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EU: Enlargement (EUC Report)

My Lords, it is always an exceptional privilege to hear the noble Lord, Lord Grenfell, as it was today when he introduced this important debate. In a remarkable overview, the noble Lord—Julian Grenfell, if I may refer to him as such—made a genuine, nuanced and sensitive analysis, which results from considerable expertise. I think that the House will thank him for it, and I shall try to address what he described as his lessons. I also thank the European Union Committee for its report, which is a valuable contribution to the debate on enlargement and the future of Europe. I wholeheartedly endorse its findings. Enlargement remains one of the EU’s most successful policies and it is one to which the United Kingdom has made a strong contribution. Full credit is due to this House for its support in that. The noble Lord, Lord Howell of Guildford, with, as ever, a penetrating analysis, introduced the very real concept of strategic choice. We are not at the point of final choice; nor am I clear that some of the contradictions between the strategic directions can be resolved at this moment. However, it is absolutely clear to me that that debate will have to be had. It will be not just about the consequences of economic differentiation, important though those are, but also, in a cultural sense, about the essentials of a social Europe and how will they be understood across a terrain as large as the one that the noble Lord has painted. As this debate has demonstrated, EU enlargement covers a wide range of topics. I shall focus on a few themes: the success of past enlargements, the challenges ahead and the need to ensure a flexible yet rigorous approach to accession. The Government and all the major parties have favoured enlargement—a sensible, careful process—for reasons that we need to discuss briefly. They are not, I know, the mischievous reasons entertainingly advanced by the noble Lord, Lord Stevens of Ludgate; none the less, I hope that he will bear with me as I express ours. The noble Lord, Lord Roper, made the point that we do not celebrate enough what has been achieved. The noble Lord, Lord Clinton-Davis, made the same point—as did my noble friend Lord Dubs—although he said that the contribution made by the United Kingdom to the outcome of the success was perhaps not the predicted one when people saw a much smaller Community but have had to adjust to a much larger one. Enlargement has been at the core of the development of the EU. It enabled the peaceful reunification of Europe after the Second World War and across the Cold War divide. It continues to be the engine for security and prosperity. Of course, I cannot agree with the noble Lord, Lord Stoddart, least of all with the phantom that he raises of new imperialism. With the greatest courtesy, I say to him that we crossed the Rubicon long ago—as I recall it was in Italy and certainly not on the route to Turkey. The security issues, touched on by the noble Lord, Lord Wallace, require a special relationship with those places where wars and ethnic conflict have not yet been resolved. I would have thought that, since the Dayton accord, we have all understood exactly what was involved in that and what one had to do to secure peace. Each round of enlargement has helped. It has brought new jobs, new markets and new investment opportunities. With a population of 490 million, the EU now represents the largest internal market in the world. Together we are better able to respond to increasing global competition. For the United Kingdom, the economic benefits of the 2004 accession are clear. Our exports to the A10 were worth almost £8 billion in 2006, compared with £4.6 billion in 2004. Exports to Poland alone rose by 67 per cent in 2006. UK firms such as Tesco, Unilever, Vodafone and BP are successful investors in new member and candidate countries. Our labour markets have benefited from increased output and jobs. I know that some in the media will continue to peddle their fears of mass immigration to the United Kingdom, but I suggest that this House understands the reality in a rather different way. Migrants have contributed to our growth and tax revenues while gaining new skills. The noble Lord, Lord Stevens of Ludgate, may be right about the impact of the age structure as a factor. That is an extremely important and interesting point but, even without that, the preliminary economic analysis shows that this has been a positive development. Enlargement, more than any other policy, has transformed poverty to prosperity and conflict to peace across Europe. While the path to accession provides incentives, it also involves challenging economic reforms for candidate countries. I commend Romania and Bulgaria, our two newest EU partners, for their progress. For example, until 2000, 36 per cent of Romania’s population lived in poverty, inflation was running at 54 per cent and the budget deficit had spiralled out of control. In 2006, Romania’s economic growth stood at 7.7 per cent, inflation was down to single digits and the budget deficit stood at 1.7 per cent. There is more to do, of course, but what a remarkable advance that has been. It is right to focus on economic benefits, but the figures do not always tell the full story of EU membership. For centuries, Europe has been disfigured by conflict. Tens of millions of innocent Europeans died in two world wars. Again, in the 1990s, Europe witnessed ethnic genocide in the former Yugoslavia. The noble Lord, Lord Judd, summed it up throughout his speech, particularly by saying that it is the movement to democracy—and the quality of Europe’s democracy—that is critical for success in overcoming these scars. It is easy to take Europe’s stability for granted. In the last half of the last century, we forged a different way so that today’s young Europeans will be the first generation who do not listen to tales of what their grandparents did during the war, fearing that they, too, might have to make those terrible sacrifices in conflict. Over the past 50 years, more and more of us have decided to share mutual security arrangements and to build close trade links. Of course, national rivalries do not vanish easily, but they are now insignificant compared with international co-operation. President Clinton rightly described the new architecture of Europe as the greatest and most successful example of fixing in place peace and community. As the noble Lord, Lord Judd, said, EU membership has fostered democracy, the rule of law, trade and deep commitment to human rights. My parents’ generation chose that path and succeeded. Indeed, some Members of your Lordships’ House were party directly to that success. In my view, all of them are to be congratulated. I hope that we have the ability to build on their vision, which is why I have no time for the scepticism that denies the achievement of that period. Of course, there are practical challenges ahead. The noble Lord, Lord Judd, was right to emphasise accountability in those challenges. I agree that the enlargement process needs to be robust and based on the Copenhagen criteria. As the committee notes, this should not prevent us from tailoring our approach in the light of experience. We have learnt lessons from the fifth wave of enlargement; for example, in the administration of justice and the fight against crime and corruption. We recognise how difficult it can be to tackle those issues. That is why European leaders agreed last December to ensure that those issues are focused on early in the negotiation process. There are, for example, now defined benchmarks for justice and home affairs issues. These new requirements will help—not hinder—Turkey, Croatia and the western Balkans as they move towards EU membership. The noble Lord, Lord Wallace of Saltaire, demanded stronger scrutiny, and those are the areas in which stronger scrutiny would be invaluable. That brings me to Turkey. We should be more rigorous in pursuing the terms for enlargement here, but that does not mean that we should set impossible conditions. The accession process is a compact. It requires commitment from the candidate to be matched by a firm commitment from the European Union that, if the standards are met, accession will ensue. The noble Lord, Lord Cobbold, raised the issue of risk in all this. Although the boundaries of Europe are perhaps wisely not defined—I am not sure that I understood the point entirely—as prescriptively as he was suggesting, I strongly share his balanced judgment of the advantage. The noble Lord, Lord Wallace of Saltaire, also made that point about borders. Incidentally, the borders are defined not only in geopolitical terms, but often through popular culture—through competitions in things such as football or singing, or what passes for singing—and they spread across into wider areas. The noble Lord, Lord Borrie, called for a pause in this context. Like others, I fear that much progress will stop if we have the kind of pause that was advocated. I am quite certain that a decade of debate is quite a pause in its own right, as we work through those issues. So we welcome last December’s European Council reaffirmation that it would honour existing commitments to Turkey and other countries in the enlargement process. A Turkey anchored in the EU will make all Europe more secure, stable and prosperous. The prospect of membership alone has already brought positive change. In recent years, Turkey has abolished the death penalty and is working hard on a zero-tolerance policy toward torture and on improved rights for women and minority groups, although it is clear to me that there is much further to go in all those respects. Those reforms must continue and, unfortunately, we should acknowledge that the pace has slowed. As the noble Lord, Lord Clinton-Davis, said, we have to continue to urge the Turkish Government to address those areas of concern. Before accession, Turkey, like all prospective members, must fulfil its contractual obligations, specifically by opening its ports to Cypriot shipping under the Ankara agreement protocol. EU Foreign Ministers have been clear that failure here will affect the overall pace of negotiations. But it makes sense for Turkey to move ahead on technical chapters of the negotiations while it works towards meeting the political conditionality. All those factors, as my noble friend Lord Dubs said, have to be weighed in the balance as we move forward. A number of noble Lords spoke of the recent events in Turkey surrounding the election processes and the unhelpful—as the noble Lord, Lord Grenfell, specifically reminded us—intervention of the military. My noble friend Lord Dubs and the noble Lord, Lord Renton of Mount Harry, also mentioned the issues of political Islam and the difficulties in maintaining a secular state, as those pressures are expressed. The capacity to create and sustain a secular state with a people who are overwhelmingly Muslim is one of the things that, if we can get it right, will add specific political and historical value to Turkish accession. As to Mr Sarkozy, I am aware that his comments have been received with dismay in Turkey. He has made no secret of his opposition to its membership of the EU, and his position hardened during the recent campaign. He has spoken of launching an early debate in Europe to reconsider Turkey’s accession negotiations. He has raised alternatives, such as privileged partnership and so on. We will have to have that argument. The reality is that the door is currently open to Turkey, Croatia and other countries in the western Balkans, and those countries have to show that they are ready to walk through that door and are capable of doing so. The process that I have just described is precisely what the noble Lord, Lord Renton, was calling for. It is a point at which careful thought about how to carry this forward is essential. I do not entirely think that, as the noble Lord, Lord Roper, suggested, in several years’ time, but within the decade, there may be another French president. There may or may not be, but there will not be another French people. Those arguments will have to be held, as the noble Lord recognises. As he suggested, in doing so, we must have a dialogue with other Europeans. The crucial point is that staying on this path, focused on the objective of EU membership, will keep the Turkish Government committed to reform. That was true of Poland and Romania, and I believe it will be true of Turkey and Croatia. Like the noble Lords, Lord Roper and Lord Grenfell, I think issues have been thrown up by the accession of Cyprus and the way that Turkey now deals with these things, but I suspect that the resolution of borders in advance teaches a lesson for the future. On balance, the progress on the 10 accession countries was probably the greater gain. Croatia is undertaking a series of political, economic and judicial reforms to meet accession standards. They are a fitting tribute to former Prime Minister Racan, who died last week, who paved the way for Croatia’s eventual accession to the EU. I agree with the committee’s assertion that Croatia should be able to accede as soon as it meets the necessary standards. The prospect of enlargement has set Croatia on the right path and while there is some way to go, it encapsulates the aspirations of its western Balkan neighbours. I agree with the points made in the committee’s report about not fixing dates. The noble Lord, Lord Borrie, came to the same conclusion for slightly different reasons, but I agree with the point, which is still right. I agree with the committee that a credible EU perspective for the western Balkans is vital, not least given the challenges those countries face. As the noble Lord, Lord Ashdown, noted, enlargement is the glue which keeps those countries from falling off the path of reform. That is why it is important to keep reaffirming the Thessaloniki commitment at the European Council in 2003 that, "““the future of the Western Balkans is within the European Union.’" The committee is also correct to note that giving these countries candidate status would present the EU with new challenges; it certainly will. The EU needs to provide financial and technical assistance to help the western Balkans meet the Copenhagen criteria. The EU’s instrument for pre-accession funding provides that support. Between 2007 and 2013, just over half the €11 billion budget will be allocated to the western Balkans. That does not mean that those countries should immediately be given candidate status. There is a clear pre-accession process, the one which Croatia has followed, which is, in essence, a graduated process which demands step-by-step progress on, for example, co-operation with The Hague tribunal and on minority rights. As a nation, we remain a strong supporter of EU and NATO integration for Macedonia, a point raised by the noble Lord, Lord Roper. We were pleased that the December 2005 European Council granted Macedonia candidate status. We want to see Macedonia in the EU, but the speed at which it can move towards EU membership will ultimately depend on the pace that it can sustain in its reform efforts. We should encourage it, and it is important that it does not take its foot off the gas. I shall turn briefly to the European neighbourhood policy. As to the wider neighbourhood, I agree with the report’s conclusion that the EU needs an effective policy to work with countries that do not at this stage have a prospect of EU membership. The European neighbourhood policy provides a framework to engage with southern and eastern neighbours on social, political and economic reform. I agree with the committee’s view that the ENP should not be viewed as an alternative to the prospect of membership for the EU’s eastern neighbours, such as the Ukraine and Moldova. I say to my noble friend Lord Dubs that in the case of Moldova, the 2007 enlargement prospects have brought the EU to the border of the Black Sea region. Moldova is one of the countries that benefits from special support under the European neighbourhood policy and will receive €13 billion over the financial prospective to 2013. That investment is already producing results. There is much better support for economic and political reform, including twinning and the secondment of civil servants from the UK and other member states to help in the process. However, there is scope for the ENP to offer better incentives to partner countries, and I thank noble Lords on the committee for all the suggestions they have made. Work is going forward with EU partners to develop ideas for stronger incentives for partner countries to reform. I agree that the prospect of EU membership can and should remain a lever for reform across Europe. There is no sense in drawing up new dividing lines; Europe has long resisted any attempt to define itself in strict geographical, cultural or religious terms, and I think that that flexibility gives it strength. Our focus should instead be to build a strong, democratic, stable neighbourhood, rather than to determine at this stage the final frontiers of the EU. I cannot accept the allegation of the noble Lord, Lord Stevens of Ludgate, that there is a secret plan to import a mini-constitution by stealth. We live in a very transparent world, and what is going on is pretty visible to everybody. Many people have questioned the impact of the enlargement on EU institutions; the spring European Council showed that an EU with 27 member states can function and deliver on the issues that matter to ordinary people: energy, climate change, security and better regulation. The EU is not in a crisis. However, there are some institutional questions that need to be addressed quickly. Existing treaty commitments require us to look again at the size of the Commission now that Bulgaria and Romania have joined the EU. The point made by the noble Lord, Lord Borrie, about the number of commissioners must be resolved because there is an obligation to do that as soon as we can. We are in discussion with the German presidency and other EU partners and will consider all proposals that meet the interests of the United Kingdom and help to deliver a more effective EU. This will be an issue for discussion by all EU partners in June. I shall not add to the comments the Prime Minister made on 16 April about the idea of a conventional amending treaty because I have addressed the House on that question in the recent past. The committee said that debates on the institutional structure of the EU should not put a pause on enlargement, and it is right. Candidates will be judged on their merits; to do otherwise will send negative signals, as noble Lords said. For that reason, I fully endorse the committee’s conclusion on the importance of honouring our clear commitments to Turkey, Croatia and the other western Balkans countries. Challenges remain and the enlargement process is not perfect, but each successive round has led to improvements. It remains the EU’s most effective soft power lever to reform. The noble Lord, Lord Howell of Guildford, said that we need a good co-operative Europe as we face the difficulties and challenges—economic and others—from the rest of the world. Indeed, he will be right in his prediction that we will need as much unity and consistency as possible as a weight in international negotiations and processes. As the committee notes, the process of enlargement has been an integral part of the EU’s development over the past 50 years. As history has shown, managed properly, it offers us all many more opportunities than risks. It does not remove our obligation to be careful or to explain more to the public about the achievements. That is a difficulty in a country where Euro-sceptic media, for example, generally have nothing good to say about Europe. Not all the political methods that we have for engaging in the debate seem to have the same sort of effect. There may be things that could be said, and said more effectively. The EU could certainly use a more approachable lexicon in everything that it says. As somebody who tries to study these things closely, on occasion I find it extremely difficult to follow. More important, the powerful history of creating peace as the unifying theme of modern Europe may be the key. We should not underestimate it when we try to get people of all generations to understand the steps that have been taken. This evening’s debate has been about a vision for Europe—a growing area of prosperity and democracy, and decency, too. That is absolutely true. It is a work in progress; it is serious work and work worth doing.