The UK in the EU

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A new direction for the European Union?

Britain and EU migrants

The EU beyond the Lisbon Treaty: An agenda for action

Background

The process of ratifying the Treaty of Lisbon is expected to be completed by the end of 2008. With the reforms in the Treaty being implemented in 2009, the EU has the opportunity to look beyond the debates about internal structures and procedures. As its contribution to this debate, the British Government published a White Paper, Global Europe, in October 2007.

This Senior Experts group paper looks at the kind of issues and questions that are raised by the White Paper and others which are likely to be considered by the EU over the next few years. Many of them were discussed in the Declaration on Globalisation agreed at the December 2007 European Council.

Inevitably a short paper such as this can only be a cursory examination of the issues. But what it does demonstrate is that the EU is involved world-wide in tackling problems and exploiting opportunities that are often of considerable benefit to Britain.

The main priority areas for EU action are considered below.

Growth and employment

The indications are that the ambitious targets set at Lisbon in 2000 to expand the European economy will not be fully realised. The Lisbon Strategy for Growth and Jobs (widely known as the "Lisbon Agenda") has proved useful at raising EU performance and productivity but not at a sufficiently high rate to catch up the United States or to maintain our lead over the emerging economies.

More needs to be done to reduce regulation, to open up markets to competition (energy and telecoms particularly), to implement the Services Directive effectively and to expand the EU’s share of world trade in services. If the world economy goes through a period of turbulence over the next two years there will be domestic pressure in many EU countries for a nationalistic approach to economic policy. How the EU responds to these pressures will be an important test of its commitment to the Lisbon Agenda and its goal of a far more competitive EU. So far, the omens are good: the European Commission report on progress on the Lisbon Agenda in December 2007 was robust in saying much more needed to be done to open up markets and develop competition and this view was endorsed by the subsequent European Council meeting.

Energy security is an issue of considerable importance to EU Member States as all are dependent on imported energy (to varying degrees) and this dependence is growing. This will necessitate a coherent EU approach to neighbouring countries that are energy exporters to the EU (such as Russia) so that they cannot exploit divisions within the EU.

Freer and fairer trade

A Europe that supports and practises free trade was one of the founding principles of the EU and it is no less important today; fairer trade is needed to benefit the developing world but must not be a cover for a return to protectionism in Europe. The EU must continue to work for a positive conclusion to the Doha Development Round of World trade talks. That will mean being prepared to make concessions as regards EU support schemes in areas such as agriculture (world shortages of food may change this argument as subsidies will be reduced). An open approach to trade increases the EU’s leverage in world trade negotiations. But there is also much to be done to improve the bilateral trading links between the EU and the US and the emerging economies, notably, Brazil, India and China. Further liberalising world trade rules would be of particular benefit to Britain.

Enlargement and the EU’s neighbourhood

The EU has been a powerful vehicle for raising the quality of governance as well as the strength of economies by acting as a magnet for countries emerging from dictatorship or instability. It continues to exercise that kind of pull – seen in the Western Balkans and Turkey today. Other neighbours of the EU aspire to join. The EU needs to maintain the momentum on enlargement so that this process can continue; this is critical to ensuring Turkey’s stability for example and for bringing an end to ethnic conflict in the Balkans.

Turkish membership continues to be opposed by several countries, notably Austria, France and Germany. Membership talks have opened but have not gone smoothly. The EU will have to respond to concerns about the effect of including a country with a large and Muslim population in the EU without abandoning its long-held commitment to Turkish membership. It is in Britain’s interest to continue with EU enlargement and to ensure that, while differing views must be respected, they should not be allowed to stand in the way.

The EU already works closely with countries bordering the Mediterranean and as part of the Middle East Quartet (US, Russia, EU and UN) is a key player in the Middle East peace process. Instability on the EU’s borders has knock-on effects for EU Members so the EU must improve its capability to deploy and support civil and military operations to help with peace-keeping and with rebuilding civic and economic life.

Illegal immigration and people trafficking are of critical concern to Member States at present. The threat of large-scale movements of people seeking a better life in the EU will remain for many years. The EU is the only organisation that can mobilise the mix of resources across national boundaries needed to counter this threat. With the extension of the Schengen area to cover eastern and central EU countries, the EU’s borders agency, Frontex, will grow in importance; it will need to be properly resourced and supported if it is to improve its effectiveness.

The Common Foreign & Security Policy and External Relations

The bringing together of the EU’s current external work under the responsibility of one person, the EU High Representative, as a result of the Lisbon Treaty will make commonly agreed policies more effective.

Improvements in the structure of CFSP, and also provisions enabling "structure co-operation" in EDSP, are important innovations. But more will depend on how the Union faces up to actual foreign policy challenges over issues such as Kosovo, relations with Russia and Iran’s nuclear activities.

The EU is a major provider of aid and assistance to the developing world. Its wealthier Members (the EU 15) are committed to raising the percentage of GDP they spend on aid to 0.56 per cent by 2010 and 0.7 per cent by 2015 (0.33 per cent for the newer Member States). The EU needs to do more to improve the effectiveness of its spending on aid, to tackle corruption and misuse of aid and to improve the co-ordination of development work with other aspects of external relations. Again, a single EU external relations chief will help to achieve these aims.

Reforming the EU budget

The budget review due in 2008 (agreed before the Lisbon Treaty) needs to accelerate the process of change in EU spending priorities, with a further reduction in agricultural support, and more resources for newer Member States and for spending on innovation and the currently under-funded foreign policy programme. The review will help to shape the outcome of the next financial perspective in 2012-13.

The debate about the Common Agricultural Policy (CAP) is changing because of the development of food shortages and the resulting increase food prices (which should reduce the need for subsidies). Although further reform is needed, some Member States will face significant domestic opposition to this, so a difficult (and potentially protracted) debate is likely. There will also be political difficulties in wealthier Member States because budget reform will also require a reduction in EU regional aid to such countries so that support can be switched to poorer countries.

Climate change

The EU is the world leader in devising effective measures to combat the consequences of climate change. It has made a commitment to cut greenhouse gas emissions by 30 per cent from 1990 levels by 2020.

Following the agreement on a framework timetable and "roadmap" at Bali in December 2007, the EU’s role will be to ensure that it is implemented.

Although the EU’s emissions trading scheme needs further revisions – to ensure each country’s quota of emissions is not too generous for example – the EU’s pioneering approach has transformed the international debate about reducing carbon emissions. In the medium to long-term, a global market in carbon will develop. The challenge here will be to use the moral authority the EU has acquired to encourage other countries in the developed world to come into line (notably the United States) and to find ways to enable the emerging economies to continue to grow while reducing their impact on the global environment (their agreement at Bali was an important step forward in achieving this).

The social dimension

Ensuring flexibility in employment while protecting the rights of the individual is a challenge in any modern economy. Getting the balance right between flexibility and the rights of the individual is of critical importance for the European economy today (and a particular concern of the UK). The EU can help by supporting skills training and other social programmes, especially in deprived areas.

Terrorism and organised crime

Globalisation has brought many benefits but easier travel, the Internet and more open borders have also increased vulnerability to organised crime. The development of a violent anti-Western culture that nurtures terrorism amongst a few extremists has already cost the lives of too many people, including in Europe. People trafficking and other forms of illegal immigration represent a related problem. The EU has a crucial role in tackling all these crossborder threats.

The EU has a wide range of measures to deal with these problems including a counter-terrorism strategy and co-ordinator in place, legal measures to combat people trafficking and illegal immigration and a programme of work to improve co-ordination between national agencies, including the sharing of intelligence. More needs to be done to build on the initial instruments of legal co-operation – the European arrest warrant and the European evidence warrant – so that there is no hiding place within Europe for serious criminals or terrorists. At the same time, this co-operation needs to be carried out in a way that respects the primary duty of Member States to maintain their own security (a point emphasised in the Lisbon Treaty) and the civil liberties of citizens (again, the Treaty makes provision to deal with this point).

Conclusion

The breadth of the agenda facing the EU is considerable. What is evident is that in many of the areas of EU work it achieves far more than the UK could achieve on its own, for example on climate change, crossborder crime, anti-terrorism, international trade and the Single Market the EU has a unique capability to add value to what Member States can do. Indeed, none of these things could be done by the UK alone.

January 2008

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