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European Affairs

I am aware of the concern caused in the Baltic states, including Poland, by that decision. It shows how all member states could reflect more on co-operating freely to achieve the desired outcomes. Perhaps it is unusual to criticise the Germans for not being as communautaire as they might, but the decision that my hon. Friend cites is, perhaps, an example of it. Energy, enlargement and the future institutional arrangements of the EU are all important, but the gaping hole in the Council agenda is an assessment of the Lisbon agenda and the massive competitive challenges that face the EU. We are 60 per cent of the way through the period that was meant to witness the EU emerge phoenix-like as the world’s most competitive knowledge-based economy. Not only has no progress been made, but we are moving backwards. Britain’s opt-out from the working time directive is under threat, and on 23 November the Financial Times reported:"““Business fears new wave of EU labour regulation””" in the wake of a new EU Green Paper on ““Flexibility and Security”” in the workplace. Meanwhile, the City of London—one of this country’s most successful business sectors, which has welcomed the prospect of a genuine single market for financial services—is increasingly worried that the implementation of new rules will damage its international competitiveness. With estimates that the financial services action plan might cost the UK more than £23 billion in the years to 2010, Michael Spencer of ICAP said:"““It would be a tragedy if over-regulation from the EU blows it for London, just at the point when the City has a shot at overtaking New York. Far too much of the FSAP has ended up being about protecting inefficient players elsewhere in Europe, rather than really opening up markets.””" A similar sentiment was expressed by the head of investment at Schroder Investment Management, who said:"““Several other member states seemed to be more concerned about protecting themselves from competition within Europe rather than focusing on the increasing competition we are experiencing from the rest of the world.””" The paradox is that the scale of the competitive threat to European economies is almost universally accepted—by the Commission, member states, businesses and the public. When The Economist produced its excellent analysis of the economic problems that France faces, with the cover showing Lady Thatcher against the background of the French flag and the banner headline, ““What France Needs””, the editor John Micklethwait tells me that 24,000 copies sold on news stands in France—more than four times the normal number. Yet month after month, year after year, we continue to slide in the wrong direction while other world economies surge ahead.