but we want to retain our opt-in provisions in this area and would only wish to take part in the kind of co-operation at the external border which is consistent with that approach. As far as enhanced co-operation is concerned, it really depends on how widely the future measures are supported by Member States but I think we would only move in this direction if there was not general support for enhanced co-operation.

  32. So with the collapsing of the Pillars establishing the legal base calling for integrated border management you would not be prepared to revisit the opt-out that we gained in Amsterdam? What about the Irish and Danish governments?
  (Peter Hain) No, emphatically not, to the question do we want to rescind our opt-out. We intend to retain that. As far as I know the Irish are in exactly the same position; in fact, I am certain of that. I think the Danish might be too but I know the Irish are.

  33. With the idea that QMV will be taken forward in the Treaty do you not think though that our position might be really much more difficult to retain?
  (Peter Hain) No, I do not, because I think it is in our interests to get British interests advanced in getting more effective action along borders and also in dealing with the problem of human trafficking by QMV. There are frankly a number of back markers in this amongst fellow Member States. I do not think you would like me to name them but they exist and it is clearly and self-evidently in our interests to make rapid progress in this area in order to improve security, including in the struggle against terrorism and international crime. That is a distinction from harmonisation. What we do not want is harmonisation on this. It is common action where QMV is sensible.


  34. Secretary of State, is what you are saying basically no change on the opt-out protocol post-Amsterdam?
  (Peter Hain) Yes, loud and clear.

Lord Jopling

  35. Minister, can I come to the proposal to merge the roles of the High Representative and the External Affairs Commissioner? Do you think this makes sense? Do you think it could work? How should that person, if he were to be created, divide himself between the Council and the Commission? I might say that Sub-Committee C of this Committee was firmly of the view on this issue that the High Representative role must remain firmly based in the Council but if that were so how would he connect with the Commission?
  (Peter Hain) We are very firmly in agreement with Sub-Committee C's view on this, that the High Representative, foreign representative, whatever the title might be, will only mean anything if that person is the voice of national governments and accountable to national governments and parliaments through the Council. On the other hand, there is a strong case for greater co-ordination with the Commission and I repeat the example that I gave earlier of Javier Solana being paralysed by lack of resources to the extent that if he goes to New York or Washington he cannot even use the Commission's staff representatives out there. They do not serve him. They do not serve me. They see me as a representative of a foreign body which is ludicrous, so if you think of foreign policy, as I do, as being a continuum with a soft end of aid and maybe trade, but let's leave it at aid for these purposes, and a hard end of soldiers and diplomacy in the middle of that which tries to avoid the reliance on either aid or soldiers, then where are we now? We are in a situation where the Commission has responsibility for all the aid and development with a lot of resources for external relations in terms of association remits and so on and for a lot of other related work and I am represented as the operational diplomat who gives some serious diplomatic force to different views. Therefore, I think co-ordination there is a desirable objective, but not to the point where, first of all, the Representative would find that he or she had two masters who might be in conflict. There can only be one master and that is the Council, so proposals to situate the High Representative, foreign representative, in the college as a full equal voting member of the college is not something we want to see because effectively we will see a communitisation of foreign policy in that way. On the other hand, it may well be that you need several deputies for the High Representative sitting in the Commission doing the kind of work they do at the present time on aid and development and so on, so it is in that kind of area with our bottom line being that the Council has to be in charge and effectively the CFSP cannot be in a position of being, either by default or by gradual erosion, communitised through the Commission taking over the role.

  36. I think you said that the High Representative, when he is in Washington, finds it very difficult to enjoy the services of the Community representation. You may like to know that a month ago Sub-Committee C was in Washington and I think the view of the Committee then was that he does not miss very much.
  (Peter Hain) I hear what you say.

  Chairman: Are there any more questions on Common and Foreign Security Policy?

Lord Howell of Guildford

  37. I suppose just to ask the Secretary of State the obvious question, that in terms of the last few weeks, is this all going to be left out of the part of the draft Treaty or do they think they will cobble something together again?
  (Peter Hain) No. I think we are on course to agree the kind of proposition I have suggested on the High Representative and I think the elected President of the Council of nearly five years will be two key institutional changes which will enable Europe to gradually move to a stronger Common Foreign and Security Policy and had they been in place, these changes, these reforms, ten years ago, we might well have got to a position where it was occupying a more sensible stance on Iraq than it has been where its existing 15 Member States were pretty well split down the middle, as will be the 25 Member States, with a substantial minority in our camp of the existing 15 and a substantial majority in our camp of the existing 25. I think it would have been desirable if Europe could have come to an agreed position and these reforms would have helped us to do so simply because to play a serious role in foreign policy, Europe needs to act in partnership with the USA not as a rival, as perhaps Paris seems to have suggested, but as a partner, disagreeing where necessary, as we have done, mainly on Kyoto, on the International Criminal Court and other key measures and key international treaties, but in trying to find the common ground in order to make the world a safer place.

Baroness Park of Monmouth

  38. What is the intention of the Germans and the French in talking about the European Minister for Foreign Affairs having a formal right of initiative in matters of the ESC? How would he use that initiative?
  (Peter Hain) Well, I think it is a good idea in principle. At the moment the Commission has the right of initiative across the board for its areas of competence, but this would be Member States being able to have effectively, through the High Representative, a right of initiative for CFSP and that person enjoying the confidence of Member States as a serious interlocutor on foreign policy matters, as Javier Solana was a credit in the Balkans to a very large extent and to some extent in the Middle East as well. Giving that formal right of initiative ultimately of course accountable to and determined by the Council would be, I think, an important step forward.

  Chairman: We come to the last area before we have to let you go, Secretary of State, and that is on energy and industry.

Lord Cavendish of Furness

  39. Secretary of State, under that broad heading there are three questions and, with your permission, I will ask them all three together. Is it proposed that the Euratom Treaty will be absorbed into the Constitutional Treaty and, if so, is it in the radical alteration so as not to cause problems with some Member States? The second question is that Article 3(2) of the draft Constitutional Treaty charges the Union with the discovery of space. Independently the Commission has made claim to space. Are there financial consequences for that policy, what is your position on that and might it not preempt important debates on security, defence and foreign affairs? Finally, the Praesidium states that there is a need for a legal basis for energy policy and I am wondering how this would affect policy areas such as nuclear waste disposal. Is it the case that until there is a firm policy on nuclear waste disposal, the discussion is closed as far as new build for generation and would this policy clarify things like nuclear waste?
  (Peter Hain) Well, on the Euratom Treaty, the Praesidium, as you will be aware, is aware of the Laeken remit which says that the Convention does not have a role here for revising the Treaty and I think the Praesidium would also be concerned that it would be impossible to do justice to very difficult and technical issues of sensitivity in the limited time available, so they suggested that the Euratom Treaty should be revised so that its finances and institutions are in line with what is agreed in the new Treaty, but otherwise left as it is and we are quite content with that. On the discovery of space, I did say that I thought Giscard was aiming high in this and I could not quite see that it was a priority for them. Obviously we want better European co-ordination in space, but the issue which you referred to, the financial implications are potentially very significant and I think that a specific reference to the discovery of space in Article 3(2) is not appropriate and we are trying to get that changed. On energy policy and energy efficiency, I do not see a serious argument for any specific legal basis for energy, but there was a consensus in favour of it in the group on competence, so we are willing to look at that if, and only if, it brought together existing measures relating to energy policy, but we would resist any attempt to use it to extend competence in this field. In terms of nuclear waste disposal, where would that fit into?
  (Mr Baird) It would not.
  (Peter Hain) It would not fit into the existing Treaty. I was not clear whether you were saying that it ought to, but at the moment we are saying that it should not.

  Lord Cavendish of Furness: I wanted to see the impact it would have.

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