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December/January 2004-
CER BULLETIN, ISSUE 33 SHOULD
BRITAIN HOLD A REFERENDUM ON THE EU CONSTITUTION? Dear Charles, This position is predictable but a shame. It makes the government look needlessly arrogant and defensive. According to opinion polls, the vast majority of people in Britain, close to 80 per cent, want a referendum. Interestingly, some prominent pro-Europeans have come out in favour, showing that calling for a referendum is not the preserve of anti-European forces. Of course few people know what exactly is in the draft constitution. It is also true that the document would not create massive new powers for the EU. But it is hard to argue against giving people a direct say in how the EU is run. Technically the government is right in portraying the constitution as a clarification exercise. But politically this position is tone deaf. As the formal basis for the new European Union of 25 countries, the constitution is rightly seen as a historical document. Moreover, if the constitution is important enough to be subjected to referenda in eight or more other EU member-states, why not in Britain? It is time for
pro-Europeans in Britain to shake off their defensive and defeatist attitude.
It is tactically shrewd but strategically flawed always to portray any EU initiative
as insignificant polishing. Instead pro-Europeans should acknowledge that EU
integration requires a pooling of sovereignty but then make the case why and
how Britain benefits. They should not let the government get away with regularly
promising 'a great national debate' on Britain's relationship with Europe and
then failing to deliver one. Politics and leadership are about changing things,
not merely going with the flow. And if successful, a referendum could be cathartic,
killing off, once and for all, the canard that the EU is somehow imposed on
people against their will. Dear Steven, If the new constitutional treaty transformed Britain's relationship with the EU, I would support a referendum on it. Although we will not know the final version until the inter-governmental conference (IGC) has concluded, we can be fairly sure that it will alter very little in the way Britain is governed. Most of the constitution simplifies and consolidates the existing treaties and jurisprudence. The biggest innovations, in my view, are the merger of the jobs held by the external relations commissioner and the High Representative for foreign policy; the creation of a full-time 'president', who will enjoy no presidential powers other than to chair the European Council and act as a top-level spokesman for the EU; and the end of the national veto over asylum policy. The first two are
largely technical matters that are of little interest to most voters. Asylum
policy has more salience. But it is easy enough to argue that asylum is a problem
best tackled through common EU policies even the Sun called for majority voting
on asylum policy not so long ago. The Single European Act of 1985 led to a much
larger extension of majority voting into most single market issues but we had
no referendum then. If the new constitution ended the national veto over taxation,
foreign policy or defence, I would call for a referendum. But it will not. However,
I share your despair at the British government's failure to argue the case for
the constitution. It says it must wait for the end of the IGC but by then the
europhobes will have fooled many people into believing that the constitution
will create a super-state. With a few honorable exceptions, including the current
minister for Europe, ministers have shown themselves to be incapable of and
unwilling to explain why Britain is better off in Europe. Until that argument
is won there is no hope of persuading the British to vote for the euro. Dear Charles, You are right that the constitution will not overhaul completely Britain's relationship with the EU. But majority voting on migration and asylum, a new 'foreign minister' and Council President, an expansion of powers of the European Parliament and the European Court of Justice: these changes matter. The task ahead is to explain why they are useful, not to deny their importance. Moreover, this focus on the technicalities risks missing the bigger picture: people want a vote on 'Europe'. The European cause suffers if it is always associated with elitism and undemocratic practices. Can we win? Admittedly
the polls look bad right now. But remember that when campaigning started in
1975, the No side led by two-to-one. In the end, the referendum passed by the
exact reverse margin. If you treat the electorate with respect instead of disdain
and, if you explain how well Britain does out of this constitution, there is
every chance a majority will agree with us. Dear Steven, Steven
Everts is senior research fellow and Charles Grant is director of the CER. A JOINED-UP EU SECURITY POLICY By Daniel Keohane and Adam Townsend EU member-states disagree on whether the EU should have its own military headquarters, or continue to depend on NATO to help run EU operations. This dispute is becoming increasingly theological. It is part of the wider debate about Europe's relationship with NATO and the United States, rather than a practical debate about the EU's security capabilities. Member-states risk missing the more pressing need to improve the EU's ability to deal with other kinds of security threats, most notably terrorism. The November terrorist attacks in Istanbul confirmed the ability of al-Qaeda-style groups to strike in Europe. After the 2001 attacks in the US, EU governments directed more resources into the fight against terrorism. They agreed to create an EU-wide arrest warrant, drew up a common definition of the crime of terrorism, and drafted rules for more joint operations between national police forces. Governments gave Europol, the EU police body, extra resources and a new task force made up of officers from national police and intelligence services. However, national governments urgently need to overhaul further their approach to security policy: Europe's security agencies intelligence, police and armed forces are organised in ways that remain more suited to fighting the battles of the Cold War era. Al-Qaeda-style terrorist groups are quite different from long-standing European organisations such as ETA and the IRA. They have members throughout Europe, and interact with other cells based in countries across the globe. To track these groups, governments must piece together information from a variety of sources. Since the terrorist threat exists both inside and outside the EU, governments cannot afford to maintain the traditional distinction between external and internal security. Increasingly, governments need to focus on the threat rather than the territory. On paper the EU has a wide range of tools available to tackle terrorism. The council of justice and home affairs (JHA) ministers can instruct national law enforcement and intelligence agencies to collaborate against a specific danger, like drug trafficking from Central Asia. The EU could use its aid budget to train and equip police forces, or use diplomacy to cajole countries to extradite suspects and share information with European security services. In the most extreme cases, European member-states could employ force against a terrorist group based abroad, or against a state that harboured terrorists. But at least two factors are hampering the overall effectiveness of EU security policies. First, there is no single EU body that weighs up information on threats and recommends responses, drawing upon diplomatic, police and military resources. This makes it hard for the EU to ensure that its law enforcement, foreign and defence policies work together effectively. Second, the EU does not have the powers necessary to devise coherent policies, nor the means to implement them effectively. Instead, the EU remains a patchwork of 15 (soon to be 25) different security establishments, with all the inefficiency that implies. Although most member-states have removed their border controls, governments only haphazardly co-ordinate the work of their law enforcement and security services. Europol has not proved effective at getting national police forces to work together. The Situation Centre in the EU Council secretariat assesses some intelligence from the member-states. However, EU governments barely co-ordinate their intelligence-gathering; do not share sufficient information on threats; and do not conduct enough joint assessments of terrorist groups. The EU has agreed, but not fully implemented a common arrest warrant. Governments still lack the legal and practical framework to carry out joint investigations easily, and rarely co-ordinate prosecutions. Governments seldom synchronise their efforts to disrupt terrorists in other parts of the world. The Djibouti-based European-American counter- terrorism task force, which pools intelligence on terrorist activities in the Gulf and East Africa, is the exception to the rule. The EU should create a cross-institutional body, a European Security Committee (ESC) to help overcome these problems. The primary role of the ESC would be to advise European heads of government on security matters. The chairmanship of the ESC should alternate between the EU's High Representative for foreign policy and the chair of the JHA ministerial council. An alternating chair would guarantee that ESC members addressed the concerns of both internal and external security decision-makers. The other permanent members of the ESC should include the chief of the EU military committee, the head of Europol, and a representative from the Club of Berne a forum that brings together the heads of some national security services. The chairman could ask other officials to attend, such as national intelligence chiefs or the aid commissioner, when relevant. The ESC should meet at least monthly, and report to the European Council. The
ESC would identify and quantify threats, and suggest responses. If EU heads
of government received the same threat assessments, they would be more likely
to agree on a co-ordinated response. For example, the ESC could provide the
European Council with a comprehensive anti-terrorism plan, drawing upon the
full resources of the EU and its member-states. Or the ESC could focus on more
specific issues, like the movement of terrorists in and out of EU territory
via the Balkans. But the ESC would not employ 'euro-spies' to gather intelligence
and would rely on member-states, Europol and the Situation Centre for information.
The ESC would not be a panacea, but it would make it easier for the EU to co-ordinate
its internal and external security policies. IS EUROPE WORKING? By Katinka Barysch With more than 14 million people out of work, unemployment is the EU's greatest economic problem. However, while EU policy-makers ponder Germany's 4.3 million unemployed, Britain's low labour productivity and Italy's greying workforce, they have missed one of Europe's key labour market challenges: eastward enlargement. If the EU's labour market statistics look bleak, those in the accession countries are desolate. Unemployment in Central and Eastern Europe hovers at around 15 per cent. The key Lisbon target of raising the employment rate to 70 per cent of the labour force by 2010 looks out of reach for most east European economies. Only the Czech Republic and Slovenia come near the current EU average of 64 per cent. In countries such as Hungary, Poland and Slovakia, only around half of all people of working age have a job. And while EU employment has grown slowly but steadily since the mid-1990s, the trend in the accession countries is in the opposite direction. Job creation in the private sector still cannot make up for mass lay-offs in old-style industries. Eastern Europe's jobless woes will not only play havoc with Lisbon targets; they will also put a strain on the EU's structural funds for poor regions; and most importantly, they could prevent the new members from catching up with west European income levels. It is the member-states, rather than the EU's institutions, which are chiefly responsible for employment and social policy. But the EU is helping to promote employment through the 'open method of co-ordination' the process of drawing up common guidelines, setting benchmarks and encouraging its members to learn from each other. The EU's employment strategy focuses on cutting back labour market regulations, revamping tax and benefit systems to create work incentives, and on so-called active labour market policies (ALPs), for example job search assistance programmes. Such measures are unlikely to do Eastern Europe much harm. But they could be beside the point. The enlarged EU will need a more differentiated approach. East European labour markets are, on average, less regulated than west European ones. Firing full-time workers can be expensive and time-consuming, but rules for part-timers and temps are flexible. The enforcement of labour laws is often lax, especially in the small enterprise sector. Trade unions tend to be weak, and wage bargaining systems are flexible. Spending on unemployment benefits and ALPs is at a fraction of EU levels. Business people fear that EU entry will make east European labour markets less flexible, since the new members have to adopt EU labour regulations. Most of the 75 employment directives deal with health and safety at work. These rules will add to employers' bills in sectors such as chemicals and construction, but they are unlikely to reduce overall labour market flexibility or hinder job creation. The same cannot
be said of EU social standards. The new members should be able to cope with
current EU minimum standards, for example for working time or maternity leave.
But the EU must resist any attempts from the 'old' member-states to export their
expensive social systems eastward. Social spending in the East is already too
high. Poland, for example, spends a larger share of GDP on social security than
Germany. As a result, payroll taxes in most accession countries are even higher
than in, say, France or Sweden, often adding 50 per cent to employers' wage
bills. High taxes The real problem
of east European labour markets is a double mismatch: one geographical, one
skills-related. Vibrant job markets in east European capitals co-exist with
unemployment rates of up to 30 per cent in declining industrial heartlands and
rural areas. But job-seekers do not move or commute, partly because of poor
transport links and ill-functioning housing markets, but also because they lack
the necessary skills. Most new jobs are now being created in high-tech manufacturing
and services, where professional know-how and flexibility are at a premium.
Both are in short supply among laid-off coal miners or farmers. The new members
therefore need to concentrate on increasing labour mobility, attracting investors
to declining regions and upgrading their education and training systems. More
EU money from the structural funds would help. Tighter EU rules on working hours,
part-time jobs, workers' participation or collective bargaining would not. CER IN THE PRESS
THE GUARDIAN THE DAILY TELEGRAPH THE GUARDIAN WASHINGTON POST FINANCIAL TIMES THE WASHINGTON TIMES 7th November 2003 Katinka Barysch, chief economist at the Centre for European Reform, said direct financial penalties [on new members] are unlikely, but the EU could impose trade barriers. "What the European Commission tries to do is continue carrying a stick [after accession], because it is quite clear that in many areas the new member-states are not ready for the European market,"Barysch said. "The EU has to have some mechanism to put continuous pressure [on new members]." SÜDDEUTSCHE ZEITUNG 5rd November 2003 Heather Grabbe, deputy director of the Centre for European Reform, has aptly described western anxieties about enlargement: "Poland could be Europe's nightmare if it copies Greek incorruptibility, Italian efficiency, Spain's generous handling of structural funds, French agricultural policy and British enthusiasm for Europe." THE NEW YORK TIMES 5rd November 2003 "If there is more pressure now on Germany to tighten its budget on top of what it was already planning to do, I could imagine that the Germans could get upset,"said Katinka Barysch, of the Centre for European Reform. "That might be one of the reasons why you hear so little from countries such as Spain and Greece," she said. Centre for European Reform © CER 2003
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