Downing Street Says » Future Financing

Asked why there wouldn’t be detailed discussions of the European budget at the informal meeting, the PMOS said that we had been very clear, as had the Commission, that we did not see the informal meeting as being about future financing. In terms of the position of new member states, we were fully aware and had been, as acknowledged in June, of their desire to try and get a settlement in December. What we had to do here was get the horse and cart in the right order. We had to agree the strategic vision and direction for Europe before we resolved how that was reflected in the budget. That was the proper way forward. That did not mean that we would try to sideline the issue of future financing in any way. It did however mean that we decided the parameters in which we approached that negotiation. Future financing would undoubtedly form a large part of the very hard work over the next two months.

Asked if he was saying that if the EU endorsed the government’s strategic vision, the Prime Minister was signalling to them there might be flexibility on the budget, the PMOS said that that adopted an unnecessarily macho approach to the subject. This was about identifying what Europe had to do to respond to the real challenge and opportunity of globalisation. That was not a political game, that was a reality. In June the Prime Minister had started to sketch out how he believed Europe had to respond. Since then we had worked with the Commission, and the Commission had produced their paper on how they thought Europe needed to respond. That paper would act as the agenda for Hampton Court. That then gave you a strategic framework in which you could address the question of the budget. It was about getting the horse and the cart in the right order.

Put to him that if we were really keen on moving things forward we should get something more detailed and concrete from the informal meeting at Hampton Court, the PMOS said that there was no point going into detail before the context was decided for that detail. There was no point trying to decide the detial of the future financing budget until we knew what strategic direction you were trying to shape. For instance with an issue like universities we knew that Europe’s universities had to be able to compete, not just with the United States but also with China and India. What was the best way to try and make that happen? Equally in terms of something like what happened when companies went bust? Did you spend money and try and save the company or spend money trying to help individual workers get new jobs. President Barroso had come up with the idea of a globalisation fund, we believed that that had merit and was worth examining. In this country for instance when Rover went bust, we spent money on helping to retrain workers. That was the sort of approach we needed to respond to the pressures of globalisation. To suggest that the issue we were discussing at Hampton Court were not real issues was wrong. What you had to do was agree the strategy before you got to the detail.

Asked if the Presidency had any specific proposals for dealing with globalisation, the PMOS said that the time for specifics was December. The globalisation fund was one idea that President Barroso had come up with. What we were talking about was modernising the European social model. Of course how that was interpreted would vary from country to country. The key thing was what was the underlying strategy in terms of what we were trying to do. Was it right to try and protect countries from globalisation? We believed that that was a false approach. What we had to do was make ourselves fit to meet the challenge and seize the opportunities and that was what we believed we would do.

Asked how he assessed the atmospherics of the summit, the PMOS said that he thought there was a real recognition in Europe that the issues of globalisation were ones we had to address. We saw that when the Prime Minister addressed the European Parliament in June. We had seen that in our meetings with other leaders. They would speak for themselves and he did not want to put words in their mouths, but in terms of the actual content of meetings that had shown a positive spirit. We had seen that in the Commissions paper, which was very much their paper, which we regarded as a very serious analysis and a very serious piece of work. People recognised that this was not about arguing over specifics alone. This was about trying to set a strategic vision for Europe and a vision which translated into detail. Therefore in short the atmospherics were serious. The issues were difficult, we should not pretend otherwise. The answers were not obvious but there was a will to try and agree an overall consensus on how we moved forward.

Asked how the Prime Minister could make his vision binding, the PMOS said that of course the proof of the pudding was in the eating and the Prime Minister himself acknowledged that in June. He didn’t think that anybody could accuse the Prime Minister of having pulled his punches in his speech in June. Equally the European Union worked by consensus. You could not impose on the European Union measures which it did not as a whole wish to accept. The spirit with which people approached this summit was important. The very nature of the summit was an informal discussion. It was not one in which the whole agenda has been pre-cooked between officials. This was primarily so that we could debate the issues in a serious way, but also get a sense of how we could move forward. December would decide whether people were determined enough and serious enough to reach consensus. If we could get a future financing deal, that would show that we were serious.

Put to him that Luxembourg had already made a highly detailed study of European finance and asked what the substance of the discussions would be on future finance, the PMOS said that he wondered how long it would be before we got to the point where somebody actually wanted him to essentially start the negotiations on the future financing deal. He was sorry but he was not going to go down that road. We should do things in the proper order and that the proper order was that we should agree that strategy and the priorities before we moved to the question of how the budget fitted those priorities. Of course it was a detailed process and of course it was difficult, but we had been round the course with the Luxembourg presidency, we knew the issues. Therefore if the will and the determination was there, the Prime Minister believed that we could get the deal. Nobody was under-estimating the ambition of the task we had set ourselves. But in turn no one should underestimate our determination to give it a real go.

Asked about the Prime Minister’s speech tomorrow, the PMOS said that although he wouldn’t give specifics about what the Prime Minister was going to say, not least because it would probably change between now and then, the spirit of his approach was that June was about setting out his overview of how changed Europe and it was seen by most people in that light. Tomorrow was not the time for that over-view. Tomorrow was much more about reporting back what the Presidency had been doing since June and mapping out how he saw us going forward between now and December. Tomorrow was work in progress, giving people a sense of what we were trying to do in the six-month presidency. Tomorrow was not the end of our presidency, it was if you like, the half-way point.

Put to him that France and some of the East European states would say that we could have done a deal on the budget off the back of the Luxembourg presidency in June and we had wrecked it and to add insult to injury we were now attempting to link the question of European farm subsidies with the wider question of the WTO Doha round, and there by offending a lot of our partner states, thus wrecking the presidency and the WTO round as well, the PMOS asked if there was anything else we could be charged with? Firstly he didn’t see the need to go over the arguments of why the June summit hadn’t succeeded. We had set out our arguments at the time. What was important was to persuade people about why we did need to get the horse and cart in the right order. We needed to persuade people that Europe did need to get its response to globalisation right, before it was reflected in the budget, not the other way round. East European countries knew that globalisation was as much an issue for them as it was for us in the UK. They knew that they, like us had to raise their skills and their R&D spending and raise their university education, so that we could meet the global challenge. It was not something that was a UK agenda imposed on the rest of Europe. There was a reality which we all had to deal with. Therefore we all had to find a strategic response to it. That was not something that people dismissed lightly. People recognised that was the reality we were dealing with. Therefore what we were not talking about was putting future financing off to some Never Never Land. We were talking about two hard months of work to get a deal, but knowing the strategic context within which we got that deal.

Asked, given the negative spirit with which France was approaching the summit, what magic ingredient were he hoping to bring that would unblock resistance in Europe, the PMOS said that he couldn’t speak for other member states, but he could reflect the spirit in which we met our partners in Europe, including France. That spirit was one of real engagement with the issues of globalisation and a real recognition of the need for consensus on issues such as R&D, universities, energy migration, transport and so on. Those were real issue which had to be addressed in a real way. That was the basis on which we approached this summit and we hoped that was the spirit in which others approached it.

Put to him that we had heard a lot of rhetoric from the Prime Minister but had very few specifics, the PMOS said that people should read the Commission’s paper on globalisation. In June we had set out a vision. We had worked intensely with the Commission, more intensively perhaps then any preceding presidency and the Commission have produced their paper, which reflected the views of Europe as a whole, on how we moved forward. That paper was anything but rhetoric. It was a very detailed analysis of Europe needed to move forward. Tomorrow the Prime Minister would report back in detail on how we envisaged the next few months, precisely to turn the vision into specifics. You couldn’t leap before you could jump. This had to be taken step by step and while it might be nice for the media to go from grand to vision to detailed reality in a few days, reality is more complex than that.

Asked where Agriculture appeared on our list of priorities and surely that should be a priority where a deal needed to be made, the PMOS said that this was an issue for future financing which should be influenced by what Europe believed its priorities were. What did Europe believe its priorities should be over the next ten or twenty years in terms of how it responded to globalisation. If you didn’t know the strategic direction you couldn’t answer the detail. The important thing was that we got that consensus on the strategic direction and then approach the detail not the other way round. Questioned further, the PMOS said that in terms of the overall debate of course people would reach a consensus about where agriculture stood in terms of priorities. The key point was what actually were our priorities.

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» Tuesday, October 25, 2005

Future Financing

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