Memorandum by Business for New Europe
(BNE)
1. INTRODUCTION
1.1 About Business for New Europe (BNE)
BNE is an independent coalition of UK business
leaders. Our aim is to support the UK's active engagement in Europe,
and to promote a reformed, enlarged and free-market EU. We recognise
the benefits that cooperation with our European partners brings.
Since our launch in March 2006, we have become a leading pro-Europe
organisation in the UK, gaining a good deal of press coverage
for our views. We have a number of leading business figures serving
on our Advisory Council (for more information, see www.bnegroup.org
).
1.2 BNE principles are as follows
— We support the UK's membership of
the EU and oppose withdrawal to the margins; we support positive
and constructive engagement with the EU as the only sensible approach
and as vital to our national interests.
— We support a vision of a prosperous
free-market Europe able to compete in a globalised world.
— We support economic liberalisation
and oppose excessive EU regulation, centralisation and red tape.
— We support institutional reform,
further cooperation between EU member states where it is in Britain's
interests and oppose old-fashioned federalism.
— We support the enlargement of the
EU including Turkey, and recognise the benefits that the recent
waves of enlargement have brought.
Business for New Europe (BNE) welcomes the opportunity
to respond to the House of Lords European Union Select Committee
inquiry on the impact of the Reform Treaty on the institutions
of the EU. This response has been prepared by the BNE Executive.
2. GENERAL ARGUMENTS
IN FAVOUR
OF THE
REFORM TREATY
2.1 BNE supports the Reform Treaty because
it will help make the EU's institutions more efficient and effective.
As a business-based organisation we welcome the fact that, as
a result of the Reform Treaty, the EU is adapting it institutions
to its enlarged membership. A similar process of internal reform
would be undertaken by any large organisation or business after
a merger which had doubled its size (after all, the EU has increased
its membership from 15 countries in 2004 to 27 countries today).
2.2 EU enlargement has been championed by
both the present Labour government and the previous Conservative
one. For the long-term functioning of the EU, enlargement necessitates
institutional reform. It is also imperative if future enlargement
is to take place.
2.3 EU institutions are needed to deliver
and implement EU policies in the domain of trade, the environment
and energy, all of which have a positive influence on European
business and citizens. If we want to fulfil the reality of a fully
functioning single market, we need an effective European Commission
and European Court of Justice to enforce the EU's regulations.
2.4 The Reform Treaty is mostly institutional
in nature, which does not directly affect economic policy. Notwithstanding
this, some of its provisions could have positive effects on business.
The fact that the Treaty includes a legal base for EU energy policy
should help the single market work better in this area of strategic
importance. We also welcome the provision about the European Research
Area (ERA) which could foster further cross border cooperation
among business and universities. Finally, the provision on EU-wide
intellectual property rights may boost Europe knowledge economy
by facilitating the use of the single application system.
2.5 Since the French and Dutch referenda
on the Constitutional Treaty in 2005, the EU's policy agenda has
been distracted by the institutional impasse. BNE believes that,
once ratified in all member states, the Reform Treaty will allow
the European Union to focus on its policy delivery agenda. Central
to this agenda will be issues of interest to the British business
community such as strengthening the single market, Europe's global
competitiveness, trade liberalisation and climate change.
2.6 Many people in Britain have been frustrated
at the lack of reform in the EU institutions over recent years.
However when a Treaty is put forward addressing these reforms,
it is apparent that many of the same people who would be complaining
about the lack of institutional reform persist in their attacks
on the EU. Therefore opponents of the Treaty often want a do-nothing
EU, and in extreme circumstances, support withdrawal from the
EU.
2.7 We believe that the UK debate on the
Treaty in recent months has been pointing in a negative direction.
We would like to see a more positive case advanced by the government.
Many of the changes made in the Treaty should be welcomed, and
we would support political leaders accentuating the positive innovations
brought about by the Treaty.
3. SPECIFIC ISSUES
IN THE
TREATY
3.1 President of the European Council
— The Presidency of the Council that
rotates every six months may have worked well in an EU of 6 or
even 12 member states. In a Union of 27 member states this modus
operandi is not so practicable. It means that smaller member states
are left with the onerous task of managing the Presidency for
which they can be ill-equipped.
— The current system also lacks continuity.
Presidency policy agendas become obsolete in six months. The proposal
to create a permanent non-executive Presidency is sensible, as
it gives the EU better coordination and continuity.
— The new Council President, whose
duties include chairing meetings of the European Council, will
be able to devote his/her full energies to the job, which will
lead to efficiency gains much welcomed by the business community.
— We welcome the fact that national
governments will elect the Council President for a term of 30
months (renewable once). This means that the President is accountable
to leaders of national governments. This innovation makes sense
as the EU's two other EU institutions, namely the European Commission
and the European Parliament also have stable and continuous presidencies.
3.2 Double majority voting in the Council
of Ministers
— The Treaty introduces some much needed
reform to the Council voting system to make it proportionate with
population. The introduction of "double majority" will
mean that a measure can only be passed with 55% of member states
representing 65% of the EU's population.
— This system is much more fair and
representative of each member state's population than the one
currently in place under the Treaty of Nice. For example the UK
is set to increase its overall voting weight from 8.4% to 12.2%,
an increase in its share of 45%. In addition, the change in the
voting system is set to increase the UK's share of a blocking
minority from 32% to 35%.
— The "double majority" system
also allows the EU to further enlarge (to Croatia soon and we
hope eventually to the Balkans and to Turkey) without a further
Treaty and institutional horse-trading on the weight each new
member will have in the Council of Ministers.
— In the UK, majority voting is sometimes
perceived as something to be feared, yet it will enable the UK
to overcome obstruction from other countries and to push its political
agenda. This highlights the importance of the UK building up fruitful
alliances at EU level, and the recent enlargements have provided
the UK with a larger pool of potential allies.
3.3 High Representative on Foreign Affairs
— The proposal to merge the positions
of EU High Representative for Common Foreign and Security Policy
(CFSP) and the Commissioner for External Relations into one role,
the High Representative, is a logical improvement and should make
the EU more efficient.
— A strong EU foreign policy voice
when all member states decide to act in common is in the UK's
interest, particularly on external-facing issues with a business
dimension such as energy security.
3.4 The European Commission
— In a European Union of 27 or more
members, it is important to review the number of Commissioners.
Like the European Parliament, the college of Commissioners needs
to be a reasonable size to function. The moves to reduce the number
of Commissioners to two thirds that of the number of member states
is welcome. Concretely it means the College will have 18 members
from 2014 (assuming no further enlargement).
— In addition, we applaud the Treaty's
strengthening of the European Parliament's role in electing the
President of the Commission, thereby making the European Commission
more accountable (beforehand the Parliament merely approved the
candidate chosen by national governments).
3.5 Simplified revision procedure
— One of the areas in the Treaty that
has aroused great concern in Britain is the simplified revision
procedure or Passerelle Clause. This Clause states that member
states can decide by unanimity to move a policy area to majority
voting. We are reassured that the Treaty ensures every member
state can veto such an initiative, and yet understand this clause
brings flexibility and may prove useful when using EU policy to
respond to crisis situations.
4. CONCLUDING
COMMENTS
4.1 BNE supports the Reform Treaty as we
believe it will equip the EU with better policy-making tools which
are necessary for creating an even better business environment
in Europe.
4.2 We believe that the EU's ability to
deliver on its future agenda, notably the completion of the Single
Market, will be helped by the provisions of the Reform Treaty.
4.3 We are also pleased that with the Reform
Treaty, the European Union brings two years of legal
uncertainty about the future of EU institutions to
a close. Both European and other businesses need this certainty
to grow and invest long-term in the EU.
Leah Charpentier
Public Affairs Executive
Business for New Europe
December 2007
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