Europe at a turning point

Minister for Europe David Lidington spoke about the UK's vision for a more open, more competitive, more flexible and more democratically accountable European Union.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Minister for Europe David Lidington

For those interested in the world of science, this month has been very positive for Europe.

After half a century of waiting, a British and a Belgian scientist have been awarded the Nobel Prize for Physics for their pioneering work on what is known as the “God particle”. Professor Peter Higgs from Edinburgh University shares the prize with Belgium’s Francois Englert.

He thought up the concept while walking in the Scottish highlands and doubted it would be found in his lifetime. But he underestimated the persistence of Europe’s scientists. The search for the elusive particle has generated astonishing benefits for humanity.

Among the Nobel Prizes associated with the CERN research centre are those won by France’s Georges Charpak, Italy’s Carlo Rubbia and Simon van der Meer from the Netherlands.

Britain’s Sir Tim Berners-Lee invented the worldwide web to crunch data generated by the experiment, and his invention led to an explosion in computing power worldwide.

But I like the fact that when the Nobel Committee tried to contact Professor Higgs, they couldn’t find him. He was on holiday… and he doesn’t have a mobile phone.

I have been invited here today to talk about the Future of Europe, so you may be wondering why the focus on science.

First, it is a good news story, for which I make no apology.

But it is also a demonstration of what Europe’s finest minds can achieve when they set themselves to it.

After five years of crisis in Europe, there are few who would maintain, like Voltaire’s Dr. Pangloss, that: “tout est pour le mieux dans le meilleur des mondes possibles.” [“All is for the best in the best of all possible worlds].

Yet I would still call myself an optimist.

I believe that if we can harness our greatest minds and face up to the difficult decisions that confront us then Europe will grow and prosper.

We are at a turning point.

Our economies are starting to recover, but we still have one in four young people unemployed across the continent.

Important steps are being taken towards banking union – and it is in all our interests that this succeeds – but eurozone stability remains a concern for businesspeople and politicians alike.

And while we look inwards to find solutions to our problems, the outside world is changing.

Unless we take action to revive our economies for the long-term - unless we can compete - then Europe will become increasingly irrelevant.

…Less able to export… less attractive for investment… less able to generate jobs and growth.

And frankly, we will be unable to afford the standards of living and social security that our generation takes for granted.

As leaders, we will have let down the 500 million people we represent.

Against this economic backdrop, we also face a crisis of confidence in the European Union.

President Hollande warned last week that the European Parliament may find itself paralysed after next year’s elections.

A Eurobarometer poll in July found that less than one in three Europeans trusts the European Union.

In France, over half the population thinks that their voice is not heard in the EU. And Pew Research came up with the surprising finding in May that the European Union is less popular in France than in the UK.

The analysis of the European Social and Research Council is that in some parts of Europe, people think they can change government but they can’t change policy.

I am not one of those that President Hollande would describe as an anti-European.

Like Prime David Cameron, I don’t want to leave the European Union. I want to stay in a European Union that has reformed.

But I am equally convinced that more of the same won’t work.

Only this week, finance ministers met to hammer out further details of how they will keep the Eurozone currency stable and protect it from banks that fail.

It’s in all our interests, whether we’re in the euro or not, that they reach a workable solution on governance structures that respects the integrity of the single market.

But as they take the necessary action to save the common currency, their decisions are changing Europe.

As European Commission President Jose Manuel Barroso has said, there can be no return to the old normal. We have to shape “a new normal” now.

This month, Italian Prime Minister Enrico Letta added his voice to those who are committed to helping Europe change.

I will argue today that, as two of the leading nations in Europe, accounting for one in four of its population, France and the UK have a responsibility to work together on this.

We need to enact reforms that will benefit all Europeans, and shape this new Europe.

So, let me take this opportunity to set out how the UK sees our common future.

It is in a Europe that is more open, more competitive, more flexible and more democratically accountable.

And I will touch on each of these points in turn.

I admit that this vision draws on the experience of the British Isles.

We are an independent, pragmatic, trading people, in many ways “une nation de boutiquiers”, [“a nation of shopkeepers”] as Napoleon said.

…Don’t forget that the late Margaret Thatcher, “La Dame de Fer” [“The Iron Lady”], was the daughter of a grocer.

It is natural for us to look out for the interests of businesses and hard-working families.

But we are not so different from our nearest neighbours.

We are a nation with a manufacturing base that is the same size – in fact, slightly larger – than that of France; a nation of writers, musicians and artists; of accountants, lawyers, architects and bankers; of farmers and fishermen; of inventors and Nobel-prize winning scientists.

And we are bound by geography, history and tradition to Europe, as we will remember next year when we mark the centenary of the First World War.

Our aim is not to drift off into the north Atlantic. We want to get to work with our allies on fixing the problems that we all face.

Our starting point is a more open Europe.

An open Europe is one in which nations can trade freely with each other and with nations outside of Europe, which will be the source of 90% of world growth in the coming years.

We strongly support the single market, which was a Franco-British invention. Since it was introduced 20 years ago, our bilateral trade has more than doubled.

But the single market is far from reaching its potential.

If you look at our economies, some 70% is made up of service industries – retail brands like Chanel and Carrefour, tourism, creative industries, and the professions. Yet together, services only account for 20% of intra-EU trade.

Clearly, we are missing a trick.

Member states are shielding their markets with disproportionate, restrictive measures that have been allowed under the Services Directive – so families and businesses across Europe pay higher prices for less choice.

We need to tighten up this directive and improve enforcement so that French and British companies face a level playing field as they do business across Europe.

Then there is digital, which will be a focus at the European Council next week.

This is not so much about national champions, a term that, to a British audience, harks back to the 1970s when failed firms were held up by government subsidies.

Our common interest with France lies in making it easier for digital firms to expand, to make use of creative content, to access broadband and to sell online.

An open Europe looks outwards.

When it comes to external action, the UK and France are firm allies, whether in the UN Security Council; on Mali, Iran or Syria; and on the international aid agenda.

Enlargement is another of Europe’s success stories, and today we expect to hear more about the progress of Serbia, Kosovo and other countries towards membership.

But for the benefit of all Europeans, if there is one change we can make to improve our long-term prosperity, it must be to increase our external trade.

Talks with the United States were held up this month by the US shutdown, but the importance of the Transatlantic Trade & Investment Partnership is such that we cannot afford to let the timetable slip. France and Britain must show leadership.

As Trade Minister Nicole Bricq has said, it is all about growth and jobs.

The US want these talks to end on “one tank of gas”, and this is in our interests too.

We must seize this opportunity.

Among those who benefit will be the French wine makers and distillers for whom the US is their number one export market; German car manufacturers, given that one in eight cars sold in the US has a German badge; and Spanish olive oil producers, who are the number one source of imported olive oil in the United States.

My next point is competitiveness.

Yesterday, six senior business leaders went to Prime Minister David Cameron to present a report on reducing the burden of EU regulation.

Their findings are based on research carried out across Europe. It includes input from French organisations such as MEDEF [Mouvement des entreprises de France], AFEP [Association française des entreprises privées] and CGPME [Confédération générale des petites et moyennes enterprises].

And they have found potential to save EU businesses billions of euros by improving the regulatory environment.

Not by abandoning all regulation. But we must reduce the burden on small and medium-sized firms who create the vast majority of new jobs in Europe, and employ two-thirds of the workforce.

One of the Taskforce members is Ian Cheshire, whose firm Kingfisher has substantial interests here in France, employing 25,000 people. He says the aim of the exercise is start a European-wide conversation on this subject.

Germany, Italy and Spain are already looking into how to improve their regulatory environment, and I think this report will complement the European Commission’s REFIT programme that has already achieved a great deal.

But the key point that I take from this report is that it is the voice of businesses themselves.

They see the EU as an advantage to UK business. Rather than just complaining about the rules, they want to change them to make them work.

And they are not asking Governments for money. Regulatory reform cuts costs for businesses, it helps jobs and growth, without a bill to the taxpayer.

In the run-up to the European Council, we will be seeking wider support for their recommendations, and I hope that we will be able to work with France in making the case for Europe’s businesses.

I want to underline that this is not a report about stripping out all regulation and social protection. It is about making that regulation work for business and making the Single Market deliver on its potential.

I am regularly reminded as I sit on my German train travelling to my constituency or consume electricity provided by a French company that it is the UK that lives “Europe”.

My third point is about flexibility.

This summer, a Dutch subsidiarity review proposed a guiding principle of “European where necessary, national where possible”.

And I think that there is much in common between this view and what President Hollande calls a “differentiated Europe”.

Our view is that Europe should have the flexibility of a network and not the rigidity of a bloc.

Flexibility is part of the EU’s DNA. Flexibility simply reflects the diversity of EU countries, which is something that we need to recognise and preserve.

We already collaborate on different levels for different reasons… France and the UK lead on defence… France and Germany work together on the eurozone.

We agree that there is a core to Europe, namely the single market, where we must all act together.

But we think that flexible, willing cooperation is a much stronger glue than compulsion from the centre.

My last point is on democratic accountability.

As I set out in the opening of my speech, trust in the EU is at an all-time low.

This can’t be fixed by giving more money to the European Union to help it win popularity.

…Although there is a worrying disconnect between those who spend EU money and those who earn it – the taxpayers.

Nor can it be fixed by giving more powers to the European parliament.

It is a fact that people don’t vote for the European parliament in the same numbers that they do for domestic elections, nor do they identify with it as much as they would with the Assemblee Nationale or the House of Parliament in Westminster.

Certainly, there are leaders across Europe who are alive to the possibility of these polls being used as a protest vote, and thinking about what that would mean for European decision-making for the next five years.

The UK believes that national parliaments are the key to resolving this problem.

They are the main source of democratic legitimacy and accountability in the EU.

They need to play a far more active role in the functioning of the EU.

Work is already underway to improve coordination between parliaments.

But we need to go further.

We need to look at how the existing ‘yellow card’ can be developed into a viable instrument that will allow national parliaments to play a serious role in EU decision-making.

We should consider whether there is agreement for parliaments to have a “red card” to force the Commission to withdraw proposals; and to ensure that their upstream political dialogue with the Commission has some teeth.

In conclusion, France and the UK have a responsibility to shape this new Europe.

We know that more of the same won’t work.

But if we join forces in supporting positive reform, then we can help to generate the jobs and growth that Europe so desperately needs.

What drives us on and supports us in our endeavours is our knowledge of the talent, energy and ambition of Europeans, and the fact that we can achieve so much when we put our minds to it.

Last year we found the “God particle” that holds the physical fabric of the universe together. If that’s not a reason for optimism, I don’t know what is.

Published 16 October 2013