EU-25: MAKING IT WORK Proceedings of the CEPS International Advisory Council

19-20 February 2004 Palais d’Egmont- Place du Petit Sablon 8 - 1000

Chairman: H. Onno Ruding Chairman of the CEPS Board of Directors

Programme Thursday, 19 February Dinner Address: Pascal Lamy, Member of the

Friday, 20 February 9.15 Chairman’s Opening Remarks 9.20 Keynote Address: Dick Roche, T.D., Minister for European Affairs of Ireland 9.35 First Session: The Enlarged EU on the International Scene Panel Discussion: Danuta Hübner, Minister of European Affairs of Poland George Iacovou, Foreign Minister of the Republic of Cyprus László Kovács, Foreign Minister of the Republic of Hungary Sandra Kalniete, Foreign Minister of the Republic of 11.30 Second Session: Concrete Proposals for a 25-Strong Commission Keynote Speaker: Desmond Dinan, Professor, George Mason University, US

Panel Speakers: Henning Christophersen, Former Vice-President of the European Commission and Former Member of the Praesidium of the Convention, Senior Partner, KREAB Philippe de Schoutheete de Tervarent, Former Permanent Representative of Belgium to the EU; Member of the CEPS Board of Directors Sir John Kerr, Former Secretary General of the Convention on the Future of Europe, Former Secretary General of the Foreign Office of the United Kingdom 13.00 Lunch 14.30 Third Session: Realigning the EU with its citizens Panel speakers: Heidi Hautala, Member of the Finnish Parliament, former MEP Ola Hellblom, EU Correspondent, Dagens Industri Robert Manchin, Chairman and Managing Director, Gallup Europe Larry Siedentop, Professor, Keble College, University of Oxford

16.00 Chairman’s closing remarks and end of conference

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Opening Dinner Address∗ by Pascal Lamy EU Trade Commissioner

EU Trade Commissioner Pascal Lamy gave the opening dinner address at the CEPS 2004 International Advisory Council. He pointed out the radical nature of the European project of the last fifty years but also the sense that there is a crisis of confidence in the European Union. Enlargement, which ought to amount to an expression of confidence in a European future, is not overwhelmingly popular. The real debate is now less about how to make enlargement work, and more how we can make the EU work. First, Europe’s twin deficits in growth and competitiveness need to be addressed. Economic growth is stagnant and the long-term pointers are ominous: an aging population and declining research spending leading to a lower level of innovation in industry. Measures to create real, high-paying jobs in Europe are the single most important priority, if we are to deliver results that matter to people. In order to enable us to deliver this vision, we also need institutional reform. Europe’s organisation has to be updated and improved. Voters want a clearer idea of what Europe does and what Europe does not do. The single key fix is to make each of Europe’s institutions more receptive to its citizens. The Commission ought to be more accountable than it already is − to the Council as well to the Parliament, for instance. Even more pressingly, the Council needs to sort out its decision- making procedures, and here the obvious answer is a simple double majority: i.e. agreement would require 13 members out of 25, representing a simple majority of Europe’s population. This would seem to be the only way to find a compromise between the bigger and smaller countries. Here, the Constitution should help in clarifying responsibilities within the system. If we want to avoid citizens turning their backs on Europe, these institutional decisions must be taken soon. But we have to ensure that the final document is simpler, and clearer to understand. Clarity has to be a key priority for a new constitution. Finally, on image and communication, the European system of today entirely lacks any sense of political animation. There is a total absence of real or meaningful debate to get across to citizens what the issues are all about. Europe does not entertain its citizens because it does not involve them. Due to its political and geographical dispersion, Europe probably needs a double dose of political legitimacy, a double dose of political entertainment, to really engage its citizens. European ‘identity’ and ‘values’ are essential, but they don’t put food on the table. The message should be to emphasise where Europe adds real value above and beyond what member states can do on their own. In conclusion, the EU-25 can work, and work well. But we have to look urgently at how we can produce tangible, measurable, concrete results that respond to the wishes of our citizens. We need to bring to life the political challenges that confront us. Fundamental questions in Europe can no longer be swept under the carpet, or buried under mounds of written procedures or details. This message must be brought home to our people, addressing topics of urgency and engaging their support for their EU resolution as the appropriate level.

∗ This is a synopsis of Mr Lamy’s speech prepared by CEPS Senior Research Fellow David Kernohan, the full text of which can be found in an annex at the end of these proceedings.

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Keynote Address by Dick Roche Irish Minister for European Affairs

Starting off on an optimistic note, Dick Roche said that although EU enlargement to 25 member states poses great challenges, the rewards are greater still. With 25 members, and with other states set to join later, the EU is a formidable force. The Union is a unique experiment, and enlargement entails the reunification of Europe after fifty years, extending the zone of peace and stability. Mr Roche described the EU as the most advanced and complex conflict-solving mechanism in history. The Irish government was honoured to preside over the largest enlargement in the EU’s history, and will invite the Heads of State and Government to celebrations in Dublin on 1 May. But Europe is about its people, and the citizens are unclear about the European Union. This is the fault of those who espouse Europe in the institutions and among politicians. It is necessary to remind EU citizens that the EU is a community of values. This could indeed strike a chord among the people, Mr Roche believed. The international role of an enlarged EU is an area that needs more focus. The question is how to unite different traditions and policies. The EU’s role in the world is based on a set of fundamental values, beyond geography and the protection of economic interests. These common purposes are strengthened, and not diluted, by enlargement according to the Irish Minister. He noted in particular the additional strength of the EU in international organisations such as the . But the EU needs to be more strategic in its approach to foreign and security policy. It needs to engage in more long-term strategic thinking, and look seriously at its objectives and its interests. He warmly welcomed the European Security Strategy drafted by the EU High Representative for the CFSP Javier Solana, in particular in providing clear objectives for EU security policy. Mr Roche noted that work was underway on a three-year strategic programme, and mentioned four particular areas of focus under the Irish Presidency: to develop an EU strategy on the Middle East, to prepare the EU’s mission in Bosnia, to undertake an assessment of EU- relations, and to advance the EU’s new neighbourhood policy, including the question of how to incorporate South Caucasus. Although we differ on the details, we agree on our overall policy, according to Mr Roche. The new members will bring in invaluable experience, in particular on relations with the EU’s new members, who for many of them have been old neighbours for a long time. The EU has already established the necessary mechanisms, such as the Barcelona process with the Mediterranean neighbours and the Partnership and Co-operation with the countries of the former , but these need to be strengthened. There is agreement among all 25 EU members on the need for a new institutional framework for EU foreign and security policy. Agreement on the creation of the post of EU foreign minister was one of the important successes of the Constitutional Treaty. The ‘double hat’- arrangements (with the EU foreign minister being both a member of the European Commission and representative of the Council of Ministers) would work, according to the Irish Minister. Mr Roche emphasised the importance of the Constitutional Treaty. The Irish Presidency would have a position on the future of the Constitutional Treaty in March. Commenting on Mr Lamy’s speech the preceding evening, he reiterated the need of the institutions to communicate better with the citizens, building a ‘bridge to the people’. This was crucial, as the Constitutional Treaty would collapse if one referendum rejects it. He noted that the political will and enthusiasm for the Constitutional Treaty was there, and that the problem was a lack of political leadership. Mr Roche noted how close the European leaders were on agreement on the Constitutional Treaty, and said that the EU should be able to agree given the political will. The world was waiting for European leadership, according to the Irish Minister of European Affairs. Rapporteur: Marius Vahl, CEPS Research Fellow

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1st Session: The Enlarged EU on the International Scene

The Foreign Minister of Cyprus George Iacovou started by emphasising the important step being taken on May 1st. The EU accession process had for 15 years been the main preoccupation of Mr Iacovou, who personally handed in Cyprus’ application for EU membership. While the EU was a very exclusive club then, it has evolved considerably, and has become more outward looking, as seen in the Congo, in the Balkans and in the Middle East. It is well equipped for a stronger international role and there is now also a political willingness to move towards this goal. Foreign Minister Iacovou welcomed recent positive developments of the CFSP, notably the European Security Strategy, mentioning in particular the references to ‘effective multilateralism,’ international law and co-operation in the UN Security Council. Mr Iacovou also voiced his support for the new neighbourhood policy. There should be no dividing lines in Europe and the EU should extend stability and co- operation to its neighbours. As the enlargement process is balanced to the North, the East and the South, and it is important that the new neighbourhood policy also is balanced and comprehensive. The Mediterranean is of strategic importance to the EU, and the EU needs to strengthen the Barcelona process. The Middle East is a prime test case for the EU, and includes important issues such as terrorism, religious extremism and illegal migration. Cyprus has much to offer to the EU’s policies in the Mediterranean and the Middle East, both as a shield against new threats as well as a bridge to the region. Foreign Minister Iacovou called for a more assertive EU policy and the need for immediate action. The EU should not be just a provider of financial assistance, and Mr Iacovou noted that the EU was perceived in as an impartial broker in the Middle East. Commenting on the Cyprus conflict, Minister Iacovou noted that this is a European problem, as Turkey is also European. In a question from the audience, Mr Iacovou stated that talks between the two sides had started in earnest on February 19, and that they had agreed that it could in the end be left to UN Secretary General Annan to ‘fill in the blanks.’ However, Mr. Iacovou hoped that agreement would be reached before that stage, although it would not be easy. Compared with the beginning of the previous round of negotiations (2002- 2003), when the parties had a 16 months period before their deadline to iron out their final differences, the parties now had a much shorter period to reach agreement on the details. Mr Iacovou also voiced some concern about the Turkish Cypriotic side. Since the collapse of negotiations in March 2003, the Greek Cypriot side had been pushing for talks, and the Greek Cypriots were not like the Turkish side challenging the core of the Annan Plan. He also voiced some concern that the Turkish Cypriots wanted to keep the EU out of the new round of talks. Latvian Foreign Minister Sandra Kalniete focused the dangers of a ‘two-speed’ Europe as has been suggested following the failure of the European Council to reach agreement on the Constitutional Treaty in December 2003. The credibility of the EU as a model depends on its . Building solidarity among the 25 members is the biggest challenge for the EU. Until now this has been achieved by the stronger countries helping the weaker ones, but in a ‘two- speed’ Europe the strong would abandon the weak. On the international scene, a ‘two-speed’ EU would not be an equal player to the Unites States, and would be less able to deal with the new neighbours and have less influence on global issues. Finally, a ‘two-speed’ Europe will alienate the new members. The Constitutional Treaty was needed to maintain EU unity, and Foreign Minister Kalniete was optimistic about the prospects for the resumption of the IGC (intergovernmental conference on the Constitutional Treaty). Foreign Minister László Kovács of Hungary started by noting that the EU- 25 would be equal to the United States, constituting the largest single market in the world. The EU need political coherence and to think, plan and act together. The EU should offer a global partnership to the US, and the European Security Strategy has contributed to this aim. On the EU’s new neighbourhood policy, focus should be on the immediate neighbours first according to Mr Kovács, mentioning Bulgaria, Romania, Croatia and the other countries of the Western Balkans. Mr Kovács stated that we need a strong and united Europe, and spoke in favour of developing the ESDP and common defence. However, this should not be at the cost of intra-European divisions or result in rivalry and

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duplication between the EU and NATO. The Hungarian Foreign Minister voiced his agreement with his Latvian colleague in being strongly against the emergence of a ‘two-speed’ Europe. On Hungary’s ‘good neighbourhood’ policy, Foreign Minister Kovács noted that Hungary was the country with most non-EU members and that relations with them had improved under the current government, which had introduced amendments to a controversial law on Hungarian minorities in accordance with European standards, as well as concluded bilateral agreements with their neighbours. Replying to a question on minorities from the audience, and whether an EU legal instrument for minority protection should be created, Hungarian foreign minister Kovacs answered in the affirmative, pointing to the example of ethnic cleansing in Bosnia. Kovács was open to the accession of possible future enlargements of the EU, based on the criteria. Danuta Hübner, Minister of European Affairs of Poland, started by stating that enlargement will increase the credibility of the CFSP. Poland’s contribution to the EU as a member was to be expected in two areas, namely economic reform and the CFSP. While Poland supports the ESDP, NATO would also in the future provide the basis security guarantee, according to the Polish Minister. Mrs. Hübner noted that Poland had supported the draft Constititutional Treaty on almost all issues, including the provisions for the CFSP. Poland strongly supports the creation of an EU foreign minister and the extension of QMV (qualified majority voting) in EU foreign and security policy. She noted in particular the importance of EU relations with the US, Russia and the emerging powers China and India, as well as global issues such as terrorism. Mrs. Hübner rejected the idea that the new members would want to change EU foreign policy. This would continue to be based on the same principles, which the new members subscribe to. Poland will contribute to the new neighbourhood policy, according to the Polish Minister of European Affairs, who noted in particular the EU’s interest in the former Soviet states covered by the initiative being reliable partners. The EU would also have to face future enlargement challenges among the new neighbours. Russia is changing, and we are not sure if the developments are for the better, according to Hübner. She noted that Europe is increasingly dependent on Russian energy. The challenges posed to the agricultural sector by the new neighbourhood policy were under-estimated. In spite of such a vast agenda, the EU was condemned to return to the Constitutional package of the IGC. Danuta Hübner emphasised the need for mutual trust and confidence in order to reach agreement on a Constitutional Treaty, while underlining that this would also have to be acceptable domestically in each member state. She expressed hope that the Constitutional Treaty would be agreed during the Irish EU Presidency, while noting that this was far from the only important issue on the current EU agenda. Rapporteur: Marius Vahl, CEPS Research Fellow

2nd Session: Concrete Proposals for a 25-Strong Commission Professor Desmond Dinan (George Mason University) started the second session by noting that, on the basis of recent news coverage of Brussels affairs, one might well start wondering whether the Commission can be saved. Dinan asserted that he believed that the Commission can be saved and, indeed, that it can be strong and effective. What we have to realise, however, is that the heroic phase for the Commission is over. The present times no longer demand a pushy, assertive Commission but rather one that can consolidate the achievements of European integration. Thus, in thinking about the kind of Commission that is needed, we have to move beyond the nostalgia for the ‘Golden Age’ of Jacques Delors. The Commission now has to operate under a lot of pressures. There are ever-more governments insisting on national interests that markedly diverge from the general EU interest. The European Parliament has developed into a rather assertive institution. There is a widespread feeling of popular alienation towards the EU. Some of the main political initiatives (Lisbon agenda) have taken the form of so-called ‘soft policy’ that is uncongenial to the role of the Commission. The Commission suffers from a lack of resources and people. Over last years it has moreover been involved in a permanent process of institutional

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overhaul. Then there are the additional challenges coming from enlargement. For one thing, this means that there will be ever more commissioners struggling over a limited number of substantial portfolios. Secondly enlargement will make it more difficult to agree on policies and to ensure administration. Against this background there is a need to reflect upon the Commission’s sources of authority that can be summed up as President, Project and Portfolios. Starting with the position of the Commission President, it is crucial to note how weak an institutional foundation this position has. Within the unique sui generis EU architecture, the President’s position is under the continuous threat of being undermined from the different sides of the institutional balance. Typically this was reflected in the Convention’s debate about the proposal for a permanent president of the European Council who might appear as a direct competitor to the Commission President. In the absence of institutionally enshrined power, the Commission President’s authority very much depends on informal arrangements and the politico-economic context in which he works. Major assets in informal arrangements are personal authority, grasp of detail and the ability to maintain good relations. These qualities immediately lead back to the profile of Delors. The question is, however, whether another Delors is possible and desirable. The answer to that question is a double “no”. Another Delors is not possible given the fact that the Commission now faces a much wider range of tasks and challenges. What is more, another Delors is not desirable considering the particular liabilities that accompanied his style of leadership. First, Delors’ strong sense of mission has led him to neglect or even exacerbate the major weaknesses in the internal organisation of the Commission’s administration. Secondly, Delors met various challenges he encountered by making funds available. Obviously, these days that money is not there anymore and the new Commission will have to do more with less or, at least, get the most out of limited resources. Another point about the Commission President is that logically it would now be the turn for a Commission President from one of the smaller Member States. Fact is however that the most successful Presidents have tended to come from the large member states. One of the reasons for that is that there is a natural inclination inherent in the office of the President to defend the rights of the smaller member states. Moreover, Delors’ authority was, moreover, boosted by the possible career prospect of him still becoming the President of one of the larger member states. Moving on to the Project, one should note that the Single Market program made Delors and his success rather than the other way around. The foundations for the Single Market project had already been laid before him. The Single Market project had many beneficial features: it put the Commission at its heart, it had a clear timetable, it could count on broad political and societal support and it coincided with an economic upturn. Obviously, the project that now needs to be focused upon is “making the most of EMU”. If one looks however at the present Lisbon strategy, one notes that it focuses on states, that it involves mostly voluntary commitments and that the Commission is not a central player. The Commission only naturally comes into play when there is a need to ensure credible commitments. The fields of justice and home affairs and the common foreign and security policy are probably even less congenial to the Commission as these have not traditionally been at the heart of the integration process and member states are inclined to jealously guard their national interests in these fields. Portfolios are probably the least important of the three sources of the Commission’s authority. Judging by its history, the Commission is a remarkably resilient and adaptable institution. Given the increase in the number of Commissioners, new portfolios can be created by diversifying, hiving off tasks or reformulating them. In particular the responsibility for justice and home affairs can be split up in various portfolios. Also one could imagine charging specific Commissioners with the tasks of maintaining relations with the European Parliament,

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between the EU and the US and with the ‘wider Europe’. Clusters should be left to form informally. Most naturally they would probably come to reflect the bundling of issues in the Council formations. Overall, however, maintaining flexibility is key. There is no need to reorganise the Directorates-General of the Commission as these have been exposed to enough reorganisations over last years. Summing up: the Commission’s heroic era is over and instead its main focus should be consolidation and preventing the integration process from backsliding. A Commission of 25 is definitely not optimal but it can be logical. Key ingredients required are political good will and flexibility.

Former Commission Vice-President Henning Christophersen followed up by observing that in his view the question of the number of Commissioners is not the most important one. He noted that this issue had been intensely discussed in the Convention and its Praesidium. He also conceded that the solution proposed by the Convention (reduction to fifteen members but with flanking measures ensuring equality between nationalities) was never seen as a very elegant one. By all appearances it looks like the Intergovernmental Conference will again decide to have a Commission of 25 and after accession of Bulgaria and Romania of 27. For Christophersen the ultimate solution in the long term would be to leave it to the Commission President to determine the team of Commissioners. Also the distribution of portfolios was not a major concern for Christophersen. One thing he could see was a system in which certain Commissioners would be designated to coordinate certain areas. However, the his own experience with a coordinating responsibility for the area of structural funds in the had not been an unequivocal good one. One lesson learned there was that coordinators also need resources and authority to make their coordinating role work. The key question for Christophersen would be: How to get the right person for the position of the Commission President? To start he would recommend that the Spring European Council would dedicate some time to the desired profile for the Commission President. Directly related to the profile is the question of the strategy the new Commission needs to adopt. The Commission needs a common cause or project to which the different portfolios can be related and in which thus each Commissioner has a stake. The Single Market and also EMU met this requirement. On this point Christophersen also disagreed with Desmond Dinan’s suggestion of Delors “throwing money” at problems; money like the structural funds were an integral part of the overall strategy. Within the Delors Commission there was always a natural and healthy sense of competition, embedded however in the strong overall team spirit. Delors' strength lay in particular in his ability to focus on the main issues and also in his readiness to delegate responsibilities. Another key factor is the presence of a well functioning substructure. Here the members of the cabinet play a key role but it is also very important to have a well-functioning division of labour between the President and the Commission’s Secretary-General. The independence of the Commissioners is another crucial factor. Christophersen had witnessed incidental cases where Commissioners would have stood up for their national interest and without exception this would be done at the cost of a loss in personal authority. Economic modernisation is the obvious focus for the Commission to come. Yet we should realise that formally the present Lisbon process falls outside of the Commission’s remit. If it is to work, economic modernisation should be turned into a genuine communitarian project. This requires an amendment of the Constitutional Treaty as proposed by the Convention. Unfortunately, as it stood, the Convention’s mandate and its time constraints did not allow it to explore this issue sufficiently.

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Philippe de Schoutheete de Tervarent (Former Permanent Representative of Belgium to the EU and Member of the CEPS Board of Directors) presented the CEPS Policy Brief that had been prepared for this debate: “Three Theses for the new Commission President”. As a first issue this paper addresses the Commission President and de Schoutheete reminded how at Commissioner Pascal Lamy at the dinner speech the night before had noted that the President’s election is better seen as a lottery than as a headhunting affair. Still de Schoutheete argued for the need for a clear profile for the President. In particular it needs to be recognised that the requirements for a Commission President diverge from those for a national Prime Minister. One particular desirable attribute of the Commission President is nicely brought out by Delors’ observation in his Memoirs that from the moment of taking office he sought to take “intellectual control” over the European Council agenda. Whatever this means exactly, the Commission President should set to exploit the advantage of being the only European Council member who is full-time engaged in EU affairs. Crucial for this is that the Commission President is capable of a high level of control of the details of political dossiers. The second thesis addresses the need for a multi-annual project for the Commission. This need is not motivated by some kind of nostalgia for the Single Market project. But, one should note that the Single Market was the Union’s last communication success. Indeed, being closely involved at the time, de Schoutheete sometimes feared whether the actors involved were not ‘over-selling’ the Single Market. The success of the Single Market much reflected upon the Commission in office. Noting a slight difference of views with Dinan, de Schoutheete submitted that the intergovernmental character of the field of justice and home affairs (JHA) is open to challenge. He noted the strong popular and political will at present to develop initiatives in this field. What is more, many of these initiatives well-suited a normative, legalistic approach and thus, in terms of form, JHA more resembles the Single Market than the common foreign and security policy. Turning to the size of the Commissioner, de Schoutheete noted his conviction that the insistence of one Commissioner per Member State is a bad idea that, in particular, is likely to be detrimental to the interests of the smaller member states. He conceded that Commissioners might want to work in clusters. However, this would have to come naturally from personal characters and ability to work together and should not be imposed by a set of pre-determined rules. Finally, de Schoutheete was very concerned about the Commission’s administrative organisation. One thing that definitely would need to be avoided is the creation of a Directorate-General (DG) for each Commissioner. DGs could well work for different Commissioners at the same time, just like many government departments do. Furthermore, a strong Secretary-General will be of major importance to ensure the good functioning of the Commission.

Sir John Kerr (Former Secretary General of the Foreign Office of the UK and Former Secretary General of the Convention on the Future of the EU) started his contribution by indicating that he very much agreed with the CEPS Policy Brief. In his view as a Brussels outsider he found that the position of the present Commission is significantly weaker than that of its predecessor in the early 1990s. Looking at the EU institutional architecture as a whole, one finds that the Council has been weakened, the position of the European Parliament has been strengthened and that the position of the Commission has fallen victim to diminution. As Secretary General of the European Convention, Kerr had been struck by the detached, disengaged and distant stance the Commission had taken towards the Convention. As much as he regarded the contributions of the two Commissioners representing the College in the Convention, Kerr considered that in his days Commission President Delors would have chosen to sit in himself in the work of the Convention. As a whole the contribution of the Commissioners in the Convention was weakened by the fact that obviously they did not represent a cohesive constituency.

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The question of the number of Commissioners needs to be addressed, and with regard to this question Kerr submitted ‘three heresies and a proposal’. Kerr believed that the correct view was represented by the very first proposal put before the Convention. In this proposal the Commission President would appoint 13 Commissioners irrespective of their nationality but ensuring that there would be an overall balance in geographical terms. As a consequence the size of the College of Commissioners would come to 15, including the President and the Minister for Foreign Affairs. The first heresy, then, was the claim that the principle of equality of states does not apply to the Commission. The principle of equality of states is already to be observed in the composition of the Council. Indeed equality of citizens is of greater relevance to the Commission. Surely there is no ground for a Maltese citizen to have 200 times as big a chance of being appointed to the Commission than a German citizen. In the end, it should be talent that counts. The second heresy is that the Commission is not a representative institution; it is not, it was not and it should not be. States already have their permanent representatives assembled in Coreper. What is more responsibilities over merger control and competition control should not be exercised by a representative institution. Neither is it the solution to hive these responsibilities off to agencies, as they much benefit from a being part of the independent and authoritative institution of the Commission. The third heresy is that there is no zero-sum game between the EU institutions and in particular not between the European Commission and the European Council. Within the Convention, Kerr had at times noted the contrary line of reasoning in which people would favour the weakening of one institution as they expected it to directly benefit another institution. In his view, however, the lack of authority and visibility of the European political leaders in the European Council is a key problem for the whole of the EU and hence it is inevitable that the European Council is reinforced. As a side-note, the same applies to the relationship between the European Parliament and national parliaments. Members of the European Parliament opposed the formation of a Congress involving national parliamentarians at the European level fearing that it would turn into a competitor of the EP. Kerr, believed, however, that the idea of a Congress as championed by the Convention’s President Mr. Giscard d’Estaing would have escaped this zero-sum logic and would have benefited both national and European parliamentarians. Kerr much welcomed the analysis of the Commission in the CEPS Policy Brief. In particular he welcomed the fact that the Policy Brief prioritised the Commission’s responsibility for good administration of EU decisions over its role as initiator in the legislative process. Contrary to some of the earlier speakers he did still have hopes for the Lisbon process. One observation Kerr shared in particular was that Commissioners should be assigned tasks rather than administrative empires. He also saw a great need to rebuild a professional ethos within the Commission embodied by a strong administrative cadre, something that had been demolished in the last decade and that had left bruises on the moral of many talented people. Turning then to his proposal, Kerr argued for moving as soon as possible to a smaller Commission. Looking back at the Nice agreement (to which he himself had much contributed) by which the five biggest member states conceded their second Commissioner, he now lamented it as a strategic mistake. If the College of Commissioners had by now come to 30 or more members, then a realist appraisal of the need to reduce its size might have opened the way for a system of rotation. Still Kerr realised the need for each member state to have a spokesman in the Commission. However, his view was that this person should not be a Commissioner within the College but rather have the role of an observer to the College who should be able to explain the Commission’s action to the home audience. At the same time there was a need to strengthen the Commission’s delegation in the national capitals and to clarify their role. In particular

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these delegations should act as the eyes and ears of the Commission in keeping in touch with national public opinion. In line with other proposals to ‘double-hat’ positions within the EU, the national delegates to the Commission should thus be senior politicians combining two roles: observer in the College and head of the Commission delegation in the national capital. Kerr admitted that this proposal was not wholly original and that others (like Pascal Lamy) had made similar suggestions in the past. Interaction between the Commission and the national capitals could be further strengthened by having Commissioners appear before national parliaments. Also there is a need for a strong EU-wide network of national parliamentarians and the introduction of a Legislative Council within the Council of Ministers would much help the position of national parliaments. Still, whatever the institutional structure, the main challenge now is to get the right people to the key positions.

In the discussion three issues were raised. First, a member of the EU Court of Auditors drew attention to the fact that his institution suffers from a similar expansion in size as the Commission. In response, Henning Christophersen conceded that the Court of Auditors is a rather different institution from the Commission. In this case the comparison with the European Investment Bank (EIB) that is run by an executive board of 5 or 6 members composed on the basis of rotation is possibly of more relevance for the Court of Auditors. In turn, this would not seem an appropriate solution for the Commission where ultimately it would appear best to leave the composition of the College to the Commission President. Sir John Kerr admitted that the Convention had failed to properly address the future organisation of the Court of Auditors and he agreed that it would probably be best run by an executive board composed on the basis of the principle of rotation subject to a supervisory board in which all member states would be represented. Then the issue was raised of the cabinets of Commissioners: whether – especially after the expansion of the College – it was necessary for each of them to follow all dossiers in the Commission and whether the size of the cabinets should not be reduced? In response, Philippe de Schoutheete and Henning Christophersen argued that the role of the cabinets in following all Commission dossiers was a vital element in the Commission’s collegiality. Without it, Commissioners would no longer be able to participate responsibly in the decision- making (and, at times, the voting) within the College. Mr. de Schoutheete agreed that the cabinets could be reduced in size but unfortunately that was not an easy message to get across. Desmond Dinan added that the issue of the cabinets (like many other issues addressed in this debate) had already been addressed by the 1979 Spierenberg report. Cabinets can be considered ‘necessary evils’; they are necessary to sustain the principle of collegiality and also at times to create political momentum but they also sometimes exacerbate the problems and tensions inherent in the Commission organisation – all of which was nicely illustrated by the way Delors sometimes used his cabinet to by-pass Director- Generals and other top officials in the Commission organisation. Finally, Onno Ruding drew attention to the proposal in the CEPS Policy Brief to have the Commission agree its mission with the European Council. Philippe de Schoutheete replied that indeed there is a need for a clear agreement with the European Council at the start of the Commission’s term and that its mission should cover the full five-year period. Rapporteur: Ben Crum, Marie Curie Research Fellow

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3rd Session: Realigning the EU with its Citizens The first speaker of this panel was Robert Manchin, Chairman and Managing Director of Gallup Europe. During a power-point presentation Mr. Manchin demonstrated how polling can be a useful tool for enlightenment of decision-makers, but he also mentioned the risk of abusing the power of data in order to align citizens to the views of a perceived majority. Mr. Manchin gave the audience an overview of different results of European opinion polls and stated that a European public opinion does not yet exist, although first signs could be detected, for example during the Iraq crisis. According to Gallup polls, the current concerns of citizens about a future EU are linked to the questions of enlargement, immigration and the impact of changing cultures. It could be seen that an overwhelming support for an EU constitution and a common foreign policy exists in most member states. However, there is no single source of trust and authority with which most EU citizens could identify. Mr. Manchin described identities of European citizens as divided between about 40% of citizens feeling exclusively “nationally attached” and the other 60% subscribing to a national and a European identity, with national minorities usually feeling the “most” European. As a result of these “mixed identities”, European politics are always linked to national or even local politics, with every national public looking at the EU from a different background. These different backgrounds also lead to different attitudes towards subjects with international implications like immigration or the transatlantic relationship. Concerning EU-related fears, it appeared striking that the younger generation is much less cautious towards European integration than older ones, but also that the EU means something different for the different age groups: While the EU as a peace project dominates for the older ones, younger generations often seem to take peace or freedom of movement for granted. Heidi Hautala, Member of the Finnish Parliament and former MEP, denounced the gap between the Member States and “Brussels” where policy-making had become too centred on a general European perspective which would not exist for many citizens. Ms. Hautala regretted that in many EU-decisions it could be seen that there was little understanding for the socio-economic realities of the individual, and she stressed that a better balance between social, environmental and economic aspects would be needed in the future. Ms. Hautamala also would like to further encourage the involvement of civil society as an important watchdog, but she acknowledged the progress made in developing and strenghtening networks of this kind during the last years. However, there would still be a long way to go concerning a more transparent legislative procedure, especially in the Council. Ms. Hautala welcomed the progress made by the constitutional draft in which the possibility of one million citizens to suggest a legislative proposal to the Commission has been inscribed. Ms. Hautala also felt positive about the possibilities of referenda, although many politicians would feel reluctant to this means of popular voting. According to her the time of stalemate on the constitution should be used to think of better ways of realigning the citizens of Europe. More and better information would not necessarily lead to more pro-integrationist citizens, but it would be the only potential way to democratise the Union. Especially for the younger generation the EU could not be justified through the thoughts of the founding fathers anymore, but through every-day results concerning the very concrete quality of citizens’ lives. However, citizens would only accept the idea that many subjects are being treated best at the European level, when they would get some real opportunities for participation in this process. Larry Siedentop, Professor at the University of Oxford and author of the book Democracy in Europe, called the current level of EU support among EU citizens ‘”t best equivocal”. He regretted the very inadequate political education, which resulted in the general fact that many would “not feel as authors, but only as recipients” of EU decisions. The EU’s top priority therefore would have to be fostering a European constitutional conscience. This would, however, imply a persistent – and not just ad hoc – European public opinion and a common demos. Mr. Siedentop stressed that laws needed a solid social rooting in order to be

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accepted, but this would not yet be the case for the EU. Siedentop blamed the European Parliament’s failure to create a “European public” as mainly responsible for the current situation, as the EP had allowed national parliaments to detach themselves from the EU decision-making process without being able or willing to compensate for the loss of democratic control at the national level. Siedentop therefore called for the re-involvement of the national political classes in the EU decision-making process through a bi-cameralism consisting of the European Parliament on the one hand and national parliaments on the other. This way the Union could profit from the large public attention that national MPs already enjoyed. Last but not least, the EU-correspondent of the Swedish daily newspaper Dagens Industri, Ola Hellblom, gave an interesting insight into Swedish europscepticism. He described the prevailing mistrust of many Swedish citizens towards the EU who blamed it of promoting a “hidden agenda” of creating a “federalist superstate”. National politicians often would not dare selling the EU as a positive project anymore, and Swedish EU commissioner Margot Wallström would not enjoy much support from her national colleagues in doing so. Mr. Hellblom denounced the old game of national politicians claiming successes for themselves while blaming failures on “Brussels” as the perfect (unelected and detached) scapegoat. For journalists it would be increasingly difficult to sell EU-related stories to an uninformed and uninterested Swedish public who often would not know the general institutional set-up of the EU. Mr. Hellblom closed with a rather pessimistic outlook on the upcoming European elections for which he foresees an extremely low turn-out in his home-country. Rapporteur: Sebastian Kurpas, CEPS Research Fellow

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Annex Full Speech of Pascal Lamy

Introduction Minister (Dick Roche), ladies and gentlemen. Thanks for inviting me back to CEPS this evening. I would like to begin with a message for your International Advisory Council. You are a brave lot. You showed up at the starting event featuring an after dinner speech by Pascal Lamy. I fear I am not renowned for wit and repartee. And indeed I was brutally reminded of this by the organisers. “Whatever you do, Pascal” I was told, “get right into the policy stuff. You’re not here for jokes or amusing stories. We couldn’t get Bill Clinton. We couldn’t even get Pat Cox. We got you.” OK. So I’ll jump straight in. The theme of this conference is about enlargement, about how we can make it work. But I would like to put to you that the real debate is now less about how to make enlargement work, and more how we can make the EU work. Less a question of the humble mechanics of the different institutions, and more a question of what we could and should do together. That will be the focus of my talk this evening. But nonetheless, it must be said that this enlargement is an extraordinary achievement, and arguably Europe’s most important ever. It is geopolitical in scale. In business speak, we are about to merge our fifteen existing member states with ten countries to our east and south. To extend the business metaphor a little further, it is important to remember that this merger is a friendly act. Indeed, many of our new member states have experienced hostile takeovers, sometimes more than one, in the last century, despite brave “shareholder” opposition. So. New share-holders. New client base. If this is a friendly merger, how does the EU proceed ? Look for a consultant with a decent track record to give straight advice, and in particular a serious check up on strategy, organisation and image. And let me also pose for you this evening as just such a consultant.

Europe in troubled waters First thing all consultants need is a market study. Well, we have the numbers, in the latest Eurobarometer poll. We must not become simply poll-driven, a slave to focus groups. But with findings this clear, Europe had better pay attention. At the end of last year, just 41% of European citizens polled by Eurobarometer declared confidence in the European Union. And just to show that the current trend is downwards, no fewer than 25 million European citizens have switched from essentially “positive” on Europe to “negative” (or “don’t know”) in just the last six months. I could soften the blow for my own institution, citing evidence that the Commission engenders more trust than national governments. But I won’t. We are all in this together. Even enlargement, which ought to amount to an expression of confidence in a European future, is not overwhelmingly popular. , Austria, Belgium and Germany, for example, all have worrying low levels of support for enlargement – indeed as low as 45% in one case. How serious is this ? Just the latest revenge of a skittish electorate on political leaders ? Again, I don’t think so…I fear we have serious challenges that are unique to us that we have to face up to. So let us review strategy/organisation/and image.

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A clearer strategy The reason a clearer strategy is needed is obvious. Europe’s sense of purpose has become blurred at the edges. Europe has succeeded in the past when we have established a clear focus on key priorities, and stuck to them. I believe we are currently trying to ride too many horses at the same time. We need to re-focus on our core business, to pick up on my earlier metaphor. Let us consider again, what our citizens want, because they are remarkably consistent. Again, Eurobarometer gives us a good pointer. What do they want ? (1) First, our citizens demand that we find a means to address Europe’s own version of twin deficits – in growth and competitiveness. Economic growth is stagnant now, and the long term pointers are ominous: an aging population, and declining research spending leading to a lower level of innovation in industry. We need a sustained effort to raise the endogenous level of growth, as the Sapir report made clear. En passant, that may mean confronting unpalatable truths. We may need to recognise that the Lisbon agenda has not delivered. That we have simply talked up the Lisbon agenda, hoping against hope. But we have neither delivered the resources, nor set the political focus and ambition for these vital targets to be reached. As is sometimes the case in politics, we have oversold expectations. We have underinvested in results. So we need a new Lisbon. Dick [Roche], perhaps it is a “Dublin”. And we need to create the same level of urgency, interest, even political hype as we did in the 1992 project to create a single European market. (2) Secondly, let’s not be afraid to use an unfashionable word. Solidarity. That means in the first instance, real, well-paying jobs in Europe. This is the single most important priority, if we are to deliver results which matter to people. But it also means closing the gap between the richer and poorer regions of the continent, and notably between the current and new members of the EU. (3) Europe needs to be more secure and free. The right to move freely within a borderless Union is a useless freedom if we cannot ensure security and justice and if we cannot make that clear to people. So we need, for instance, a common asylum policy, a common policy on immigration (and let’s not confuse the two, by the way), and improved policies on integration into society. 6000 kms of land border and 85 000 kms of sea borders will need managing: and not just by those Member States who, as a result of their specific geography, have more to do than others. (4) And finally, Europe needs to develop more weight in the international arena. Of course, I will leave it to braver men than me to draw lessons from the conflict in, and over, Iraq. The only clear thing that emerges is that Europe didn’t exist in this whole debate. Fine for the likes of me, to avoid awkward questions by saying: “no comment: the EU has no policy.” But hopelessly inadequate for the future. Of course, now there is some rather distant light in the tunnel in the form of a European foreign minister, and a distant rumble in the December decision on defence. But in the current planning phase, we have to run before we can walk. And that means sharpening our focus on development and international governance where we have to reorganise so we are more coherent and more consistent. Coherent in that we have to bring spending on the European Development Fund within the overall budget, and not leave it out on a limb. Consistent in that we cannot work in isolation from our Member States or indeed other international organisations like the IMF or World Bank. Europe can and should be “bigger” in this area. But for this consultant to earn his fee, or at least his dinner, we must remember that priorities mean less, as well as more. What does this mean less of ? One example has to be agriculture. Not because we don’t care about our farmers – far from it - but because successive waves of reform of the Common Agricultural Policy, the latest only

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last year, have meant that the share of agriculture as a percentage of our total spending has declined and will continue to decline. Moreover, enlargement brings in ten new Member States, adding 4 million farmers to our 7 million, while reducing expenditure in real terms. So the CAP is capped. And the CAP is not only smaller, but smarter. Better focused on quality rather than quantity. More oriented towards rural development than boosting production. So that’s the key set of strategic objectives. And the mechanism is the current discussion on financial perspectives. For this vital exercise of long term budget planning is of course really about priorities, not who pays what. Or at least, not first about who pats what. We haven’t had a really good European level discussion on priorities at all since the last such exercise, Agenda 2000. The enlargement process could have been such an occasion, or indeed the Constitutional Convention. But neither turned out that way. So the debate on Financial Perspectives must be that discussion. And if so, when we agree it – sometime next year – it will remain a de facto political contract at European level between the constituent parts of the European Union, and that is of fundamental importance for the solidity of the Union.

Organisational questions: clearer decision-making and management of the engine Putting my consultant’s hat on again, where better next to turn than institutional reforms? Europe’s organisation has to be updated and improved. The fact is that we are long due for a fundamental overhaul of our procedures, and the Constitutional Convention was a good idea in this respect. For too long, our institutional debate has been dominated by a false debate between two ideological extremes. On the one hand, the eurosceptics, who because they believe that the nation state is the only level at which political accountability can or should be exercised, and as a consequence therefore also believe that any European construction must by definition be illegitimate and anti- democratic. And on the other hand, the federalists, who press nervelessly forward for a federal executive uniquely responsible before a genuinely powerful European Parliament. Whatever we think of these two poles in terms of ideology, they both fail to address the current needs of European citizens. The Eurosceptics are calling on us all to commit economic, and perhaps political, suicide in a globalised world. And the Eurodreamers are determined to sacrifice improvements in today’s Europe for a politically unrealistic Europe of tomorrow, or probably the day after tomorrow. So let us set aside two poles, and hold a broader and probably more nuanced debate on the question of addressing Europe’s democratic deficit. The key single fix, in my view, is to make each of Europe’s institutions more receptive to its citizens. The Commission ought to be more accountable – to the Council as well to the Parliament, for instance. And the Council needs to sort out its decision-making procedures, and here the obvious answer is a simple double majority: i.e., agreement would require 60% of the votes in the Council, together with a majority of Europe’s population. This would seem to me to be to be the only way to find a compromise between the bigger and smaller countries. Obvious conclusion: the IGC must deliver an agreement on this issue as soon as possible. And I stress: as soon as possible, given the open, wounds left in Brussels in December. I am glad the Irish Presidency has not rushed this issue, to allow some time for reflection and consultation. But if we want to avoid citizens turning their backs on Europe, we have to see these institutional decisions taken this year and if possible this semester and even better, before European elections. I hear a deal may be in the works, and that is obviously highly desirable – a great feather in the cap of the Irish Presidency. And one last point: whatever we do, we have to ensure that the final document is simpler, clearer to understand, clearer to use. Everyone agrees on this, of course. But please, let’s not have the IGC take the rather good work of the Convention and render the text illegible, just in the interests of finding dirty deals. Clarity has to be a key priority.

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Communication: Europe and its capacity to entertain / towards a vigourous political life Which leads me to a key word in any consultant’s presentation: communication, a terribly difficult area for the European Union. I see you have Larry Siedentop on your agenda tomorrow, and there is one area, or perhaps I should say at least one, where I am strongly in agreement with him. The European system of today entirely lacks any sense of political animation. The machine exists, but it lacks soul, as James Brown would say. There is a total absence of real or meaningful debate / to get over to citizens what the issues are all about. For want of a better way of describing it, Europe does not entertain its citizens, and therefore it does not involve them. Strange, because we have all the potentially entertaining accoutrements of a real European political society. To start with, we have a European Parliament, directly elected by its citizens, a unique feature in the world, and gaining strength with every decade which passes. We have enough lobbyists to start our very own K Street. We have every NGO known under the sun, plus several local Belgian branches. We have confederations of every European industry and trade union represented here. And we have here over 1000 accredited journalists from across the world. Even European political institutions have changed a lot, particularly under the Nordic influence, much more accepting of transparency in all modern senses of the word. Our system is transparent, our web-sites are full of information and professionally run. Universities everywhere study us to death. And still – after all this - Europe lacks, as I would say in French, both lisibilité and visibilité in political terms. Why is a fascinating issue, and again I don’t have time to consider this fully. But a key factor is the absence of political debate on what Europe should be and should do. It’s some time now since policy makers both talked policy and politics. The first problem is that neither of the two main groupings of the European Parliament – the PPE and PSE – are much more than distant relatives of national parties, which has not helped. Here, there may be change in the air. Second problem, politics does not yet travel easily across national frontiers. It is still quite difficult to find consensus between a Swedish social democrat and an Italian socialist. Or between a British Tory and a Belgian Christian Democrat. And, thirdly, and ironically, as the Economist has pointed out, European politics has been the victim of European consensus itself: a consensus between European social democrats and European christian democrats, particularly amongst political elites. Ironic, because it might be a result of the fact that so many “sort of” agreed for so long / on so much. So Europe’s citizens never got the chance to discuss the benefits up close, or decide what they really wanted from Europe, apart from a few sporadic referendums here and there. Too easy, all too easy, as a result, to decide that the problem is simply in Brussels. And now some of those chickens are coming home to roost, to judge from some of the surveys I cited at the start. Another conclusion I have drawn from nearly fourteen years in Brussels is that something like Europe needs a double dose of political legitimacy, a double dose of political entertainment, to really engage its citizens because we are more distant from them than national governments are. And every time we argue for the one hundred and fifteenth time about the powers of the Commission against the powers of the Council, we lose more of their interest. Of course these are vital questions, I am not disputing that, and I have my pretty firm views on this type of thing. But it’s a switch off for European voters. There is no single answer to such a complex and ephemeral problem. You can’t “create” politics. But I would suggest that as a start, the new European Council, indeed perhaps the first European Council properly meeting with 25 members undertake a novel exercise. They should devote an entire day, or an entire Council meeting, as a good executive board should do, from time to time, to debating how to communicate a clearer, more political, more vibrant

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vision of Europe to its citizens. And this could be useful to commit the whole corporation, and notably the bosses, to deliver this message. And what is the message ? That Europe adds real value above and beyond what Member States can do on their own. European “identity” and “values” are essential, but they don’t put food on the table. So as the Centre for European Reform has suggested, perhaps we should look for a fairly utilitarian mission statement for the EU: that the EU exists to ensure greater stability, security and prosperity than any one Member State can achieve alone. And this message I would like to put clearly and simply to our clients, our voters, our shareholders.

Conclusion As the years go by, I find myself ever more committed, not just to the notion of Europe – I guess all of us here would sign up to that – but to the political project of Europe. For what we have created in the last fifty years is nothing short of a radical re-design of the paradigm of the international system. Perhaps because post Westphalian architecture did not predict or allow for either communism or fascism, we have all forgotten just how radical it is to have supra-national government existing, calmly, peacefully, democratically, across almost all of modern Europe. In my real job as Trade Commissioner, I spend more than 50% of my time outside Europe. It’s a good vantage point, like seeing the world from outer space. And I am often asked if Europe can be an effective laboratory, an effective model, for regional integration on a global scale, to those labouring towards regionalism, for a host of different reasons, in SE Asia, different parts of Latin America and Africa and the Gulf region. My answer of course is yes, as long as you are prepared to learn from our mistakes as well as our successes. In some areas, such as trade policy – and no credit to me, I inherited a good system – we have our strategy, our organisation, even our communications clear. In other areas, frankly speaking, our contribution to global governance is rather less clear, rather less harmonious. Two major lessons which say the same thing. Europe has to be lit up by its debates, and we need to do that urgently, and at the same time, arrive at the tough compromises which come from a real political process of priority setting, from political choices in the years to come. Only by doing this can we fulfill the – literary - last will and testament of Jean Monnet, whose memoirs finish with the following words: « Les nations souveraines du passé ne sont plus le cadre où peuvent se résoudre les problèmes du présent. Et la Communauté elle-même n’est qu’une étape vers les formes d’organisation du monde de demain ». Jean Monnet’s world of tomorrow is our world of today. Thank you.

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