Downing Street Says » European Council Meeting

Asked if the Prime Minister had any plans to meet either Chancellor Schroeder or President Chirac prior to the G8 meeting, the Prime Minister’s Official Spokesman (PMOS) told journalists that he was not aware of any plans at this stage. However we were of course in close contact with their representatives through the Sherpa system.

Asked when we expected to make a deal on the European budget and what contacts we expected to make with European leaders, the PMOS said that in terms of the average amount of time it usually took to complete a finance deal we were well ahead of schedule. The last deal took a further nine months down the negotiating track than where we were now. Furthermore in terms of our contribution, we were still the second largest contributor to enlargement, and no doubt that was something the East Europeans would bear in mind. In terms of receipts for structural funds, cohesion funds and so forth, half the money under this proposed deal would still have gone to the richer countries. Therefore the East Europeans would have been contributors to that and to a much a greater extent than to our rebate. He had no doubt that in the coming weeks and months we would be talking to the East Europeans and setting out our position. The Prime Minster would no doubt be doing that himself. We understand that there was a degree of frustration after Friday. We shared that frustration. Equally what was important was that we not only moved forward but that we moved forward on the right basis. That was a view that had been supported by others such as the Italians, and the Swedish Prime Minister had said the same on Friday. The important thing was that whilst we understood the East European’s position, that we moved forward on the right basis.

Asked about whether the current disagreement made it impossible for the Prime Minister to take the UK into the Single European Currency, the PMOS said that the Prime Minister’s view had always been that it had to be justifiable in economic terms under the five economic tests. That hadn’t changed. Asked about the personality clash between the European leaders, the PMOS said that we should deal with the issues rather than the personalities. Inevitably tempers got frayed and so on, everyone understood that as part of negotiation. Fundamentally it was about getting an EU budget which more accurately reflected the needs of Europe today, rather than 40 years ago. Within that we had said that we were prepared to put our rebate on the table, but there had to be that wider dimension. It was about whether people were prepared to accept that or not.

Asked if it was appropriate for us to be discussing the rebate under our presidency, the PMOS said that there was precedent. Future financing had been one of the issues that had been dealt with during the 1991 presidency. Also you could discuss matters of national interest, even in the presidential chair. Luxembourg benefited significantly from the deal it proposed.

Asked about our aspirations for the presidency if we had this issue as a distraction, the PMOS said that we wanted to keep moving things forward and we wanted to see whether a deal was possible. A deal was only possible if others agreed. Therefore we would keep working towards a deal. Whether that was possible during the presidency we should wait and see. The important thing was that we kept pushing forward.

Asked if the Government would feel it had failed if it didn’t have a deal on finance by the end of the presidency, the PMOS said it wasn’t helpful to take such a stance on these issues. What was important was that you objectively assessed what needed to be done to get a deal and to set out your criteria and push forward. We have done that during these negotiations, we did that on Thursday and Friday. Obviously when we took over the presidency, we had an extra obligation to try and move things forward in Europe and part of that was undoubtedly future financing. It would clearly take a wee while for people to recover from the frustrations of Friday. We then needed to take an objective assessment of where we were.

Asked if, over the next few days, the Prime Minister was likely to emphasise his commitment to the European Social Model, the PMOS said that in his address to the European Parliament on Thursday the Prime Minister would say that to be made to choose between what was called Social Europe and Market Europe was a false choice. What we needed was an effective Europe in which there was a social dimension, which boosted the economic dimension rather than acting as a restriction. The Prime Minister did not believe it was a zero-sum game. He believed that you could have a social dimension which helped the economic dimension rather than hindering it.

Asked about how we expected to move forward on the debate about the European Constitution, the PMOS said that first of all we should recognise there did have to be a period of reflection. We needed to reflect on the implications of the Dutch and the French votes, that we needed to re-connect the leadership and the people. What the summit had achieved was a consensus that that was the sensible way forward. In the immediate aftermath of the two votes that had not been the case. In that sense we had seen progress at the summit. What we now needed to do was not to rush out an artificial timetable which contained the promise of addressing these issues without thinking through the substance. The Prime Minister will go some way towards addressing this issue on Thursday and try and reflect on what was the best way to get the proper debate going about how we reconnected and more accurately reflected the issues that people wanted Europe to address. The budget issue was not irrelevant to that, because that issue was about meeting people’s real priorities. Put to him that the reconnection couldn’t just be forged by groups of leaders talking amongst themselves and if there might be a ‘grande conversation’, the PMOS said there would be many ideas but the first thing was to start the debate. It was a mistake to try and judge what the end of the debate would look like, just at the starting point.

Asked how many countries agreed with the Prime Minister’s vision for Europe, the PMOS said that there was a recognition that something had gone wrong. There was also a recognition that we needed to address that. Rather than ticking off individual countries, what was important was that there was a debate starting. In a debate you inevitably started off with people in different positions, he would not pretend otherwise. Of course people had different positions. We should be clear about the terms of the debate. That was one of things the Prime Minister would try and do in his speech in Brussels. We should not start off from the position where one side caricatured the position of another. That was why in the Prime Minister’s interview in the FT and probably in his speech on Thursday, he would set out the reality of social protection as we had it in this country. Rather than the caricature that was sometimes presented. Inevitably countries would vary on social protection, but equally we had to insure that that social protection enhanced the economic position rather than detracts from it. That was the debate we needed to have in Europe.

Put to him that the Prime Minister’s address to the EU would be in the "graveyard slot", the PMOS said that since it was a full 3-hour debate so there should be significant attendance. Put to him that the Prime Minister didn’t usually attend the debates and if this was just because it was somebody else’s parliament, the PMOS said that question was somewhat mischievous. Asked if there was a danger of us being seen as being condescending towards other economic models, the PMOS said that he hope that wasn’t a danger because what the Prime Minister was interested in doing was starting a genuine discussion. He recognised that you couldn’t have a genuine discussion if you lecture people or harangue them or whatever. What you had to do was engage with the issues and engage with their concerns. That was why he said what he said in the FT interview, that was why he would take account of the concerns of others whenever he addresses the European Parliament. In saying that he strongly believed that Europe did need to change. He strongly believed that that involved getting a better balance between the social element and the market element to make Europe effective. Therefore it wasn’t a lecture but the start of a conversation.

Asked if he could think of a regulation we have supported, the PMOS said that if you considered the minimum wage, extended maternity leave and extended paternity leave those were all examples of social protection in practice. Therefore the caricature that we were some sort of Dickensian society, without social protection did not add up. Equally you had different systems in different countries. The important thing was that you didn’t impose a single model, but recognised that there was a balance to be struck. Put to him that in a single market you had to have a single model, the PMOS said that the benefits of a single market were that you got rid of regulation that hampered trade. Getting rid of restrictions that stopped trade. That was why the single market had been the success it was. You needed to keep going further. Questioned further with respect to the current issues, the PMOS said that there was an argument about the balance of the budget and how we seemed to be spending so much more on the CAP then on R&D and education. That was a debate, within that people argue about the figures and there was a question about how you got from where you are to where you want to be. If you looked at the European press you could see a hunger developing for this debate to take place, not to let personality issues get in the way.

Asked if given that this debate should have already taken place during the drawing up of the constitution, the new debate lacked credibility, the PMOS said the Prime Minister continued to believe that the Constitution was a perfectly sensible set of rules to handle the different circumstances of a Europe of 25 compared to a Europe of 15 or smaller. Equally however he believed that what the votes told us was that the political dimension, somehow or other, got lost in the setting up of the rules. Therefore as he argued on Thursday night, what was necessary was for Europe to get the politics right and then the rules. Without getting the politics right you didn’t get the reconnection between the leadership in Europe and the people. You had to show that Europe was capable of dealing with the issues whether it was the challenge of globalisation or issues such as crime or asylum. Showing that Europe worked at that level was what the Prime Minister believed would re-connect.

Put to him that it could be argued that the Anglo-Saxon economic model was itself a caricature and in fact the UK was closer to our old friend the Swedish model, the PMOS said that the Prime Minister was not trying to impose one model on everybody. He was arguing why we have found that if you had an economy which has a minimum wage, which had a level of protection in other areas as well, that didn’t inhibit economic growth. It didn’t stop the reduction of unemployment, it didn’t stop progress, it didn’t stop investment in skills and education. The name-tag was frankly less important than the substance. What was also important was that people didn’t misunderstand what we were about.

Asked if the Prime Minister would be outlining some of his vision today, the PMOS said that today was more about an account to Parliament of the summit. Thursday was more about his vision for the future.

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» Monday, June 20, 2005

European Council Meeting

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