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Baroness Rawlings: My Lords, I congratulate my noble friend Lord Dundee on securing the debate today. It has been most interesting, with important and knowledgeable contributions from all sides of the House.

Slovenia's acceptance into the European Union last year and the start of membership talks with Croatia this October are, I am sure the Minister will agree, clear incentives for other states in the Balkans to undertake reforms and to apply for EU membership. If the negotiations with Croatia are successful, this will demonstrate to other governments in the region that a country deeply involved in the wars of the 1990s can, 10 years later, democratise and restore friendly relations with previous enemies, something which we on these Benches, and indeed your Lordships' House as a whole, fully support and encourage.

Indeed, with Romania and Bulgaria's accession due in 2008, the remaining Balkan countries will be encircled by the EU and, unless they have a genuine prospect of membership, could face serious consequences. As the Economist highlighted on 3 November in an article entitled "Approaching Europe":

There can be no doubt that the stabilisation of the Balkans and the accession of other Eastern bloc countries to the European Union require decisions of an historic nature and they provide a test that will determine whether the European Union succeeds in today's climate of globalisation and changing civilisation.

We support the European Union in its capacity as the main donor of assistance to the Balkans. It has shown that it recognises progress by entering formal contractual relationships with qualifying states. Croatia and Moldova have both signed stabilisation and association agreements with the European Union. They seek to improve the existing autonomous trade preferences, and to provide autonomous trade liberalisation for 95 per cent of all the affected countries' exports to the European Union.

We welcome Croatia as a member of the European Union. However, the legacy of the 1991–95 armed conflict continues to overshadow the former Yugoslavia
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as a whole. The region suffers from low standards of living and a serious brain drain. Understandably, frustration is still widespread. During the conflict, approximately 300,000 Croatian Serbs fled Croatia, out of which the UN High Commissioner for Refugees reports that 200,000 remain displaced. The Adventist Development and Relief Agency reported at the end of last month that although it had seen some increase in the number of families returning home in the past couple of years,

In short, it stated that,

While the Croatian authorities have pledged to return illegally occupied property to returning Croatian Serbs, the repossession rate remains slow and many have lost their tenancy rights to socially owned apartments. There are claims too that the Croatian Serbs continue to face discrimination in employment when unemployment is a problem in itself. What discussions do the Government plan to have with the Croatian authorities on this issue?

These problems affect not only returning refugees. Discrimination remains a significant issue also for the Roma population—a subject that is often raised in this House. Will the Minister outline what progress has been made there?

The Commission's report of November 2005 stated that Croatia faced no major difficulties in meeting the European Union's political criteria for membership. We welcome this, as did the noble Lord, Lord Dholakia. However, human rights issues continue to cast a shadow over Croatia's application. Despite the Croatian Government's pledge to co-operate fully with the International Criminal Tribunal for the former Yugoslavia (ICTY), the authorities have adopted an ambivalent attitude. Negotiations have already been postponed once on these grounds. While the ICTY's chief prosecutor, Carla del Ponte, as mentioned by the noble Lords, Lord Anderson and Lord Hannay, considers that Croatia is now doing everything that it can to locate and arrest Ante Gotovina, a former army general, who has been charged by the tribunal with crimes against humanity and war crimes against Krajina's Croatian Serb population during Operation Storm, would it not have been better if it had acted promptly in the first place? Will the Minister confirm that Her Majesty's Government will insist that less than full co-operation may well trigger a suspension of negotiations?

I understand that corruption continues to be a serious problem too, although the legal framework to combat it seems largely to be in place. It is vital that these problems are resolved before accession to full membership is allowed, but the visa problem needs to be addressed by us, as several noble Lords have mentioned today.

Croatia is not yet there, nor is the former Yugoslavia as a whole. Contention still reigns between Croatia and Slovenia over the Bay of Piran and the relationship with the State Union of Serbia and
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Montenegro, but slowly Croatia is taking great steps in the right direction. As highlighted by the noble Earl, Lord Dundee, in his eloquent opening speech, this direction has largely started to help stabilise the country and its neighbours, and will also help to promote constructive regionalism and aid the assistance to subsidiarity; "a zone of hope" as the noble Lord, Lord Giddens, described it.

It is essential that we watch this process with care and continue with the tight tests for membership. At the same time, we should encourage and support applications like Croatia's as best we can in the interests of peace and stability, in a region that has already suffered too much from turmoil and strife.

8.41 pm

Lord Triesman: My Lords, I was able to make a Statement on 11 October about the opening of negotiations with Turkey and Croatia, and I am grateful to the noble Earl, Lord Dundee, for giving us the opportunity to discuss Croatia on this occasion in much more detail. I thank him and all noble Lords who have taken part in this debate. I also congratulate the noble Lord, Lord Biffen, on his son-in-law's sagacity and political judgment. It is much appreciated, I can assure you. I do that just as wholeheartedly as I congratulate Croatia on winning the Davis Cup. I wish we had its weather—it might improve things generally.

The noble Earl, Lord Dundee, has asked us an interesting and relevant question: what contribution will Croatia's accession to the EU make towards peace and prosperity in Europe? The noble Earl has indicated that Croatia can play a positive role in this important task. Others have echoed that thought—and I share that view—and he has linked it with a number of other key facts. He has also asked about the principle of subsidiarity and the importance of international exchange in the UK's own formulation of policy. I will do my best to answer all those points.

It is worth saying to my noble friend Lord Anderson of Swansea, and to others, that Croatia is, as I think the noble Earl, Lord Dundee, said, potentially a stabilising influence, and I would like to explore that thought as well. When my noble friend Lord Giddens referred to a book he had recently acquired, it might have been just 1 per cent of its pages covering an area of such importance, but he is right to say that that percentage would probably be a great deal more now when we consider the peace and trade and other advantages that have come through Europe, replacing the serial violence of the continent. That is a great gain for all of us, and important to all the parts of the former Yugoslavia.

Of the former Yugoslavia, leaving aside Slovenia, Croatia has moved the furthest towards EU membership. I take my noble friend Lord Anderson's point about its proud European history, and, as the noble Lords, Lord Hannay and Lord Giddens, have said, this European sense of belonging is important. Support for the EU did indeed fall after Croatia's
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accession talks were postponed in March, but equally polls have now shown that this has risen again, although not wholly, following the start of the accession talks on 3 October. That reflects what the noble Baroness, Lady Rawlings, said a few moments ago: it demonstrates to Croatia, as it does to others, the advantages of European Union membership, because it demonstrates the importance of the broader values and our commitment to keeping our word that, where progress is made, there are substantial advantages that we will ensure obtain.

The noble Lord, Lord Anderson, also raised in a way the issue of identity—Balkans or central Europe, as I think he characterised it. I completely agree. The view is that Croatia is in central Europe, but it does not mean that it cannot also be designated as part of the western Balkans. Historically it has played both of those roles. Albania is negotiating a stabilisation and association agreement. Serbia and Montenegro and Bosnia and Herzegovina have recently, under the UK presidency, opened their negotiations for an SAA as well. Macedonia recently received an opinion from the Commission on its formal application for membership. We are pleased as we look across that swathe that the countries in the region are beginning to take steps towards EU membership and starting to adopt the necessary reforms. The noble Lord, Lord Anderson, asks whether there has been sufficient progress and rightly makes the point that progress has been more significant over the past 18 months. I agree. In this process Croatia's progress towards EU membership sets an example for the other Balkan countries to follow. Croatia demonstrates that the EU will fulfil its commitments when the agreed conditions are met.

So the most important thing that Croatia can do for the region is to continue its progress towards EU membership. Let me be clear though. That does mean sustaining full co-operation with the ICTY. I shall comment a little more on that in a moment. It also means continuing to reform its institution, and it means working to put in place the acquis. It will not be an easy task. The noble Lord, Lord Biffen, is right about that. It will be difficult. But I am convinced that the Croatian Government, with EU support, can achieve it. As it does so, I am also confident that Croatia will share its experience of the negotiations process with others in the region. The business of developing government structures and transposing EU law can be very challenging, but I am sure that Croatia's neighbours will be grateful for the advice they then receive.

I know that Croatia has taken important steps to improve radically its bilateral relationship with its neighbours. President Kostunica visited Croatia last month, the first visit by a Serb Prime Minister, and this visit was characterised by a determination to work together as neighbours. Croatia should work with Serbia and Bosnia and Herzegovina to resolve their outstanding issues. Some of these—such as border management, which came up a moment ago—are of great importance to the United Kingdom. Many smuggling routes for illegal immigrants and trafficked
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people—trafficked women in particular—and for arms and drugs pass through the western Balkans on their way to the United Kingdom. We want to see the region develop coherent policies to combat that. Likewise, the countries must continue to work together to resolve legacy issues from the conflicts of the 1990s. In particular, they must work together on refugee returns to ensure that conditions are in place and encouragement is given to refugees—to all of the ethnic groups who want to return to the homes they fled in the 1990s.

The noble Lord, Lord Anderson, and the noble Baroness, Lady Rawlings, have both raised that point. Rather than deal with it at great length, I just want to say that the UK Government have been consistent in the work they are doing to support the return to the Krajina region of Serb refugees who fled Croatia during the conflicts. We are pleased that many are returning. Issues of provision of housing and of overcoming discrimination in employment are central to the work that we are doing. It was right that the noble Baroness, Lady Rawlings, made those points to us a few moments ago. The Croatian Government, in respect of the Roma, have also recently adopted a national plan to address issues relating to Roma populations. We will be monitoring its implementation as I believe we have a duty to do.

The noble Earl, Lord Dundee, and others also spoke about subsidiarity. I agree with the points that they made. We are scheduled to discuss that in more detail later in the month. But I would argue that we have a very strong and positive reason to support EU enlargement on its own merits. I shall come to those reasons in a second.

In that context I thank the noble Earl, Lord Dundee, for highlighting that we must all learn from each other. Every country that joins the EU brings examples of good practice from which we can learn. As my noble friend Lord Giddens said, international interaction exists in many places—the EU, the UN and the Council of Europe, to name but a few places where experts and officials can come together to learn from each others' experience and to develop best practice. The noble Lord, Lord Dholakia, also rightly emphasised that point.

Croatia fully participates in these activities in the UN, the Council of Europe and so on. I look forward to the experience and knowledge that Croatia can bring to the European Union across all policy areas, including penal policy. I assure noble Lords that the United Kingdom and Croatia will work together in committees on those issues. Naturally it is for the Home Office to report on that important work. I emphasise the point made by the noble Lord, Lord Anderson, that not only do we have the opportunity of learning but so does Croatia, certainly as regards the finance sector and armed forces' compatibility if there is a real intention to take part in the alliance. As ever, learning is a two-way street.

Several noble Lords asked about Croatia's co-operation with the Hague Tribunal. The noble Lord, Lord Hannay, is right—co-operation is essential. It
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remains our position—I am sorry if I disappoint the noble Lord, Lord Biffen, in saying this—that impunity is not a viable alternative. The issue is central to Croatia's EU accession talks. The EU and the UK have consistently made it clear that full co-operation is absolutely essential. The positive report by Chief Prosecutor del Ponte on 3 October meant Croatia had met that condition, and in consequence the EU took the decision to open negotiations. Like the noble Lord, Lord Dholakia, I am not sceptical; I respect Mrs del Ponte's judgment and her independence. As the noble Baroness, Lady Rawlings, said, unless we deal with the matter, the legacy issues will always lead to financial and economic backwardness and other disadvantage. The Council has also agreed that if there is not full co-operation at any stage, it will affect the overall progress of negotiations and will be grounds for triggering suspension of them. It is absolutely crucial that Croatia maintains this level of co-operation. The UK and the EU will follow this question very closely. I welcome Prime Minister Sanader's commitment that Croatia will maintain full co-operation until Gotovina is in the Hague. This is important; it cannot be expressed any other way. The noble Lord, Lord Dholakia, emphasised that point.

How are we assisting in these processes regarding Croatia? The EU and the UK have been generous supporters of the stabilisation and accession processes in Croatia. We are delighted with the values that have been created by the investment we have made. Between 2001 and 2006, a total of more than €500 million has been committed to Croatia under various EU schemes. The UK has itself generously contributed to Croatia through the Foreign Office's Global Opportunities Fund. In 2005, more than €615,000 was allocated to projects in Croatia. These are all designed to press forward the reforms essential for EU integration.

The noble Earl, Lord Dundee, the noble Lords, Lord Biffen and Lord Dholakia, and the noble Baroness raised the visa issue. We continue to impose a visa regime on Croatian nationals. It is kept under regular review, not in the sense that a review report is published, but in the sense of our looking at the necessity for it. We shall not keep it for a moment longer than is strictly necessary.

As regards enlargement in general, during our presidency we have seen progress not just by Turkey and Croatia but also by practically all the countries of the western Balkans. At a national level we are bringing forward a Bill to ratify the EU accession treaty with Romania and Bulgaria, which had its First Reading in your Lordships' House recently. I look forward to debating its later stages.

These are real achievements which will affect the lives of millions of people and for which this presidency that we have enjoyed will be remembered. I thank the noble Lord, Lord Hannay, for his comments about the successes of the presidency. His work and the work of other distinguished diplomats paved the way for this progress. Support for enlargement is expressed on all sides at Westminster; it is a tradition in this country that is irrespective of party. It is clear from the comments that have been
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made that this Parliament remains a champion of enlargement. We support it with money and we support it with advice. We support it because we believe that it is right. It demonstrates in action not words the transformative power of the EU. That point has been made by a number of noble Lords, including and especially the noble Lord, Lord Hannay, when he talked about how it had been a spur to so much reform. The western Balkan countries and Turkey will present particular challenges that we will have to address. Enlargement Commissioner Rehn has stressed the need for the Commission to monitor candidates closely. EU standards must be scrupulously met. I entirely agree with that; it is a rigorous approach to conditionality and it must remain so.

The issue of whether we are moving too fast is important. The noble Lord, Lord Biffen, suggested that. However, it would be unfair to block countries that are trying to make faster progress than they might otherwise make because of the prospect that is in front of them. Accession—soft power, as the noble Lord, Lord Hannay, rightly called it—is a great compass to direct countries in a helpful direction. Of course that compass route is corrected by having conditions; that is the point of them. I do not know that I can fully answer the point made by my noble friend Lord Giddens about political Europe. Of course the EU is an open market, which is one of its great benefits. But as a political entity it also helps to establish decent standards for conduct in many areas right across its remit. That must not be a formula that stultifies enterprise; that would not help. It is a powerful influence on the world. I have seen in discussions just last week at the EU-AU troika meeting in Mali that it is a force to argue for peace and security in places where it is very difficult. Next week, I hope that I am going to use the authority that the troika provides to see if we cannot get a more peaceful stand-off between Ethiopia and Eritrea. I do not know whether that will succeed, but I know that it is a powerful addition to the arguments that are available to us. That is political, that is global, and that is in all of our interests. It is not in Europe, it is not a state or quasi-state; we are acting together because we can add value by acting together. We should always consider on the occasions when we act as a separate nation state whether that is the best way. Those are the judgments that we must all make as part of the bigger judgment.

I conclude with a thought that I borrow unashamedly from John Major, which may come as a surprise to noble Lords opposite. It is from his Guildhall speech made on 20 November 1995, almost exactly 10 years ago. He said that eastern and central Europe have been the cockpit of war through the centuries. But we now have an historic opportunity to bind them into a single market and into the democratic embrace of western Europe. That is why enlargement
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of the European Union remains a vital objective. Prime Minister Tony Blair has echoed that thought on more than one occasion. I echo it and I pay tribute to it today, because it is the right vision. In my father's generation, most young men saw Europe in uniform, and they often saw other Europeans down the sights of a gun. Our peace must extend—the peace that has been created throughout Europe and throughout the Balkans. They are on the path already, and they can travel far further on the path. I thank the noble Earl, Lord Dundee, for giving us the opportunity to explore how that can be achieved.

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