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provided by Policy Documentation Center Volum e 13 Number 10 November 2006 The £3.00 European Journal

The Journal of the European Foundation

Croatia at the Crossroads Roger Helmer mep & Joel Anand Samy & Sara Rainwater • Oliver Kaye • Ian Milne Edward Leigh mp • Christopher Arkell • Tony Lodge Maurice Xiberras • Don Anderson • Dan Hamilton John Laughland • John Mehrzad • David Wilson Carlo Stagnaro • Dr Lee Rotherham

The European Foundation 2nd Floor, Carlyle House, 235 Vauxhall Bridge Rd, London SW1V 1EJ www.europeanfoundation.org Chairman: William Cash, MP November 2006 Vo lu m e 13 Number 10 THE EUROPEAN JOURNAL The Journal of the European Foundation

Contents

For reference, numbers on pages are as in the printed copy Original PDF Articles below are hyperlinked – use the hand icon, point and click Page Page Solon: Old and New – Facing Reality 23 Up Front Sara Rainwater: From the Editor 34 Oliver Kaye: Takes On New Media 45 Roger Helmer, mep & Joel Anand Samy: at the Crossroads 56 In Depth Ian Milne: More Costs than Benefits 89 Edward Leigh, mp: Improving Financial Management in the EU 12 13 Christopher Arkell: Prodi Power 13 14 Tony L od ge: The ‘Deal’ – A Sell Out or Real Progress? 14 15 Maurice Xiberras: Gibraltar: Swords into Ploughshares? 15 16 Don Anderson: Of Fog and Funny Statistics 19 20 Dan Hamilton: The Year Ahead 20 21 Intelligence Digest John Laughland 21 22 And Finally… John Mehrzad: The Impact of British Eurosceptic Groups 1990-97 25 26 David Wilson: Reviews Don’t Mention the War by John Ramsden 28 29 Carlo Stagnaro: Reviews Europe After the ‘No’ Votes by Professor Patrick A. Messerlin 30 31 Letters to the Editor 31 32 Dr Lee Rotherham: Chunnel Vision – 50 Things I Won’t Do if Elected Mayor of London 32 33

Editor: Sara Rainwater Publisher: The European Foundation 2nd Floor, Carlyle House, 235 Vauxhall Bridge Road, London SW1V 1EJ Tel: +44 (0) 20 7630 9700 Fax: +44 (0) 20 7630 9533 E-mail: [email protected] ISSN 1351–6620

The European Journal is published by The European Foundation. Views expressed in this publication are those of the authors themselves, not those of The European Journal or The European Foundation. Feature articles and reviews should be sent to the Editor at the address above, if possible by e-mail or on 3.5" IBM compatible disc in MS Word. No part of this publication may be reproduced in any form or by any means or stored in a retrieval system without the written permission of the publisher. Solon so’lon,- n. a famous lawgiver of Athens (594 b.c.), one of the Seven Sages; a sage; a wisacre.

Old and New – Facing Reality

he past six months have seen elections in countries of Blair’s announcement in September that he will step down Tboth Old and New Europe: Italy, the Czech Republic and within 12 months provoked a veritable civil war among the Hungary. These recent elections have one factor in common. ranks of Labour – one which may not be resolved until the None have produced strong, stable governments capable of leadership itself is. With this in mind, the UK will be lumber- bringing about lasting, essential reform. Unfortunately, weak ed with a weak and divided government for the foreseeable and timid government is a persistent characteristic across the future. Even when a new leader is in place, it is unlikely he will EU25. command the authority required for strong government. Hungary has recently witnessed open and sustained Jacques Chirac’s authority – or lack thereof – was rioting in the streets of Budapest – the worst since 1956 – over epitomised earlier this year over the botched attempts to Prime Minister Ferenc Gyurcsany’s admission to lying over implement the youth employment contract. With unemploy- the state of the economy in order to win the elections last ment at around 20 per cent for 18 to 25 year olds, France June. Gyurcsany also said his Government had achieved needs measures to ease labour markets, but the lack of nothing during its previous four years in power. This is bad authority in Chirac’s government, notably by Dominic de news for Hungary which is plagued by problems that cry out Villepin and the President himself, meant the law was for good government. Hungary’s deficit is now 10 per cent of scrapped. GDP, by far the highest in the EU; the problem has been With large parts of Old and New Europe paralysed by lack greatly exacerbated by Hungary’s poor record in collecting of strong leadership, low economic growth and high taxes and other state revenues, and an inability to impose unemployment, is it really the right time to be bringing yet rigorous checks and controls on state spending. more members into the club? Bulgaria and Romania – both In Poland the main governing party, , has predominantly agricultural states – are poor, with incomes ruled for almost a year in a series of shaky coalitions, due to around one-third of the EU average. Although the two the recurrent yet petty feuds which have plagued Law and countries are set to join the EU this January, it is patently clear Justice and its potential coalition allies, the liberal- neither are ready. conservative Civic Platform. At the moment, Polish Prime This point is implicitly acknowledged in the long list of Minister Jaroslaw Kaczynski is trying to cobble yet another safeguard measures which the Commission has imposed coalition together, with the chances of an early election being upon the two countries in case either regresses. This is just called ever more probable. another example of how the EU is failing. Rather than A whole host of other problems beset Central and Eastern sticking to its guns, the Commission all too often lowers its European Member States, the majority stemming from the ‘strict’ accession criteria to accommodate lacklustre attempts lack of stable government, which brings with it discontent, at reform in candidate countries. The inability to enforce declining competitiveness, sleaze and subversion. However, standards at this early stage leaves accession states in an the situation in the EU15 is not too far removed. unstable situation. Italy has had 60 governments since 1945 and the latest A handful of the eight ex-communist countries that joined budgetary crisis may well spell the need for another. Romano the EU in 2004 – namely Hungary and Poland – were not Prodi is hamstrung by the demands of Brussels and the terms ready either. This is manifested today by the problems in their of the acquis and his wafer-thin majority in the Senate, which leadership, poor public administration and weak political prevents him from enacting substantial reforms and puts him structures. at the mercy of the radical elements within the coalition. Italy What the EU needs to do now is face up to reality. Many see badly needs less regulation, greater competition and lower the solution to this political malaise as ‘more Europe’: a public spending, but this is highly unlikely under the current Constitution, the extension of QMV, deeper integration and a conditions. final consensus on further enlargement. These are dangerous, The Labour Party in the UK seems more concerned with not to say ludicrous, suggestions which will fail and the leadership question than the running of the country. Tony invariably serve only to worsen the situation.

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from the editor

Dear reader, The hot topics in EU politics last month were the accession of Bulgaria and Romania, which is taking place on 1 January, and the problem of over-regulation. The British media was saturated with stories on John Reid’s plan to curb migrants from the two new Member States and the overall impact immigration from Eastern Europe is having on British business and employment. There were also countless stories about how Gordon Brown promises to tackle the red tape issue and the revelation that, shock horror, the majority of British businesspeople think the EU is failing and Britain’s relationship should be renegotiated back to a free trade association. Two serious issues facing British business, but it is only the tip of the EU iceberg, I’m afraid. Last month, I also had the pleasure of visiting some of our most distinguished Conservative MEPs who are fighting our corner in Brussels. It was an enlightening trip, one I aim to make at least once a year to remind me why I feel the way I do about the EU. Witnessing the Euroland spectacle firsthand made me proud to be Eurosceptic and proud to question Brussels’ authority. Whilst in Brussels, I also attended a conference on Croatia hosted by Roger Helmer, MEP, who has kindly co-authored the lead article on page 5, which looks at the problems facing the country today. Pages 14 to 18 recount two perspectives on the current from Tony Lodge and Maurice Xiberras. Edward Leigh, MP, examines the possibilities for improving financial management in the EU on page 12, and Ian Milne comments on two interesting reports of the costs of EU/eurozone membership on page 8. If you are up for the journey to Prague, I hope to see you at our conference on 13 November, which promises to be an extremely interesting event.

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Brussels Takes On New Media by Oliver Kaye

hy does the Commission exist if not as it increasingly hosts material that can be is even before going into the problems Wto create regulation? If it did not considered an ‘economic activity’ and is posed to those who watch programmes on over-regulate, then the restaurants and cafés making ‘editorial choices’, just a couple of their mobile phones or computer. This around the Berlaymont would be out of the criteria required for a broadcaster to fall allows for very limited flexibility to innov- business. This is why when Viviane Reding, under the scope. ate with new advertising techniques, which Commissioner for Information Society and will keep up with new technologies such as Media, and her colleagues in the Com- Culture should be bottom TiVo. Again we will see a decline in revenue mission saw the beginnings of a boom in streams, which will eventually lead to a dec- new media, they felt uncomfortable leaving up and not top down, line in the quality of European production, such a large sector unregulated, despite particularly in the EU exactly what the regulators do not want. countless examples of the merits of self- A likely outcome of the Directive is that regulation. The and advertising during children’s programmes the Council of Ministers have now been An underlying theme that runs through will be banned, as this is deemed to have a furiously debating over the last few months the Television Without Frontiers Directive detrimental effect on the development of the Television Without Frontiers Directive. is the promotion of ‘European culture’ and children. What many are refusing to hear is the protection of our moral development that 66 per cent of revenue from advertising The problem for new through limits on advertising and product is invested back into the production of placement. For example there is a serious children’s programmes. Channels will be media is that many call for adverts not to promote activities left with no option but to broadcast cheaper services are being that could be seen as being detrimental to Japanese and American cartoons, rather the environment or to show minors in than European produced programmes. regulated that have not dangerous situations. This is a very noble even been invented yet, thought, but surely culture should be We will be left with a level bottom up and not top down, particularly stifling these creative in the EU. When proposals are put forward European playing field industries before they that certain percentages of content must be with no European players have a chance to flourish European, countries such as Spain and the UK have every right to believe this to be unfair as they both have strong rivals out- The question remains – is such regulation The problem for the EU is that much of side Europe who share the same language, irrelevant? In many ways, the answer is yes. new media is internet based, and the unlike, for example, Sweden. The EU, for all it says, cannot effectively internet is the ultimate regulation breaker, The minds of regulators are still very block media services coming in from in that if regulation becomes too stifling, much set in the broadcasting world where outside of the EU. Consumers will still be businesses can simply move outside the EU. only limited channels existed. Most don’t served with content broadcast from Amer- The best type of regulation is one that appreciate that today we live in a multi- ica or Norway. However, businesses that struggles to keep up with technology, platform, multi-channel world, where the might have set up in EU Member States will correcting any obvious problematic areas. viewer is the ultimate regulator. Even so, now consider relocating elsewhere, taking The problem for new media is that many there are strong calls to regulate advertising investment with them. Other unintended services are being regulated that have not and product placement universally across consequences might be that, for example, if even been invented yet, stifling these creat- the EU, particularly from the European product placement is banned, European ive industries before they have a chance to Parliament, including many who are calling advertisers will simply place their products flourish. What we are seeing here is the EU for a complete ban on product placement. in American programmes, giving contracts looking to regulate one of the areas that However, many in the EU forget that there is to American sales houses that they know are should be a driving force behind the Lisbon a world outside of Europe and that it will be going to be shown in the EU. Entire revenue Agenda. impossible for the EU to block programmes streams may be lost, adding to Europe’s The best example is that of YouTube. containing product placement coming in relative decline in competitiveness. The Regulators became aware of YouTube only from the USA or South America. phenomenal pace at which the lucrative after it was bought for £1.6 billion by It is quite possible that the European new media, which craves limited regulation, internet giant Google. Commission officials Parliament will in future ban broadcasters is moving will leave Europe behind. There confidently explain that the Directive is from advertising more than once every 45 will be no European equivalent to YouTube. future-proof and that sites such as YouTube minutes, as recommended by the Industry We will be left with a level European playing will not fall under the scope of the regu- Committee. We should be placing more field with no European players. lation. It may be true that YouTube does not faith in market forces; if there are too many today, but what they forget is that the highly adverts, the viewer will simply change Oliver Kaye is the assistant to Syed Kamall, innovative website is currently changing its channel (or with TiVo, fast forward) and MEP for London and ‘shadow rapporteur’ on business model almost every other month broadcasters will respond accordingly. This the TVWF Directive.

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Croatia at the Crossroads by Roger Helmer, MEP, and Joel Anand Samy

At a conference in the European Parliament on 13 October, hosted by Roger Helmer, MEP, and organised by the free-market think tank The Adriatic Institute, the parlous state of Croatia’s legal system came under the spotlight. The conference was attended by Vesna Škare-Ozbolt, the former Minister of Justice of Croatia, who was fired in February having upset the old guard by her determined pursuit of an anti-corruption programme.

n 1991 Croatia emerged from the independence was won after a bloody war Many who witnessed Croatia’s desperate Iwreckage of the former Yugoslavia. This that was fought in the early 1990s during the attempt to cut its ties from Belgrade and small nation of 4.5 million inhabitants is break-up of Yugoslavia. During the Balkan gain independence are surprised at how surrounded by such countries as Hungary, conflict, Croatia suffered heavy losses, swiftly this small nation has allowed Slovenia, Serbia, Bosnia–Herzegovina and including the lives of innocent civilians and Brussels to begin exerting greater control. the newly formed independent nation state the destruction of homes, hospitals, Croatia’s willingness to replace Belgrade of Montenegro. Croatia enjoys a 1,000 churches and schools. During its quest for with Brussels remains a mystery. It appears kilometre coastline on the Adriatic Sea and independence, several generals of the that the EU incentives dangled in front of is situated across the Adriatic from Italy. The Croatian forces were indicted for war Croatia’s political élite have given them Greeks, Romans, Venetians, French, Aus- crimes by the UN’s International Criminal reason to speed ahead in joining the trians, Hungarians, Italians and Germans Tribunal for the former Yugoslavia (ICTY). . Croatia may be motivated all at one time or another conquered and The recent arrest of General Ante Gotovina by security concerns, but these could ruled over the lands of Croatia. was a condition set by the EU to give easily be resolved by its partnership with After World War II, Tito’s Yugoslavia Croatia the green light in starting the NATO and with international forces on began as a communist state and later arduous process of negotiations to join the ground in Bosnia–Herzegovina and developed into a ‘socialist nation’. Croatia’s Brussels. Kosovo.

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Internal Challenges the investigative report, trafficking in In the middle of 2006, the Sanader human beings has significantly increased in administration presented a watered-down Croatia is a picturesque nation with a recent years. Routes towards countries of version of anti-corruption strategies that pristine coastline and tourists and retirees the Balkan region are also used “to smuggle had first been presented by Škare-Ozbolt, flocking to spend their holidays or purchase synthetic drugs produced in Western Euro- which included clearly outlined tough goals, real estate, yet there appear to be some pean countries, as well as stolen cars.” objectives and deadlines for each proposed rather unpleasant realities. There is more The assessment also highlights the measure. The watered-down version scrap- than just the turbulence created by waves following concerns: ped the plan to remove political cronies crashing on the beaches as the country faces • The traditional forms of organised crime from supervisory boards of state owned internal tremors, with widespread corrupt- are still the most significant and common in companies. Once again, the Croatian gov- ion, increased organised crime activity and Croatia: illegal migration, smuggling of ernment sent the wrong signal by failing to most importantly the lack of an inde- narcotics, trafficking of arms, counterfeit- clearly support a tough anti-corruption pendent judiciary. Croatia’s government ing of money, etc.. In addition, organised strategies initiative. appears to cater to crony capitalism and criminal groups are attempting to use their corruption rather than taking robust illegally gained assets to invest in real estate The Recent debate measures in combating these challenges. and other legitimate business activities. The issues discussed above were recently A recent article in the European Voice (27 Thus they manage to legalise their ‘dirty debated by Vesna Škare–Ozbolt (Croatian July 2006) written by Edward Lucas, The money’ and make additional profits and can MP and former Justice Minister), Snjezana Economist’s Central and Eastern Europe even present themselves as successful bus- Bagic (State Secretary, Croatian Ministry of correspondent, caught our attention: inessmen. Justice) and Natasha Srdoc (Adriatic “The [Croatian] authorities have just been • There is no official agreement between Institute) during an event held in the criticized by the International Federation of the Police and the Croatian National Bank European Parliament on 13 October 2006, Journalists for appointing a number of pol- on the exchange of information on which was chaired by Edward Lucas from itical cronies to the board of HINA, the main counterfeited currencies. The Economist. news agency (and that in itself is odd: why • The Republic of Croatia does not yet have The debate showed that Croatia’s justice does the state have anything to do with the a special strategy for fighting illegal trade system is severely flawed with over 1.4 media anyway?). Some journalists say that and smuggling of firearms. million backlogged cases in a population of advertising from state-owned industries is EU accession criteria require reforms to 4.5 million people, has a plethora of used to reward friendly media outlets and the judicial system, an independent judic- unresolved land registry cases (UK citizens withdrawn from critical ones. One local iary and strategies to combat corruption. may wish to take extra precaution and think-tank compares , the Yet it is worth noting that Bulgaria and engage in due diligence when purchasing Croatian prime minister, to Vladimir Putin of Romania have been allowed to enter property), lacks an independent judiciary Russia. That may be too harsh. But there is an without fulfilling the ‘strict measures’. This and has a weak state prosecutor’s office. interesting analogy. example reflects the EU’s inability to Furthermore, the debate revealed that “Just as the top-heavy and incompetent enforce its own criteria in this area. Croatia’s government is experiencing Russian state survives thanks to the rents challenges within the Cabinet – Ministers (unearned income) from the country’s oil and Attempts at reform and senior MPs are facing corruption gas wealth, Croatia’s stodgy economy lives off Croatian Prime Minister Ivo Sanader’s allegations, conflicts of interest cases and the rents of tourism. The country scores very administration initially sent a positive are serving on state owned enterprises poorly on indexes of economic freedom: signal to the international community and prepared for privatisation. labour laws are restrictive, taxes high, foreign foreign investors when it selected Vesna Such a flawed judicial system combined investment puny.” Škare-Ozbolt as the Minister of Justice after with entrenched corruption at the centre of Despite protests from within Croatia and the 2003 parliamentary elections. Škare- power does not bode well for Croatia’s from the international community at large, Ozbolt’s bold judicial reforms and ability to combat corruption and reduce the the government has gone ahead and initiatives to combat corruption began to influence of organised crime. In fact, installed its political cronies to the main make an impact and the results of the two- according to The Index of Economic Free- news agency. The government’s control and year reform campaign are visible in the dom published by The Heritage Foundation influence over both state-run and com- World Bank’s 2007 Doing Business Report. and , international mercial media is disconcerting, as elections However, the reforms in the judicial businesses often require arbitration outside are scheduled for November 2007. Freedom system and the fight against corruption and Croatia rather than using the local courts to of speech is regrettably being undermined organised crime came to a complete halt resolve disputes. in Croatia. when Prime Minister Sanader sacked The absence of the rule of law and the A recent report produced by the Euro- Škare-Ozbolt in early 2006. Reformer lack of an independent judiciary in Croatia pean Union, Assessment Mission Croatia, Škare-Ozbolt was replaced by Ana Lovrin, recalls an interesting statement relayed by July 3-7, 2006 – Observations in the field of party loyalist and former mayor of (a Nobel Laureate Dr Milton Friedman when the fight against organized crime, unveiled a seaside city known for organised crime). he reflected on Russia’s privatisation in the range of concerns. One of the most serious This substitution at the top Justice post later 1990s that went awry: issues is that Croatia is situated on main came under scrutiny by “We have learned about the importance of smuggling routes (persons, drugs, vehicles, business weekly, Business HR, for abuse of private property and the rule of law as a basis weapons and explosives) and according to power and links to corruption. for economic freedom. Just after the Berlin

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Wall fell and the Soviet Union collapsed, I On the other hand, how can the European Union and to encourage nations used to be asked a lot: ‘What do these ex- European Union press nations to reform beyond the EU’s borders to press ahead with communist states have to do in order to when its own institutions are growing more free market reforms based on the rule of law become market economies?’ And I used to bureaucratic and where a command and and protection of property rights. For say: ‘You can describe that in three words: control structure in Brussels undermines Croatia’s hopeful citizens, ‘reforms for the privatize, privatize, privatize.’ But I was free markets and liberty? There is much to EU’ should be replaced by ‘free market wrong. That wasn’t enough. The example of be done within the European Union in reforms for its own future.’ The experiences Russia shows that. Russia privatized but in a pressing forward with reforms and creating of Eastern Europe’s tigers such as Estonia way that created private monopolies – private a flexible Europe of nation states, not a and Slovakia clearly show the importance of centralized economic controls that replaced monolithic country called Europe. implementing reforms first. government’s centralized controls. It turns out Croatia once belonged to such a union Such should be the goal of Croatia’s that the rule of law is probably more basic that was called Yugoslavia and all the government: advancing economic freedom than privatization. Privatization is meaning- nations that were a part of this ‘free trade by upholding the rule of law, establishing an less if you don’t have the rule of law. What zone’ ended up breaking away from independent judiciary, combating corrupt- does it mean to privatize if you do not have Belgrade’s command and control. There are ion and implementing free market reforms. security of property, if you can’t use your striking parallels between the fate of By striving for growth and prosperity property as you want to?” † Yugoslavia and the prospects for the EU. through reform, both Croatia and Europe Croatia’s government expenditure as a Advancing liberty, economic freedom, would benefit. percentage of GDP is approximately 51 per democracy and prosperity are goals worth cent – the highest in Eastern Europe. 40 pursuing. Dr Friedman describes this best † Source: The meeting of the Economic per cent of the economy is owned by the in his book, Free to Choose, when he Freedom of the World network late in 2001 in government and further privatisation has highlights the importance of economic San Francisco, where questions were directed stalled as the government promotes freedom: to Rose and Milton Friedman. The above ‘government-private partnerships’ in the “Economic freedom is an essential requisite quote is part of an edited excerpt from the areas of tourism and real estate. With for political freedom. By enabling people to discussion – Cato Institute, Washington, DC. corruption at an all-time high, observers coordinate with one another without coercion are concerned that this new initiative, called or central direction, it reduces the area over Croatia’s ‘new deal’, will lead to a new wave which political power is exercised. In Roger Helmer is a Member of the European of criminal capitalism. addition, by dispersing power, the free market Parliament for the East Midlands and a During Prime Minister Sanader’s term, provides an offset to whatever concentration member of the European Foundation’s UK Transparency International’s Corruption of political power may arise. The advisory board. Joel Anand Samy is co- Perception Index – which ranks over 150 combination of economic and political power founder of Adriatic Institute for Public Policy countries in terms of perceived levels of in the same hands is a sure recipe for and International Leaders Summit on corruption, as determined by expert assess- tyranny.” Economic Growth and is co-author of Flat ments and opinion surveys – concluded The has a unique Tax: The Case for Tax Reform in Croatia that Croatia had slipped from 59th place in opportunity to advance reforms within the with Natasha Srdoc. 2003 to 71st in 2005. Moreover, the World Bank’s Doing Business Report 2007 ranked Croatia 124th out of 177 nations; this is in comparison to 2005 where Croatia was ranked 118th. The World Bank’s report also places Croatia bottom of its group, Eastern Europe/Central Asia, alongside Ukraine, Belarus, Tajikstan and Uzbekistan. Albania, Bosnia-Herzegovina, Serbia, Macedonia and Montenegro, once perceived as being behind Croatia and so worse-off, are now Advertisement for the ahead of Croatia. Adriatic Institute for Public Policy Brussels-bound? These statistics and observations on Croatia undermine its case to join the EU. Is the European Union prepared to embrace nations that do not uphold the rule of law? Will the European Union hold to its strict criteria that were applied to countries like Estonia, which is now experiencing a robust economic growth rate of 12 per cent and just 30 per cent of government expenditures as percentage of GDP?

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More Costs than Benefits For once, it is not the British who are pointing out the shortfalls of EU membership. Ian Milne takes a look at two new critical reports. In his first article, he analyses a report by the highly regarded French policy group Conseil d’Analyse, which is composed of eminent French economists including Dominic de Villepin. The report finds the situation of the euro ‘perilous’, citing France, Germany and Italy as countries which are specifically unable to make the necessary reforms, but curiously does not recommend changing the current institutional framework. The second report, this time by the Swiss Government, is a comprehensive cost-benefit analysis of EU membership. In his review, Milne focuses on how the Swiss see the impact of EU membership on their economy and sovereignty; unsurprisingly the current EFTA-style arrangement is preferred in both areas. EU membership would cost the Swiss almost nine times as much as it does now and would give a voting weight of just 2.7 per cent in the European Parliament. The first report serves as a stark warning to the UK and other Member States who have not yet adopted the euro and the second remains a tantalising reminder of what is in store when, not if, the UK renegotiates her membership. Earlier versions of these articles appeared in eurofacts (22 September and 6 October).

The Single Market and Single Currency haven’t made any difference, says official French report “Europe’s economy’s a failure, and it’s all the fault of the EU system of governance.” So what’s the solution? “More Europe, naturellement!”

The Conseil d’Analyse Economique is a bit The importance of this report is not so and insufficient structural reforms among the like a supercharged No 10 Policy Unit. It has much in what it says about the EU’s (and Member States, particularly reforms in its own permanent staff and its own office especially the eurozone’s) poor perform- labour, goods and services markets; on the Left Bank not far from the Matignon, ance, devastating though it is: many in the • The last explanation is that the problem is the official residence of the Prime Minister. UK have been covering the same ground for not so much with ‘Europe’, but with Germany, Its part-time members comprise about 40 at least a decade. Its significance is that all France and Italy. These countries, unlike the of France’s best-known economists from this is being articulated and discussed at the smaller and faster-growing members, are both the public and the private sectors, apex of the Europhile politico-economic unable to make the necessary reforms… including a couple of dozen establishment of the country which regards The authors do not systematically reject professors, the director of the INSEE (the itself as the originator of the European the above explanations but feel that no single equivalent of our Office for National project: France. one is satisfactory … for the authors, Statistics) and mandarins in charge of Failure: Diagnosis… deficiencies in the EU’s economic policy departments at the Banque de France and at system are a main cause of inefficiency and various ministries. The President of this The English summary begins thus: slower growth…” eminent body is the Prime Minister himself, “… the USA enjoys faster economic In the main text, they explain what they Dominique de Villepin. This, in short, is a growth than the euro area and … continues mean by the “EU’s economic policy system”: serious outfit. to maintain a higher standard of living … the the combination of the division of powers The main authors of its report on following analyses are generally proposed to † between the various ‘agents’ (vertically Economic Policy & Growth in Europe are explain the persistence of these gaps: Philippe Aghion, a Harvard professor; Elie between Brussels and the Member States, Cohen, research director at Sciences-Po; • Europe’s weaker economic performance is horizontally between EU institutions); of and Jean Pisani-Ferry, director of the due to Europeans’ preference for leisure as the objectives assigned to each of the Bruegel Institute in Belgium and professor opposed to work… ‘agents’; of the associated control mechan- isms; of the procedures of coordination (or at Paris IX-Dauphine. There are essays by • Europe suffers from weaker demand that their absence) between ‘agents’; and finally another ten equally prestigious economists. may be attributed to a history of restrictive the recommendations or instructions or The report consists of 300 pages of closely macroeconomic policies; argued analysis of the EU’s economy: exhortations or signals that the economic diagnosis, conclusion and recommend- • The dominant analysis maintains that policy leadership addresses to these ‘agents’ ations. At the back is a seven-page summary Europe’s growth lag is the result of a com- (page 25 of the main text). They note that all in English. bination of incomplete economic integration attempts at ‘clarifying’ the respective roles of

Jump to Contents 8 The European Journal In Depth November 2006 the ‘agents’ have been counter-productive, that, “The actual experience of the euro is And, having brilliantly and conclusively and that the system just gets more and more the opposite of that predicted by [monetary exposed the cause of the EU’s economic complicated and confusing. They ack- union] theory … there is a [minor] positive problems – the EU itself – the authors’ nowledge that subsidiarity has turned out impact of the euro on exports from non- solutions for the EU turn out to be: ‘More to be a dead duck (page 28). The economic member countries to the eurozone (but not in Europe !’ principles on which the system is con- the other direction) … it’s as if the euro has Their recommendations are deployed in structed, as well as the economic signals it worked as a one-way valve.” [Incidentally, intricate technocratic detail on pages 136– emits, are “dysfunctional” (page 39). discussing the unreliability of trade data, 152. There are three main themes: more The authors refer to the “disturbing” she mentions the ‘Rotterdam (–Antwerp) economic integration, (essentially ‘deepen- conclusions of recent OECD and IMF Effect’, confirming that this distortion is not ing’ from Brussels); ‘reforming’ the econom- studies which point out that when it comes just a British concern.] ic governance of the eurozone (essentially to market liberalisation, the EU has neither Describing the inability of EU politicians diluting its anti-inflation policies); and done more, nor moved faster, than other to make up their minds whether they want ‘fine-tuning’ the interaction between developed and less-developed countries to stick to intergovernmentalism or transfer ‘structural’ policies and macroeconomic (page 42). They quote Gideon Rachman of all essential power to Brussels, the report policies. The solutions involve lots more the Economist asking, in 2004, “Is it fair to observes (page 130): rules, directives and regulations and the give credit to EU institutions for what is a “Unable to decide on objectives and a setting up of even more ‘high-level’ com- result of globalisation, and, in the other decision-mechanism, Europeans [sic] have mittees. Without all this, they warn, “Europe direction, is it fair to impose a single been reduced to multiplying procedures which will end up as predicted by Gordon Brown [in institutional model on all new EU Member take up the energy of civil servants, ministers his 2005 pamphlet, Global Europe: Full- States?” They conclude (page 63) that, and MEPs but fail to engage with the effective employment Europe’], irrelevant politically “analysis of structural indicators for markets decisions of Member States.” and irrelevant economically.” in goods, labour and capital do not suggest “We are convinced that the situation we One example: control of university that EU membership has had a significant describe is perilous: the inability of the EU to would be removed from Member impact on the nature of or the speed at which revive the economy turns investment away States and run by Brussels, under a reforms have been carried out. The EU has from the continent; persistent under-employ- ‘European Research Council’, the objective simply been part of a wider movement…” ment and anaemic growth undermine social being to “promote the emergence of ten or To return to the English summary: provision; and the combination of agonising twenty world-level teaching and research “… no sudden burst in the trade of goods economic problems, poorly-managed en- ” – financed of course by Brus- and services has been observed since the largement and a manifest exhaustion with sels. This could take some time: Harvard, Single Act entered into effect in 1993, nor community procedures all threaten to trigger the world’s number one, is almost 400 years since the euro was introduced in 1999, as was a vicious circle which will unravel the acquis old; Cambridge, the world’s number two, seen [in North America] after the NAFTA communautaire.” almost 800 years old. And, at page 171, the agreement was signed in 1989. The price So, what is to be done ? report points out that, “The former East convergence that EU monetary union was Germany has been heavily subsidised for 15 supposed to bring also did not occur, and … but no cure in view. years with no decisive impact on either its convergence even came to a standstill in Given the report’s damning analysis, and its growth rate or its labour market,” bringing to 1999… The authors believe that these prob- pinning the blame for the shambles mind Keynes’ famous remark: “In the long lems may largely be attributed to the EU’s squarely on EU governance in its widest term we’ll all be dead.” institutional shortcomings.” sense, the answer is obvious. No doubt it “Economic integration has stagnated and crossed the minds of the highly intelligent Nevertheless, no longer promotes growth. The euro’s authors and of the Conseil d’Analyse an excellent report creation has not produced the knock-on Economique as a whole. Dump the said benefits expected. The increase in trade has superstructure and replace it with a In spite of the fundamental (but under- been relatively modest and financial and NAFTA-type arrangement which, as the standable) incoherence between diagnosis credit markets remain segmented. The single report acknowledges, actually works. and remedy, this is an admirably dense, currency even seems to have had a ‘numbing’ Such a proposition, coming from the thorough and fascinating report. The effect on the EU members, which no longer Prime Minister’s own think tank, less than a bibliography alone cites 120 publications need to protect against a foreign-exchange year after the French ‘No’ to the Constitut- and covers every significant work on the EU crisis and have become complacent in their ion, just over a year ahead of the French and the euro in the last thirty years, many of efforts to control spending and make presidential election, and overturning the which have been reviewed or reported on in structural reforms. Moreover, the euro area’s core 55-year old domestic and foreign these columns. All those concerned in the macroeconomic framework has become policy of France, would, needless to say, UK with the impact of the EU will find obsolete. Furthermore, the Lisbon strategy have been unthinkable. Instead – to quote nuggets not just of information, but also of has become bogged down in procedures and again from their English summary – deep-seated French mindsets which, has degenerated into rhetoric.” “… the authors do not however recom- however baffling to mere Anglo–Saxons, On page 268, at the end of her essay on mend changing the current institutional underpin much of the projet européen. ‘The effects of the euro on trade flows’, framework since they feel that attempting If, for example, there are people in the Narcissa Balta (one of the ten auxiliary con- institutional changes would be costly and not City who still don’t believe that Paris is tributors to the report) observes ruefully very realistic…” genuinely determined to de-throne London

Jump to Contents 9 The European Journal In Depth November 2006 from its pre-eminent position as the In the UK, the EU is ‘sold’ to a sceptical report; if you can’t, get someone who can to European financial centre, let them inspect public overwhelmingly on economic go through it for you. the evidence set out on page 164, where grounds. Here, from the heart of the Philippe Herzog, a former French MEP and French establishment, is the incontrovert- † Politique Economique et Croissance en now professor at Paris-X Nanterre, discus- ible proof that all those EU directives, Europe, Aghion, Cohen, Pisani-Ferry, ISBN: ses “the risk [sic !] of a euro-atlantic en- regulations, committees, ministerial ‘sum- 2-11-006149-9, March 2006, available in pdf semble dominated by New York and London”, mits’, institutions, legal judgements, work- at www.cae.gouv.fr; as a paperback from: and poses the question, in all seriousness: ing groups – in short, the entire acquis – are, La Documentation française, 29-31 quai Voltaire, “Is London’s quasi-monopoly of financial as far as the economy’s concerned, 75344 Paris Cedex 07, Tel: 00 33 1 40 15 72 30 services good for growth in Europe?” pointless. If you can read French, get this www.ladocumentationfrancaise.fr. Government Publishes Cost-Benefit Analysis of EU Membership t last, a European government has hitherto untried types of relationship may The authors point out that these Apublished a proper cost-benefit emerge. These can also be seen as no more budgetary costs do not reflect the “dynamic” analysis of EU membership. It comes as no than stages in an open process, the purpose of knock-on or induced effects of costs – and surprise that the government in question is which is to eventually find solutions that will benefits – associated with each alternative. not the one that sits (and occasionally enable Switzerland to defend its interests Curiously, they do not cite any of the governs) in London. No, the government with the greatest chance of success.” numerous reports by the Commission and concerned is a grown-up one (on matters Hence, the report examines a range of others quantifying the current underper- European, anyway): the Swiss Federal alternatives. These are, broadly: formance of and the depressing outlook for Government in Berne. • to continue the current set of Swiss-EU the Single Market. They do however state Their Europe 2006 Report,1 published at bilateral sector-specific agreements;2 that, “the negative economic effects (higher the end of June 2006, is an admirably • to join the European Economic Area real domestic interest rates on joining the serious and comprehensive analysis of the (EEA); euro, net contribution to the EU Budget) are costs and benefits of EU membership. Apart • to become a full member of the EU. likely in the short and medium term to from the absence of economic analysis on outweigh any positive effects resulting from the current state (dismal) and future Costs & Benefits full Single Market integration.” On the euro, prospects (dire) of the Single Market, and a The report quantifies the ongoing they note that, “the adoption of the euro has tendency to assume that the EU is self- budgetary cost to Switzerland of each of the frequently been associated with higher evidently a good thing, the report is three alternative ‘policy instruments’. These prices,” citing opinion polling by the remarkably honest. Its language is free of are summarised in the table. It can be seen Commission in November 2005 in which 93 political correctness: it spells out bluntly that full EU membership would cost almost per cent of respondents across the eurozone and unequivocally the hundreds of areas in nine times as much as the current system of said that the advent of the euro had put which Switzerland would lose sovereignty – bilateral agreements, based on the esti- prices up. yes, sovereignty – if it were ever to join the mated Swiss gross contribution to the EU The “negative economic effects” referred to EU. (But then Switzerland is just about the budget, or over six times as much based on above take account of two factors, one of only genuine parliamentary democracy left the estimated Swiss net contribution. (The which is the net contribution to Brussels. in Europe.) projected Swiss gross contribution to the The report also examines in detail the The authors insist that, “Switzerland must EU, if it joined, would be similar, pro-rata to impact of EU membership and the other define its … relations with the EU in such a its population, to the UK actual gross con- alternatives on the Swiss economy as a way as to always be able to defend [Swiss] tribution, which in 2005 was £15 billion). whole and on Swiss-EU trade flows (60 per interests … Switzerland’s relationship with Joining the EEA would be significantly cent of Swiss exports go to the EU, and 80 the EU must not be considered as a simplistic more costly than the current Bilateral per cent of Swiss imports come from the ‘to join or not to join’ question… It is not so Agreements, but still miles less costly than EU). It warns, rightly, that such evaluations much a question of whether or not joining the EU. are difficult. It notes that EU customs duties Switzerland should be a member of the EU, on imports of goods from outside the EU as of finding the best way and the appropriate Annual Cost to Switzerland are almost double Swiss duties, and that EU [policy] instruments for the government to of alternative relationships with EU: minimum VAT rates are higher than Swiss achieve Switzerland’s fundamental goals and 2007-2013 VAT rates. The raising of Swiss customs foreign policy objectives.” Quite so. Swiss francs Index barriers and VAT rates on joining the EU The authors emphasise that those millions would have a negative effect on the Swiss “instruments” are not inflexible: “The major Continue Bilateral Agreements 557 100 economy. To some extent, those extra costs and frequent changes to which the EU, and to would be offset by savings in respect of a lesser extent Switzerland, have been subject Join EEA 737 132 Swiss–EU trade, partly resulting from the on a regular basis, call for a fluid relationship, Join EU (net contribution) 3,400 610 reduction at frontier crossing-points of both internally and externally. The instru- Join EU (gross contribution) 4,940 886 export and import documentation and ments can therefore be adapted and new and procedures if Switzerland became a full

Jump to Contents 10 The European Journal In Depth November 2006 member of the EU Single Market, partly to the price-lowering pressure – to the extent Switzerland and Europe that it actually occurred – from fully Switzerland, with a population of 7.2 million, is not a member of the EU but is surrounded on all opening Swiss markets to EU imports. sides by EU (and eurozone) countries: Germany, Austria, Italy and France. Around 70 per cent of Swiss agriculture, like that in the EU, is Swiss foreign trade is with the EU. (For the UK the comparable proportion is around 40 per highly-protected, though less-subsidised. In cent.) The Swiss economy exhibits low real growth (averaging 1.7 per cent per year for the examining the impact of joining the EU the period 1998 – 2007, which happens to be the arithmetic average of the growth rates of its four report looks at the prospects for the CAP, EU neighbours over the same period). Switzerland’s GDP per capita was 57 per cent higher than including the possibility that the ‘review’ that of the eurozone in 2004; it has low unemployment, low government borrowing and a high due to take place in 2008 (the one that Mr savings ratio. Blair accepted in return for giving up a large Switzerland has been a member of EFTA since 1960. Its fellow-members are Norway, Iceland part of the British rebate) would actually & Lichtenstein. It has had a Free Trade Agreement in industrial goods with the EC/EU since 1972. result in some ‘reform’. Its conclusions are The Berne Government applied to join the EEA (the European Economic Area, which consists of pessimistic: “One must not count on any EU25 plus Norway, Iceland & Lichtenstein) in 1992, but the Swiss people by referendum refused fundamental change in the present EU their consent. Seven sector-specific bilateral Swiss–EU free trade agreements (Bilateral agricultural policy.” Agreements I) came into force in 2002; a further nine (Bilateral Agreements II) in 2004. Transferring sovereignty on Switzerland joined the United Nations in 2002. It has its own seat – and exercises its own vote – in the World Trade Organization, which is headquartered in Geneva. In line with its policy of joining the EU: Consequences neutrality, which began in 1515 and (except under Napoleon between 1798 and 1812) The report makes no bones about the extent continues to this day, Switzerland is not a member of NATO. of the sovereignty that Switzerland would give up (to Brussels) if it were to join the EU, and the effect that that would have on Swiss The Report’s Conclusions EU. The report is the mirror image of what citizens’ democratic rights, including on the The policy of the Federal Government in will be the outcome of exercises currently extraordinary autonomy and independence Berne is to join the EU (provided the Swiss being undertaken by those in the UK who that its cantons have enjoyed for centuries. people consent by referendum, which looks wish to defend British interests by radically In return for giving up sovereignty, it says, unlikely at the moment). Thus, the appli- changing the current UK–EU relationship. Switzerland would be able to participate cation to join, lodged by Switzerland in fully in EU decision-making. It spells out 1992, “has not been withdrawn”. Joining the 1 Europe 2006 Report. The condensed English what this would boil down to in the EU, says the report, is “considered to be a version runs to 12 pages; the full report in European Parliament: fewer than 20 seats long-term option”. Holding out the prospect French is 157 pages & in German 164 pages. out of 732, or a voting weight of less than 2.7 of joining eventually as a full member helps www.europa.admin.ch per cent. no doubt to persuade Brussels to continue 2 Described in Global Britain Briefing Note When it comes to the far more important negotiating further bilateral agreements No. 36, Nov 2004, Cherry-Picking, www.global forum for EU decision-making, the Council with Berne, whose economic leverage vis-à- britain.org of Ministers, the report notes that the most vis Brussels is not strong: Switzerland takes 3 These include: agriculture; air transport; frequently used system of voting is qualified only 5.7 per cent of EU25’s goods exports competition policy; consumer protection; majority. It states, correctly, that the key (the UK takes 16.4 per cent). currency/monetary union; environment; free feature of this system as EU enlargement The report concludes that Switzerland’s movement of goods, services, capital & continues, and as the veto is given up in interests are best served by continuing to people; immigration & asylum; industrial more policy areas, is that the bigger develop the existing system of bilateral products; infrastructure; internal security; Member States lose influence, as do the sector-specific agreements with the EU – so labour market; police & judicial cooperation; smaller members. (It omits to state that the long as that system allows the country the public finances; public health; rail & road result can only be that the permanent EU freedom of manoeuvre that it has at present. transport; research & development; services; bureaucracy, mainly the Commission and That freedom is restricted by the ever- social security; Swiss direct democracy the Court of Justice, gains power.) increasing legal and regulatory constraints (referendums); Swiss federalism (cantons & The report lists the number of votes that of the acquis communautaire, which will federal government); Swiss neutrality; tax. each of the current 25 members has in the inevitably increase. (It must be said however Council. At this point – humankind can that those constraints appear to be felt more Ian Milne has been the Director of the cross- stand only so much reality after all – the by Swiss politicians than the population as a party think tank Global Britain since 1999. authors lose their nerve. They can’t quite whole, who seem not to share their leaders’ He was founder editor (in 1993) of The bring themselves to spell out just how enthusiasm for the EU.) European Journal and the co-founder and insignificant Swiss voting power would be if The quantification of costs and benefits first editor of eurofacts. He is the author of it joined the current EU. This reviewer occupies a minor part of the report. Its main numerous pamphlets, articles and book estimates that the maximum voting weight value to non-Swiss readers is in the reviews, mainly about the relationship the country would get would be 2.7 per cent extensive description, in great detail, topic between the UK and the European Union. – a fairly meagre return for eviscerating by topic,3 of the EU’s institutional arrange- His most recent publications are A Cost Too your democracy and imposing on your ments and policies, and the assessment of Far? (Civitas, July 2004) and Backing the economy costs which far outweigh the the pros and cons of the present Wrong Hors e (Centre for Policy Studies, benefits. arrangements between Switzerland and the December 2004).

Jump to Contents 11 The European Journal In Depth November 2006

Improving Financial Management in the EU by Edward Leigh, MP

hose of us who have taken an interest robust financial management by the relationship between the desired outcome Tin European affairs over recent years institutions of the European Union. of a particular scheme, the complexity of will be all too familiar with the chorus of The Committee noted that accountability the rules governing it, and the con- concern that greets the annual report of the and audit arrangements in the European sequential likelihood of an error occurring. European Court of Auditors. For each of the Union had been characterised by inertia Getting a clear picture of whether the last 11 years – by the time this article is amongst its institutions. The high levels of situation is improving or not was not helped published the Court will have reported fraud and irregularity generally thought to by the difficulty we had in obtaining a clear again – the Court has effectively qualified exist in the European Union had damaged indication of the extent of the problems the accounts of the European Community. its reputation and the successive years of related to the legality and regularity of Although the Court has reported some qualified accounts had only given credence European Union expenditure. We recom- improvement in recent years, it continues to to this view. mended enhancements to the European point to problems with the legality and In our view, trying to obtain a positive Court of Auditors’ annual report to address regularity of transactions in key areas of Statement of Assurance on the EC accounts this problem: a clearer assessment of expenditure such as on Structural Measures would be hopeless without dramatic legality and regularity of each of the six and parts of the Common Agricultural changes to the Common Agricultural Policy areas of the budget and an indication of Policy. This continuing problem has and the Structural Funds to make them progress compared with the previous year grabbed attention at the highest political simple to control, thereby avoiding high (both in relation to each of the six expend- levels within the European Parliament and levels of error and fraud. iture headings and each Member State). Commission. The Budgetary Control Com- In addition to the concerns we expressed mittee of the European Parliament has been over the qualified audit opinion, the Com- very active in pushing for improvement. The heterogeneous nature mittee highlighted the level of irregularities, And, in January 2005, Jose Manuel Barroso, of the European Union can including alleged fraud, reported by Mem- President of the , act as a hindrance to ber States to the European Commission. In made it a strategic objective of his Com- 2004, this was €978 million, some five per mission for 2005-06 to strive for a positive sound financial cent more than the previous year. We identi- Statement of Assurance.1 Given the scale of management fied that the precise level of irregularity and the financial management issues to be fraud is unknown and difficult to calculate. addressed, however, the aims of the Barroso This arises for a number of reasons, for Commission are, by its own acknowledge- The degree of complexity that currently example, Member States report irregular- ment, highly ambitious. exists is challenging. Expenditure in the ities and fraud in an inconsistent manner. What role has the UK Parliament played European Union now takes place in 25 Trends and progress are therefore difficult in urging change? The House of Commons’ countries and across six expenditure to assess. We supported OLAF’s work in Committee of Public Accounts, supported headings. Member States are organised developing a methodology for estimating by the work of the Comptroller and Auditor differently – some have federal structures, the levels of fraud within individual sectors General, has been very active in this area. others have autonomous regions, and they of the budget. We understand that OLAF Each year the Comptroller and Auditor employ different methods for distributing intends to extend this work to differentiate General reports to the Committee on results funds to final beneficiaries such as farmers. between fraud and irregularity. of the European Court of Auditors’ work The heterogeneous nature of the Euro- Whilst we had clear concerns about the and the progress being made to achieve pean Union can act as a hindrance to sound current state of financial management in improvement. financial management. the European Union, and the prospects for In 2005, the Committee of Public This organisational complexity is com- improvements, we identified some areas Accounts undertook its own inquiry, pounded when individual schemes become where the European Commission had made drawing upon the Comptroller and Auditor complex – making them difficult and costly some progress in improving financial man- General’s report and Committee visits to for Member States to administer and agement. The European Court of Auditors the European Court of Auditors in Lux- frustrating for those at the receiving end identified improvements in the quality of embourg, the European Commission and coping with the bureaucracy. Schemes and the annual reports intended to enhance the the European Anti-Fraud Office (OLAF – programmes, particularly those imple- accountability of each Directorate-General L’Office Européen de Lutte Antifraude). mented under the Structural Measures, and that the Commission had made good The Committee’s report, Financial Man- have a propensity to lead to a high number progress in designing internal control agement of the European Union, published of errors and therefore to qualification. The systems. We welcomed the introduction of a in April 2005,2 raised a number of Committee drew parallels with the experi- new accruals accounting system and the significant issues. We were concerned, given ence of the UK Department of Work and establishment of an Internal Audit Service. the size of the European Union’s budget and Pensions where complex schemes had led to The Committee also welcomed the the United Kingdom’s contribution to it, the Department’s accounts being qualified commitment of the Barroso Commission to whether sufficient emphasis was given to in successive years. We recommended that move towards a positive Statement of As- the need for sound financial controls and the European Commission consider the surance as part of the process of enhancing

Jump to Contents 12 The European Journal In Depth November 2006 accountability in the European Union. The inquiry into the Management and Audit of would seem to have much merit, providing Committee were pleased to see, as part of European Community expenditure and a much clearer focus for seeing what this, the introduction by the European accounts. In evidence to that Committee in European taxpayers are getting for their Commission of a roadmap towards a June the Comptroller and Auditor General, money. The debate on how best to secure positive Statement of Assurance. The Com- Sir John Bourn, suggested that Member better financial management in the mittee looks to the Government to press for States might each prepare some form of European Union looks set to continue. the improvements in financial management consolidated European Union account that are an essential pre-requisite for the bringing together the European Union European Court of Auditors to provide a money spent in each state. This account 1 Strategic Objectives 2005-2009, Europe 2010: positive Statement of Assurance. would be prepared according to Inter- A Partnership for European Renewal, Since the Committee reported, the national Accounting Standards and audited Prosperity and Solidarity. European Commission has published an by the national audit office of the country 2 Committee of Public Accounts, Eighteenth action plan intended to help improve its concerned according to international Report of Session 2004-05, HC 498 performance. It remains to be seen whether auditing standards. The certified account it achieves its goal of a clear certificate. would be presented to national Parliaments. In recent months, the House of Lords In this way different countries would have Edward Leigh is the Conservative Member of European Union Select Committee (Sub- to be much more explicit about what they Parliament for Gainsborough and Chairman Committee A) has been conducting an did with the money they received. This idea of the UK Committee of Public Accounts. Prodi Power by Christopher Arkell In an extraordinary reversal of euro would have come under such strain precedent, the European Court of Justice that either Italy would have been forced to The European Court of ruled, in a decision released on 3 October withdraw from the currency, or the 2006, that Italy’s regional tax (known as exchange value of the currency itself would Justice is not a court IRAP) does not contravene European law. have collapsed. It would also have suffered a of law, but a chamber of The Court’s decision went against two huge blow in international confidence. previous opinions of its Advocate General, Alternatively, the Prodi Government would political convenience itself a rare event, and against years of have been forced to put up other national rulings against Member States who have taxes, such as income and corporation tax, retained, or attempted to introduce, forms by substantial margins which would have several other Member States have had their of turnover taxes in opposition to the brought about its fall, and a severe deflation own turnover taxes overturned. Others are specific rules set out in the Sixth VAT in the Italian economy. regularly brought before the ECJ. The UK Directive. The government of Italy, headed Yet the Italian Government has got away itself faces a challenge on its waste disposal by Romano Prodi, the former President of with it. In this respect, the Prodi connection tax (a form of VAT on landfill sites) which it the European Commission, no longer faces cannot be emphasised too much. Prodi is an was previously expected to lose even the prospect of having to repay £82 billion academic economist by training; he was though the UK has designed its tax to business taxpayers. head of several industrial enterprises in regulations to fit into the EU’s VAT regime Many commentators are puzzled by the Italy in which the Italian state was a major extremely carefully. Landfill tax not only ruling. Jonathan Bridges, senior manager in shareholder; he is the Italian most favoured generates substantial income for the the EU Law Group at KPMG, said: “This is a by the European Commission’s grandees Treasury (though nowhere near as much as real surprise and an unprecedented move… (the permanent heads of the administration Italy’s IRAP), but it supports the environ- [The] decision is completely contrary to not rather than the Commissioners); and he has mental policies of the EU. To overturn it, just one but two Advocate General’s excellent relations with Merkel in Germany especially after the IRAP decision, will Opinions… We did not expect the Court to and Chirac in France. He has the technical, demonstrate with astral clarity that the overturn the fundamentals of earlier Opin- political and personal connections to bring European Court of Justice is not a court of ions… It is open to speculation whether the influence to bear on the Court. Though he law, but a chamber of political convenience. Court’s interpretation of the rules has been will never admit doing so, we do not need It will also demonstrate that the UK will influenced by the vast sums at stake and his admission to see the result of his never have any influence whatsoever in the economic difficulties Italy would have had influence. The Court has decided in Italy’s decisions of the European Union and its had the decision gone the other way…” favour against its own long line of institutions – until it announces its Bridges has put the matter too delicately, precedents and against the opinions of its timetable for withdrawal. and it is worth drawing a bolder conclusion. own advocate. If the Italian Government were to have lost The Italian tax in question is specifically the case, and been forced to repay £82 prohibited by the EU Treaties and the Sixth Christopher J. K. Arkell is an accountant billion, it would have breached its eurozone VAT Directive. These permit one, and only specialising in tax and is Editor of London budgetary limits, not just this year, but for one, turnover tax – VAT. There is no other Miscellany. He has written extensively on an indefinite number of years ahead. The way to interpret the texts involved, and European issues.

Jump to Contents 13 The European Journal In Depth November 2006

The Gibraltar ‘Deal’ – A Sell Out or Real Progress? by Tony Lodge

“A Stone in Spain’s Shoe” was how King Juan Spanish workers were barred from going to Gibraltar with Spain was famously defeated Carlos referred to Gibraltar during a State work in the British naval dockyard and in the November 2002 Referendum. 88 per visit to Britain in the 1980s. The King and elsewhere, effectively condemned to low cent of the Rock’s voters turned out and Queen of Spain had even boycotted the pay and unemployment in Spain. delivered a 98.5 per cent vote against wedding of Prince Charles and Lady Diana In 1984 Spain agreed to lift the blockade sharing sovereignty with Spain. This was a Spencer in 1981 when they learnt that the in exchange for an agreement, the ‘Brussels vote organised by the Gibraltar Govern- couple would start their honeymoon in Declaration’, under which the UK would ment against the wishes of the Foreign Gibraltar. Set against the long and turbulent agree to discuss co-operation with Spain Office. Their plans for joint rule had been ’s relations with her and the issue of sovereignty whilst making torpedoed and were in tatters. However, neighbour, a deal has been signed between clear (unilaterally) that no change of importantly the then Foreign Secretary, the main parties – in Spain – in an attempt sovereignty could take place unless it Jack Straw, had made a Statement to the to normalise relations and end this prickly enjoyed majority support in Gibraltar. At House of Commons on 12 July 2002 dispute. Supporters of the deal claim British the time were told that Spain proclaiming joint sovereignty. Crucially, sovereignty has not been weakened; its had to lift its blockade in order to join the this Statement has still not been withdrawn. detractors disagree. then EEC – Madrid breached the funda- The Tripartite Deal – Recent History of the Dispute mental principles of free movement at the Cordoba, Spain, September 2006 heart of the Treaty of Rome. The land It is difficult for many modern Europeans to blockade was lifted but the sea and air The arrival of a PSOE socialist Government understand or comprehend that there is a blockade remained. in Madrid prompted by the 11 March 2004 corner of the EU where British European Set against Spain’s determination to join terrorist attack changed the mood music citizens are still struggling to obtain a the then EEC, the British Government failed and the approach from Spain. A PSOE number of fundamental rights, which other to capitalise on its strong hand and set clear Government had, in 1985, opened the EU citizens have taken for granted for over demands on Spain over Gibraltar. Britain’s border which Franco had closed in 1969. thirty years. It is a corner of Europe which decision not to threaten to veto Spanish The governments of Spain, Britain and has suffered but stood firm against bullying accession to the EEC if Gibraltar relations Gibraltar launched a tripartite forum in from its land neighbour, faced down were not normalised was a huge oppor- October 2004. It was described as being countless sieges (the last one ended in 1985) tunity lost. Either politicians of the period outside the Brussels negotiating process, and endured years of guarded support from succumbed to Foreign Office vacillation or which is temporarily shelved. its mother country – Great Britain. were not aware or made aware of this The practical agreements which emerged Gibraltar is Britain’s last colony in opportunity to help Gibraltar. in mid-September after two years of Europe. This small peninsula, famous for its Consequently, Spain has used its tripartite negotiations have already caused huge limestone rock and military history, membership of the EU to impose draconian controversy and stirred opposition on the represents a community which is both and illegal restrictions on Gibraltar. It has Rock. The talks have provided for an vibrant and forward-looking. The Gibraltar used its veto to block the application of agreement that would allow Gibraltar to be finance centre, shipping, tourism and the Community law to Gibraltar. Until 2000 this integrated into European air liberalisation Rock’s crucial military importance under- state of affairs meant that British Gibral- and permit flights with Spain for the first pins Gibraltar’s quality of life and represents tarians were being denied rights as citizens time in over 30 years, and gain recognition a community which has acted with of the EU simply because it was easier for by Spain of Gibraltar’s international tele- admirable foresight and determination in Britain to prioritise Spanish concerns and phone system and improve cross-border light of a declining defence budget and the attempt to secure Spanish support in the traffic flows with the establishment of red need to diversify into other industries. Council of Ministers. and green channels at the frontier. A Span- For years Gibraltar has represented a Then Spanish Prime Minister, José María ish cultural institute will also be opened in diplomatic headache for the Foreign Aznar, warned Tony Blair in 2001 that he Gibraltar. Ministries in London and Madrid. General wanted results in Spain’s favour on Controversially, the agreement will Franco’s decision to close the land frontier Gibraltar. Blair was prepared to listen and require UK taxpayer’s money for Spanish in 1969 condemned Gibraltar to 16 years of act. He urgently needed Spanish support in pensioners who were stopped from entering isolation. Franco’s decision to maintain a the EU and was keen to move in tandem and working in Gibraltar when their own blockade by land, sea and air was a response with the Spanish position. Spain was one of Government closed the border in 1969. to Gibraltar’s refusal to give up British the very few European powers which com- 12,000 Spanish workers crossed into Gibral- sovereignty (which they have enjoyed since mitted troops to Iraq and was christened as tar at this time and many of them have been 1704) and come under Spanish rule. A being part of ‘New Europe’ by the Ameri- campaigning for their pensions since the referendum in 1967 rejected Spain’s ‘offer’ cans. Blair heralded his special relations gates closed. It is expected to cost the British by 12,138 votes against and 44 in favour. with Spain and Italy. Government anywhere between £40 – £60 Families were separated and thousands of Blair’s attempt to share the sovereignty of million to solve the pensions claim. Critics

Jump to Contents 14 The European Journal In Depth November 2006 have argued that it is extraordinary that departing from Gibraltar would be cleared would Spaniards think if I were to propose the Spain should be rewarded with such vast by Spanish immigration and customs and joint use of the port of Algeciras?” The GSD sums of money for the consequences on its once in the departure lounge would be maintain that the airport will remain under own citizens of the restrictions it imposed treated as in Spain for customs and British Ministry of Defence Control and on Gibraltar for wishing to remain British. immigration purposes. They also claim that will not house Spanish customs officials. Their pension contributions were left to the proposals would require all people The Chief Minister told the Gibraltar gather interest in a bank until Geoffrey coming in from Spain who were flying to a Chamber of Commerce last month, “In one Howe, as Foreign Secretary in 1984, rather Spanish destination to go straight to a fell swoop we have cleared the decks of some naively agreed to pay the pensions on the departure lounge without passing through of the most thorny and intractable issues basis of EU law. When this promise turned any Gibraltar customs. One question which distorting the normality of our lives here in out to cost Britain £180 million plus, the must also be addressed is what classification Gibraltar. Gibraltar cannot condemn itself to pension scheme was frozen in 1989. The would an Iberia flight from Madrid to remaining stuck in the siege mode and pensioners look set to receive their unpaid Gibraltar carry? Would it be a domestic mentality of the past.” increases if the deal is fully implemented. flight or an international flight? Controversially, the Agreement will not Gibraltar is a vibrant democracy. The The GSD rejects the Opposition’s claims be put to a referendum in the colony, governing Gibraltar Social Democrats and argues that the deal, involving thereby allowing the other parties the (GSD) have staked their electoral reput- ‘enhanced’ use of the airport, sends a strong opportunity to mop up the votes of those ation on the deal which was negotiated by message globally to investors that Gibraltar who are opposed to the deal. their leader, the combative Chief Minister, is moving forward and has dropped the The Tripartite Agreement is a huge and . The GSLP/Liberal Oppos- siege mentality. symbolic development in Gibraltar’s unique ition has vowed to block the key elements of The GSLP/Liberals have also argued that evolution. It represents Gibraltar’s coming the deal if elected. The new Progressive Spain has hardly made concessions to of age after years of struggle for recognition Democratic Party (PDP) has also rejected Gibraltar when it has been widely accepted with Spain. She has taken her seat at the the Airport Agreement and categorically that they have been in breach of EU law table with her own priorities and objectives, stated that if elected in the forthcoming anyway – on the free and unhindered alongside Britain and her land neighbour. general election it will also not be bound by movement of traffic at the frontier, which But the extent to which the deal is a step too the Agreement. they promised to properly address when the far and a move towards a greater Spanish On the Airport Agreement, the Gibraltar frontier re-opened in 1985. dimension in Gibraltar’s affairs is now for Opposition GSLP/Liberals argue that it The Opposition have vowed to block the the electorate of the Rock. Only they can represents a direct incursion of UK sover- key elements of the Agreement and have take this decision and the British Foreign eignty: “Any question of sovereignty over the declared that they will not be bound by it if Office should stand aside and cease from airport, the isthmus or anywhere else is they are elected to office. A general election involving itself in an internal democratic entirely bilateral between the United King- is expected in Gibraltar within 12 months, decision. dom and Gibraltar alone and has nothing to possibly in the Spring. Joint use of Gibraltar do with Spain.” They have argued that with airport was initially floated in 1987 but was the building of a new airport terminal overwhelmingly opposed by the local Tony Lodge is the Vice Chairman of the comes crucial problems of jurisdiction and population and dropped. The GSLP Leader, Conservative Friends of Gibraltar. He is a control. They claim that passengers , has pointedly asked, “What former Editor of the European Journal. Gibraltar: Swords into Ploughshares? by Maurice Xiberras talwart defenders of Gibraltar’s Significant Spanish Change Zapatero ‘gifted’ Gibraltar to the British as a SBritish sovereignty can rest assured that reward for Blair’s help in dealing with the the Cordoba Agreement reached by the UK, President Zapatero’s socialist Government Basque problem. As they see it, Gibraltar is a Spain and Gibraltar does not signal a British would not have risked such major policy further example of their Government’s weakening on the issue. change in Spain’s approach to Gibraltar if he weakness on a whole range of issues, foreign Nor is there anything in the Agreement did not intend to make the Cordoba Agree- and domestic, which has polarised Spanish on which to base such a view. If there had ment work. How significant a change it is politics even more than usual. been it would not have stood a ghost of a can be judged from the reaction of Spain’s Yet in a revealing exchange in the Spanish chance in Gibraltar, at Westminster or in the Opposition, the Partido Popular (PP). Parliament’s Foreign Affairs Committee, UK at large, where support for British Their leader, Mariano Rajoy has cried former Foreign Minister, the Catalan Josep Gibraltar remains as strong as ever. betrayal accusing Miguel Angel Moratinos, Piqué, gave the Agreement that guaranteed Swords will be merely sheathed, in case the present Foreign Secretary, of signing an his Party’s qualified support, maintaining they are needed again, politically speaking, Agreement that “does nothing about sover- that in office the PP would have followed a but not turned into ploughshares. Spain eignty” and of ditching the common policy similar policy. Previous methods had not cannot expect any other disposition from of all his Spanish predecessors in office. His brought Spanish sovereignty any nearer. Gibraltar, whilst she maintains her sover- parliamentary spokesman has said his Moratinos commented that if they had eignty claim. compatriots should not be surprised that succeeded, they would not still be there

Jump to Contents 15 The European Journal In Depth November 2006 discussing the issue of Gibraltar. There were pressure means giving up on sovereignty – a Cordoba. But by the Agreement, Spain has even references to Spanish ‘aspirations’ to de facto acceptance of an indefinitely British finally accepted Gibraltar’s DDT (350) free- sovereignty, instead of the Spanish ‘claim’, Gibraltar, including the isthmus, and see ing up expansion of telecommunications an indication of movement in the direction Moratinos’ protestations to the contrary as and making possible ‘roaming’ mobile similarly taken by the Republic of Ireland. a de iure fig leaf to cover up this de facto agreements, much needed by Gibraltar’s Spain, it is clear, has not gone into this recognition. burgeoning finance centre. She has Agreement from a position of strength. For Gibraltar Opinion undertaken to liberalise cross-border traffic all the bluster about maintaining their consistent with her Schengen customs sovereignty claim, as a ‘policy of State’, the In Gibraltar, there is some division of opin- obligations. Gibraltar’s exclusion from EU fact is that Gibraltar’s 2002 Referendum on ion. Opposition Leader Joe Bossano has ‘Open Skies’ legislation, engineered by Joint Sovereignty laid waste the prospect of refrained from condemning the Agreement Spain, will be reversed within six months on the sovereign powers resolving the issue outright but added that he would not be the joint submission of the UK and Spain, above the heads of the Gibraltarians – the bound to implement its ‘bad parts’. These and over-flight of Spanish territory will UN route is blocked and, with the defeat of include what the Agreement terms ‘an come into operation making straight-on the European Constitution, by far the most administrative’ arrangement allowing pass- approaches over Gibraltar Bay possible and dangerous threat to Gibraltar lifted. engers ‘in transit’ within the Schengen Area more safe. Gibraltar will become an The Cordoba Agreements to avoid Gibraltar customs and immigration ‘international airport’, from which Spain is checks; 50 per cent commercial par- not excluded, with a single terminal on Indeed, the texts of the Agreements ‘do ticipation by a Spanish concern in the British soil with access from either side of nothing’ to advance Spain’s claim to sover- operation of the single terminal on British the frontier. eignty. soil; and the setting up in Gibraltar of a If these are not ‘concessions’, they are The agreement on the Airport, the only Spanish ‘Cervantes Institute’ on a site certainly ‘climb-downs’ or ‘reversals of one at issue, is explicitly “understood to be provided by the Gibraltar Government with policy’, even if the policy aim continues to without prejudice to the respective legal posit- a Spanish flag being allowed to fly from the be stated. Involving as they do international ions with regard to the dispute over sover- premises. organisations – the EU, NATO, ICAO etc. – eignty and jurisdiction over the territory in It is significant that Bossano has not they may be greeted with some polite which the airport is situated.” challenged the “sovereignty, jurisdiction and clearing of throats, or from a different This ‘without prejudice’ formula is not a control” free nature of the Agreement. But perspective, some relief (the European new one. It was already around in the late Sir with a general election imminent, it is Commission has already issued a gushing ’s day (Gibraltar’s pater logical that he should not embrace the statement of welcome). From a Gibraltar patriae) and as he used to say, not without Agreement wholesale. perspective, registering these ‘changes’ controversy then, it allowed Spain to keep Every Gibraltarian would argue that the internationally will make their reversal her claim, whilst we kept Gibraltar. restrictions should have been withdrawn as more difficult, though not impossible, with What made it difficult to implement then unilaterally as they were imposed – a a change of Government in Spain – a good was the persistence of an active policy morally unassailable argument. Spain, they reason not to turn swords into ploughshares of harassment aimed at strangulating, and argue, has conceded nothing that she just yet. later emasculating, Gibraltar through a pol- should have had in the first place. The de facto Political and icy of restrictions against Gibraltar’s eco- A more realistic majority, however, Economic Balance nomy. This was coupled with an unrelenting knows that without negotiation Spanish political campaign against Government and policy would have remained unchanged Important as these ‘concessions’ are, the people which, having started in 1954 with indefinitely, whilst a few wish no recon- significance of the Cordoba Agreement is, I the visit of HM the Queen, reached its climax ciliation at all with Spain. would argue, political in a broader sense. It in the closure of the land frontier and the Gibraltar is not the only long-standing marks a shift in the underlying political withdrawal of Spanish labour (1969), and dispute in the world where the prospect of dialectic between Gibraltar on one hand, did not stop with the death of Franco (1975) ‘peace’ divides and excites opinion at a and the UK and Spain on the other – and the opening of the frontier in 1985. political or popular level. A strain is placed decidedly in Gibraltar’s favour. It is this policy of harassment as the on political responsibility, now greater in The 1987 Airport Agreement, for instrument for the ‘recovery’ of sovereignty the highly charged party political atmo- example, was the creature of the infamous that Zapatero has forsaken by the Cordoba sphere of an impending general election, on Brussels Agreement, whereby the two sover- Agreement and has outraged Rajoy. Mora- which the fate of the Agreement may hang. eign powers agreed to negotiate sovereignty tinos still repeats over and over that his It has the declared support of the Trade bilaterally, as a condition for the opening of country’s sovereignty claim stands, to the Unions, commercial organisations and the border and the lifting of restrictions. annoyance of the Gibraltarians. But he other representative bodies. But there is a The outcome was predetermined – the insists that Spain will be pursuing it through popular view that the Agreement is the transfer of Gibraltar to Spain. The naval economic cooperation with Gibraltar in the beginning of the end for British Gibraltar dockyard had been turned to commercial economic interest of the whole geograph- and should be de-railed. use, and the economy was in tatters. ical region and in the hope that it will Spanish ‘Concessions’ Explaining why he accepted the ‘bilateral- facilitate a solution to the ‘sovereignty issue’. ism’ of Brussels, then Chief Minister, Sir Many in Spain still believe, however, that In this climate therefore it may not be politic Joshua Hassan, wrote to his biographers surrendering the leverage of sanctions and to talk about Spanish ‘concessions’ at after the event:

Jump to Contents 16 The European Journal In Depth November 2006

“The economy was at its lowest; the stumbling block to constitutional agree- Spain has swallowed what she calls this prospects were very bad; it was a decision I ment was Bossano’s insistence on the “internal right of self-determination,” though had to take myself… The full opening of the unqualified and continuing right to self- she still balks at it being recognised by the frontier was a sheer necessity to survive.” determination figuring in the text or in the UN as an act whereby Gibraltar is removed (Hassan letter of 5 October 1994 quoted by new preamble, and not unconnectedly, that from the colonies list. Jackson and Cantos, p. 258) the whole exercise should result in de- Hoon’s formula and Spain’s acquiescence That Airport Agreement was signed by colonisation and the de-listing of Gibraltar make one thing clear. Britain will not be Geoffrey Howe and Fernandez Ordonez. In by the UN as a colony. This would have midwife to such an independent state of terms, language and staging of implement- given Gibraltar the right to independence at Gibraltar, and Spain will fight it to the last. ation it was a disgrace for the Gibraltarians, some time in the future with the approval of As Thomas D. Grant argued in his excellent who amid demonstrations and by their the UK. Although all political parties stand article, ‘Gibraltar on the Rocks’, (Policy Re- refusal to approve necessary legislation in for self-determination in the above sense, all view no 116), rebus sic stantibus will be a the House of Assembly, brought it down. maintain that the choice of independence is powerful consideration in the foreign The Brussels Agreement has not been ‘academic’, since none want it at present. policy of existing nation states when weigh- withdrawn, but ‘bilateralism’ has been It became clear, though officially denied, ing up the political future of such enclaves, rendered inoperative. In a letter from the that Madrid would not sign any co- from Gibraltar to Taiwan. In the times in UK Secretary of State to Gibraltar and to his operation Agreement until the Constitution which we all now live, geo-political con- Spanish counterpart, the UK Government was agreed. Inclusion of the offending right siderations are hugely important. has stated that no meetings under it will would in Madrid’s view breach the Treaty of Faute de mieux, therefore, the Treaty of take place unless the Gibraltar Government Utrecht (1713) by which Gibraltar was Utrecht serves the UK and Spain’s purpose is ‘content’ with such a meeting, an essential ceded to the English Crown. of denying an independent mini-state of assurance formally repeated in the UN’s That this adherence to Utrecht was also Gibraltar, even if the Gibraltarians wanted Fourth Committee (a policy applied also to the long-established and oft-repeated view one. But thought must be given to its re- the Falklands recently). of all UK governments did not seem negotiation in terms which do not exclude Gibraltar’s Chief Minister will by relevant to Bossano. Whereas the rest of the the people of Gibraltar. Utrecht serves no definition continue to be a constituent Gibraltar delegation was prepared have other useful purpose than pre-empting the participant in the Tripartite Forum, which their reservation on self-determination independence of Gibraltar. produced Cordoba. He will continue to recorded in the constitutional ‘Despatch’, The Principle of Consent have the power of veto over all decisions. Bossano threatened to oppose the new The Forum’s agenda will be ‘open’ – a policy Constitution in the ‘decolonising’ refer- It goes without saying that any weakening agreed by both Government and Oppos- endum to follow. In real terms, if the of the UK Government’s position – any ition in Gibraltar. Thus in complete contrast Constitution foundered, the Cordoba regression to undeliverable 2002 policies – to the Blair Government’s shameful Joint Agreement would have been at best will spell the end of this new phase. Almost Sovereignty agreement with Spain, postponed and at worst wrecked. 40 years later, the Preamble to the 1969 devastatingly rejected and defeated by Eventually Geoff Hoon produced a Constitution will be re-iterated in the new Gibraltar’s 2002 Referendum, all discussion, formula, which did enough for Bossano: the Constitution. negotiation and agreement will be tripartite constitutional referendum would be an I believe that Spain has got the message and not bilateral. Spain’s insistence that exercise of the right of self-determination, that, whatever aberration seized the UK sovereignty is a ‘bilateral’ issue is more a but the Despatch firmly reiterated the UK Government in 2002, the wishes of the safeguard against the Gibraltar Government Government’s adherence to Utrecht and people of Gibraltar will not be dishonoured claiming Gibraltar sovereignty, than explicitly ruled out independence in the by Britain; they are a reality that no one can entertaining any prospect that sovereignty future without Spain’s agreement. The new ignore. To the dismay of the Spanish Op- will be taken completely out of Gibraltar’s Constitution was rated ‘non-colonial’ by position, the present Spanish Government hands. ‘Bilateralism’ is incompatible with Peter Caruana and Geoff Hoon. Bossano has purposively attacked many aspects of the level of Gibraltar representation in the agreed to support it on that basis. the Francoist state, in the name of freedom, Forum, and the new Spanish policy of The Treaty of Utrecht democracy and the principle of consent. cooperation depends in the continued Dea ex Machina The slate must also be wiped clean of existence of the Forum. Franco’s policy of attrition against the The new Gibraltar It is a supreme irony that the 300 year-old people of Gibraltar in the name of the same Constitution Treaty is intensely disliked by many values. Gibraltarians – not because it gave Britain Moratinos himself is on record as saying Gibraltar’s negotiations with the UK possession in perpetuity, but because of its that Spain could not impose a solution on Government on the new Constitution have reversion of the sovereignty to Spain clause, Gibraltar. But for as long as the Spanish run ‘parallel’ to the trilateral negotiations, if Britain surrendered it. Its anachronistic claim endures, even the most civilising of but there is no doubt that, whist denying and insulting prohibition of the presence of influences will be regarded by the Spain any locus standi in agreeing Jews and Arabs in Gibraltar, now obviously Gibraltarians with a measure of suspicion. Gibraltar’s Constitution, there have no a dead letter, and its curtailment of the right Spain’s formal acceptance of the principle doubt been significant points of contact of self-determination, should hold the key of consent seems to me to be the next, between the two. to the whole situation and make possible though not the final, objective of UK/ To an interested observer, the major agreement on both issues. Gibraltar diplomacy.

Jump to Contents 17 The European Journal In Depth November 2006

Peter Caruana of Spanish sovereignty, jurisdiction and guarantee that Caruana will be Gibraltar’s control, on economic terms that are greatly Chief Minister in a year’s time. But the That such a small place like Gibraltar should beneficial to Gibraltar. Agreement is not re-negotiable, and the UK, throw up issues of such complexity for all In the context of Anglo–Spanish relat- Spain and the EU have the vested interest of involved is not new. What is new is that two ions, it marks the political and economic maintaining good relations and the stability ‘parallel’, but not unrelated, agreements ascendancy of British Gibraltar and effect- of the region, this time not at the expense of should have been struck simultaneously. All ive recognition by Spain that ‘possession is the people of Gibraltar. three participants have shown a high degree nine tenths of the law’, the other tenth still of political courage and diplomacy, but to be fought for. Swords, which politically- Maurice Xiberras is a former Deputy Chief none more than Gibraltar’s Chief Minister. speaking past generations in Gibraltar, at Minister and Leader of the Opposition in Peter Caruna has delivered a new ‘non- Westminster and in the UK generally, have Gibraltar and was a member of the UK colonial’ Constitution, with which the had to wield in earnest, are not going to be delegation in talks with the Spanish Foreign majority of his fellow citizens appear to turned into ploughshares just yet. Secretary under the Strasbourg Process in the concur, and a ‘cooperation’ Agreement, free In typically British fashion, there is no 1970s.

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Jump to Contents 18 The European Journal In Depth November 2006

Of Fog and Funny Statistics by Don Anderson

his journal published my Appraisal where its diktats are industriously gold- I have a feeling that this is the sort of Tof our membership of the EU in plated, just to be on the safe side. This misinformation the Labour leaders used to August. I have also been sending it to illuminates the irreconcilable difference trot out –“There are 3 million jobs dependent politicians on all sides of the House, in the between the continental mindset based on on our membership of the EU,” they’d say, as hope that they would think hard about how the Napoleonic system, where everything is if it were a statistic. This figure was based on they are representing us. William Hague forbidden unless it is specifically permitted an academic study which employed indices, riposted by sending me a printout of his by law (and preferably licensed), and ours projections and guesswork, and would only recent speech on the subject. He wants the which is the reverse way about. have any relevance whatsoever to jobs in the UK to be participating energetically in an This accounts for why the proposed event that UK–EU trade were to suddenly open, flexible Europe and to be leading it in Constitution was 50 times longer than that cease. It was therefore just political scare an about-face turn from its current path of of America (which works better), and ours, mongering. The GDP would similarly be integration, over-regulation, protectionism which we haven’t even considered necessary unaffected unless we were to cut off and economic stagnation, so that it might to write down. Moses delivered economical business relations with the Single Market. stand some slight chance of competing with one-liners such as ‘Thou shalt not kill’, How can any government complacently the emerging powerhouses of China and which are still the most powerful edicts of accept the continual letting of our lifeblood, India. Worthy thoughts indeed, but it is all. for no discernable benefit other than as a laughable to think that he might be in any I am none the wiser as to how we can licence for self-important popinjays to way more successful in bringing about this simultaneously be £3,800 per household attend conferences on lavish expenses, and pie in the sky than any of his predecessors better off, yet worse off by the £119 million a mop up ‘hospitality’? When will they take have been. He might as well try pushing a week we know EU membership costs the notice of the recent cost/benefit analyses pea up Highgate Hill with his nose, as divert British taxpayers, after allowing for the carried out by four authoritative bodies into the EU from its obsession with gumming return of some of our money in ‘grants’. If our relationship with the EU, none of which up its own works to the point of solidifi- you divide this by the number of house- concludes that we derive any significant cation. holds and multiply by 52, each one is worse economic benefit at all? Open and flexible? The EU has 39,000 off by some £450 p.a. On top of this direct We shouldn’t have to live our lives bureaucrats working to keep it hidebound tax, we pay over the odds for food because regulated by the burdensome complexity and ever more complex. Hague quoted a of the CAP/CFP (which is reported to add being churned out by Brussels. A fog so European Commission report, Te n Year s some £1,500 to a household’s food bill), the dense that not even a constitutional lawyer Without Frontiers, as his authority for highest cost for fuel and many com- can be sure he has mastered it, or a claiming that the Single Market makes a modities, the cost of housing and support compliance officer be confident that his contribution to GDP worth £20 billion for immigrants, the cost of EU regulation company is not transgressing the law. On annually to Britain, and an annual increase estimated at £20 billion that industry has to airfields, in the old days, we knew that the to a European household of £3,800. This pass on, and the huge increase in the public only way of dispersing fog was to light a fire seemed so ludicrously untrue to me (I sector and their pensions. A further cost, under it. couldn’t imagine why he had accepted and which is not generally taken into account, is regurgitated it) that I made an effort to look the loss of the opportunity to enter into Our political classes are out it up. It was easy enough to find the trade agreements in the world outside the document and I started to read. Then I EU, where countries afford each other the of touch and letting us down started to speed-read. Eventually my eyes same benefits as we get in the EU trading glazed over, my mind went into meltdown bloc, but without the tariffs and few of the Mr Hague should acknowledge that it is and I gave up. But I had discovered the costs. not remotely possible that powers over secret of the EU bureaucrats. They spew out I suspect some propagandist in the Com- social regulation and employment can be such incredible masses of stultifyingly mission has divided the increase in overall retrieved, especially under a leader who was boring jargon that no Minister or MEP GDP by ‘x’ number of households over unable to deliver on the only pledge he could possibly comprehend what machin- some convenient period and, perhaps using made. Very few of our electorate are in ations are afoot, and heaven help the a Slovakian farmer as a low datum point, favour of EU membership, and the rest feel ordinary Joe who might want to know. calculated this sum as an average across the that our political classes are out of touch – The Commissioners might be the ones EU. This would obliterate any difference and letting us down. The excuse that they who set things in motion, but plainly it is the between the effect on households in net were elected in order to show leadership can 39,000 who create this sheer mass of anal contributor nations and in the nations only be argued up to the point where the retentive nit-picking that not even an benefiting from our enforced charity. ignoring of popular feeling becomes educated person can read without his mind Neither am I convinced that fluctuations in betrayal. going into refusal. Thus is the indigestible GDP can be said to affect households like porridge speed-voted through the mine where the occupants are retired and, Don Anderson is a retired company director, European Parliament by bemused MEPs therefore, an average gives a totally mis- who worked in the advertising industry for 40 and delivered by the lorry-load to Whitehall leading picture. years.

Jump to Contents 19 The European Journal In Depth November 2006

The Year Ahead by Dan Hamilton A New Year, a New Leader Eurosceptics wanting the Conservative Whilst time will tell whether the Party to break away from the federalist EPP incoming leadership will entirely follow the 2007, unlike 2006, looks set to be an grouping could not have wished for a better Davis/Brown dogma on trade policy, interesting year for the European Union. successor to Mr Poettering than Joseph Democratic control in 2007 will certainly January 2007 will see Hans–Gert Poet- Daul, the Strasbourg-based sugar beet mean a return to the imposition of EU/US tering step down from the position he has farmer who appears to be a lock for the job. manufacturing and agricultural tariffs and held since 1999 as President of the First elected in 1999, he has shown little increased pressure for the US to withdraw European People’s Party group to take up enthusiasm in his current job as Chairman from the World Trade Organization. The the presidency of the Parliament. of the Agriculture Committee for reform of change of leadership will not mean free- Poettering, who has been described by the ailing Common Agricultural Policy, marketeers have lost an ally in the form of a even hardened Eurosceptics like Daniel which still accounts for around half of the Republican-controlled Congress, but we Hannan as “fair-minded”, would have to put EU’s annual expenditure, and fought the will certainly be mourning the death of a in genuine effort to perform as badly in the last European elections on a platform of critical friend. President’s Chair as the incumbent. opposing Turkish membership of the EU. The socialist, former Spanish Treasury At a time when the European Union is so New additions Secretary, Josep Borrell Fontelles’ abrasive badly in need of reform, Daul is a bizarre The real test for 2007 is, of course, the style has angered Eurosceptics and dedi- choice to say the least. accession of Bulgaria and Romania to the cated pro-Europeans alike. His blunders European Union amid genuine scepticism include the incorrect assertion that no The US Dimension about the commitment of both countries to Nordic countries were involved in World With the United States Congressional eliminating internal corruption and imple- War II and the suggestion that EU policies elections of 7 November drawing ever- menting market reforms. towards the Ukraine have succeeded in spite closer, the Democrats are certain to seize Romania, in particular, has an oppor- of opposition from Poland and Lithuania control of the House of Representatives, tunity to establish itself as a leading force in “acting under US influence” ! with the prospect of the Party gaining the the future of the European Union. As the With Poettering’s accession to the Senate appearing to be an ever-increasing seventh largest Member State, the country’s presidency of the European Parliament, the possibility. Whilst the incumbent Republi- proximity to Asia and aspiring accession EPP will be in need of a new President. This can leadership of the House and Senate can states such as Serbia, the Ukraine and Tur- is, on the face of it, a great opportunity for barely be described as friends of those in key is highly significant. How the reforming the ailing group. the European Union seeking to encourage Liberal Prime Minister Calin Popescu Will they endorse a reforming figure freer trade – one only need remember the Tariceanu chooses to use this influence will such as the Swede Gunnar Hokmark or Steel tariffs imposed by Congress in 2002 – be significant. Will he be a genuine advocate the dashing Dutch MEP Camiel Eurlings the Democrats can only generously be for reform of the European Union’s who, despite their enthusiasm for a federal labelled as enemies of the cause. Amongst outdated institutions or will he, in the style Europe, broadly share the Conservative those free-trade advocates facing near- of the Kaczynski brothers, fail to live up to Party’s commitment to internal market certain defeat include Rep. Tom Reynolds, his initial promise? reform and liberalisation? Will the group Chairman of the Republican Congressional For those believing in market liberalis- bow to pressure and accept that the Committee, and Senator Mike DeWine. ation and EU reform, 2007 will be a year of European Constitution really is dead? Will Reynolds’ likely replacement, 75 year old new and immense challenges. Prepare Member State ‘red lines’ on foreign, defence industrialist Jack Davis, has declared he will yourself. and currency policy be embraced and “fight to cancel all free trade agreements” safeguarded? Will the group become a whilst DeWine’s vanquisher, north-eastern champion for reform of the Common Ohio steel-belt Congressman Sherrod Dan Hamilton is a member of the Agricultural Policy? Brown has penned a book entitled The Conservative Way Forward Executive The answer to all of these questions is – Myths of Free Trade in which he rallies Committee. He can be reached at quelle surprise – “non”. against the “follies” of globalisation. [email protected].

… news in brief squads, directly subordinate to the dictator and his associates, are still As relations deteriorate between Russia and Georgia, a member of the operating in the country… Besides ordinary citizens atrociously killed Georgian opposition has denounced the ‘political terror’ which, she by Interior Ministry officers, the circumstances of the death of Georgian says, the government there is pursuing. Irina Sarishvili, who leads the Prime Minister Zurab Zhvania remain uninvestigated, and other Imeda movement and the Khena anti-fascist coalition, told journalists citizens – members of parliament and the Tbilisi city assembly, political at a news conference in Moscow that Georgia has effectively been a opponents of the regime – have been killed or brutally beaten.” “I don’t dictatorship since the ‘Rose Revolution’ brought President Mikheil approve of the current relations between Russia and Georgia,” she said, “I Saakashvili to power in early 2004. “The Saakashvili regime has widely belong to a political group that believes that Russia and Georgia are practiced political terror, including through murders,” she said. “Death being driven to a conflict by the West.” [RIA Novosti, 5 October 2006]

Jump to Contents 20 The European Journal Intelligence Digest November 2006 Intelligence Digest by John Laughland

Stoiber attacks European Arrest Warrant question of linking moral actions with economic actions.” The The Prime Minister of Bavaria, Edmund Stoiber, has attacked the resolution made reference to the murder of the campaigning Government of Angela Merkel for failing to insert any safeguards into journalist, Anna Politkovskaya, calling on the Russian authorities to the proposed EU Arrest Warrant following the accession of Romania undertake an independent inquiry into it. Speaking to the MEPs, the and Bulgaria. Stoiber has said that the justice systems of both Finnish Prime Minister, Matti Vanhanen, admitted that the dinner countries should be specifically barred from being able to demand with Mr Putin had been rather tense. “It is true, it was very frank and the extradition of German citizens to their countries, as the EU Arrest open but we in Finland have a long tradition of open discussions with Warrant allows. He has said that protective clauses should be inserted Russia,” he said. (In fact, of course, during the Cold War, Finland was to prevent this because organised crime and corruption have a often excoriated for its supine attitude towards the Soviet Union.) considerable influence over both judicial systems. The European [Philippe Ricard, Le Monde, 27 October 2006] Union has itself said that the justice systems in both countries remain corrupt because it has inserted clauses into the accession treaties Hungarian opposition TV station fined which allow financial penalties to be inflicted on the two states if their As 130 people were injured as police fired tear gas and rubber bullets ‘reforms’ are judged insufficient. “I demand that our citizens be at demonstrators during the ceremonies to mark the 50th annivers- protected from deficiencies in the rule of law, corruption and organised ary of the Hungarian uprising against Soviet rule, the country’s crime in Bulgaria and Romania by means of special clauses,” Stoiber official media watchdog has imposed a 1 million forint fine (about told Die Welt. The German Government says that it has inserted £2,500) on a TV station owned by the country’s main opposition protective clauses but Stoiber responds that these must come into party, Fidesz. This is the largest fine to date imposed by the body. force as soon as the two countries join, i.e. in January. “I cannot and According to the watchdog, Hír TV’s broadcasts about riots on 18 will not accept that German citizens can be imprisoned in these September were biased, in particular because they allegedly countries,” says Stoiber. [Die Welt, 24 October 2006] attempted to “present the incidents as revolutionary events and spoke of a new ’56 and did not inform viewers objectively and factually.” During EU–Russia meeting goes badly those riots, the building of the state television station, MTV, was The summit meeting held in Finland on 20 October between the attacked by protesters. Press freedom has been a constant bone of Russian President and the heads of state and government of the contention between the Hungarian parties since the end of European Union has not led to an agreement on energy policy. The communism. Supporters of Fidesz argue that the left-wing parties EU has been trying to get Russia to sign an ‘energy charter’ since 1994 have harassed their media when in office, only to complain loudly to but Russia fears that it will permit foreigners to take control of its international organisations when the unfair advantages enjoyed by energy sector. EU leaders claimed that they wanted good relations their outlets are curtailed while in opposition. [Budapest Sun, 19 with Russia but they did everything to undermine them, accusing October 2006] Russia of protectionism and human rights abuses. Putin’s patience Turkish accession could founder on Cyprus snapped at one moment, when he was faced with a question about Experts are speculating that the negotiations between the EU and corruption in Russia. He said that the word ‘Mafia’ came from Italy Turkey could collapse over the Cyprus question. In an interview with and that Spain was currently facing a huge corruption crisis as mayors an Austrian newspaper, Heinz Kramer, a political scientist who from all parties were being imprisoned for graft. specialises in the EU’s foreign policy, has said that he does not think Prior to the summit, the President of the European Commission, that the Finnish presidency’s current proposals will succeed in José Manuel Barroso, called for the EU to adopt a unified energy breaking out of the current impasse created by Turkey’s refusal to take policy. “We must speak with one voice when negotiating with third certain measures on trade with Cyprus which would amount to a parties,” he said. This is diplomat-speak for attacking the bilateral near-recognition of the Greek Government as the legitimate agreement reached between Germany and Russia by the previous government of the whole island. Kramer says that he fears the latest German Chancellor, Gerhard Schröder to build a pipeline under the proposals are merely a way of hiding the fact that the negotiation is Baltic Sea, i.e. bypassing Poland, a project which the Polish Defence not advancing, since Cyprus has said clearly that it will not allow Minister, Radek Sikorski, has likened to the Molotov-Ribbentrop Pact matters to proceed until Turkey recognises it. Kramer claims that a between Nazi Germany and Stalin’s USSR in 1939. Mr Schröder, who majority of the EU Member States is against Turkish accession but lost last year’s election, is now the head of the consortium building the that none of them dares to take responsibility for torpedoing the pipeline. Since expressing their dissatisfaction with German policy, negotiations – not even the Greek Cypriots. [Der Standard, 24 however, the twins who govern Poland have toned down their October 2006] rhetoric, perhaps because they understand that the German presidency of the EU starts in January and that it will aim to Chirac apologises to Erdogan determine the future of EU energy policy and of policy towards The French President has telephoned the Turkish Prime Minister to Russia. [Célia Chauffour, Le Monde, 20 October 2006] present his apologies for a vote in the French Parliament calling for On 25 October, the European Parliament formally requested that denial of the Armenian genocide to be criminalised. The vote, which the EU place democracy, human rights and freedom of expression “at resulted from a bill put down by a Socialist deputy, will be an the centre of any new agreement” on future partnership with Russia. enormous obstacle to Turkey’s accession to the EU. Mr Erdogan said This resolution goes against what President Chirac said during the that Chirac had called him on 14 October to express his regrets and EU–Russia summit in Finland, when he declared that, “There is no that he had promised to do all he could on the issue in the future.

Jump to Contents 21 The European Journal Intelligence Digest November 2006

President Chirac has said that he was opposed to the measure during be paid will be that the new treaty is not called ‘a constitution’ any more a visit to Armenia on 30 September. Recalling that France had but ‘a Europe treaty’. The goal of having an actual constitution may recognised the Armenian genocide in 2001, Chirac said that the new have to be postponed and we may have to be satisfied with a basic treaty text resulted more from polemics than from judicial reality. Chirac instead.” Leinen claims that the absence of this treaty or constitution is had added, however, that Turkey would be “well advised” to recognise the reason why Europe is under-performing in energy policy, the war the genocide since that would facilitate its entry into the EU. The vote on terror, the fight against illegal immigration, the fight against in the French Parliament criminalising denial of the genocide caused organised crime and many other areas. He says that the upcoming a huge outcry in Turkey, with Prime Minister Erdogan saying that it German presidency should work towards a consensus in 2007 and was “shameful, a black stain on freedom of expression.” The Turkish that corrections and amendments to the old text should be agreed Foreign Minister, Abdullah Gül, said that the law would profoundly upon by 2008, by which time a new ratification process could begin. damage Franco–Turkish relations and he expressed the hope that Leinen says that he wants the new treaty to be ratified by referendum French politicians would prevent the bill from entering definitely into – but by a single referendum taking place simultaneously across the law. [Natalie Nougayrède, Le Monde, 17 October 2006] whole of Europe, and that the ‘majority’ should be of voters as well as of states. (This would be tantamount to destroying national Dutch elections on Europe sovereignty before the vote had even taken place.) Leinen said it was More than a year after the Netherlands voted against the European quite wrong for the will of “the majority” to be thwarted by ‘No’ votes Constitution, the country is preparing for a general election on in “one or two states.” Asked whether he thought there should be a 22 November. The various parties seem to have agreed amongst referendum in Austria, where anti-European feeling is among the themselves not to raise the European issue during the campaign: the highest in the EU, Leinen said that there should be no popular vote leaders of all the main parties campaigned for a ‘Yes’ vote. In this since the Constitution had already been ratified by the country’s campaign, they are keeping quiet or calling for ‘reforms’ in the EU. Parliament. [Der Standard, 20 October 2006] They are also keeping quiet about the question of Turkish accession, At a meeting of the heads of Socialist parliamentary groups in since popular opposition to Turkey was one of the main reasons why Europe, the French Socialists were in a minority of one when they said the Dutch voted against the Constitution (which the party leaders that the Constitution had to be abandoned. Whether they had been in presented as essential for EU enlargement). The issue of Turkish favour or against it at the time, they all agreed with Jean–Marc membership has nonetheless arisen during the campaign since Ayrault, President of the French Socialist group in the National candidates of Turkish origin from two mainstream parties have been Assembly, who said, “It is not possible to make our citizens vote again struck off their respective party lists because they have refused to on the same text.” By contrast, all the representatives of all the other recognise the genocide of Armenians in Turkey in 1915. The issue of Socialist groups, especially those from countries that have actually the genocide arose when a small Protestant party put down a bill in ratified the Constitution, said they want to press on. They refuse to the Dutch Parliament which would have made denial of the Armenian accept that the Constitution is now a dead letter. Leinen said, “It is very genocide a crime, just as the French National Assembly has recently dangerous to say that the treaty is dead” – even though Germany itself done. Feelings are running high in the 370,000 Turkish community in has not ratified the Constitution since, although it was approved by Holland, as they are among ordinary Dutch people, who shocked at the German Parliament, it has been successfully stalled by an appeal the double-murders of Pim Fortuyn and Theo Van Gogh, the latter by by anti-Constitution campaigners to the Federal Constitutional a Muslim extremist. The Muslim issue was also at the centre of a Court. One Spanish socialist, Carlos Carnero, shouted at his French scandal involving a Dutch MP from Somalia, Ayaan Hirsi Ali, a friend colleagues, “You cannot impose your national debate on the rest of us in of Van Gogh’s, who was threatened with expulsion from the Nether- Europe! This is not the 1950s!” A Portuguese MEP said that the third lands after it appeared that she had lied about being persecuted by part of the Constitution was the most important, even though it was Islamists in her home country in order to obtain Dutch citizenship. this part, its political content, which was most hotly contested by the [Jean-Pierre Stroobants, Le Monde, 18 October 2006] opponents of the Constitution in France. Robert Badinter, the French Lepper back in government constitutional expert, reminded the audience that the Constitution’s The anti-EU Self-Defence Party has been reintegrated into the own text stipulated that, subject to ratification, it would enter into governing coalition in Poland twenty-five days after leaving it. On 21 force on 1 November 2006. “That is the Day of the Dead!” interjected a September, the Prime Minister, Jaroslaw Kaczynski, sacked the head Luxembourg deputy. [Jean-Dominique Merchet, Libération, 20 of Self-Defence, Andrzej Lepper, who had protested against the 2007 October 2006] budget and against sending 900 extra Polish soldiers to Afghanistan. But on 16 October this decision was rescinded and Lepper has been Hans-Peter Martin’s battle with OLAF continues brought back into the fold. Thus early elections have been avoided. The battle between the anti-corruption MEP, Hans-Peter Martin, and [Célia Chauffour, Le Monde, 18 October 2006] the EU Commission’s so-called anti-corruption unit, OLAF, continue. Although OLAF is supposed to fight corruption, it has in fact been EU Constitution on track persecuting Hans-Peter Martin ever since he took up his one-man The chairman of the European Parliament’s Constitution Committee, battle against institutionalised graft in the EU. OLAF has accused the German Socialist, Jo Leinen, has suggested that France and the Martin of misusing €190,000 of money from his secretarial budget Netherlands vote again on the European Constitution, which they and it has sent its claims to the Austrian authorities with a view to both rejected in referenda last year. Citing the precedents of Denmark encouraging them to investigate the matter further. Martin, who has and Ireland, both of which voted again (respectively, on Maastricht legal immunity as a Member of the European Parliament, has and Nice) after having got the answer ‘wrong’ in 1992 and 2001, virulently rejected the claims of any irregularities, accusing OLAF of Leinen says that the same approach could be adopted for France and conducting a witch-hunt against him and denouncing its accusation the Netherlands. “It could be,” he says, “that the price which will have to as “a joke” and “a farce”. [Der Standard, 12 & 19 October 2006]

Jump to Contents 22 The European Journal Intelligence Digest November 2006

Merkel online the 2004 ‘Orange Revolution’, has been marginalised from Ukrainian The German Chancellor, Angela Merkel, has used the internet to politics. At the height of the crisis, indeed, the West pressurised present her policies for the German presidency of the EU which starts Ukraine into a radical change to its Constitution. The result of the on 1 January 2007. Since June, she has been posting a brief video change was that most of the President’s powers were taken away from message on www.bundeskanzlerin.de and in her message of 7 his office and given to the Prime Minister instead. Now that October she devoted the podcast to the EU. She listed five priorities Yanukovich has become Prime Minister, it is he, not Yushchenko, who for bringing Europe closer to its citizens and, referring to the 50th really runs Ukraine. The result is that the man whom the Western anniversary of the Treaty of Rome, said that Europeans had to rally media pushed forward as the most popular politician since John F. around their ‘common values’. However, she remained coy about the Kennedy has in fact slumped into the nobody he always was. And the politically sensitive issue of Turkish membership, saying only that result of that is that few Ukrainians even care any more when he turns there would be no further enlargement for a while. She said that up at public functions. On the occasion of a visit to Kiev by the Europe needed ‘a constitutional treaty’, confirming thereby that she American film director, Steven Spielberg – who is making a remains attached to her well-known goal of reviving the defunct text. documentary of the massacre of Jews by the Nazis in 1941 – She also repeated a lot of bromides about improving Europe’s Yushchenko turned up unexpectedly for the première – and few competitivity. people even recognised him. [Agence France Presse, 20 October 2006; Le Monde, 23 October 2006] Italian spooks ‘knew about CIA kidnapping’ Public support for Yushchenko has now fallen to 9.5 per cent in the Not only did the Italian secret services know about the CIA’s plans to opinion polls. Five of his allies in government have resigned. At the kidnap the Egyptian cleric, Abu Omar, in a hit which occurred on the same time, Mr Yanukovich seems to be repairing his country’s streets of Milan in 2003, but they also participated in the operation. damaged relations with Russia. On the occasion of a visit to Kiev by This is the firm belief of the prosecutors who concluded their the Russian Prime Minister, Mikhail Fradkov, Yanukovich indicated investigation into the affair on 7 October. The report names eight that the two countries were on the way to resolving their differences agents of SISMI, the Italian security services, including the chief, over the price of gas. Yanukovich said that the events of winter 2005- Nicolo Pollari, and his deputy. The prosecuting magistrates claim that 2006 (when the gas supply was temporarily cut off because Ukraine Pollari knew about the operation and agreed to help out. Abu Omar, refused to pay the bill and was accused of siphoning off transit gas) an imam in a Milan mosque, was suspected of links to Al-Qaida and had brought the question of gas supplies to “a high level of politicis- was kidnapped on 17 February 2003. He was taken to the American ation” but that things had now stabilised and that this stability was air base at Aviano and on to Ramstein in Germany, another US base, what the Ukrainian economy needed. He also gave guarantees that from where he was flown to Egypt. He claims that he was tortured transit arrangements would be respected. “We will certainly guarantee there. Four other Italians are under investigation for complicity in the stable volumes and look to it that the gas transportation system should affair: two journalists from the daily, Libero, and two SISMI agents be operating and our partners in the European Union should not who tapped the phones of journalists from La Repubblica. experience the discomfort they experienced last winter,” Ya nu ko v i c h Claudio Scajola, chairman of the committee which controls the said. For his part, the Russian premier said that gas price rises were secret services, has said that Enrico Micheli, the Deputy Minister with not on the agenda in their bilateral discussions. The prospect of a responsibility for the services, declared the matter ‘a state secret’ in continuing gas war seems therefore to have been averted. [Itar-Tass, response to the committee’s questions on whether the Italian author- 24 October 2006] ities knew about the kidnapping plan. By making this declaration, the Prodi Government is continuing the policy of state secrecy imposed Peacekeepers by the Berlusconi Government which it succeeded. [Corriere della The German Foreign Minister, Frank–Walter Steinmeier, has said he sera, 25 October 2006] was deeply shocked by the “disgusting” photographs published in the German press which show German soldiers in Afghanistan Spain & Portugal for common immigration policy desecrating human skulls. Germany has a large contingent of soldiers Lisbon and Madrid have said that they want to see the EU adopt a in Afghanistan as part of the international military force there and common policy on immigration. Both countries are under pressure their presence has been a matter of considerable controversy in a from a huge influx of refugees from Africa, more than 23,000 of which country unused (since the end of the Second World War) to sending have landed on the coast of Spain since January. Speaking on 20 its soldiers into active combat. The pictures were taken in early 2003 September at a joint press conference in Lisbon, the Spanish and during a patrol in the Kabul area and published in the mass Portuguese Europe Ministers said that solidarity and cohesion were circulation Bild newspaper. The soldiers in question have been ‘fundamental’ EU values and that this meant that all EU states had to identified and are being prosecuted. The pictures show a soldier share the burdens their countries were carrying. The same appeal had about to stick wire through a skull as if to hang it up; another shows a already been made by the French Interior Minister, Nicolas Sarkozy, soldier with his penis in his left hand and the skull in his right; a third who on 15 September said that the unanimity rule had to be shows the skull on a tank. It is not clear whether the skull is of an abandoned where immigration was concerned, i.e. that the national Afghan or perhaps a Soviet soldier from the 1979 occupation. The veto had to be dropped, but he criticised the decision of Spain in 2005 German Defence Minister, Franz Josef Jung, said that this kind of and Italy in 2002 to legalise hundreds of thousands of illegal behaviour was totally unacceptable and that it represented the direct immigrants, saying that this had only encouraged the traffickers. [Le opposite of what the German army in Afghanistan is supposed to Monde, 21 September 2006] stand for. [Bild-Zeitung, 25 October 2006] Yushchenko? Who’s he? Lustration in Poland Following the victory of his rival, Viktor Yanukovich, in the recent On 18 October, the Polish Parliament voted for a new law on general election, the Ukrainian President, , ‘hero’ of lustration. According to the new law, an affidavit (or denunciation)

Jump to Contents 23 Mo Th The European Journal Intelligence Digest November 2006 can be submitted to the Institute for National Memory against it has not been approached by this committee and that France will members of Parliament, members of the Government and of the civil cooperate with the International Criminal Tribunal for Rwanda. service, executives in state companies, local politicians, prosecutors, There are cases currently before the French military courts alleging head masters and mistresses, university rectors and journalists, if complicity in genocide and a senior judge is conducting an they collaborated with the Communist secret police. A successful investigation into the attack in April 1994 against the aircraft which denunciation can lead to a person losing his job. The law also enlarges was carrying the Rwandan President, Juvenal Habyarimana. [Le the definition of ‘agent’ by referring not to ‘secret collaborators’ but to Figaro, 25 October 2006] ‘personal sources’. This new definition could include people who were approached for information by the secret police but who did not German immigrant workers in Ireland necessarily work for them. The Kaczynski twins are opposed to An association of German builders has been created in order to opening all the Institute’s archives; the law has to be signed by the promote their services in Ireland. The ‘German Crafts Association’ President, Lech Kaczynski, for it to enter into force. He has fifteen days has been set up by builders in Hessen and the Rhineland Palatinate to to sign it or send it to the constitutional court for review. [Célia market the skills of German carpenters, painters and builders in Chauffour, Le Monde,25 October 2006] Ireland. The construction industry has been booming in Ireland for ages but, according to the Germans, many of the builders there are not French judge their politicians severely qualified. The Germans are intending to market their reputation for 60 per cent of French people – according to a poll – think that their high quality work, and to ensure that, when a builder puts in a politicians are ‘generally corrupt’ but only 24 per cent firmly condemn cupboard, the door shuts or when a wall is painted it is done so their dishonesty. In other words, they are more intransigent about smoothly. The German builders had a stand at the recent Irish their politicians in theory than in practice. The 60 per cent figure Building Exhibition and they claim that there was huge interest. One contrasts with the 38 per cent who thought their politicians ‘generally of the specialities that the Germans are marketing is in building corrupt’ in 1977. In 1991, the figure was 65 per cent. 78 per cent say houses which are economic in their consumption of energy. This is that their ministers are corrupt; 69.1 per cent think that the President expected to be popular in a country in which energy prices have of the Republic is corrupt; 68 per cent for deputies to the National doubled in recent years. [Laura Stoll, Frankfurter Allgemeine Zeitung, Assembly. 84.9 per cent think that the courts are too soft on ministers 25 October 2006] and 78.1 per cent think that they are too soft on national deputies. 56 per cent think that mayors are treated too lightly. 96.5 per cent say Russia reluctant on Kosovo independence they would not vote for a politician who had been implicated in a Russia is in disagreement with the other Western members of the financial scandal even if he was very effective. However, this apparent Contact Group on Kosovo about whether the province should be severity in their judgements contrasts with the answers to other made formally independent of Serbia. The USA, France, Italy and questions. 72.3 per cent say there is little or nothing wrong with going Germany want to suggest to the Security Council that Kosovo be to see a deputy to obtain a place for one’s child in a crèche; 70.2 per made independent, even though Belgrade is strongly opposed to this. cent say there is nothing wrong soliciting a deputy to find a job for a Moscow, however, wants to continue negotiations so that a result is friend. Even taking out membership of a political party only in order found which is acceptable to both sides. In the middle of September, to obtain social housing is considered all right by 49 per cent of those Russia had indicated that it would veto a resolution on independence. asked. [Le Figaro, 20 October 2006] [N. Mappes-Niediek, Frankfurter Rundschau, 26 October 2006] Many Russians resent the Western pressure for independence for Kosovo, France implicated in Rwanda genocide especially when those same Westerners are opposed to independence A committee has been set up in Kigali, Rwanda, officially charged by Transnistria, a secessionist province of Moldova which has fewer with “collecting proof about France’s role in the genocide” which took historical ties with Moldova than Kosovo does with Serbia. The issue place in 1994. Composed of historians and jurists, the committee is is further complicated by the fact that the Bosnian Serbs would like to supposed to hear the testimony of 25 witnesses in the first week. It will declare independence from Bosnia–Herzegovina. The Western- then pursue its investigations abroad and produce a report in six backed High Representative who governs Bosnia, however, has said months’ time. According to the committee chairman, Jean de Dieu that any referendum on independence would be null and void. Other Mucyo, a former Minister of Justice, “the report will determine whether politicians in Bosnia who have campaigned for more autonomy, for or not a judicial procedure should be undertaken at the International instance the former Bosnian Croat leader, Ante Jelavic, have been Court of Justice.” Situated in a room near to the office of the Prime imprisoned for anti-constitutional activities. Minister, the committee’s first witnesses were Jacques Bihozagara, one of the leaders of the RPF rebellion (the RPF is the party which EU decides not to legislate on alcohol currently holds power in Rwanda) who was Ambassador of Rwanda The European Commission has abandoned plans to force alcohol to France after the genocide, and Augustin Iyamulemye, a Senator producers to label bottles with health warnings similar to the ones who was a senior officer in the Rwandan secret services from 1993 to they have imposed on cigarette packets. It has decided instead to 1994. encourage the Member States to take their own measures against It will also hear testimony from people who lived in the zone where alcohol abuse. It had been suggested that the EU would require beer the military-humanitarian operation ‘Turquoise’ was launched by and wine bottles to carry health warnings, or that the EU should France three months after the genocide started. In his hearing, introduce its own system for licensing alcohol outlets. These Ambassador Bihozagara attacked France for having “organised a proposals met with a storm of protest, not least in Germany. The campaign to denigrate and demonise the RPF” and for then having health Commissar, Markos Kyprianou, expressed frustration and “protected those who committed genocide.” He then attacked France for anger at what he said was “the aggressiveness of the lobby campaign having “preached the existence of a double genocide” (i.e. of Hutus by waged by part of the alcohol industry against our strategy.” [Frankfurter Tutsis as well as the other way around). The Quai d’Orsay has said that Allgemeine Zeitung, 24 October 2006]

Jump to Contents 24 The European Journal And Finally… November 2006

The Impact of British Eurosceptic Groups 1990-97 In the last of a 3-part series, John Mehrzad investigates the major players in British . JANUARY 1995 Major may have viewed them as “the barmy with most Eurosceptic MPs between 1993- army” 12 but the sceptics had built a team 97, Holmes cannot recall anyone intimating to round more than oddballs. The Bruges that they simply wanted to “get rid of MAY 1997 Group “was there full time” providing Major.” 20 These recollections suggest, there- resources, expertise into different ideas of fore, that sceptic motivations were not y the beginning of 1995, Eurosceptic policy and Martin Holmes became the based primarily on differences of person- Bfactions had been ‘combat trained’.1 former Minister’s European Policy Advis- ality but on a question of policy towards Structures were in place and had been used or.13 Some of the Tory press also endorsed Europe. well in the past. Metaphorical ideological Redwood. The Daily Mail was unhelpful to By coming face-to-face with groups and trenches had also been dug around the issue Major, The Times was gunning for a dream putting himself up for re-election, Major of Europe. The combination of conviction, Heseltine-Portillo run-off, while Simon had tried to address divisions. In October, experience and energy were potent Heffer at promised this theme continued with an arranged weapons that organisations were not afraid Redwood a great run.14 Indeed, such was meeting with Goldsmith at the Party to deploy to pursue their aims. With the the importance of Eurosceptic organis- Treasurer, Charles Hambro’s flat, following general election approaching rapidly, an ations that both candidates met the 92 an impromptu tête à tête at Margaret assault for control of the Conservative Party Group on the eve of the election although Thatcher’s birthday celebrations at Clar- had begun. the occasion “passed off uneventfully.” 15 idges. This meeting did not extract from As was his way, John Major continued to Major won the contest with 218 votes to 89 Major an early commitment to a refer- follow an attempted policy of compromise but the gamble had not worked. The size of endum on the single currency but it did with sceptics over the first half of the year. Redwood’s vote meant that there were many demonstrate the perceived importance of On 3 February 1995, at a Conservative Way storm clouds ahead. Goldsmith as “why otherwise would they Forward (CWF) dinner, the Prime Minister have met?” 21 With enormous personal diplomatically stated that, “we will aim for wealth, connections galore, a fanatical a more flexible European Union… Nor will Sceptic motivations were attitude against Europe and an intention to we agree to a more prescriptive, centralist not based primarily on stand candidates against Tories, the threat Europe, or removal of the nation states’ was obvious. Further correspondence was veto.” 2 The most pivotal meeting with differences of personality exchanged in March 1996 by telephone and Eurosceptics, however, occurred on 12 June but on a question of policy letter bringing agreement “that Europe when Major agreed to address Fresh Start, should be built around the nation state” but with Michael Spicer in the Chair. This event towards Europe again nothing on a referendum.22 soon descended into a slagging match with Goldsmith had also been busy meeting Major “heckled and interrupted.” 3 He saw The leadership election had brought other political figures. He met Lamont at the meeting “as rigged as a scaffold” with up an important question; was sceptic the Dorchester and at Wilton Place in early attacks rehearsed.4 Overall, “the meeting was opposition to Major based on personality as 1996.23 In April, he also had a meeting with a disaster.” 5 Desperate times now called for much as policy? The Times’ Peter Riddell Redwood at Claridges.24 Most significantly, desperate action. observed that “some are motivated by hatred he wrote to all Tory candidates, whether Ten days later, on 22 June, Major, of John Major: some by their passionate inside or outside the House, and a number believing himself to be in “a coalition opposition to the European Union.” 16 Alan of Labour ones telling them the only way to government of my own,” 6 announced his Clark has reflected that opposition was avoid a Referendum Party candidate resignation with the intention to stand for based on policy before personality as, quite standing in their constituency would be to re-election. This was a direct call for his simply, sceptics wanted Major to jump off commit themselves to an immediate opponents “to put up or shut up.” 7 It was the proverbial fence on Europe.17 Addition- referendum on the single currency.25 This clear that he was referring to sceptics when ally, hardly any of the Referendum Party led to a great deal of angst amongst Tory stating “for the last three years I’ve been candidates came out of the Conservative MPs with small majorities. opposed by a small minority in our party.” 8 Party. For them, “some intra-Tory Party One of the oft-repeated criticisms of However, this alleged ‘small minority’ was conflict was not the cause of what they were Major was that he chose not to command sufficiently large to run their own candidate doing.” 18 All other organisations have also the decision-making process in Cabinet as – No Turning Back member John Redwood. strongly refuted accusations that they felt an his predecessor had done. At times, how- Akin to the preparations made for votes animus first and foremost against Major. ever, the course of events was not in his on Europe, Redwood’s campaign had been The Bruges Group has pointed out that control. On 25 March 1996, the EU Veter- planned months in advance.9 In May, the many of their associates, like Lamont and inary Committee imposed a temporary ban ‘whipless nine’ were returned to the fold Duncan, were actually part of the campaign on the export of British beef products to the without conditions, which was both “gullible team in 1990 that put Major into power. rest of the world following the publication and foolish.” 10 Leading figures, such as Their resentment was not personal but of the possible link between Bovine Gorman, Gill and Marlow regrouped and based on a feeling that he had sided with Spongiform Encephalopathy (BSE) and emerged as the ‘whippers-in’ for Redwood.11 ‘enthusiasts’. 19 Similarly, in conversation Creutzfeldt–Jakob Disease (CJD). This

Jump to Contents 25 The European Journal And Finally… November 2006 decision caused outrage in the Conservative also argued that if “the majority of Tory pragmatic approach aimed at making the Party and further inflamed British opinion candidates in winnable seats pledge in their Group’s overwhelming Conservative mem- against the EU with the virtual closure of own personal election addresses that they will bership reflect on Europe, not party politics. the beef industry.26 Subsequently, on 21 fight against a Single Currency in the lifetime Thirdly, there were sceptic parties, which May, Major decided that Britain would of the next Parliament … then it will be involved themselves in the contest directly. withhold consent from EU decisions that obvious to voters that no Tory Cabinet could required unanimous approval until a ever recommend such a sell-out to For both parties, however, compromise on the beef problem had been Parliament.” 32 the mere fact that Major reached. This issue, additionally, only When Conservative Central Office finally served to increase the vehemence of Euro- published election addresses over 100 had decided to commit to sceptic attitudes towards Europe. contained a commitment that the candidate a referendum on the single By 1996, The Bruges Group had begun to concerned would not sign up to a single currency was perceived as reconsider their attitude towards Europe. currency. Considering that the Cabinet had Whereas the policy of reform of the EU had announced on 3 April that the Tories would the greatest success of been articulated (and the EU flag had flown hold a referendum on the euro, these declar- their involvement in the on platforms) in the early 1990s, it was now ations “made a mockery of any attempt to political scene accepted that if a full renegotiation of find a common approach.” 33 Eurosceptics Britain’s involvement with Europe was not and the Tory press were unimpressed by the possible then Britain ought to withdraw referendum decision and “kept hammering The impact of Eurosceptic parties in the altogether.27 Thatcher also spoke out about on … to secure sworn testimony from Major 1997 general election was limited. In the the importance of sceptic organisations and that he would not enter EMU.” 34 In run-up to the contest, this factor was a the necessity to fund them. In June, 74 December, the 92 Group adopted a similar source of much irritation for the backbench Tories also supported ’s position, despite the intervention of Referendum Party. Lamont has suggested Referendum Bill, which called for “a Heseltine,35 with an announcement that that, “if Goldsmith had wanted to succeed he plebiscite on whether Britain should retain its “this is not an economic issue. If you believe should have done more to get daily coverage powers of government and not become part in a sovereign Britain you must be against the … in newspapers and on TV.” 42 However, of a federal Europe or join a single currency.” single currency.” 36 In April 1997, Marcus the simple fact remained that the Tory press Summer 1996 marked the last-ditch Fox, Chairman of the 1922 Committee, saw the Referendum Party as a threat to the attempt by Major to resolve rifts. His joined the rebels when stating, “I am totally Conservative voter base and would not reshuffle, however, started inauspiciously. opposed to a federal Europe, and our national positively report on its actions.43 In July, the Paymaster General, David identity must be maintained at all costs.” 37 Additionally, Goldsmith took the BBC to Heathcoat–Amory, resigned, convinced These sentiments were taken up in Cabinet court claiming that it should have been that “joining a single currency would be by Howard, Lilley and other Eurosceptic granted the same number of party political disastrous both politically and economically Ministers38 and Major was forced to modify broadcasts as the main parties.44 Ultimately, … and the Government’s equivocation on the Tories’ position on Europe approving the Party had to create its own publicity this issue is confusing to the public and our the Daily Telegraph headline ‘Major plans to networks through the local press, by supporters.” 28 Like Lamont before him, he hold out against the Euro’.39 sending out 750,000 videotapes to the immediately joined all sceptic organisations Two weeks before the final contest, Blair general public and by compiling a database and The Bruges Group launched his pam- announced that, “there are two Conservative of some 250,000 individuals.45 It eventually phlet, A Single European Currency: Why the Parties fighting this election. John Major is in stood 445 candidates with estimated overall United Kingdom must say ‘No’ at his resign- charge of neither of them.” 40 The truth was costs of between £20–30 million.46 The ation speech. Major, though, did promote that there were far more than two Party, though, won no seats with 2.86 per sceptics to positions of authority in a recon- organisations fighting over Tory voters. cent of the national vote and lost 403 ciliatory gesture. The most notable was First, sceptic, but not necessarily enthusiast deposits.47 This percentage may not seem Fresh Start member , the Conservative, parliamentary organisations significant but was, in fact, far greater than future chairman of UKIP, who became fought to keep the Tories in power. the standard return for sceptic parties at Senior Whip “because of European convict- Secondly, non-party organisations also previous contests. The figure was also ion rather than talent.” 29 Nevertheless, the involved themselves in the electoral process crucial in a number of marginal seats. Party continued to be “seen as deeply but only in an indirect sense. The Bruges Although this remains debatable, it is divided and incapable of governing.” 30 Group “did not tell members how to vote” but, estimated that the Referendum Party’s While Major toiled under the full glare of when pressed on the subject by adherents, intervention contributed to the loss of up to the media, Eurosceptic organisations con- Holmes did suggest that it depended on the 50 Tory seats.48 UKIP, too, with 183 tinued to advance their aims in an organ- constituency: “If I was living in Grimsby, I’d candidates won no seats and less than 0.4 ised fashion. In October, the Referendum obviously vote for the Labour Eurosceptic, per cent of the national vote. For both Party held the largest conference of any Austin Mitchell. If I lived in Ludlow, I’d vote parties, however, the mere fact that Major political party in Brighton with nearly 6,000 for the Tory, Chris Gill. If I lived in a had decided to commit to a referendum on people in attendance. There, Goldsmith constituency where the Tory was a Heathite the single currency – as Labour and the outlined plans to stand at least 400 and the Labour candidate was a federalist, Liberal Democrats did subsequently – was candidates at the next election.31 CWF, in then I might look at the candidates of the perceived as the greatest success of their the autumn issue of its magazine, Forward, Referendum Party and UKIP.” 41 This was a involvement in the political scene.

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Ultimately, however, the battle of ideas committee rooms were left unmanned and 17 Alan Clark, The Tories, London, Phoenix, pp. boiled down to the sentiments of a single understrength.55 For example, in Sutton and 1998, p. 509. group on Europe – the British. Both sides of Cheam, the Referendum Party campaign 18 Ibid. the divide claimed to represent the true was said to have been “considerably more 19 Collett, interview. convictions of this sphere. Sceptic organis- impressive” than that of the sitting Tory MP, 20 Holmes, interview. ations even unequivocally declared that “the Olga Maitland, who duly lost.56 21 Glendening, interview. main task was to convert the Tory party-base 22 Op. cit. Major, p. 704. to Euroscepticism.” 49 In a specific sense, Tory Conclusion 23 Op. cit. Lamont, pp. 466-7. voters did feel more passionately about the In a more general sense, there has also been 24 Op. cit. Clark, p. 527. concept of losing national sovereignty. A an ongoing polemic about whether the 25 Glendening, interview. 1996 poll showed that whereas only 42 per British general public really cared about 26 Op. cit. Major, pp. 651-3. cent of Labour supporters were concerned Europe to the extent that sceptic organis- 27 Collett, interview. about such an outcome, 61 per cent of ations thought they did. In reflection, 28 David Heathcoat–Amory in , 23 Conservatives were.50 UKIP knew of these Holmes believed that both the sceptics and July 1996. statistics and felt Europe “was certainly one enthusiasts incorrectly thought that people 29 Knapman would like to believe it was the other of the main issues for lots of Tories.” 51 Their regarded Europe as the number one issue. way around but agreed that this was not the reasoning that the decrease in Party mem- In his words, “this was not actually true and case, interview. bership and full-time agents over the 1990s this was a lesson for both sides … as it did not 30 John Turner, The Tories and Europe, Manchester, also mirrored party-base concern with the affect their [the public’s] material interest.” 57 Manchester University Press, 2000, p. 213. Party’s approach to Europe, though, stretch- Furthermore, he believed that the whole 31 Glendening, interview. ed the argument too far.52 Membership may question of the single currency had been 32 Conservative Way Forward, Forward, autumn have dropped from 750,000 to 300,000 effectively ring-fenced by Tory and Labour 1996. between 1990 and 1997 but this was a commitments to hold a referendum, which 33 Op. cit. Heseltine, p. 520. downward trend that had begun in the mid- allowed “people to consider housing, the 34 Hugo Young, This Blessed Plot, London, Mac- 1950s when membership was at 3 million. health service, employment, inflation, etc. millan, 1999, p. 465. Similarly, this was a universal trend as instead.” 58Others, however, have argued to 35 Op. cit. Heseltine, p. 525. Labour membership had also decreased the contrary. Roger Knapman accepted that 36 Observer, 8 December 1996. over this period. The consequences of “people will always talk about education, 37 Marcus Fox in the Daily Express, 16 April 1997. desertions were, nevertheless, felt in other health and the economy” but “they also care 38 Op. cit. Turner, p. 192. areas. about the future of the country.” 59 Away from 39 Daily Telegraph, 9 December 1996. generalisms, Lamont has recalled that 40 Seldon, op.cit., p. 723. The party base was simply “people on doorsteps” often quizzed him over 41 Holmes, interview. Europe but that parliamentary arguments 42 Op. cit. Lamont, p. 468. not sufficiently concerned made the Conservative Party “appear a one- 43 See Chapter II, p. 31 with the issue of Europe issue party unconcerned with other areas.” 60 44 Glendening, interview. Overall, as Major has stated, “voters expect 45 Ibid. to undermine Major as unity and punish division.” 61 46 Ibid. the parliamentary Party 47 House of Commons Library, 1997 General 1 Alan Duncan in Major, op.cit., p. 347. Election Results. had done 2 Major, extract from speech delivered to Con- 48 Glendening, interview. servative Way Forward dinner, 3 February 1995. 49 Collett, Glendening, Holmes and Sked have all At the local elections of 1995, the 3 Norman Lamont, In Office, London, Warner, mentioned this aim, interviews. Conservatives lost over 2,000 seats. In April 1999, p. 433. 50 ICM Research, Poll Review, 1996. 1996, the Tories had a majority of over 7,000 4 John Major, The Autobiography, London, Harper 51 Sked, interview. overturned in favour of Labour in East Collins, 2000, p. 614. 52 Ibid. Staffordshire while, in February 1997, a 5 bid, p. 615 53 By-Election results of the 1992-1997 Parliament. majority of 8,000 was lost at the South 6 Major at G7 Summit, Halifax, Nova Scotia, June 54 Op. cit. Major, p. 639. Wirral by-election. Voters, however, did not 1995 55 Op. cit. Clark, p. 531. endorse sceptic parties. UKIP achieved only 7 Major, resignation speech delivered in garden 56 Glendening, interview. 2.9 per cent and 0.9 per cent in both by- of 10 Downing Street, 22 June 1995 57 Holmes, interview. elections respectively.53 A Sunday Express 8 Ibid. 58 Ibid. poll of constituency chairmen also gave 9 Op. cit. Lamont, p. 439. 59 Knapman, interview. Major 96 per cent support during the 10 Major speaking on The Major Years, part 3. 60 Lamont, interview. leadership contest.54 The party base was 11 Michael Heseltine, Life in the Jungle, London, 61 Op. cit. Major, p. 691. simply not sufficiently concerned with the Coronet, p. 476. issue of Europe to undermine Major as the 12 Op. cit. Major, p. 634. John Mehrzad was awarded a distinction for parliamentary Party had done. The loss of 13 Collett, interview. a Masters in modern European political manpower did have an important conse- 14 Op. cit. Major, pp. 618, 635, 641. history at Keble , Oxford. He is now a quence, nevertheless, for the Party at the 15 Op cit. Major, p. 641. barrister of England and Wales and an oc- general election as polling station exits and 16 Op.cit., Major, p. 607. casional speaker for Youth for a Free Europe.

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intellectual cache; breakthroughs in the BOOK REVIEWS natural sciences were universally admired; philosophy and literature were succès d’estimes; and opera, orchestral music and the performing arts were genuinely and Don’t Mention the War: widely enjoyed. This sense of cultural affin- The British and the Germans since 1890 ity was accentuated by successive Germanic monarchs succeeding to the British throne John Ramsden, Little, Brown, 2006, 433 pp, (despite the fact that a few of them did not ISBN 13 978 0 316 86122 9, £20.00 even speak the King’s English on their Reviewed by David Wilson coronation). Needless to say, this admir- ation was not universal. While Carlyle he 2006 World Cup, of sad and not the half of it. Or, as our more prosaic regarded “Germanhood all along as a Tinfamous memory, began with one football fans would have it, “Two World quality, not a fault,” Macaulay disparaged the dim-witted wiseacre announcing, “That, Wars and One World Cup.” German philosophical mindset – he had within living memory, having beaten the particular dislike for Hegel – and sneered, Germans twice at their national game and “An acre of Middlesex is better than a once at our own; it is high time we beat them Germany has become so Principality in Utopia.” again at ours.” Yet, the World Cup ended neutered and quiescent in With Bismarck’s unification of a Ger- with most English fans supporting geopolitical terms that it many in the mid-19th Century, Prussian Germany and not just because they were militarism came to dominate the new Great playing Argentina. Outside the ground at has virtually disappeared European Power. This cuckoo in the nest of the Germany v. Argentina quarter-final a off the British radar… We the heartland of Europe upset the balance group of English fans spotted an Argentine of power on the continent which – even news crew (complete with the obligatory now tend to criticise before the Congress of Vienna – it had been bronzed anchorman with regulation slicked contemporary Germany British policy to maintain. Yet it was only back glossy hair) and immediately struck when the hubris of Wilhelmine imperial up the chant ‘Malvinas Anglettere’. for its neutralism, if not ambition led Germany to challenge the Incongruously, this was taken up by the downright pacifism. Royal Navy’s rule of the world’s waves – a massed ranks of Germans and sung with struggle that led to the first modern arms cheerful abandon all through the bierkeller- race – that things started to get nasty. This fuelled night. This fellow feeling was not Professor Ramsden’s question is also a problem of preventing a hegemon assum- unreciprocated throughout the rest of the more specific one: will we ever forgive the ing suzerainty on continental Europe is the competition, even the latest variation on a Hun? In one sense, Germany has become so same problem that every British statesman hardy perennial joke, “Who do you think you neutered and quiescent in geopolitical from Castlereagh to Palmerston to Sir are kidding, Mr Klinsmann,” fell a little flat. terms that it has virtually disappeared off Edward Grey has faced. The vast majority of England fans support- the British radar. If anything, despite the Grey put it like this, “If the German fleet ed Germany against the eventual winners obligatory and admittedly tiresome auto- ever becomes superior to ours, the German Italy in the semi-final. Well, didn’t that feel dictat jokes regarding Teutonic militarism, army can conquer this country. There is no strange. we now tend to criticise contemporary corresponding risk of this kind to Germany.” Well, that’s enough about football (for the Germany for its neutralism, if not down- The naval theorist, Admiral Alfred T. time being). Don’t Mention the War is a right pacifism. However, there are strategic Mahan, used to argue that given that the better book than some of its reviewers have stirrings in Mitteleuropa and, despite seas and the great oceans are continuous given it credit; not that it has been meanly appearances to the contrary, neither of and uninterrupted and given that sea reviewed, far from it. Professor John these countries lives merely through their transport was more effective than land Ramsden, the distinguished historian of the shared pasts of mutual loathing or merely transport, whoever controlled the sea, and Conservative Party,1 has written a witty and through the displacement activity of war by was possessed of an insular and defensible provocative thesis on our German problem other means that is international football. home nation, would ascend to primacy in (and, in the process, the Germans’ English Enmity is the order of the day, but it was not world affairs. Though not formulated at problem). Why does Britain – or, again, always like this. such a theoretical level, this was roughly the more accurately, England – have such a In 1881, The Times declared in a fit of view of Her Majesty’s Government, whereas problem with the greatest Central European Teutonic fellow feeling (based on an Sir Halford Mackinder based his theory of power? The question, of course, virtually assumed common racial ancestry) that, primacy on land domination: “Who rules answers itself. Professor Norman Stone, our “Germany does not excite in any class East Europe commands the Heartland; Who most eminent historian of Mitteleuropa, amongst us the slightest feeling of distrust or rules the Heartland commands the World- when asked to explain the moral catas- antipathy.” Indeed, British attitudes towards Island; Who rules the World-Island trophe of the first half of the European 20th Germany excited no great antipathy until commands the world.” 2 This was roughly the Century, retorted in just four simple words the Edwardian Era and even then Germanic view of the Wilhelmine General Staff. – and with some singular emphasis, “The. high culture was still hugely admired: the These strategic concerns were given Germans. Went. Ape”. Stürm und Drang was new Rilkean historiography had particular dramatic popular expression with the

Jump to Contents 28 The European Journal And Finally… November 2006 publication of Erskine Childers’ sensational ern civilisation; the Germany of Goethe and romantic Germanophilia and returned yet thriller, The Riddle of the Sands (1903). Beethoven had metastasised into the again to the idealisation of the likes of Goe- Childers’ book, which caused something of barbarian Hun. The Anglican Church was the and Beethoven. Robert ‘Van’ Vansittart a mass Greuelpropoganda at the time, preaching from its national pulpit that, “We (then the government’s chief diplomatic concerns two Englishmen on a yachting are the preordained instruments to save the adviser, though a notable Germanophobe) expedition, sailing among the shifting sands Christian civilisation of Europe from being was incapable of comprehending the totali- of the German Baltic coast, who chance overrun buy a brutal and ruthless paganism.” tarian nature of Hitler’s National Socialism, upon preparations for an imminent It was certainly during this period that believing it was just the latest sinister invasion of England. The Riddle of the Sands Rudyard Kipling summed up the sentiment manifestation of Junker militarism. Worse, is a call to arms; a desperate plea for of the people when he wrote, “When the Keynes was a romantic Germanophile who England to reassert its own war readiness.3 English begin to hate …” Ford Maddox was not only hopelessly naïve regarding the After 1870 and the Franco–Prussian War Hueffer went further, “I wish Germany did true nature of the Nazi state, but also about which the Germans won with embarrassing not exist, I hope that it will not exist much the extent of its enthusiastic popular sup- ease, there had been the greatest of Great longer. Burke said that you cannot indict a port. Bernard Morris points out that of the Power European stand-offs with Germany whole nation. But you can.” Writing thousands of articles on Germany in the the dominant force on the land and Britain prematurely of their defeat in 1914 G.K. British press published in the 1930s, no on the high seas. As Ramsden accurately Chesterton excommunicated the entire more than 25 attempted to define, explain points out, “Once Germany acquired a battle German nation from Christendom, “the or analyse Nazi ideology. Nevertheless, fleet only a day’s steaming from Britain’s empire of blood and iron rolled slowly back amongst the ranks of the ruling class there undefended East coast that balance was towards the darkness of the northern forests.” was at least one exception – at the time a terminally destabilised.” There was now a Then suddenly, after four years of hatred, man of Kent – to virtually all these general- driving panic to build ever-bigger capital came the Armistice. isations. ships of the gargantuan Dreadnought class In the age of total war this Armageddon to protect these islands from the imminent was a moral crusade to specifically rid threat emanating from the North Sea. It was After the much-maligned Europe of Hitler’s New Order. Nevertheless, in this atmosphere that the demagogic Treaty of Versailles, it was this time there was also almost a presumpt- chant went up across the land, “We want ion of the collective guilt on behalf of the eight (Dreadnoughts) and we won’t wait.” Britain that infamously German people. Just how much were the These sentiments might have been burdened itself with ‘war German people collectively guilty; to what jingoistic, but strategically they were sound. degree were they complicit in the regime as The Kaiser could be conciliatory, guilt’. It was preeminetly Hitler’s Willing Executioners? In the after- proclaiming to British listeners at a 1901 the British that saw the math of the liberation of the death camps, dinner, “We ought to form an Anglo–German the Political Warfare Executive announced alliance, you keep to the seas while we would Treaty as unjust, as a what was effectively a verdict of German be responsible for the land.” All the worst punitive peace. ‘exceptionalism’; that is to say, “The moral fears of the earlier invasion scares were con- responsibility for these crimes should be laid firmed when in December 1914 German wholly and solely at the German nation.” The battle cruisers shelled Whitby, Scarborough After the much-maligned Treaty of German population, the nation itself, was and Hartlepool, killing 133 civilians. Versailles, it was Britain that infamously held not to be passive victims of the Third Shocking as they were to the British public’s burdened itself with ‘war guilt’. It was Reich, but the active perpetrators of psyche (like the 1,413 killed in Zeppelin preeminetly the British – in contrast to the unspeakable war crimes.4 It is arguable that raids) these atrocities, would have been far fallen empires and war ravaged nations of if you wanted a lasting peace you needed to worse were it not for the fact that the continental Europe – that saw the Treaty as have one militarily and judicially imposed German Admiralty – not unlike the British unjust, as a punitive peace. In The Economic by a Nuremberg; rather than one reluctantly – realised they could lose the war in one day Consequences of the Peace (1919), John signed up to at a Versailles. It was once said after a single disastrous naval engagement, Maynard Keynes represented not only of Prussia that it was a not a country with an so they put into port and never came out progressive and pacifist opinion, but also, to army, but an army with a country. Similarly, again en masse. a degree, popular sentiment. It was nothing under the Nazis, Germany was not a This arms race set off the ticking bomb short of astonishing that soon after 1918 country governed by a dictatorial part, but that ended exploding all over the fields of both the British public and the British a dictatorial governing party that had the Somme, Ypres and Paschendale. And political establishment were prepared to become the country. Though A.J.P. Taylor God bless the bloody infantry, yet even in forgive and forget. Versailles was increasing- almost certainly went too far in his 1973 the first Christmas of the conflagration, that ly seen as an ill-judged and unjust expres- Creighton Lecture when he declared that, of 1914, the Bosch and the Allgemeines sion of Gallic vindictiveness. Tragically, it “the gas chambers represent Germany as squaddies famously found time to play was this sense of moral culpability in the truly as Gothic Cathedrals represented the football against each other across no-man’s ‘Carthaginian Peace’ that was to lead civilisation of the Middle Ages.” land – until the officer class put a stop to it directly to Appeasement. By the 1930s the The sheer variety of English nomen- for fear of encouraging fraternisation with ruling classes – after the slaughter of their clatures for the Germans are indicative: the enemy. Inevitability, by 1914 Wilhel- first born (and everyone else’s) – had Krauts, the Bosch, Jerries and the Hun. It is mine Germany was seen as a threat to West- reverted to their default position of the fair to say that these designations and even

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less contumely and mannered ones, are Policy: The Conservative Research Department universally hostile. At the time, the attitude Ramsden’s book is witty since 1929 (1980), Ramsden, The Real Old Tory of that everyman, the post-war Foreign and well observed… In Politics: The Political Diaries of Sir Robert Secretary, Ernest Bevin, who famously Saunders, Lord Bayford, 1910-1935 (1984) and remarked to General Robertson, “I tries short, he would like us all Ramsden, An Appetite for Power: A History of ’ard, Brian, but I ’ates ‘em” was typical. As to grow up and stop the Conservative Party Since 1832 (1998). you might expect, Noel Coward – who must 2 The ‘World-Island’ refers to the Eurasian stand as Bevin’s almost too perfect alter ego making Molesworth-like landmass or continent. Mackinder was one of – expressed what he termed “being beastly to schoolboy jokes about the founders of the London School of Eco- the Germans” rather more elegantly, “They nomics and its Director from 1903 to 1908. gave us culture, science, art, and music – to the Germans. 3 Childers was a Protestant Irishman, with the excess/They also gave us two world wars and start of the war he joined the Royal Navy as Mr Rudolph Hess.” jokes about the Germans. If only it was as an Intelligence Officer and was active in the Ramsden appears to argue that this simple as that. After all, no one intelligent is North Sea and Dardanelles. He as awarded adversarial pas de deux came to a head over in favour of petty nationalisms. The trouble the DSO and promoted to Lieutenant Com- the post-war German Federal Republic’s is it is not just Molesworth; long before the mander by 1916. However, the suppression of Sonderweg, Wirtschaftswunder and Ost- demented man-child was terrorising St the Easter Rising incensed him and Childers politik and that, in that most clichéd of Custards with all his brilliant adolescent became an even more vehement Irish metaphors, Britain missed the European inanities, the Comte de Mirabeau stated, nationalist. Though he was the Secretary- bus. More convincingly he argues that con- “La guerre est l’industrie nationale de la General of the delegation that negotiated fronted with this all too ostentatious success Prusse” (War is the national industry of the Anglo-Irish Treaty, he rejected the final story and the refrain of “Who won the war Prussia). They have given up on war, but draft that required Irish leaders to take an anyway” – brilliantly dramatised in the still seem determined to ascend to primacy Oath of Allegiance to the British King. He was Seventies by Auf Weidersen Pet, the subtle in Europe by other means. Germany now executed for treason by the pro-Treaty Free Dick Clements and Ian La Frenais scripted tries to control its sphere of influence in State government at Beggar’s Bush Barracks, television comic drama, portraying unem- Central Europe by exercising a not wholly Dublin in 1922. ployed Geordie builders moonlighting in benign form of ‘soft power’ through the 4 See Daniel Jonah Goldhagen, Hitler’s Willing Hamburg to escape the domestic dole agency of a supranational European state Executioners: Ordinary Germans and the queues – the victory over became a with itself at the epicentre. This will con- Holocaust (New York: Alfred A. Knopf, 1996); culture of consolation for relative industrial tinue to create its own problems. Perhaps Christopher Browning, Ordinary Men: Reserve decline. This found its xenophobic release our attitudes to our German cousins are Police Battalion 101 and the Final Solution in mainly in popular culture; particularly, in changing, not least a degree of amicability Poland (London: Penguin, 2001) and Raul television programmes such as Auf Wieder- over a century long football rivalry, after all Hilberg, Perpetrators, Victims, Bystanders: sehen Pet as well as Dad’s Army, ’Allo, ’Allo this is such a very special relationship; but Jewish Catastrophe (London, Harper Collins, and, of course, Basil’s immortal goose step- then, perhaps not – though I am a well- 1993). These books are also a useful ping mental breakdown in Fawlty Towers – known pessimist. corrective to the John Maynard Keynes from which Ramsden takes his title. Not Popular Front line presuming the lack of discounting countless tabloid headlines support amongst the German people for the about Teutonically efficient tourists mount- 1 Ramsden’s books on the Tories include: 3 Nazi state. ing dawn raids on our Costa del Sol sunbeds volumes in the Longman History of the and, last but certainly not the least of it, the Conservative Party – Volume 4: The Age of ever-growing deification of the boys of ’66. Balfour and Baldwin, 1902-1940 (1978), David Wilson is a Neoconservative member Ramsden’s book is witty and well Volume 5: The Age of Churchill and Eden, 1940- of the Labour Party. He is a frequent observed, but overly and overtly po-faced. 57 (1995), Volume 6: Winds of Change: contributor to the European Journal and is In short, he would like us all to grow up and Macmillan to Heath (1996) together with writing a book on the Congress for Cultural stop making Molesworth-like schoolboy Ramsden, The Making of Conservative Party Freedom and the Cultural Cold War.

Europe After the ‘No’ Votes Professor Patrick A. Messerlin, Institute for Economic Affairs, 2006, 96 pp, £10.00 Reviewed by Carlo Stagnaro s the European dream over? That is super-state is the wrong one. However, there the hodgepodge of issues referred to during Iwhat many thought after the French and is still a need for a common economic the campaign as the ‘social model’ should the Dutch voted against the proposed agenda for the future of the European remain matters of strictly national European Constitution. In Europe After the Union. competence.” To put it otherwise, the ‘No’ Votes, Professor Patrick A. Messerlin Messerlin, an economist at the Institut European social model is not European at argues that the rejection of the Constitution d’Etudes Politiques in Paris, believes that, all – let alone social. People in Member shows that the path towards a European “the French referendum makes it clear that States think that the welfare state, labour

Jump to Contents 30 The European Journal And Finally… November 2006 regulations, etc., are their own business and farmers from more efficient ones, be they demand from rent seekers and those willing there is no need to harmonise them at the from foreign countries or from other member to defend protected positions, it will European level. If that is the real message states.” ultimately be rejected as people realise they underlying the French ‘Non’, then it is Likewise, there is also a lot to do in regard get less benefits than costs from Brussels. correct to question the path of intensive and to the single market in services: “the welfare The paradox is that “today, nobody in Europe pervasive regulation followed by Brussels gains to be expected from an open single seriously promotes an alternative plan to a over the last few years. market in services are huge.” The challenge market-based economy. But that leaves an Originally, as evidenced by the Treaty of was tentatively addressed by the so-called endless number of battles on very specific Rome, the unification of the old continent Bolkestein Directive which faced unprece- topics that powerful coalitions of NGOs and was a visionary project that set a political dented opposition across the Member private vested interests present disin- goal (peace) to be achieved through States. Messerlin writes, “opposition to the genuously as limits to the market model.” economic means (free market). Hence, Directive is much broader because its wide Messerlin’s work is followed by three Messerlin suggests that the liberalisation sectoral scope (a key asset from an economic commentaries. Pedro Schwartz, an econo- and integration of European markets into perspective) has produced heavy political mist from the Universidad San Pablo CEU one single market should be taken seriously. costs by uniting a huge number of monopolies in Madrid, argues that the key is “the That requires common efforts towards or collusive firms all over Europe.” But widening and full application of the freedoms reforms, both at the national and European “opposition to the Directive has focused on of the Treaty of Rome: the free circulation of level. The trick is not to take anything for the PCO” [principle of country of origin], persons, services, goods and capital.” Former granted. So, Messerlin argues that reform which is a minor – although crucial – part member of the European Commission Lord should start with the creation of a single of the Directive itself. Brittan of Spennithorne, while generally market for goods, which “would exhibit two agreeing with Messerlin, sets forth a few features: regulations in all the member states In Messerlin’s view, the disagreements concerning the possibility of would be roughly equally pro-competitive achieving radical reforms in a complex (reflecting intra-EU openness) and they future of Europe lies in its world, where for example countries such as would tend to be less restrictive than those of ability to return to its the US deploy sometimes higher tariffs than the other OECD countries (mirroring extra- Europe itself. Historian John Gillingham, EU openness).” If Europe is strong enough to fundamental principles. from the University of Missouri–St Louis, pursue the creation of a single market in The Union can survive only questions the ability of Member States to most sectors, it will gather substantial work out a common strategy towards benefits. insofar as it can deliver reforms: “the only European consensus That is true also of the ‘sacred cow’ of greater economic benefits existing today is on doing nothing… In a European politics, i.e. agriculture: “if there is to its citizens. globalising world economy driven by Chinese one good sector in which the single market’s modernisation and American innovation, progress depends heavily on multilateral Europe will simply count for less.” trade opening,” says Messerlin, “It is In Messerlin’s view, the future of Europe agriculture… The Common Agricultural lies in its ability to return to its fundamental Policy has systematically prevented the principles. The Union can survive only Carlo Stagnaro is Free Market Environ- emergence of pan-European farm markets insofar as it can deliver greater economic mentalism Director of the Istituto Bruno because its subsidies and price supports benefits to its citizens. If instead it micro- Leoni, Italy’s free market think tank – protect each member state’s inefficient manages the market, while meeting the www.brunoleoni.it.

LETTERS TO THE EDITOR

From Sir Oliver Wright agree to the abandonment of the enormous Conservative Members of Parliament have Dear Miss Rainwater, reduction in the amount of the UK’s annual taken the point made by Margaret Thatcher Congratulations on the conference contribution to the European Union four years ago in her book Statecraft, when edition of the European Journal. A bumper secured by Margaret Thatcher. she wrote, “as I shall seek to show, Europe number if there ever was one. Well done. Yo u r s , as a whole is fundamentally unreformable” Yo u r s , Antony Flew (p 321). ’s piece is a re- Oliver Wright freshing contrast to those who continue to assume that Margaret Thatcher was wrong From Professor Antony Flew From Dr Charles Hanson and that reform is possible, despite the Dear Editor, Dear Ms Rainwater, massive accumulation of evidence to the The case for Gordon Brown as the Thank you for including in the last issue contrary. I hope that we can look forward to successor to Tony Blair as Prime Minister of The Journal the excellent article by more articles supporting the case for our might be greatly strengthened if only he Douglas Carswell, MP, Why Britain Must exit from the EU. would reveal whether and, if so, by what Quit the EU. Yours sincerely, arguments, Tony Blair persuaded him to At last some of the more intelligent Dr Charles Hanson

Jump to Contents 31 The European Journal And Finally… November 2006

C H U N N E L Apologise personally for anything Put obligatory eel pie on schools’ 10 done in history, e.g. the Boudiccan 32 dinners Revolt or South Sea Bubble V I S I O N Enrich plutonium Put up a giant statue in Trafalgar 33 Square of a penguin with a banjo 11 Reemploy the London Dungeon Send a special envoy to Pyongyang 34 as part of a foreign policy for the 12 Construct a space station in a PPP capital 36 with Drax Enterprises Export for ‘inclusiveness’ purposes Allow giant apes to clamber up Tob y the Notting Hill Carnival to Morison 13 major public buildings Yellowknife, North West Territories 37 Build a hydroelectric dam at Instruct Tower Hamlets to join the 14 Chiswick 37 eurozone 50 Things Post the Elgin Marbles to Greece Arm traffic wardens as an urban I Won’t Do 15 38 paramilitary Rename Waterloo Station after the Open a Starbucks in Buckingham if Elected Mayor 16 indefatigable Mr Saddam Hussein 39 Palace Tax beards Initiate a Gumball Rally for stretch of London 17 40 limousines down the Old Kent Road by Dr Lee Rotherham Explore for oil in the wilds of 18 Battersea Build a matching Millennium t is customary for politicians to 41 Dome for the sake of symmetry I Measure exactly the Square Mile make five election pledges that they 19 Run a mobile command centre subsequently break. You know the type – 42 from a bendy bus education, education, education; no trash- Turn the South Bank into a giant ing of the NHS; no land wars in the Middle 20 Thunderbirds theme park, with Install a shower at the Diana East; that sort of thing. revolving shrubbery 43 Memorial As a new age politician, here are fifty Annoy the Americans Attempt to clone the contents of things instead that you’ll never catch me unnecessarily the Natural History Museum doing if you elect me to the job of Mayor of 21 44 London. Dig a moat around the M25 Privatise the London Underground 22 45 to a coal mining consortium Sell off Tower Bridge to join Sell the ravens at the Tower to an 1 Invite Fidel Castro over for tiffin 23 London Bridge in Arizona 46 Edgar Allan Poe exhibition Allow Japanese trawlers into the Move my office across to the Order people not to flush their 24 London Aquarium conning tower at HMS Belfast and toilets 47 2 Put a windmill on Nelson’s Column reactivate the ship Introduce a window tax for Canary 25 Allow chariot racing around Wharf 3 Outlaw Beefeaters on Health and 48 Piccadilly Circus Nationalise garden gnomes Safety grounds 26 Shut down The Mousetrap if they 4 Compère a game show 49 refuse to change it to a comedy Invite Ikea to run Tate Modern 27 musical 5 Use cockney rhyming slang more Increase the Congestion Charge for Turn the GLA building into a giant 28 than official guidelines permit 50 performing midgets in exploding newtarium clown cars 6 Erect a bouncy peace castle on Ban cheeseburgers 29 Parliament Square 7 Give Oxford Street’s pavement a Tow an iceberg up the Thames cycle lane 30 Dr Lee Rotherham is a declared candidate for 8 Take out all the books from the the Conservatives’ London Mayoral Prim- Annex Essex 31 British Library in one big loan and aries. The candidate’s real policies can be 9 forget to return them found at www.newstartforlondon.com

Jump to Contents 32 The European Foundation

Mission Statement: The aims and objectives various peoples of Europe by the fundamental listed below are summed up in The Foundation’s renegotiation of the treaties of Maastricht, overall policy of ‘yes to European trade, no to Amsterdam and Nice. The Foundation does not European government’. We believe that greater advocate withdrawal from the European Union, democracy can only be achieved among the rather its thoroughgoing reform.

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The Foundation’s History: The Great The European Foundation was created by Bill College Street Group was formed in October 1992 Cash after the Maastricht debates. It exists to con- in order to oppose the Maastricht Treaty. The duct a vigorous campaign in the UK and across Group, consisting of politicians, academics, Europe to reform the EC/EU into a community businessmen, lawyers, and economists, provided of free-trading, sovereign states. The Foundation comprehensive briefs in the campaign to win the continues to establish links with like-minded arguments both in Parliament and in the country. organisations across Europe and the world.

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