Biography Chronology Home Search Speeches/Statements

1993 - Mr Major’s Article on the European Union

Below is the text of Mr Major’s article on the European Union, published by The Economist on 25 September 1993.


PRIME MINISTER:

In the past year there has been a sense of malaise within Europe. The recession has played a large part in this. So has the debate in many countries about the Maastricht Treaty. So has Bosnia. But I believe the causes go deeper. The European Community has become ill at ease with itself and, for the time being, uncertain about its future course.

A powerful view--still dangerously fashionable among some continental politicians--is that the fault of Maastricht lay in not going far enough; that economic problems require corporatist solutions that the free market cannot supply; that instability, East and West, requires faster progress towards integration; and that full federation is the grand vision of the future around which public opinion can unite.

I believe profoundly that this view is wrong. It does not carry the hearts and minds of the electorates of Europe. They believe that decision-making in the Community must be brought closer to the people, not taken further away. Unless the Community is seen to be tackling the problems which affect them now, rather than arguing over abstract concepts, it will lose its credibility. Last year the Maastricht process nearly divided the Community. We cannot run that risk again.

The debate over Europe has too often been conducted in extremes. Inevitably, those who take an extreme position for or against Europe do not discuss how best to improve the Community. For them it is too bad or too good to be properly considered--to some an article of faith, to others anathema. Yet the Community is no more than an instrument for improving the security and prosperity of European citizens. When it fails to measure up to that task, it lacks purpose.

So I believe it is time to look afresh at the Community and consider the way ahead. Time to put away the old slogans, dreams and prejudices. All over Europe, what are people worrying about? Not to reduce the number of currencies, but to increase the number of jobs.

We should focus first on the objectives of Europe, before debating its institutions. The concept of the Community has commanded support from right and left, right across Europe. The objectives of peace, stability, growth, prosperity and employment are shared by sceptics and enthusiasts alike.

But from there on paths diverge. I do not want to caricature a debate full of subtle shades of opinion. But the prevalent view within the Community has been that unless the Community continued to march forward to ever tighter political and economic integration, ever greater uniformity, then its existing achievements would be eroded. The demons of nationalism would reassert themselves. Europe's ability to compete with the United States, Japan and the Pacific rim would be undermined. The very future of the enterprise would be in jeopardy. Clinging to a false transatlantic analogy, they wanted to create a "United States of Europe".

There are, of course, some in Britain too who hold that view. There are, however, many more, myself among them, who do not; and not only in Britain. I believe it is that centralising vision that alarms so many voters in the applicant countries of Norway, Sweden, Finland and Austria. If their governments were to negotiate entry into the Community and then their electorates were to reject it, that would gravely damage the credibility of the Community and wreck--for a time--the development of a wider Europe.

Community leaders should recognise that danger, and work to avoid it; not imply--as they sometimes do--that these EFTA (European Free Trade Area) countries are lucky to be able to apply. The Community is not Europe. A true European Community needs the EFTA countries and others.

For the vast majority in Britain, the Community is still the best means of advancing Britain's interests, political and commercial. After 20 years of membership, the overall balance sheet is positive. The disadvantages have been outweighed by the benefits: political stability throughout the Community and an economic prosperity in which we have shared.

Successive Conservative governments have therefore supported the European Community as a way of securing peace, ensuring stability and increasing our standard of living. But we have opposed the centralising idea. We take some convincing on any proposal from Brussels. For us, the nation state is here to stay.

Some differences in the Community are stark and simple. We counted the financial cost of our membership. Others counted their financial gain. We subjected each proposal to the scrutiny of Parliament. They relaxed in the sure knowledge that their public opinion uncritically endorsed the European idea. Hang the detail. Never mind the concession of power to Brussels.

Maastricht changed all that. For the first time, the sort of questions that Britain had been asking were asked in other Community countries as well. The Danes wanted the safeguards for Denmark that I had secured for Britain. The German people did not want their government to sacrifice the D-mark. The French came within a whisker of saying "no" to the treaty their government had signed.

Since then, the old complacency has taken a further jolt. Last autumn, when the pound left the ERM, I warned of the fault lines throughout the system. Some scoffed. The fault line was in British policy, they said. Not so. These policy fault lines lie across Europe; the ERM as a whole has foundered.

I take no satisfaction in that. Exchange-rate stability is in the interests of business and thus of prosperity. But I am not prepared to sit down in Brussels in a few weeks' time and pretend that Humpty Dumpty is whole and well. I care too much about the European Community to pursue sellotape policies--patching together the unmendable--or to play the politics of illusion--pretending that it was never broken. The good European does not cling to old nostrums, but seeks solutions to new problems.

The most pressing item on the Community's agenda is the GATT negotiations: the world's last chance to complete the Uruguay round. Much now depends on the Community. The costs of failure would be very high. It is not only that we would pass up the benefits of a new, far-reaching and overdue trade agreement: lower prices, new markets for our exporters, a double boost to output and jobs. We stand to lose what we have now: international commitment to resist protectionist pressures. Only our joint interest in success in the Geneva negotiations on GATT has kept Europe and America back from trade war. Breakdown in those talks would threaten a repeat of the protectionism and isolationism of the 1930s when production fell by a fifth, investment by a half.

Failure would lead to an immediate crisis within the European Community, and in its relations with the United States, countries of the Cairns Group and the whole developing world. It would fly in the face of Europe's liberal economic principles; its commitment to free trade. It would confound the instinct for prosperity which drove us to break down national trade barriers and create our own single European market.

The need for a new agenda

In these circumstances, we cannot assemble for a special European Summit in October on the same, old, stale agenda. I hope my fellow heads of government will resist the temptation to recite the mantra of full economic and monetary union as if nothing had changed. If they do recite it, it will have all the quaintness of a rain dance and about the same potency.

The troubles in the ERM are just a foretaste of the difficulties in moving to a full monetary union. There can be no question of Britain going back into the exchange-rate mechanism in the foreseeable future. And--while I always believed Europe's ambition for monetary union later this decade was unrealistic--by now the folly of the artificial timetable has become glaringly apparent to many across Europe. The plain fact is that economic and monetary union is not realisable in present circumstances and therefore not relevant to our economic difficulties.

So let us have a very serious debate based, not on wishful thinking, but on the real situation in Europe and the world. Let us look at workable ways of promoting economic convergence. Let us, above all, concentrate on people's real economic concern-- Europe's shortage of jobs. To do that, we must address the decline in our competitive position.

In June, I urged this on my colleagues at the European Summit at Copenhagen. The facts spoke plainly. Long-term unemployment is higher in the European Community than in either Japan or the United States. There is now increasing agreement that these problems stem from the inflexibility of European labour markets, from the tangle of regulations, from wasteful systems of welfare, from the burden of too high taxation, which Europeans have imposed upon themselves in the last 40 years.

European labour costs rose by 4% a year during the 1980s, while barely changing amongst our major competitors. Europe spends proportionately nearly twice as much as the Japanese on public social security and health care, and over 60% more than the Americans. The problem will be compounded as the proportion of old people in our population increases. Unless we take action to contain costs, Europe's taxpayers will be paying 30% more for social security and health--in real terms--by 2020. Unless we act to deregulate our economies, there will be too few earners in Europe to pay those tax bills.

There has been increasing recognition from my colleagues since the Copenhagen European Summit that this analysis is correct. The Community must take practical decisions: to complete the single market for goods and services and make it work; to review and repeal many of the burdens on business and industry; to play our part in the conclusion of crucial world trade negotiations.

A wider Europe

Some critics may say that this is a typically British agenda: climbing the foothills when we should be scaling the peaks. This criticism is puerile. It ignores the arguments. The Europe I believe in extends far beyond today's Community.

The vision of the founders of the Community was a fine one. What we have seen in the last two years is not so much a swing against Europe as a demand for a different kind of Europe. The structures and strategies envisaged in the Treaty of Rome are the product of Europe in the 1950s. It is natural they should be clung to by a generation of European politicians whose views were moulded in the 1950s and 1960s. But the new mood in Europe demands a new approach.

The new mood reflects new realities. The Treaty of Rome was designed for the countries of Western Europe; to enable them to compete with each other, not fight against each other. It was designed to help them stand up to that illusory economic might of the Soviet empire; to complement Western Europe's defences against the real fear of nuclear war.

The challenge to this generation of European leaders is to build a Community for the whole of Europe. That is a bigger vision. They must address three questions. How should the West Europeans organise their security? How should the Community extend its embrace to the EFTA countries and to Eastern Europe? And what do these questions imply for the Community and its institutions?

During the Cold War, defence was costly but relatively simple. We knew what the threat was and where it came from. We could measure its military strength, and see what we had to do to meet it.

Today the threats to our security are harder to define. But they are no less real for that. There is instability inside Europe and beyond. Some countries are collapsing into chaos, remain under the rule of dictators, or are pushing to acquire weapons of mass destruction. The North Atlantic alliance will remain our only effective instrument against the remote contingency of a direct attack against us. It will remain the only credible vehicle for a tangible American commitment to the security of our continent.

But the alliance will have to adapt. It is already devising more flexible structures, developing its relationships with its former opponents from the Warsaw Pact. The West Europeans will take on greater responsibility for the European pillar of the alliance. There is a heavy agenda for the NATO summit this winter.

In the 1970s Greece, Portugal and Spain turned to the European Community as the only firm anchor for their newly-founded democratic systems. Europe has been stronger and more authentic as a result. We have an equal duty towards the new democracies of Central and Eastern Europe. Not even the most advanced of them, of course, is yet ready for membership. Before they can sustain its obligations they must complete an economic as well as political revolution. But we can--and must--get ahead with dismantling the barriers to their exports. In the short term that will cause us difficulty. But freedom to trade is essential to the success of economic reform; and will in turn create opportunities for our own investors and exporters.

The present Community is but a fragment of Europe. If we fail to bring the democratic countries of Eastern and Central Europe into our Community, we risk re-creating division in Europe--between the haves and the have-nots. Through Community membership we can consolidate democracy and prosperity across our continent. Without it, we risk turmoil among our neighbours in Eastern and Central Europe and endanger our own long-term prosperity and stability.

This is an historic agenda. And it is for Europe's leaders, not its bureaucrats. The heads of government should give a stronger lead through the European Council. They should set the priorities, as they did at Copenhagen. The commission should then get on with implementing that agenda. No decision should be taken in Brussels which can better be taken at national or local level: that is the principle of subsidiarity, endorsed by all, which we need to develop.

I believe that this would reduce the scope for friction between the commission president and member governments. The president of the commission could play a more, rather than less, important role on behalf of the Community if he were seen to be operating more clearly within a framework laid down and supported by the elected heads of government.

The role of the other commissioners should also change. They are people of high seniority and ability. But there are already 17 of them. This is too many, if we are to find space around the commission table for new EC members.

We must ensure that Europe has the flexibility to tackle new problems--which means acting in different ways. The Community institutions do not have a monopoly on European co-operation. For example, we should provide the impetus, through the inter-governmental provisions of the Maastricht Treaty, for more effective common mechanisms to frustrate the criminals who are no respecters of borders: drug traffickers and financial swindlers.

People are moving more freely, with fewer formalities, around Europe than ever before. However, partly because of changes outside the Community, partly because of the Community's expansion, Europe faces migratory pressures which were not even envisaged a few years ago. We have to find an orderly way of dealing with them, and of managing our frontiers. And we have to find answers that respect national identities and concerns.

A Europe of nation states

The Treaty of Rome called for union among the peoples of Europe. After a phase in which "Europe" was too narrowly defined, and the peoples were taken too much for granted, we now have the opportunity to move back towards this founding principle.

Britain successfully used the Maastricht negotiations to reassert the authority of national governments. It is clear now that the Community will remain a union of sovereign national states. That is what its peoples want: to take decisions through their own Parliaments. That protects the way of life, the cultural differences, the national traditions which the French and Germans, the Greeks and the Danes, hold as dear as the British. If anyone still thinks the Commission's first Maastricht blueprint was the way to go, they will have learnt nothing from experience. And they are closing their minds to the future.

It is for nations to build Europe, not for Europe to attempt to supercede nations. I want to see the Community become a wide union, embracing the whole of democratic Europe, in a single market and with common security arrangements firmly linked to NATO. I want to see a competitive and confident Europe, generating jobs for its citizens and choice for its consumers. A Community which ceases to nibble at national freedoms, and so commands the enthusiasm of its member nations.

Such a Community would be a more genuine and lasting European union than anything we have now. It offers peace. It promotes security. It widens free trade. It preserves and enhances infant democracies. It marches with the instincts of free people in free nations. It is an ambition for the new century that dwarfs the dreams of the founders of the Community. The Treaty of Rome is not a creed. It is an instrument. We must tune it to the times.