Ditchley Foundation Lecture XLI
8 July 2005
Most British prime ministers have the same compendium of historical memories – familiar from Arthur Mee and Al Bryant – on which they can draw in political adversity. So it is not only Margaret Thatcher who sounds like Margaret Thatcher. For Harold Macmillan, then prime minister, Dean Acheson in 1962 had fallen into the same error as Philip of Spain, Louis XIV, Napoleon, the Kaiser and Hitler. In posing his famous question in a speech at West Point he had denigrated the resolution and the will of Britain and the British people. But what have resolution and will ever had to do with what Acheson said? “Great Britain,” he argued, “has lost an Empire and not yet found a role. The attempt to play a separate power role – that is a role apart from Europe, a role based on a ‘special relationship’ with the United States, a role based on being the head of a Commonwealth which has no political structure, or unity or strength and enjoys a fragile and precarious economic relationship by means of the sterling area and preferences in the British market – this role is about played out”. Certainly, in so far as resolution and will had any bearing on this role, the die was pretty well cast. Britain, which for understandable and gallant reasons counted for less in the post war world than in the pre-war years, spent the second half of the 1960s bringing her soldiers and sailors home from East of Suez. Economic performance had prescribed the limits of resolution and will. We could only cut the dash that our GDP could afford. It left a rank taste in some mouths. Philip Larkin wrote:
“Next year we shall be living in a country
That brought its soldiers from lack of money.
The statues will be standing in the same
Tree muffled square and look nearly the same.
Our children will not know it’s a different country.
All we can hope to leave them now is money.”
Gone were the bases. Gone, or almost gone, the Empire – and there was little success in building up the Commonwealth as a geostrategic or emotional surrogate. And gone too the delusion that we could construct around the rim of the Common Market, a free trade area with our disparate friends and trading partners that would allow us to avoid clambering between the sheets with federastic French and Germans. But the notion that we were still somehow set apart from other Europeans, and enjoyed in the words of that great journalist, Winston Churchill, a ‘special relationship’ with the US (with an American mother he was himself the product of just such a special relationship), all this still left vapour trails in the skies above our island homes, like those above the Weald of Kent and the South Downs which we remembered from our finest hour. Harold Macmillan like most other prime ministers of the last half century (with the implacable exception of Edward Heath), thought he could have it both ways: we would be late entrants into the improbably successful common Market and semi-detached participants, while acquiring at the same time the status of senior prefects in Washington. Within weeks of the Acheson speech Macmillan persuaded a hugely reluctant President Kennedy to sell Britain the Polaris missile. There it was, a shining example of the relationship. American had flogged us our very ‘independent’ – ho hum – nuclear deterrent. I think it is one of the few times that America acted against what it believed to be its national interest in order to help Britain, pleading at the drawing room door like an Edwardian retainer.
The decision resulted in de Gaulle’s famous “non”; it was probably not the only reason for his rejection of our suit. After all, as Macmillan confided to his diary, Hitler had not danced in London. But it was a reason that the Americans could understand. How damnably infuriating for them. Since the war, it had been American policy to promote the political and economic integration of Europe, and unlike Churchill they thought that integration should include Britain. When the post-war Labour Government turned down membership of the Coal and Steel Community (how would Labour sell it to the Durham miners?) there was a serious move in Congress to deny Britain its share of Marshall Aid. American wanted Britain in Europe, first, because she thought this would help Europe to work better; second, because she genuinely wanted Europe to share the burden of maintaining the world’s economic and political stability; and third, because understandably she believed Britain would be a useful friend inside the European stockade. There were suspicions in Britain that this American enthusiasm for our European membership was at least associated with Washington’s desire to see our Empire closed down as rapidly as possible. This itself caused many here to harbour doubts about the European enterprise.
I daresay that if Kennedy had made a different choice, de Gaulle too, we would have been spared forty years of geostrategic schizophrenia. What would this have meant? Not hostility or rivalry to America, but a recognition that we were probably a better partner for America in the long run if we helped to build a stronger and more coherent Europe. Failure to make the Acheson choice has not usually obliged Britain to choose explicitly between different policy options though this has sometimes happened. But what has always been there is attitude, perception and approach, accompanied by oodles of sentimentality, especially on the British side. President Wilson had said at the end of 1918 to a British official during a gala reception at Buckingham Palace, “You must not speak of us who come over here as cousins, still less as brothers; we are neither.” And today? Brothers and cousins are just for starters. In the 2000s we even share the same Colgate toothpaste. It’s curious really because not only is there little evidence, as Ambassador Seitz argued, that on the American side mush ever overcomes national interest; the ‘special relationship’ was a brass plaque that he declined to polish. Odder still that Wilson’s view is forgotten, because of the growing sociological and economic evidence of a widening gap between America and Britain. Americans are far more religious than Britons or other Europeans “We don’t do God,” Mr Blair’s and Sir Clive Woodward’s Rottweiller – Alastair Campbell – famously declared. Not even Mr Blair. It is no criticism of President Bush to note that he does “do” God. American nationalism is a far more assertive sentiment than its British equivalent. I suspect that even London cabbies would be a tad embarrassed by a British equivalent of Fox News. Moreover, for all our attachment to what the French call the Anglo-Saxon model, in America there are degrees of social inequality that would be politically intolerable here, just as the size of the State sector and levels of tax in Britain would be politically unacceptable in America.
But let me complete President Wilson’s 1918 observations. He regarded it as misleading to talk about the Anglo-Saxon world when so many Americans were from other cultures. As we know, today and for the future, the majority of immigrants to America come from the Hispanic south of the American continent and from Asia. In addition, Wilson thought that we should not make too much of the fact that both nations spoke English. Ever since as a young man I asked politely in New York where I could get some fags, I have recognised this old truth. So, Wilson concluded, “there are only two things which can establish and maintain closer relations between your country and mine: they are community of ideals and interests”.
Fair enough. But that has not been much of a problem over the last sixty years. Of course, we did not always see eye to eye. Suez is the most dramatic example of a falling-out, when we in Britain rudely discovered that American was not prepared to allow us to play at being a great colonial power whenever it suited us. That was a splendid example of smart American diplomacy – Washington going to the UN to stop two old European countries invading with scant justification an Arab country with incalculable consequences for Arab sentiments towards the Western world. ‘Autres temps, autres moeurs’, as President Chirac might say. There were other times too when we temporarily parted company, but by and large, we never felt that there was any real threat to that community of ideals and interests that had been established in the wake of the second world war.
America, the incomparable super power, had then alchemised her own attachment to law, due process, enterprise and pluralist democracy into a framework for world order, complete with rules and institutions. It worked brilliantly for most of us – by the end of the century, the majority lived in democracies and the world’s wealth had surged – and it worked equally well for the US. It legitimised American power; it shielded America from the world’s envy; it led to the triumph of the liberal economics and politics in which America believed and which America more than any other country represented; it preserved, outside and inside America, the dream of ‘the city on the hill’. How do we best describe post-war multi-lateralism, all those of us who benefited from it and who love its creator? Well, in part, we have lived in an empire without an emperor. And what worries us and confuses us today is that we think those times may be over.
If you are having to make the Acheson choice, then it helps to know what are the options between which you have to choose. And this, I think, is where the decision is even more complicated for Britain today. Because the previous certainties on both western and eastern Atlantic shores seem less clear and less secure. We hear too much about shifting tectonic plates, not in any event a very good analogy since political change comes far faster than geological. It seems to me at the very least wishful thinking to suppose that nothing has recently changed in America’s world view to oblige us to reconsider our position. I shall come to Europe a little later.
The Iraq invasion was only the most visible and alarming manifestation of change in Washington. Whatever one’s views on its morality and efficacy, to argue that it did not represent any radical shift in American policy and behaviour strikes me as either wilfully ignorant or crudely mendacious. For up to a decade, there had been a noisy debate in the think tanks and newspaper columns in America between traditionalists – believers in multi-lateralism, engagement and deterrence – and a mixture of assertive nationalists, sovereigntists and neo-conservative ideologues. To paraphrase James Baker, we had and have a dog in that fight, and it’s not the dog that has recently been doing the barking and the biting. It cannot possibly be part of our British community of ideals or interests to believe in preventive wars, the setting aside of the international rule of law and the demonising of the UN and international cooperation. I am not going to re-visit today “the thankless deserts of Mesopotamia”. But when Mr Blair decided in 2002 to take this country to war, while it may have been the ‘special relationship’ that summoned him – the strategic decision that he could not possibly let America go it alone – the relationship by then was with an administration that was acting differently from its predecessors, not particularly because of the atrocities of 9/11 but because of its own ‘zeitgeist’. What I have never understood is that he never appeared to recognise this himself. In an interview with Jim Naughtie, for his excellent book “The Accidental American”, the Prime Minister says – ‘puzzled of Downing Street’ – “I never quite understand what people mean by this neo-con thing”. Can it be true? What was he reading? Who talked to him? Does he think that American foreign policy has normally been conducted by men and women like Paul Wolfowitz, Douglas Feith and John Bolton? There is a deep fissure between Republican foreign policy makers (not all that different from Democrats) like Richard Lugar, Brent Scowcroft and Richard Haas, and those who make the big foreign policy decisions in the 2000s. To put it in family terms there is a difference in the world view of Bush 41 and Bush 43. I know which side of the divide Britain should be on.
The word whispers through the long grass that the days of Vice President Cheney’s ‘America First’ nationalism and of the neo-cons’ ‘armed missionaries’ are behind us. Naturally, we should expect no disavowals; this, after all, is super-power politics. But just listen and watch. Since the election, pages have been turned, even lessons learned. It is no longer regarded as outsourcing America’s security interests to talk to allies. We are all heeded, more or less, and many of us even rather liked. The community of ideals and interests is rebuilt from the rubble of recent controversy.
I would love to buy all this. Send those tectonic plates packing. Make the odd speech about there being more that unites than divides us – and, of course, events like yesterday’s terrorist bombings remind us that at a fundamental level that is true for all our democracies. So far as our regular diplomatic intercourse is concerned shaking hands is certainly more civilised than shaking fists. But I cannot quite believe the spin, the suggestion that nothing has really changed in Washington. I suggest there are three issues that we in Britain should look at very seriously if we are interested in ideals and interests. I will deal with each of them briefly.
America is rightly worried about the proliferation of nuclear weapons and in particular about the threat of a nuclear device falling into the hands of a terrorist organisation. After yesterday’s atrocities in London, we need no reminding that this is the greatest danger that we all face. We have in place a global framework for preventing the spread of nuclear weapons, for stopping the development of nuclear energy in ways that could lead to the production of weapons, and for nuclear disarmament. Given that President Kennedy used to fear that by 1975 there would be 15 to 25 countries with nuclear weapons, the Nuclear Non-Proliferation Treaty and the International Atomic Energy Agency have been pretty successful. The UN has worked well. In recent years, two countries – Libya and Iraq – were obliged by intelligence, verification and diplomacy to abandon their secret nuclear programmes. But clearly we are today faced with two particularly worrying cases of further proliferation which raise more general questions about the non-proliferation regime. For North Korea and Iran to become actual or potential nuclear powers would be extremely destabilising. In the case of North Korea, there would be a real danger of weapons falling into the hands of – or being deliberately sold to – terrorist groups. In both cases, the regional impact would include the encouragement of neighbours (for example, Saudi Arabia and Japan) to go nuclear.
To defuse these crises, America needs to work with Europe in Iran, and China (and others) in North Korea. It also needs the understanding of China over Iran, since China is now such a large investor and partner in Iran’s energy industries. But this touches a broader issue that tests how far America will go today to make multi-lateral solutions work.
Plainly we need a stronger system for policing proliferation with tougher political back-up and sanctions. Verification procedures need to be more intensive, with sanctions against non-compliance with the treaty or withdrawal from it. There need to be limits on the production of new nuclear material and tighter controls over the export of sensitive material and technology. We need to share our responsibility for the management and disposal of spent nuclear fuel and get rid of the weapon usable nuclear material that already exists. A stronger treaty is necessary, but as we saw once again in May we will not get such an agreement if we appear to focus exclusively on the interest of the existing nuclear club, the N8. Nor do I see how we will be able – failing diplomacy with Iran and North Korea – to get support for sanctions through the UN unless the existing nuclear powers and particularly the US are prepared to bring rather more to the negotiating table ourselves. We cannot expect all the ‘give’ to come from the non-nuclear states. When that is our starting position in talks, our moral authority is eroded. So Britain should be pressing the case for more transparency in the possession of nuclear weapons, the running down of stockpiles, the verification and implementation of the Comprehensive Test Ban Treaty, and an end to further research and development in advanced nuclear weapons. The argument that America needs to do this research and development in order to deal with some putative future nuclear threat carries little weight given the imbalance in present nuclear armaments. Here then is a first test of whether there is a transatlantic consensus on one of the most dangerous issues requiring a negotiated multi-lateral solution.
The second is the issue that, we are told, has dominated much of the discussion in Gleneagles this week. I will not discuss the science of global warming and climate change, nor the precise meaning of the Gleneagles communiqué compromises, nor the threats that loom over us as we fail to take the action required to limit future damage. I guess I shall be gone before the Thames Barrier fails later in this century – I hope much later. I shall in any event advise my children to take the wise precaution to move up hill to Highgate and Hampstead. But I just want today to make three points, which will continue to be at the heart of the debate until the US signs up to targets for reducing carbon emissions.
First, one of the arguments that America has used against doing this and against the Kyoto Protocol – joined lamentably in this nonsense by Australia which did not raise the same point on the depletion of the ozone layer over its continental mass – is that is unfair to have a global agreement that does not include China, India and other rapidly growing and carbon-emitting economies. But it was America that helped teach us all not only about the precautionary principle in science, but also about common but differentiated responsibilities. American pioneered the arrangements that enabled China, India and others to sign up at a later date, with financial support and technology transfer, to the Montreal Protocol that has been so successful in ending the production and use of ozone depleting substances. What changed in principle between Montreal and Kyoto?
What changed, is that we are told that it is impossible to convince American voters that they should pay realistic prices for their energy. And what price has to be paid for strong and honest political leadership? American policy today is selfish. It is also foolish and self-destructive. Judging by recent polls large numbers of Americans seem to recognise this themselves. Higher energy taxes would encourage people to use energy more sensibly, insulating their houses and businesses. They would cut back dependency on Middle East suppliers. Every sports utility vehicle on America’s roads cocks a snook at President Bush’s admirable if selective attachment to democracy in Western Asia. Paying more for energy would encourage exploration and cut back the growing revenue gap of recent years. The European experience does not endorse the claim that there would be dire economic and employment consequences – we have found other ways in Europe of driving unemployment up and growth down.
The other point to make is that this really is a question of ideals and interests. I share many values with political Washington but plainly these do not include taking seriously our responsibility for our environment and for our future. What sort of legacy do we hand on if the ice-caps melt and the seas rise? Where is the morality in denying our culpability for ruining the world?
The third issue is how we accommodate peacefully and constructively the rise of the great Asian powers, China and India. For eighteen of the last twenty centuries, China has been the largest economy in the world. It will be again in this century, provided China avoids political turmoil. Before the Industrial Revolution, China and India represented half the world’s GDP. During the rest of this century they will be moving back in this direction. We should not regard this a threat, provided we can draw these great countries into a system of responsible global governance in which they help to make the rules as well as learn to obey them.
This seems to me to require at least three things. First, we have to look sensibly at institutions including the UN, but perhaps because of the week we are in we should begin – at least as far as economic issues are concerned – with the G8. What sense is there in an organisation that draws in Russia, as a sop for wounded national pride, but excludes countries that are going to shape our well-being significantly in the short and longer term? Is the global imbalance between what China sells and what America has to borrow – an imbalance that brings to mind Herb Stein’s wise first law of economics, “things that can’t go on forever don’t” – going to be resolved by populist, protectionist pressures in Congress, and a reprise of the same pressures in Europe’s parliaments? It is not a sign of Sino-inebriation to say that if we are going to save free trade and a global rule book for commercial dealings, we have to involve China – and India – in finding solutions on a basis of parity of esteem.
Second, America in particular has to recognise the role China and India will also necessarily play in security issues, a point on which I have just touched. The main danger I see in Asia is that a Sino-Japanese reconciliation on which Asia’s future security without American guarantees depends, may be precluded by the deliberate feeding of belligerent Chinese nationalism. I think we can stop hat happening, but it will take a lot of engagement on America’s part.
Third, if we are going to persuade China and India to play by the rules (not that India should be a problem) and if those rules are going to reflect as they did in the 1940’s and 50’s, our own pluralist and liberal economic and political values, we need to look hard again at whether we all – though it is mainly a question for America – believe in the international rule of law. We certainly did in Europe, and that was largely America’s doing. But today? What does extraordinary rendition tell other countries about America’s real commitment to human rights? Or Guantanamo – a deliberately created legal black hole? Or the debate about the ‘quaint’ international conventions on torture? I remember the fair but fierce interrogation to which I was subject in America by politicians, professional groups and ngo’s about the practices of the police in Northern Ireland. Where in the US would the moral authority to conduct a similar searching review be found today? Does the democracy we cherish extend to the Middle East but stop when we arrive at the borders of Pakistan and Uzbekistan, to name two countries at random? America’s much debated soft power has always been based on the world’s admiration for what it stands for, how it is governed and what sort of life it offers its present citizens and future immigrants. America’s new head of public diplomacy, Karen Hughes will I am sure have looked with interested at the Pew Research Centre’s findings on China’s popularity elsewhere in the world in comparison with that of the US.
The way Britain behaves and the way the EU behaves will naturally help to determine whether or not we can encourage the sort of American leadership that we would like to see, and in particular whether it reflects what we deem to be our ideals and interests. How would the EU need to act, how would it need to develop, in order to convince the US that the multi-lateral approach of the post-war years had not died unmourned with the fall of the Berlin Wall and in the wreckage of the Twin Towers.
Europe would need for a start to see itself as a partner of the US not as a rival. As a rival, what sort of figure would we present? Well, one thing for sure is that we are not en route to super-powerdom, or super-statedom for that matter. we face a half century in which our population will be falling and with it our share of world output and world trade. We will be hard pressed to ensure that demography and weak economic leadership do not also lead to a falling underlying growth rate. As for military rivalry, we all know that there is no contest. America spends about twice as much as us, and what we spend – which admittedly is not negligible when considered in the aggregate – we spend badly. Individual member state contributions vary enormously. The budgets in Germany and Spain, for instance, are in inverse proportion to the amount of hot air in those countries about Europe’s world role. Even less defensible, and to me more worrying, we are not shaping up as a cultural or scientific rival, or even partner. In Europe we spend half what America spends on universities. What does this say about us as societies? Does it entitle us to patronise America’s allegedly materialistic culture? Try telling that to the three quarters of European D Phil students in America who now stay there after they have completed their dissertations. What sort of intellectual legacy is old Europe going to hand on to its next generation?
To be an effective partner for an America committed to multi-lateralism, we would also need to remain advocates of a rule-based international system, not least in economics and trade. We have been leading examples of the benefits of free trade and have sought to extend its advantages to others.
We have been an economic bloc on a par with America, and even though we are no longer closing the gap between the American standard of living and our own, our performance as surplus-producing trading economies with high standards of public service provision and high productivity per hour is pretty good. Are we now losing the plot when it comes to economic growth?
We have been slow in shaping and carrying through our own positions in foreign and security policy, not surprising given that Europe is manifestly not a country and that foreign and security policy goes right to the heart of what it means to be a nation state. But one very successful foreign policy we have pursued has been enlargement, which has created stability around our expanding Union boundaries. What price further enlargement today?
All these issues are up in the air after the recent referendums in France and the Netherlands, to which I would add the regional elections in Italy and Germany, which showed the fragility of support for the governments on those countries. What we should look at is what the referendums were notionally about; what is really at the heart of Europe’s sickness; what is being suggested as the way forward; and what Britain could do, which might make us more comfortable at least with our position in Europe, and more effective in shaping our partnership with America, a great country which may be changing in ways that make it a much more awkward ally and friend.
Paradoxically, the treaty, which has been in effect rejected because it is said to represent a further example of Brussels creep, went further than ever before to define the limits of EU power and policy-making, albeit sometimes in language deliberately ambiguous, to mask just how deep the federal dream has been buried. Nevertheless, we have agreed in Europe to share sovereignty to a unique degree, and on the whole the enterprise has worked surprisingly well. Europe’s problem is that while we have created institutions to manage this shared sovereignty, there is no European demos to give the sense and confidence that the institutions themselves are accountable. Several of the member states increase the sense of democratic alienation by attacking the legitimacy and credibility of the institutions which they themselves have created.
This is not the time for setting out at length how the EU institutions should pull in their horns and operate more effectively. I made a speech along those lines last spring, which was seen – perish the thought? – as my manifesto for the Commission Presidency. But I will make four simple points. First, political narrative. It’s time for an end to visionary waffle. The EU is an amalgam of nation states. It is as strong as they are. Most nation states do, first, what they believe to be in their national interest. That includes Mr Juncker’s Luxemburg. Second, subsidiarity at present is a word in the treaties not – as it should be – a day to day practice. Brussels should stop doing some of what it does today. That does not mean dismantling broad swathes of policy and administration. It does mean understanding that unless Brussels reflects added value, it should not be in the game. Third, delivery is more important than acquisitive ambition. Brussels should focus primarily on what it is already asked to do, not on what it would like to pick up from the portfolios of member states. Fourth, Brussels should be a barrier against corporatism, protectionism and nationalism.
The main reason why European ambitions have gone off the rails is that we have spent too much time debating institutions, and too little time looking at the product of those institutions – that is getting the policies right. The three largest economies in the eurozone have been badly run. The real European malaise is not found in Brussels but in Paris, Berlin and Rome. With unemployment in double figures, with the blighting of job hopes for so many young people, and with political analyses of the problem which belong in fairy stories, what sort of public reaction do governments expect to their appeals for trust and for the benefit of the doubt.
I have most sympathy with Berlin. The expense of reunification has been colossal. On top of that, Germany still pays a prince’s ransom into the EU budget. It has to operate with a ball and chain around its ankles, yet still manages an extraordinary export performance. But it needs to go further in reforming its labour market and welfare policies, an argument that will clearly be at the heart of the autumn election campaign there.
The new French prime minister, Dominique de Villepin, has set out his own thoughts on what Europe should do and become. The British press are not very fair to him. He is in good company. It is not a crime to be handsome, debonair, intelligent, cultivated and eloquent. We should even be prepared to forgive his enthusiasm for Napoleon Buonoparte, whom every old-fashioned Liberal and Tory should abhor. Prime Minister de Villepin went further than anyone else has done in spelling out an alternative to trying to make the policies that have already been agreed in Europe work effectively. He wrote an article last week in the “Financial Times” which I assume represents the French programme for a re-invigorated Europe. I am not sure whether I was more shocked by it intellectual vacuity or by the damaging consequences of trying to follow it. The French prime minister offered us a choice. On the one hand, we resign ourselves to making our continent a vast free trade area governed by the rules of competition. I beg his pardon but isn’t this what the EU is supposed to be? Isn’t this the stuff of international agreements since the Treaty of Rome? What is the alternative? Presumably a protectionist Europe governed by the rules of cartels and corporatism.
Mr de Villepin suggests that instead of a free-trading, market-oriented Europe we should create a “new political Europe” where there is first, a “genuine economic government for eurozone countries” pursuing lower unemployment and managing common responses to the rise in oil prices; second, an entrenched CAP; third, the creation “in France” of one or two European research and technology institutes; fourth, closer co-operation on European security and development of European democracy and identity through, for example, the creation of a European voluntary service.
I am not sure how seriously we are supposed to take all this but may I hazard the thought that if this had been on offer in these terms in the referendum campaign in France it would not have made much difference to the outcome.
What does Europe need to feel more comfortable with itself and to be a more credible partner to America and to the re-emerging China and India.
First, we need a re-invigorated economy. There is no secret here about what needs to be done. Countries like Finland, Sweden, Denmark and Ireland are already doing it, and most of the new Member states are wedded to the same approach. It is perfectly possible to combine open, enterprising economies with social responsibility. What is clear is that the much lauded European social model – job guarantees and high employment overheads – creates unemployment. As French companies understand – after all, they perform brilliantly in the global economy in areas as diverse as insurance, motor cars, airplanes, luxury goods and public utilities – the threat to workers’ jobs in Europe is not the ubiquitous Polish plumber but the increasingly well-educated and well-trained Asian worker. Even if that out-dated social model can survive the bracing climate of the global market, it cannot withstand the demographic pressures that our own low fertility rates and high age dependency ratios have unleashed.
Second, we need an open, free-trading Europe. What sort of signals are we sending to Asia before the conclusion of the Doha Development Round when we appear to flirt with higher tariffs and non-tariff barriers? If France and Italy want to raise barriers to exports from China, what sort of response do they export from German exporters who do so well there? If Europe wants a world shaped by multi-lateral consensus and regulations, the place to start is trade. We will all suffer if we retreat into dog-eat-dog protectionism. In addition to avoiding a trade war with Asia, we should give higher priority to the goal of creating a free trade area around the Mediterranean by the end of the decade. But in my experience some member states are more enthusiastic about free trade areas than about free trade itself.
Third, we need to invest more – privately and publicly – in European research and development, and in European universities. A couple of new European institutions in France might look good – especially in France – but what would be even more helpful would be for France and other countries to stop cutting their science budgets and to increase them instead. It makes no sense, as the Sapir Report on the EU budget noted two years ago, to send about three quarters of it on agriculture and the regional funds and so little proportionately on research. At the moment, we are investing in yesterday not tomorrow.
Fourth, we certainly need greater co-operation on security and more expenditure too. We could begin with two simple decisions. We should allow the competition and single market rules to apply to defence industries as well as to others; and we should make our crisis management and peace-keeping capacity a reality sooner rather than later. At the moment we have the worst of all worlds. We set out plans for a bigger European defence role which disturbs some of our American allies; but then we don’t deliver.
Fifth, this is not the time to call a halt to the most effective element of Europe’s soft power, the enlargement of the EU. It is probably the policy that most entitles us to claim that we are a serious partner to America in keeping the world safe and making it more prosperous. I do not doubt that we shall need to be more brave and honest in debating the issue. But it would be both foolish and immoral for us now to decide that the drawbridge should be raised. In time – over a decade or longer – I hope that we can incorporate South East Europe, Turkey, Moldova and Ukraine in the EU.
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