Press release

Tony Blair tells MEPs how Europe should face up to globalisation

European Council - 03-11-2005 - 16:50
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Tony BLAIR, President-in-Office of the EU Council, told MEPs that it was necessary to get Europe moving again and get it moving in the right direction. There were three main aims: first, to get agreement at the Hampton Court summit on what was the right direction for Europe and its economy; second, to agree on a set of new priority areas reflecting that direction; third, to get a budget deal in December in the light of these priorities.

Mr Blair praised the Commission's paper for the summit, with what he called its stark but right analysis on the scale of the challenges of globalisation.  He hoped the summit would agree that paper, then move on to look at six priorities for the future:
"Research, development and innovation should take a larger share of the EU budget, but there should also be a better coordinated approach between the Member States by setting up a European Research Council along the lines of America's National Sciences Foundation.  This would give us a chance to form world beating companies in the technologies of the future."
Secondly, Mr Blair called for a real common EU energy policy to develop a proper integrated electricity grid and use Europe's combined weight in negotiations with energy suppliers elsewhere - all the more so since Europe would soon be importing 90 per cent of its oil and gas.  Nuclear power should be included in the analysis. Thirdly, there needed to be a focus on the European university sectorwhich, he said, was not competing well with the US and was not ready to meet the challenge of competition from China and India.  He wanted to ask the Commission to draw up a report on how to improve the sector's competitiveness and increase links to the business sector.
A fourth priority was migration policy, both looking at better controlling illegal migration and bringing the benefits of controlled migration to Europe's economies.  "Those countries which opened their labour markets to the 10 new Member States have benefited from it," he said.  A fifth key area was demographic change and enhancing work life balance.  He said the open method on coordination was the best way to work together in enhancing childcare provisions, pension arrangements and social security systems rather than new European regulation.
Finally, he offered support for the Commission's idea of a globalisation fund, not to protect failing companies, but to protect and help people made redundant or facing difficulties in adapting to change in the labour market.
Among other issues, he called for progress in developing a counter-terrorism policy, including exchange of information between police services and data retention, repeating his willingness to use the first pillar legislative method.  He also called for political agreement on the services directive by the end of the year, even if legislative adoption was not a prospect.
He was hopeful of reaching a budget deal at the December summit, which was especially vital for the ten new Member States:  "If we are to get agreement it will be better if we have agreed a direction for Europe and let that influence the deal, and get a forward perspective on a more rational way of organising the EU budget in future."
If agreement could be reached on a way forward, covering globalisation, climate change and security, that would be a start in getting Europe moving again, he concluded: "Council, Commission and Parliament should work closely together, if not always in agreement.  Europe has much to be proud of - let us show our citizens the next 50 years can be as good as the last."
(Note: the full text of Mr Blair's opening speech is included at the end of this summary of the debate.)
Commission President José BARROSO said that the Hampton Court Summit would be an opportunity to face up to the economic and social challenges that Europe faces.  The Commission has already published its position on the summit, and Mr Barroso welcomed the positive reaction from the Parliament. The Commission, he recalled, had also published its position on how to re-launch the financial perspective.
Europe needed to modernise in order to meet the challenges of globalisation.  The status quo for Europe was not an option.  Europe needs ambitious policies and Europe needed to avoid the false argument of those that believe that European is only a market. The EU needs to have a structure for social cohesion.  Europe can not be built on 25 separate energy or service markets.  It was about getting the right combination of action at European and national levels.  The EU would also need to regulate and deregulate, where necessary, but without an agreement on future funding, no one could plan economic priorities.  Europe, he said, is a good example of how group of nations could work together in a globalised world.  The proposed creation of the globalisation adjustment fund  would be not put in place to help failing firms.  The fund would be there to help people and Europe needed to show that it cares. All the EU institutions needed to work together.  The Hampton Court summit should also address Europe's place in the world.  It should be about building a new consensus on Europe's economic and social model. 
Political group speakers
For the EPP-ED group, Hans-Gert POETTERING (DE) reminded Mr Blair it was his duty to represent all EU citizens, not just the UK.   He welcomed the fact that Parliament's President would be present for the whole summit at Hampton Court and hoped this would set a precedent for the future.  On globalisation, he said this was more than just economic: "It means we are one world.  This is a spiritual, cultural, economic and moral challenge." Countries like China and Cuba could not be allowed to go on claiming human rights were internal matters.  He stressed the importance of the WTO negotiations, giving the example of Morocco with its large proportion of young people: "If we do not open our markets to their products, including agriculture, progressively, not, of course, overnight, those young people will be knocking on the doors of Europe."  Finally, he urged Mr Blair to ensure the Commission was included in all the work ahead planned by the Council.
The leader of the Socialist group, Martin SCHULZ (PES, DE) began by recalling the 7th July 2005 attacks in London, which he said had been attacks on the civil society of the whole of Europe.  On the European social model, he warned that many "so-called economists" were calling for lower wages, longer working hours and fewer trade union rights as the way to boost growth.  "We do not accept the destruction of the European social model, the idea that economic and technological progress leads to social progress.  We want free provision of services, but not social dumping."  It was good, he said, if companies made profits, but their workers should share in that success with decent wages to feed their families.
Graham WATSON (UK), leader of the ALDE group, said it was sad that some people were unable to see beyond a simplistic debate between a liberal and a social Europe.  He said ninety per cent of Europe's GDP came from countries with social costs that were too high.  "The German welfare state model no longer works. It is 'kaput'. If the EU is to properly combine reform of its economic system... to provide the wealth needed to pay for social policy, we need a common response to the common challenge [of globalisation]," he said.  With the answer being neither the American or Gallic model, perhaps what was needed was the third way?  This would require leadership from the front - and it would be easier for the UK to lead if it were to join the euro, he said.
For the Greens/EFA group, Monica FRASSONI (Greens/EFA, IT) said Mr Blair had once again shown off his performance skills, but she wanted to know what, other than nuclear power, Mr Blair had in mind for the energy policy.  She called for a focus of research and development spending to be renewable energy and environmental technologies.  As for the European social model, "We should promote our principles of solidarity, democracy, rights and healthcare around the world."  Europe could not be re-launched, she added without an adequate deal on the budget.
Francis WURTZ (FR), for the GUE/NGL group welcomed the fact that Mr Blair's speech to the Parliament in June had identified three main problems with today's European Union.  Namely, crises of confidence, a need to change a Europe "that has delivered 20 million unemployed"  and that a substantive debate on the future of Europe is needed.  Mr Wurtz went on to cite August's "Gate Gourmet" industrial dispute in Britain (where a US company made staff redundant), as an example to warn against the dangers of market dominance.  He said that it was the conviction of his group that the European social model was "too precious" to be tampered with. He warned MEPs that the "chilly winds of the market" are too cold for Europe.
Nigel FARAGE (UK), for the IND/DEM group, welcomed the European Commission's initiative to withdraw proposals for European legislation saying this was "music to euro-sceptics' ears".  However, he doubted whether the Commission would implement this legislative rollback as envisaged by the European Commissioner for Enterprise and Industry Gunter Verheugen.  Referring to the venue of the informal summit due to be held on 27 October, Mr Farage claimed that King Henry VIII (whose palace it was) was "the first eurosceptic".
Irish MEP Brian CROWLEY for the UEN group stated it was important that Europe met the challenges of globalisation.  He said that the deliberations of European leaders should be guided by the following four principles; solidarity so that the social model is protected, generosity towards the new members of the European Union, responsibility towards others and finally the capacity to implement policy. On the last point Mr Crowley warned that the real test of legislation is in improving peoples lives on a daily basis.
Roger HELMER (UK), representing the non-attached (NI) Members of  Parliament, said Mr Blair had disappointed pro-Europeans by not living up to the expectations they had of his pro-European intentions when he was first elected in 1997. Mr Helmer then went on to suggest that the Mr Blair's British Labour MEPs should defect to the EPP group in the European Parliament as they consistently failed to support the policies of the Prime Minister and his government.
Mr Blair's response to group leaders
Responding to the group leaders' comments, Mr Blair began with an ironic welcome for Roger Helmer's suggestions, saying that if he was the future of the Conservative Party, Labour could look forward to a long period in office.
He told Hans-Gert Poettering that he agreed on the importance of the WTO, and that the CAP needed to have "a perspective of future change" rather than an overnight transformation.  To Martin Schulz, he said, "We do not want to destroy social solidarity but to make it relevant to today's world." Responding to Graham Watson, he said he hoped the ideas he was putting forward would show the way out of the narrow liberal/social Europe debates.  To Monica Frassoni, he said he wanted research to focus on biotechnology, where Europe should be a world leader.  He also pointed to the example of Airbus to show how Europeans working together could achieve the scale needed to compete on a global market.  For Francis Wurtz, he listed his government's social achievements, such as the minimum wage, the New Deal for the unemployed and the Working Families Tax Credit, before adding that often some on the left joined the right in attacking progressive governments.  He told Nigel Farage that he very much welcomed Commissioner Verheugen's plans on simplifying EU legislation, saying that there was a case for both good regulation where it was needed and deregulation where that was needed.  Finally, he repeated to Brian Crowley that he was not seeking to abolish the CAP all at once, but there needed to be a perspective for reform.
In a more general conclusion he said: "There is a danger if citizens see globalisation as a threat, when it could really be an opportunity.  Yes, China and India are scaling up their economy in a striking way, and are competing on top-end products as well.  Other countries like Vietnam are also coming up fast.  This is a huge competitive challenge and an opportunity.  They will need financial services and technology and will start importing our goods." 
Mr Blair said there was no question of abandoning social solidarity, he supported the social dimension for Europe, but it must also enhance Europe's competitive position. The EU had been set up to meet a desire to change from the past, and it should be an instrument of change for the future.  "Are we really incapable of modernising our social model in the way we want? No, we can do it if we listen to our people.  They are not saying they don't want Europe; they say that want Europe to answer the concerns they have on globalisation, terrorism and the environment.  Pro-Europeans must lead the case for change - it is Eurosceptics who want no change in the EU as this will allow their nationalist agenda to gain ground. Let's act together to make Europe relevant to our citizens."
British speakers during the debate
Timothy KIRKHOPE (UK) leader of the British Conservatives in the Parliament, said the Prime Minister had outlined a second "shopping list" in his speech.  He wanted to know when the "goods would be delivered".  He wanted to know the Prime Minister's position on a common energy policy, calling his decision to support "a reversal".  Mr Kirkhope stated that the Presidency had stalled. He welcomed progress made on Turkey.  What were the concrete plans to face up to the challenges of India and China?  There had been no progress on reaching a deal on future financing.  It was still unclear as to whether the British Prime Minister would negotiate on the rebate and there was no progress over the Constitution.  Mr Blair would have to live up to his rhetoric.
Ian HUDGHTON (Greens/EFA, UK) regretted that Mr Blair had left the chamber before the end of the debate.  There was still no budget for 2007.  The UK government was making proposals that would cost Scotland £1 billion in structural funds. There was also concern in rural areas, given the UK government's position to withdraw funding for European programmes.  There had been no progress as regards the Constitution or to reaching a deal on December summit. 
Ashley MOTE (NA, UK) wanted to know what the UK government was doing about the "institutional looting of funds by the EU".  Mr Mote said that the Court of Auditors says that €600 billion had gone missing since 1973 when the UK entered the Union.  He called for the EU's accounting systems to be reformed so that they meet international standards. 
Jean LAMBERT (Greens/EFA, UK) said she hoped Mr Blair had got the message that the services of general interest should be left out of the services directive.  She wanted to know what the presidency would do to encourage eco-efficiency projects and called for renewable energy to get at least as much funding as nuclear power.  "We need to link the Lisbon strategy to tackling climate change, and we need to find ways of driving up environmental and labour standards globally," she said.
Gary TITLEY (PES, UK) welcomed progress under the UK presidency on a range of fronts, including energy policy and development in Africa.  He said the best way to restore confidence in the EU would be for Member States to respect the commitments they entered into, thus curing the EU's "delivery deficit."
Douglas ALEXANDER, UK Minister for Europe, responded to the debate stressing, in particular, the UK Presidency's commitment to trying to reach a fair budget settlement in December, and arguing that this would be more easily achieved if a new general direction for Europe had been settled first. 
Commissioner Margot WALLSTRÖM, in her response to the debate, said that after recently meeting with the Africa Commission, Europe's perceived problems seemed very manageable.  The only regret she had was that the debate had not focused enough on how to regain citizens' confidence and democratic legitimacy. 
Full transcript of speech given by Tony Blair to the European Parliament:
Mr President, Colleagues. It is a very great pleasure to be with you here this afternoon in the European Parliament in Strasbourg, and let me add my word of welcome to our colleagues from the Ukraine.  If at any point in time we should ever feel lacking in confidence about Europe and its values, then the interest of people such as our Ukrainian friends should tell us that the values of Europe are strong and are much envied by so much of the rest of the world.
Mr President, my purpose in coming here today is, as I explained I would, to report back on what we intend over these coming weeks to be the basis of the UK Presidency, and I have with me Douglas Alexander, who is our Europe Minister, and after I have left he will stay to answer more questions – especially the difficult questions. However I shall be here, I am pleased to say, for at least an hour and a half to hear both your comments and to answer some of those questions myself.
Can I also say, just at the very outset, to explain how we want to take forward the Presidency over these coming weeks. On 23 June in Brussels we set out an essential vision as to how we combat the challenge of globalisation, and I think it is agreed generally in Europe that we need to get Europe moving and we need to get it moving in the right direction. The question is how we do that?  We now have an opportunity, both in the informal summit, which is tomorrow, and then in the formal summit in December, to set out that direction and put in place the specific policies to match it. So over these two summits our idea is first to agree the right direction for Europe economically; then secondly to set out some new priority areas for European action; and then thirdly, on the basis of that and in the context of that, to get a budget deal in December at the formal Council.
Now let me first of all come to the informal summit. This is what I want to come out of this informal summit. The first thing is that I want to get that informal summit to agree effectively the Commission paper presented by President Barroso and the European Commission. That Commission paper is an analysis of the challenge of globalisation and how we meet it, how we meet it both as member states and how we meet it as the European Union.  It is, I have to say, a stark analysis, but it is the right analysis. It shows just how great a competitive challenge we have from the emerging economies such as China and India, never mind the United States and others; it shows how important it is we deal with the 20 million people – almost 20 million – unemployed in the European Union; it shows how we must make our labour markets less restrictive, how we have to make sure in research and development, and innovation and other areas, we catch up with the best practice in the world; it shows how in areas like energy, where after all we are going to be importing within the next few years something like 90% of our oil and gas needs, that Europe has to up its game considerably;  and it shows also the enormous demographic challenge that we will have, that we will have fewer people of working age, more people in retirement, more people therefore needing to work, and therefore issues such as work-life balance and how we allow people both to raise their family and to work in the workplace is all the more crucial.
So the first thing that we want to do at this informal summit is to get that paper agreed and make that the basis then for the discussion we have about Europe, its social model, its economic future.  However, in addition to that we also want to add some specific areas of future priorities for European work, and I just want to go through some of those, if I may.  In respect of these areas of future work, we are in addition, as the Presidency, publishing some papers today from academics within the European Union on certain aspects of the challenge we face in each of those areas, and those will be published and available for people, Members of Parliament and of course for people attending the summit tomorrow.
But what are these areas, what are the new priority areas that we should be thinking of?  First of all, there is research and development and innovation.  We need both to make sure that more of the European budget is spent on those priority areas if those are the future areas for the European economy, and we also need to co-ordinate better how we do the work in these areas. We propose specifically a European Research Council that is the equivalent of the American National Science Foundation, that will support the funding of research and development projects and gives us the chance in Europe to be forming the world beating companies in the technologies of the future. So one major area for future priority work is research and development. 
The second area is energy and energy policy.  I believe it is time that we developed within Europe a common European energy policy. For far too long we have been in the situation where, in a haphazard and random way energy needs and energy priorities are simply determined in each country according to its needs, but without any sense of the collective power we could have in Europe if we were prepared to pool our energy and our resources. This should focus, not on new regulatory barriers, but rather on obtaining a genuinely open energy market. It should deal with, for example, a properly integrated European Union grid.  Already this is done on a bilateral basis between countries.  Think of how much greater economic power and competitiveness we could have if we were prepared to make sure that that was integrated on a European-wide basis.  Secondly, we like other major countries in the world, should be prepared to enter into dialogue at a European level with key suppliers of energy, use our collective weight to make our voice heard;  and thirdly, we need to be developing … coming to some common views at least about the possibilities and perspectives on issues to do with areas like nuclear power -  I thought certain things might have a mixed reception!  But these are areas into which we need to be putting future work.
The third area – universities.  Let’s be absolutely clear about the situation in Europe today.  Our university sector is not competing in the way it needs to with America. You have got China and India developing their university sector in an extraordinary way, and yet if you look at the overall, not just the spending on our university sector, our tertiary education sector, but also where we are getting the value added in the connection between business and university, we don’t have anything like the same possibilities in Europe that they have in other parts of the world.  Our proposal is that we task the Commission specifically on coming back and reporting to the European Council next year on the challenge facing European universities, how we compete with the United States, how we get more public-private partnership into sustaining them, and more graduate schools, linking business and the academic world across the European Union.
There is a fourth area I would like to suggest for priority work, and that is how we both control migration, but use migration to boost the effectiveness and competitiveness of the European economy. We need both to make sure that we have the proper controls on illegal immigration, at the same time as recognising that controlled migration can actually bring a benefit to our European economies.  One of the papers that we publish today is a paper from a French academic, Patrick Weil, and he has also been an advisor to politicians in France, which points out how ironically those countries that have opened their labour markets to those from the accession countries, the accession ten, have actually benefited economically from that opening up.  Now I think we need to take those lessons further. 
The fifth area is where we need to make far greater progress on what I might call the demographic or work-life balance issues.  Now here it is not appropriate for the European Union to be engaged in substantial bouts of extra regulation and so on, but here is where the open method of co-ordination could work properly – in things like work-life balance, in childcare, and provision for people to be able to raise their family and work at the same time, in how we get the best practice in pension and social security systems across Europe.  This would be sensible if we were looking at how we modernise the European economy.
And then the final part of priority work is in relation to what was called by the European Commission, the Globalisation Fund. And I just want to make one thing very clear about this idea, the important thing about the Globalisation Fund is this, it should not be a fund that protects companies that need to restructure, or failing companies, or bails out companies that can’t succeed. What it should be however is protecting and helping people in circumstances where restructuring has made them redundant or given them difficulties within the labour market.  Now to take an example from the UK recently where we had the Rover works, where thousands of people were made redundant, we didn’t stop the restructuring because it was necessary I am afraid economically, even though tragic for the individuals involved, but we did provide real help with retraining, reskilling, finding new jobs around the workforce in order to protect, not the job, but the individual. I think such a fund, if it is done in the proper way, helps us meet the challenge of globalisation, rather than hinders us.
So at the informal Council tomorrow, what we want to propose is that we agree the basic direction in the Commission paper, and then in the six areas of work I have just set out, that we set out how we can make progress on each of those in order to enhance the competitiveness of the European Union, and also its social solidarity in helping people adjust to the challenge of globalisation.
In addition tomorrow, arising out of the special Council that we had on 13 July, we want to propose measures for a counter-terrorism strategy in order that we get agreement to those measures at the December Council. Those should focus on things like the radicalisation of people inside the European Union, the protection of our infrastructure, and in particular how we exchange information and protection better, how we retain that, how we get cooperation between the different security and police services inside the European Union in order to protect our people better, and as the Home Secretary, Charles Clarke, said to you I think when he was here at the European Parliament, we are happy to deal with this in the first pillar so that that can be part of the co-decision-making process. Now if we can agree that tomorrow, then I believe that we have the beginnings at least of the right context in which we can get a financing deal.
In addition to these other issues, there are outstanding dossiers, and let me just say a word about those at the moment.  On the Working Time Directive, I hope we can reach agreement under the UK Presidency, we will certainly try to do it.  In respect of the Services Directive, we know the position taken by the European Parliament, I still however hope that it is possible to get political agreement on the right way forward here, because I say this in all sincerity to you, the Services Directive is a necessary part of completing the single market and it is important for Europe.  I would also like –  you know I decided to come to the European Parliament today, and was unable to attend the British Parliament, this is a kind of reminder, so thank you for that. Can I also say I would like - and this may get me into further trouble - but specifically say to the President of the Commission, who I congratulate on the work that he has done over the past few months, and say that Commissioner Verheugen’s proposals on deregulation are an important indicator that Europe is prepared to regulate where it is in the interests of its citizens, but prepared also to deregulate where it is necessary for our competitiveness.  I think colleagues, this will be giving our Ukrainian colleagues an excellent example of what a modern democracy is all about.
When we then come to the December Council, it is our intention to do our level best to reach a financing deal, and I want to make it quite clear, I know this particularly from conversations I have had with members from the accession countries, obviously for all of us the European budget is important, and as we know in Britain there are major issues that arise in connection with it.  However I think we should remember – that is we, the 15 members of the European Union as was some time ago – that for the accession ten countries this is of fundamental importance to them. And what I want to say to you is I acknowledge our responsibility as the Presidency to do our level best to reach agreement.  I hope we can do that, whatever the particular level the budget may be.
Also can I just make one other point, which is that if we are to get a budget agreement, however, and I know that people want that, they want it in the European Parliament, they want it in the European Council too, we are going to be in a better position to get that agreement if we have agreed an economic direction, new priorities for work, and if those can then influence the outcome of that budget debate. That budget debate has got to make a start in this financing deal in re-ordering the priorities, and it has got, through the review process, to be able to give us a forward perspective of a more rational way to spend the European budget in today’s world. If we want our economy to meet the future challenges, at some point we have got to make sure that the budget is aligned with the economic priorities of our citizens, of our business and of our workforce.
Now finally on the external relations.  In respect of climate change you will know that we have successful agreements both with China, India, and also with Russia, on the issue of how we take forward a proper dialogue on climate change.  And in particular I would commend to you the coal demonstration plant, with near zero emissions, that we have agreed with China for Europe to build.  I think this could be an important signal for the future, and I am perfectly happy, in response to questions, to say more about climate change in a moment.  In December also we hope we can get agreement at the December Council on an Africa strategy.  I think Europe can be proud of what we have done in respect of development, but the truth is we need to do more, and we also need incidentally for these reasons to have a successful outcome to the WTO negotiations in Hong Kong.  In defence, it is just worth pointing out that when we began the process of European defence, people were very sceptical.  Today we have 9 different European missions round the world, undertaken by European forces, and that shows that European defence can indeed work. And of course we have had the accession negotiations with Turkey and Croatia opening.
Now our aim therefore is to get the following things done:  a new economic direction agreed; new priorities for European work, in areas like research and development, energy, universities, migration, demography and so on; a future financing deal that is fair, that makes us start on addressing those priorities and gives the perspective in the future of being able substantially to re-order the European budget;  of getting a justice and home affairs set of conclusions that allows us to combat terrorism and illegal immigration, whilst taking the benefit of proper managed migration;  to take forward our defence, particularly common defence policy in areas like strategic airlift and air-to-air refuelling; to get clear December conclusions on a development strategy for Europe in respect of Africa; and to make sure that we keep to a strong process of change in order to combat greenhouse gas emissions and the environmental challenge we face.
We came to the point a few months ago where as a result of the No votes in the referendums, there was a sense that Europe was in paralysis.  If we want to get Europe moving again, and in the correct direction, then we have to agree both what that direction is and the specific measures to get us there. If we are able, through the course of these next few weeks, to offer at least some explanation and answer to our citizens of how we meet the challenge of globalisation, how we give greater security in the era of global terrorism and mass migration, how we have a foreign policy that uses Europe’s collective weight for the benefit of the citizens of Europe, if we are able to do that then we will at least have made a start on putting Europe back together again, on the right track and moving forward.
No one Presidency can achieve all of that, but if we can achieve what we have set out here, I think it will be significant.  I came here today in order to report back, both on what we have done and what we intend to do over the next few weeks. I can tell you we intend to report back again and make sure that you are kept constantly in touch with the deliberations within the Council.  And if I may end on this point, Mr President, it is important that we make sure that in addressing these challenges, the European Commission, the European Parliament, the European Council, work together and work together closely. That is our desire.  As is obvious from the debates you have, and the debates we have with you, we are not always in agreement, but to return to the point I made at the very beginning, it is also obvious from those up in the gallery watching our proceedings, that Europe has an immense amount to be proud of, but it is time we showed our citizens that the next 50 years could be as good as the last.
REF.: 20051103IPR02004