Introduction

Mr Chairman, ladies and gentlemen, I am enormously grateful for your warm words of welcome and for giving me this opportunity to speak to you here this evening.

The Conservative Party and the German CDU in partnership with the CSU share many political values and I appreciate the strong relationship that continues to exist between our parties.

It is no accident that I should be giving this speech in Berlin, a city which encapsulates so much of Europe’s recent history. There is no better place in which to set out a new vision for Europe’s future.

My first visit to Berlin was in the summer of 1963. I was there on 26th June. I was one of the half million people who thronged in front of the Rathaus Schoneberg to hear President Kennedy give his famous address. The whole world remembers his words: ‘Ich bin ein Berliner’ – I am a Berliner; I am at one with the people of Berlin.

To all those who believe in democracy, in freedom, in hope for mankind, President Kennedy had a simple message: ‘Lass’sie nach Berlin kommen’. Let them come to Berlin. It was an iconic moment, echoed almost a quarter of a century later when President Reagan stood in this city and called across the divide ‘General Secretary Gorbachev…if you seek peace…if you seek liberalisation: come here to this gate! Mr. Gorbachev, open this gate! Mr. Gorbachev, tear down this wall’.

Throughout those years, West Berlin was a beacon at the frontier of the battle for freedom. Those Presidential visits were inspirational. They represented defiant idealism in the face of a brutal reality.

Today, the people of Berlin are one. The West’s vision and determination unified a city, a country and a continent. So I come to Berlin once again - to the capital of a country which has been one of the great success stories of the post-war era - aware of history but looking to the future, aware of the battle for freedom that took place here, and determined that freedom should flourish in Europe.

I am here in a new century, in a city that is the gateway between the east and west of Europe, at the heart of this great continent. We are on the point of welcoming ten nations as new members of the European Union. The entry of these countries, large and small, from Poland to Malta, which my Party has always welcomed, will profoundly change the nature of the European Union. And the European Union has a profound responsibility. For if it stands for anything, it is for the healing of our continent.

Different National Perspectives on the European Union

Britain and Germany are two great nations with their own histories and their own perspectives.

Germany has wanted to achieve closer and in some cases irreversible integration thanks to her specific experiences in two world wars. Konrad Adenauer, whom we honour in this foundation, understood that the European process could be of great service to Germany. As a result, he made this country strong in Europe, valued as a trading partner and trusted as an ally. I understand why his European policy, which helped to establish Germany’s place in the community of nations, is admired in Germany today.

We in Britain came through the war with our national institutions strong. When we seek to preserve those institutions, we are defending a constitutional settlement that has survived great stresses and strains and which continues to work well and be understood by people in Britain.

Britain has always been a global trading nation. We have historic connections with our Commonwealth partners and with the United States. Look, for example, at where our international telephone calls go at Christmas and New Year: to North America, to the Caribbean, to the Indian subcontinent, to Australia and New Zealand.

This is not just a sentimental point. It is also a hard commercial truth. More of our trade is with non-EU members than is the case for any other member state. We have more overseas investments in non-European markets than any other member state. We are unique in the EU in having a global financial centre.

But Britain and Germany are not the only countries that approach European integration from a perspective shaped by their history. Every European country does. I do not always agree with your Foreign Minister, Joschka Fischer. Nor I suspect, do you. But he was recently quoted in one of our newspapers as saying: ‘All the countries … have different traditions, different political disputes at home, complicated parliaments, complicated majorities … Language and history matter in Europe and we have to understand these different histories and difficulties’. He makes an important point.

The Eastern European accession countries have thrown off the yoke of Soviet domination. They, along with other new member states, have rediscovered their own national identities and the freedom to determine their own destiny. As a result they may well be wary of giving up too much of that hard-won independence.

Different histories, different institutions and different traditions.

To undermine these institutions and ways of life, whether they have developed uninterrupted over hundreds of years or only recently re-emerged, and which are seen as legitimate by their people, would be an act of folly. Most people in the nations of Europe do not feel the same affinity or identity with EU bodies that they do with their own national institutions. People who identify themselves as Europeans rather than as citizens of their own country still remain a very small minority in every member state of the European Union.

Most people simply do not feel European in the same sense that they might feel American or German - or British.

There is no European public opinion; no European national identity. In the absence of a European demos, we are left with unadorned kratos: the power of a system that commands respect through force of law, not public affection.

A Competitive Europe

Yet the European Union has achieved a great deal. Together we have created a single market of 380 million people. People now have the right to work, study or retire in any other EU member state. We have also achieved some of the best environmental standards in the world. These are things of which we can all be proud.

But there are dangers too. The communications revolution means that individuals now have a global reach and a global outlook. International institutions, whether they are businesses or charities, have abandoned the head office culture. Today, they create multi-centred organisations with power devolved to local and national centres.

In this world, competition is fiercer than it has ever been before. The pace of change is faster than it’s ever been before. Those who respond most quickly and effectively to these changes will win the prizes. So flexibility is at an enormous premium.

In this new environment we need a flexible Europe which puts global competitiveness at its heart. It would be idle to pretend that we have it. We now have to compete against China, India and the Asian economies. We cannot afford to be complacent.

When I was Employment Secretary in the early 1990s I had to negotiate over the Working Time Directive. I had a meeting with one of my European counterparts, and pointed out to him that this new regulation would harm our competitiveness. His reply was chilling. ‘If we all do it’ – by which he meant the countries of the EU – ‘It won’t make any difference’.

I hope we have all moved on since then. The EU was designed to free up our markets so that we could compete globally. But the weight and burden of the directives and laws it has introduced has had almost exactly the opposite effect - damming the flood of enterprise that should be sweeping across our continent.

I was struck by the recent remarks of Gerrit Zalm, the Dutch Minister of Finance, who pointed out that ‘over 50% of the administrative burden on businesses in the Netherlands has a direct European origin. On a European scale these costs must be enormous. European legislation tends to be very detailed in its prescriptions and in its information demands. It also tends to grow rapidly. The decision makers involved, including the politicians in the Parliament and the Council, should realise the pressure they put on the economic potential’.

These are fine words and I agree with them. But reform is simply not happening. The nation states of the European Union are still bedevilled by rules, regulation and red tape, which significantly impede our ability to compete. That is why our economies are not as dynamic as that of the United States. That is why productivity per person is almost 20% higher in the United States than it is in the European Union, and output per hour is 15% higher. That is why over the last decade employment in the United States grew almost twice as fast as in the European Union. If we had the same record as the United States in creating jobs, 28 million more people would be in work in the European Union today.

We must build a Europe that is flexible. There is huge scope for improvement. This means that we must be honest about the work that the European Union should and should not do.

The Conservative Vision for Europe

Europe needs to go in a new direction. I say this as leader of a Party, the British Conservative Party, that has been at the forefront of Britain’s engagement with Europe. It was a Conservative government which first applied for membership in the early 1960s. It was a Conservative government which took us into the European Economic Community in 1973. It was a Labour government which threatened to withdraw from Europe and held a referendum on that issue in 1975. It was the Labour Party which stood on a manifesto of withdrawal from the European Community in 1983, a manifesto on which Tony Blair was first elected to Parliament. Three years later, in 1986, it was Margaret Thatcher who was one of the leading forces behind the Single European Act which established the single European market. Which is perhaps why the former European Commissioner Jacques Delors was recently moved to remark that ‘I have nothing to complain about with Mrs. Thatcher…she is a figure who counts in Britain’s and Europe’s history’.

So let me, too, speak frankly. I am determined that Britain shall remain a positive and influential member of the European Union. But British policy towards the EU has often led to worse rather than better relations between States. Faced with a new EU initiative, our traditional response has often been to oppose it, to vote against it, to lose the vote, then sulkily to adopt it while blaming everyone else. You are understandably sick of constant British vetoes. And shall I tell you something? So am I.

Many fears about the way in which the European Union is developing, on both sides of the Channel, stem from the fact that it is seen as a one-way street to closer integration to which all must subscribe. This is a perception which must be changed if Europe is to retain public confidence.

Of course there are basic requirements which all member states must accept. Foremost among these are the four freedoms of the single market; free movement of goods, services, people and capital. But a single market does not require a single social or industrial policy, far less a common taxation policy. Allowing countries to pursue their own policies in these areas will encourage the spread of competitiveness across Europe. Forcing common standards upon them will mean that Europe as a whole falls further and further behind as each member state tries to put its own costs onto its neighbours.

A Flexible Europe

A flexible approach raises the important question of how to decide which areas should be applied to every member state, and which should be optional. In my view, every member state should be allowed to administer for itself those policies which do not directly and significantly affect the domestic affairs of other member states. So, matters such tariffs and cross-border pollution could be left to Brussels. But in areas which serve their own national interest, individual member states would be able to decide whether to retain wholly national control or whether to co-operate with others. The nations of Europe should come together as a series of overlapping circles: different combinations of member states should be able to pool their responsibilities in different areas of their own choosing.

I first spoke about the need for Europe to adopt a more flexible approach a decade ago. For me this is not a new concept.

And nor is it the revolutionary approach that many commentators might consider it to be. Historically, there have always been moments when Europe has been prepared to be flexible. This, after all, has been the case with NATO since its inception, where France signed up for membership but refused to submit her armed forces to separate NATO command and control. It is the case with the Euro. It remains the case with the 1990 Schengen Agreement. It was the case with the Protocol on Social Policy, negotiated at Maastricht, the so-called Social Chapter.

A New Deal for Europe

So the precedent is clearly established. And it can be developed. So far, everyone has had to move forward together, with individual countries negotiating specific opt-outs. This has caused tremendous tension. But since 1998, there has been a procedure within the Treaties which could be used to allow some member states to go ahead with further integration in a specific area, without involving every other member state. It is, as you know, called enhanced co-operation. It means that, instead of individual member states having fraught negotiations to opt-out of a new initiative, those that support it can simply decide to opt-in.

This would allow those countries who want to integrate further to do so. But others would not be compelled to join them. It suits the integrationists. It suits the non-integrationists. Let’s use it.

It would enable us to strike a new deal on Europe. Those member states which wish to integrate more closely would be free to do so. It would not be necessary for them to drag Britain and quite possibly some other member states kicking and screaming in their wake. We would say to our partners: ‘We don’t want to stop you doing what you want to do, as long as you don’t make us do what we don’t want to do’. In that way we would be able to break free from the institutionalised tug of war which has so often characterised relations between the Member States of the European Union in the past.

It would no longer be necessary to impose on the European Union a rig id straitjacket of uniformity from Finland to Greece, from Portugal to Poland. We would be able to create a structure in which Europe’s member states would have room to breathe.

I am not talking about a two-speed Europe. That implies that we are all agreed on the destination and differ only about the speed of the journey. I don’t want to reach the destination that some of our partners may aspire to. But I don’t want to block their aspirations.

My policy is simple. Live and let live. Flourish and let flourish. That is a modern and mature approach.

In my view it would create an imaginative structure for the European Union which could well be seen as a model by countries in other parts of the world which wish to co-operate more closely with each other without sacrificing their essential national sovereignty. That flexible approach, variable geometry, would ensure that we create a ‘made to measure’ Europe in which the institutional arrangements comfortably fit national interests, not an ‘off the peg’ Europe, ill-fitting and splitting at the seams.

Britain’s Influence in Europe

There are some who say that this would mean a loss of influence on the part of those countries which choose not to integrate more closely. But influence is not an end in itself – it is a means to an end.

Britain, for example, does not need a seat at the table when decisions on the Euro are being made. And our economy has not been adversely affected by staying out. The decision to keep our own currency does not mean that we oppose the establishment of the Euro, or secretly hope for its failure. On the contrary, the euro-zone accounts for a significant amount of our trade: we depend on the prosperity of our European partners. So we wish them, and the Euro, well. But I thank M. Delors for acknowledging, in the same interview that I quoted earlier, ‘Since we have not succeeded in maximising the economic advantages of the euro, one can understand the British…saying “things are just fine as they are. Staying out of the Euro has not stopped us prospering”.’

For a long time, on both sides of the Channel, commentators expected that Britain would eventually have to join the single currency. They simply could not envisage a situation where the United Kingdom diverged permanently from the rest of the EU. But it is now widely accepted that the status quo is sustainable. Our absence does not seem to be causing any ill effects within the euro-zone. We see, in short, a major European policy from which Britain, along with Sweden and Denmark, has amicably stood aside. This is something which seems to cause some people anguish. I see it as a source of satisfaction all round.

Britain is the second largest economy in Europe. It is also the strongest military power in Europe. So we should not have any fears about our influence. Influence depends much more on what you can bring to the table than on any particular institutional structure.

National Powers

The kind of approach I am suggesting should also enable adjustments to be made to the acquis communautaire. Where it is clear that policies can be more effectively implemented on a national basis the European Union should be prepared to recognise this. Proposals to achieve national control in such circumstances should be treated on their merits and not automatically rejected as an affront to the European ideal.

In 1996, when I was Britain’s Home Secretary, my country tabled a proposal to re-assert national control cover over civil defence and emergencies: that is, over how Governments respond to disasters like floods and fires. I could see no reason why we needed to have common policies on volcanic eruptions – something hardly likely to be relevant to Britain. It struck me as absurd that these matters should be dealt with by a European Secretariat funded by the European taxpayer. British negotiators were therefore instructed to press for the removal of the provisions relating to civil defence and emergencies from Title II of the Treaty.

But my fellow European interior ministers took a different view. Interestingly, none of them argued that there was some compelling European interest in how we should respond to burst dams. Rather, their concern seemed to be that any diminution of Brussels’ role would be a betrayal of the European ideal.

There should be no need today to maintain that attitude. Just as it would be dogmatic to refuse to co-operate with our European neighbours in areas where we have clear common interests, so is it equally dogmatic to insist that the EU should administer policies which can perfectly well be left to national governments.

Specific Areas of Concern

Within this new framework, what would be my priorities for reform?

From a British perspective, the Common Fisheries Policy has been a failure: it has led simultaneously to the dwindling of fish stocks and the near-destruction of the British fishing industry. Its quota system encourages the dumping of dead catches over the side of boats. Its rules have turned good men into liars.

There is no reason why fishing grounds could not be administered at national level. Not only does this happen in the rest of the world, where many countries have pursued successful conservation policies; it has also happened within the EU itself, where large portions of European waters were never incorporated into the Common Fisheries Policy.

That which no one owns, no one will care for. The first step towards regenerating fisheries as a renewable resource is to establish the concept of ownership. That is why an incoming Conservative Government will immediately negotiate to restore national control over British fishing grounds, out to 200 miles or the median line as allowed under maritime law, with sensible bilateral deals and recognition of the historic rights of other nations.

I am also keen to see individual member states take more control over their overseas aid budgets. Britain has one of the most effective overseas aid and development programmes, where almost all of the aid reaches the people it is intended to help and is used effectively. Very few people could make the same claims about the EU programme, despite Commissioner Patten’s heroic efforts at reform. As someone who is genuinely concerned with the need to give British taxpayers value for money, and to alleviate global poverty, I see a compelling case for increasing national control over overseas aid and development.

Other Areas of Reform

There are many other areas where reform is needed. I shall resist the temptation this evening to give you a long list of examples. But radical reform of the Common Agriculture Policy is especially urgent.

It is no exaggeration to say that this policy has been disastrous for many of the poorest countries in the world. It has led to the over-production of food in Europe and the dumping of cheap food in Third World countries, harming their indigenous industry. Enlargement has made the need for reform more urgent. Over 40 per cent of the EU’s budget – 40 billion euros - is still spent supporting this policy, and that is likely to increase with the advent of the accession states, unless there is urgent reform.

The European Constitution

In short the European Union should stop trying to do everything and concentrate on doing fewer things more effectively. It should give the member states the chance to develop their own European approach that suits their national traditions, within the framework of the EU.

It is on this basis that British Conservatives oppose the proposed constitution. We disagree with many of its contents, of course, but we also oppose the idea of having an EU constitution. There is a world of difference between an association of nation states bound together by treaty, and a single entity, whether you call it a state or not, with its own legal personality, deriving its authority from its own constitution.

If this constitution were accepted in anything like the proposed form, the EU would gain many of the attributes and trappings of statehood: its own president, its own foreign minister, its own legal system. For the first time, the supremacy of EU law would derive not from Acts of national Parliaments but from a supra-national constitution. That is a profound and radical change.

It is quite dishonourable to pretend that this is all a tidying-up exercise. What is proposed is perhaps the biggest change in Britain’s constitutional arrangements since the Seventeenth Century.

I do not believe it is right to make a change of such magnitude without specifically consulting the people on whose behalf we purport to govern. Parliament does not own our liberties. It is meant to safeguard them. It should not diminish those liberties without an explicit mandate from the British people.

So let me make it clear. I believe any proposal for a new constitution must be put to the British people in a referendum.

Europe and America

Our continent has always had close links with America. She has stood by us in two world wars and beyond. For all of us, she has been the difference between living a life of freedom or living a life under tyranny. It is a very long way from this city of Berlin to the Atlantic seaboard of the United States. But from the late 1940s onwards President Truman and his successors disregarded that distance. They declared that a threat to Berlin’s security was a threat to America’s security. They all gave steadfast support to NATO. They were all honorary Berliners.

It is vital that Europe and America continue to remain close. Germany’s role in this is critical. Most of the greatest challenges the world faces can best be overcome by Europeans and Americans working together. But if each of those challenges becomes a cockpit for transatlantic rivalry, an opportunity for one to score points off the other, the outlook is very gloomy. The challenges will be much more difficult to resolve. We must not allow friction to become fracture. So we must manage our differences so that they do the least possible damage to a crucial relationship and we should draw back from initiatives that will risk exacerbating these difficulties.

For example, I have grave reservations about Europe’s plans to undertake a new defence initiative which involves duplicating the planning and command structures of NATO. I strongly support greater co-operation between European countries on defence. But it should take place within the framework of NATO. NATO should remain the cornerstone of our defence. And Europe should not seek to create a defence structure as an alternative to NATO or as a counterweight to the United States.

After a year in which the death knell of the transatlantic relationship has been sounded on both sides of the Atlantic, I hope that both Britain and Germany will play their part in repairing and renewing the relationship. Undermining NATO is not the best way to achieve that.

A Europe for the 21st Century

It took more than a quarter of a century after Kennedy spoke for the Berlin Wall to come down. It was dismantled brick by brick by the people it had divided. Its fall united a city, a nation and a continent.

Now, some fifteen years later, ten new countries will be joining the EU, many of whom never expected to experience freedom in our time. Their accession to the Union is a matter for celebration.

Now we are in a new century. And I can do no better than to quote my predecessor Iain Duncan Smith. This is what he said in Prague last year. ‘The Union’s founders built a solid foundation. They built structures that served their time well. But some of those structures are no longer right for today’s Europe or today’s world. The children and grandchildren of those who shaped post-war Europe now want to stand on the shoulders of their forefathers to advance a vision of their own.’

We have today a unique opportunity. An opportunity to recast Europe in the image of the 21st century. To build a Europe that is truly free, one based on co-operation and not on coercion. One that serves each and every citizen in this great continent of ours, from whatever background and from whatever nation. I hope we can work together to make the most of that opportunity. History will not forgive us if we squander it.