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WORKING TOGETHER TO BUILD

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					WORKING TOGETHER TO

 BUILD EUROPE OF THE

          21ST CENTURY



        Report by the Initiative Committee of the
          International European Movement

            with a view to preparation of the
                 "Congress of Europe"

    to be held in The Hague on 8, 9 and 10 May 1998
 on the 50th anniversary of the first Congress of Europe
                                             Brussels, 24 February 1998




                    This report was prepared by
                       the Initiative Committee
             of the International European Movement,
                  chaired by Mr Jean–Victor Louis
           and coordinated by Mr Pier Virgilio Dastoli,
    General Secretary of the International European Movement.


      Rapporteur : Mr Jean–Guy Giraud, committee member.




   The following individuals participated in the committee's work:

   Roland Bieber, Bruno Boissière, Elmar Brok, Paul Collowald,
  Albert Coppé, Willy De Clercq, Jacques Defay, Thierry Demeure,
     Ugo Ferruta, Monica Frassoni, Fernand Herman, Thomas
Jansen, Carlo Luyckx, Guillaume McLaughlin, Ernst Piehl, John
   Pinder, Sergio Pistone, Derek Prag, Jacques–René Rabier,
  Raymond Rifflet, Robert Toulemon, Jacques Vandamme, Inge
                           Vendryes,
                  Gerard Wissels, Ernest Wistrich


   [All committee members participated in this work in a personal
                          capacity.]




                                   1
       "(...) it is the urgent duty of the nations of Europe
            to create an economic and political union
      in order to ensure security and social progress (...)


   The time has come for the nations of Europe to surrender
          certain of their sovereign rights, exercising
                them henceforth in common (...)


         Such a union or federation must remain open to
all the nations of Europe living under a democratic regime (...)"



                                              The Hague Congress
                                                     9 May 1948




                                  2
                                             FOREWORD


The European Union is on the brink of two exceptionally important changes.

It is embarking on negotiations with States from which it has been cut off for nearly half a century. The
message to Europeans, launched in The Hague in 1948 by Denis de Rougemont, in the context of a
historic Congress, called in its first article for “a united Europe, given throughout its extent to the free
movement of persons, ideas and goods”. This aim, prepared by an historic upheaval without
precedent and by partial but significant agreements, is now within reach.

At the same time, the large majority of Union States will be changing over to the euro, the single
currency, the crowning achievement of economic and monetary union representing the
“accomplishment of the gradual economic integration process in Europe” (Delors Report). A major
goal, set out in the economic resolution of the Congress in The Hague in 1948, is thus on the point of
becoming a reality.

These two events are a fundamental source of optimism for the European Movement and for all those
who support European integration. The European Union‟s power of attraction bears witness to the
dynamic nature and future of the Community blueprint, which is its fortitude. The accomplishment of
monetary union is a qualitative leap forward in the integration process.

And yet, there is no shortage of reasons for concern.

These major events in the history of the continent are tackled by governments without a common
overall vision of the aims of integration. As commendable as it may be, the overall approach set out in
the Commission‟s Agenda 2000, however, reflects in its concern for realism a minimalist idea of
actions to be undertaken, and is also constrained by restrictive views with regard to the budgetary
consequences of the essential policies.

Faithful to its calling, the European Movement cannot resign itself to enlargement without necessary
and prior deepening. This cannot simply be the handful of reforms, that failed in Amsterdam: the
Commission‟s composition, the weighting of votes in Council and several additional cases of majority
vote. More in-depth reflection is indispensable on how all the institutions function and, as the present
report stresses, reform must also aim at policies. Among the latter, special attention must be given to
those which still, and all too exclusively, come under intergovernmental methods, notoriously ineffective
in other words, as far as common foreign and security policy and the judicial and police cooperation
area are concerned.

The Initiative Committee also places emphasis on the imperative need to strengthen the economic and
social section of economic and monetary Union. The macro-economic coordination mechanisms must
be enhanced. The Community must be given the instruments required to finalise employment policy.
The Union must speak with a single voice and on an equal footing with its partners within the
international monetary system. In short, the Union needs a government.
                                                     3
The Initiative Committee proposes continuity in resorting to the Community method, which reflects
federal principles and the uninterrupted adjustment of procedures and policies destined to stand up to
the challenges facing Europe in the 21st century.

With the present report, it proposes a programme for reflection and action and contributes to rallying
all those who wish, at all cost, to put a brake on the intergovernmental drift and right the helm in order
to pursue the aims set by the founding fathers for European construction.

If, as could well be the case, a unanimous agreement cannot be reached on this programme, then the
Committee report urges the participants at the Congress in The Hague to recognise the legitimate
nature of a core of States, sharing the same objectives and united in their determination to resort to
Community procedures, thus forming the avant-garde of a federal, democratic, effective and open
Union.

I wish to thank all those who have helped in drafting the present report and, above all, the rapporteur,
Jean-Guy Giraud, whose zeal, enthusiasm at work and great willingness have never failed, as well as
Pier Virgilio Dastoli, Secretary General of the European Movement, whose help as coordinator has
proved highly useful to the Committee chairman.




                                                                                    Jean-Victor LOUIS
                                                                    Chairman of the Initiative Committee




                                                    4
                                                    CON TEN TS




Pages


  Introduction ......................................................................................................     6

                                                    *
  Reform of the Treaties ....................................................................................             9

  Economic and Monetary Union ...................................................................... 15

  Employment and social solidarity ................................................................... 20

  European area of freedom, security and justice ............................................ 24

  Common foreign and security policy .............................................................. 28

  Agenda 2000 ....................................................................................................... 33

  The Union’s finances .......................................................................................            34

  Reform of major policies ..................................................................................             39

  Enlargement ...................................................................................................... 45


                                                                *

  Reflections on a European model for the 21 st century ................................... 51

                                                                *

  Conclusion .........................................................................................................    55

  Calendar ............................................................................................................   57

                                                                *

  Summary ........................................................................................................... 59



                                                                    5
6
                                        INTRODUCTION


The stalemate on Political Europe

      On 17 June 1997 in Amsterdam, and then on 13 December 1997 in Luxembourg, the
European Council successively adopted a further revision of the Treaties and agreed on the
opening of negotiations for a new enlargement of the Union.

      While the initial goal of the revision of the Treaties was to complete the unfinished
reform achieved in Maastricht in 1992, its principal objective was, in fact, to strengthen the
Union on the eve of an historically unprecedented enlargement.

     The European Council itself recognized that the outcome of Amsterdam –like that
of Maastricht- is insufficient. Moreover, a new revision has already been
programmed.

      This recurring inability of the European governments to adopt the reforms necessary for
the development of the Union stems no doubt from the lack of fundamental agreement on
Europe‟s long-term political objectives. What type of Union –federal or intergovernmental-
do the present Member States (or their majority) wish to build over the next twenty years?
What level of solidarity and interdependence do they wish to attain? Are they still determined
to complete the “foundations of an ever closer union” of peoples sharing the same destiny?

     At no time in Amsterdam or in Luxembourg were these issues debated, in spite of the
fundamental changes (monetary union and enlargement), whose approach the European
Council was, understandably, celebrating.

       In fact, the European Council side-stepped all fundamental debate on the pursuit
of integration or federation. Some claim that the Union is a slowly-evolving sui generis
construction and that it would be unrealistic to try to specify its ultimate form. They prefer to
trust in the automatic effects of mechanisms set into place (yesterday the internal market,
tomorrow the single currency). Others fear spotlighting the hitherto irreconcilable differences
between Member States on the integration process.

       Consequently, the architecture of the European Treaties –reflecting successive partial
revisions- is becoming ever more ambiguous and complex. Above all, the Union seems
condemned to move forward in a conceptual vacuum, devoid of all political perspective at the
very time it is embarking upon the two greatest adventures of its history : the single currency
and enlargement.


A major public debate of clarification

       The European Movement is convinced that this political stalemate on the perspectives
of the Union is putting it at serious risk of dilution or break-up, and that it should be publicly
                                                    7
denounced. On the eve of an enlargement of the Union that is unprecedented in nature
and scope, a unique and doubtless ultimate opportunity exists to initiate a vast public
debate clarifying the nature and role of the Union in the 21 st century. It is urgent to
break the silence of official bodies and to dissociate ourselves from the diplomatic,
technocratic and, in the end, minimalist approach taken in Maastricht and Amsterdam. It is
vital to initiate political reflection and to put before European citizens clear and precise
objectives for the building of a greater, unified Europe of solidarity.


A federal model

         At the dawn of the 21st century, the Union of Europe must be the undertaking and
the hope of the younger generations. To face a new world and a new era with
confidence, Europe must be united and strong, capable of ensuring peace and prosperity for
its citizens.

       The European Movement considers that only a federal1 model –democratic, modern,
specific and respectful of national identities– is capable of guaranteeing the durability of
the Union through successive enlargements. This model should be inspired by the well
established principles of federalism :

–      solidarity between citizens and between States, both within the Union and with the rest
of the world,

–      efficacy, through institutions vested with the means necessary to bring common actions
to a successful conclusion,

–     subsidiarity, through the precise definition of tasks that fall within the competence of
the Union and those remaining the competence of States or of their regional and local
authorities,

–     flexibility, to enable those States so wishing to precede the others in establishing “an
ever closer Union” without undermining the overall unity,

–     modernness, in order to adapt the level of the Union's interventions and regulations to
the demands of an open world and to reconcile the imperatives of freedom and solidarity at
the economic and social level,

–      plurality, to preserve the national diversities (political, social and cultural) that make up
the inestimable richness of the European heritage.

        Thus the sole ambition of the federal model –bearing in mind solidarity and efficacy
(“living together and living better”)- is to ensure both the clarification and the free exercise of

1
      It should be recalled that, during revision of the Maastricht Treaty, the opposition of a single M ember State prevented
      the Treaty‟s preamble from mentioning the Union‟s “federal vocation”.

                                                              8
authority at every level of power, for the benefit of the citizen, who remains the centre and the
raison d‟etre of the edifice. 1


A constitutional pact

       The European Movement is convinced that the time has come to lay down the guiding
principles of the development of the Union in a constitutional pact which should be drafted
on the occasion of the next –already programmed– revision of the Treaty and which would
serve as the keystone of the entire reform.

       In contrast with earlier revisions, European citizens themselves should be the
standard bearers of this reform, thus conferring upon it absolute legitimacy. The fifth
election of the European Parliament by direct universal suffrage –in June 1999– offers the
opportunity for a large-scale democratic debate, at the conclusion of which the new assembly
could mobilize civil society and launch this constitutional initiative with the support of the new
Commission appointed with its approval and in cooperation with Member State parliaments.


New impetus in The Hague on 9 May 1998

      It is in the hope of triggering this debate, this reform and this constitutional initiative that
the European Movement has prepared –in anticipation of the celebration of the 50th
anniversary of its founding, on 9 May 1998 in The Hague – the present report which
addresses each of the aforementioned major challenges the Union will have to take up in the
coming months:

      - revision of the Treaties
      - the start-up of economic and monetary union
      - the defence of employment and of social solidarity
      - the promotion of “Citizens‟ Europe”
      - consolidation of the common foreign and security policy
      - the reform and financing of the major common policies
      - the start-up of enlargement negotiations

and, in conclusion, makes recommendations on the "European model for the 21st century”.




1
      This view is closely akin to that expressed by M r Kohl in an interview : “I do not want a new Leviathan in Brussels, but
      respect for the trinity „native soil-nation-Europe‟ : to each its own powers.” (Libération, 3/11/97).
                                                             9
                         THE NEXT REVISION OF THE TREATIES


1. THE SITUATION FOLLOWING THE SIGNATURE OF THE AMSTERDAM
TREATY

     The Fifteen signed the Amsterdam Treaty on 2 October 1997 in the capital of the
Netherlands.

       Ratifications of the Treaty by Member States will take place throughout 1998 and
perhaps 1999. In several Member States, ratification will take place via referendum1 .
Difficulties of a legal and/or constitutional order are likely to arise in certain Member States 2 .

       Debates and ratification procedures will be taking place simultaneously with decisions
related to the single currency (May 1998), the opening of accession negotiations (early 1998)
and the first discussions of the Agenda 2000 proposals (especially the sensitive issue of the
Union‟s future financing system). Also, general parliamentary elections are already planned in
1998 in several Member States3 .

2. THE PROTOCOL TO THE AMSTERDAM TREATY ON THE NEXT
REVISION OF THE TREATIES

       All the Member States and all the institutions recognized that the Treaty of Amsterdam
–irrespective of the real progress it made possible- 4 includes serious shortcomings, notably
on institutional affairs, which will have to be remedied prior to any further enlargement.
Opinions diverge, however, on the timeframe and scope of the necessary reforms.

a)    The “Protocol on the Institutions in the Perspective of Union” annexed to the
      Amsterdam Treaty makes provision for a thorough reexamination of Treaty
      provisions on the composition and functioning of the institutions at least one year
      before the Union enlarges to more than 20 Member States. In any event, it provides
      for a re-weighting of votes in the Council and modification of the composition of the
      Commission (one national from each Member State) prior to any further enlargement.

      The Commission considers that “another IGC must be convened as soon as possible
      after the year 2000 to conduct an in-depth reform of the institutions” and that a political
      decision on the weighting of votes in the Council to accompany the reduction in the
      number of Commissioners must be taken well before the year 2000.




1     Denmark, Ireland, Portugal, etc.
2     Germany, Denmark, France, etc.
3     Germany, Sweden, Netherlands, etc.
4
      The modifications made by the Amsterdam Treaty are not discussed in this chapter, which essentially concerns the next
      reform.
                                                           10
b)    On 17 July 1997, the Commission issued its opinion on the applicants for accession,
      proposing that negotiations open on 1 January 1998 with six States. This would bring
      to 21 the number of Member States at the conclusion of these negotiations, possibly
      around 2003/2004. In this hypothesis, in accordance with the “Protocol on the
      Institutions”, a thorough reform of the institutional provisions of the Treaties should be
      undertaken in 2002 at the latest.

c)   The European Parliament, in its resolution on the Treaty of Amsterdam of 19
     November 1997, “regrets that the Treaty of Amsterdam does not encompass the
     institutional reforms necessary for the efficient and democratic functioning of an enlarged
     Union” and states that these reforms must be achieved as a preliminary to enlargement
     and at the earliest date possible so as to avoid delaying accessions. In its resolution of 4
     December 1997, Parliament confirms that, “in any event, accession to the European
     Union will only be possible after a constitutional reform”.

d) In a separate declaration, Belgium, France and Italy stated that “the Treaty of
   Amsterdam does not fulfil the necessity … of substantial progress towards reinforcing the
   working of the institutions”. They consider that “such strengthening is an indispensable
   condition for conclusion of the first accession negotiations”. Both the President of the
   European Parliament and the President of the European Commission lent their support to
   this declaration.

e)   The Luxembourg European Council, in its conclusions (§ 3) of 13 December 1997,
     declared that “as a prerequisite for enlargement of the Union, the operation of the
     institutions must be strengthened and improved in keeping with the institutional provisions
     of the Amsterdam Treaty”.


3. THE EUROPEAN MOVEMENT’S POSITION

a) On ratification of the Amsterdam Treaty

The European Movement expresses its resolute and unequivocal commitment to early and
unconditional ratification of the Amsterdam Treaty. A failure -or delay- in the ratification
process by the Fifteen would compromise decisions on monetary union and enlargement.
Such a situation would provoke a major political crisis in the Union and is therefore to be
avoided at all costs.

The European Movement consequently considers that the possible rejection of ratification
by any Member State should not prevent the entry into force of this Treaty among the other
Member States : it would be incumbent upon the State in question to accept all the
consequences of its refusal to embark upon a new phase of European integration1 and to
negotiate a new mode of relations with the Union.


1
      § 1 of the Preamble to the Treaty of M aastricht.

                                                          11
Likewise, the European Movement considers unacceptable any clause in Member States‟
decisions on ratification of the Treaty of Amsterdam that would limit the extent of this revision.

b) On the scope of the next revision of the Treaties

For the majority of Member States, the subsequent revision of the Treaties prior to
enlargement essentially concerns the institutions, and in particular the following three issues :
the reduction in the number of Commissioners, the change of the weighting of votes in the
Council (to the advantage of the “big Member States”) and possibly the extension of majority
voting in the Council.

The European Movement considers that, over and above indispensable institutional
improvements, a much deeper and more ambitious reform of the Treaties is necessary
on the eve of the construction, at the turn of the century, of a “greater European Union”.

For the Fifteen, the Amsterdam Treaty does not lay down the political bases needed to
enable the Union to attain its essential objectives : supporting the development of economic
and monetary union, triggering a decisive common effort to promote employment, promoting a
European model of society, ensuring the development of a common defence and so on.

In time, the Amsterdam Treaty will obviously be unsuited to a Union with more
members and more diversity and unable to guarantee the cohesion, integrity, solidarity and
strength of such an entity.

The governments refused, both in Maastricht and in Amsterdam, to launch a genuine
constitutional debate clarifying the future of the Union. They consequently refused to
give the Union the necessary means to pursue the federal process of integration. The
European Movement considers that, should the Fifteen fail to launch this debate and bring this
reform to conclusion prior to the next enlargement, the Union will be faced with a major
risk of dilution, drifting into an area of economic cooperation no longer guaranteeing the
original objectives of peace and unity.

c) On the content of the reform

The European Movement therefore takes the view that the time has come to put into place a
large-scale reform

     confirming and clarifying the Union‟s federal goal,

     defining its place and role in the world of the 21st century,

     adapting its institutions and mechanisms accordingly.


A constitutional pact
                                                    12
The European Movement considers that the time has come to endow the Union with a
constitution, i.e. a pact establishing ties not only between States, but also henceforth,
between citizens. Indeed, only such a pact can ensure the dual legitimacy of common
institutions charged, on behalf of the States and their citizens, with participating in the exercise
of powers as essential as currency, fiscal and budgetary policy, justice and police, defence
and so on.

This constitution must establish the objectives and principles of a federal organisation of
the Union, in particular the clear sharing of powers and responsibilities between the States
and the Union. This brief and concise text would be set out as a preamble to the Treaties, of
which it would be an integral part, serving as inspiration for all provisions.

A thorough revision of the Treaties
The European Movement is convinced that the Treaties themselves should be totally revised
and simplified. The following should be the main points of this reform :

-      institutional mechanisms should be adapted to make possible the development of a
genuine system of European democratic government with an independent and responsible
executive branch, a bicameral legislative branch representing the States and peoples and a
constitutional court guaranteeing the respective rights of the Union, the States and citizens1;

- the electoral system should be reformed to make possible the election of a percentage of
Members of the EP (10%, for example) from trans-national lists so as to favour the creation
of genuine European political parties and an authentic common political awareness at
European level2;

- a general clause enabling willing Member States to precede the others in the march
towards integration (see below) should be written into the constitution and the Treaties;

- the objectives and means of common policies on economic and social matters, security
and justice, foreign and defence policy (see below) should be considerably strengthened;

- all these policies should fall within the realm of Community action (the “first pillar”) and
not be pursued using complex intergovernmental procedures, whose inefficiency has been
proved by experience;

- the simplification of texts should culminate in the drafting of a single Treaty made
considerably shorter through the deletion of all non-essential provisions;

- the European Union, enjoying full legal personality, should be clearly substituted for the
Communities.


1
      See the report by the Initiative Committee of the International European M ovement : “For an Efficient and Democratic
      Union” (1996).
2
      Ibid.

                                                            13
- arrangements for the revision of the Treaties should be made more democratic and
should make it possible to abolish the possibility of deadlocking inherent to a Union of 25 to
30 Member States.

d) On the reform procedure

Firstly, there must be a total separation between reform of the Treaties and the
accession negotiations : the updating of the Treaties, a preliminary to enlargement, is a
matter to be addressed and negotiated by the Fifteen. Secondly, coherence is needed in the
inspiration and method of the reform : in this regard, the procedure used in Amsterdam should
be completely revised. Thirdly and most importantly, the reform process must be
democratic, with the full involvement of European citizens and their direct representatives.

The upcoming procedure for reform of the Treaties must necessarily respect provisions in
force relating to revision (Article N of the Amsterdam Treaty), but should be conducted
according to the Community method, which gives the Commission a role of initiative 1 and
Parliament a role of codecision2.

This reform could be organised as follows :

 the current Commission would be charged with developing a complete initial draft, in
liaison with a restricted group of distinguished citizens (1998),

 this draft would be submitted to Parliament for review and, in parallel, would be the
subject of debate in national parliaments (1999). The representatives of civil society - and,
through them, public opinion - would be closely associated to these parliamentary debates 3.
At the conclusion of these debates, the new Commission could finalise the draft (2000),

 the Council and newly-elected European Parliament would jointly examine the draft
under the arrangements for legislative codecision (2000); the result of their deliberations would
be submitted for final adoption to an intergovernmental conference (2001),



1
       According to Article N, “the government of any M ember State or the Commission may submit to the Council
proposals for the revision of the Treaties on which the Union is founded”.
2
       In its resolution of 19 November 1997 on the Amsterdam Treaty (§ 20), Parliament “calls on the Commission to submit
       to Parliament, in appropriate time before the European Council of December 1998, a report with proposals for a
       comprehensive reform of the Treaties, which is particularly needed in institutional terms and in connection
       with enlargement; requests that this document, in accordance with the new protocol on the role of the national
       parliaments in the European Union, be forwarded to the parliaments of the M ember States; intends in due course as part
       of this process to clarify its own position in the light of these proposals in order to launch a dialogue between the
       Commission and the European Parliament; requests that, even before Article 48 (former N) of the EU Treaty is
       amended, Parliament should be fully involved in the next Intergovernmen tal Conference and that a binding
       arrangement (e.g. modeled on interinstitutional agreements) will be achieved to this effect that the Treaty may enter into
       force only with the assent of Parliament”.
3
       In this context, the European M ovement stresses the importance of the action undertaken by the Permanent Forum of
       Civil Society created in September 1995 through its initiative and the European Citizens‟ Charter adopted in Rome on
       M arch 23, 1997.

                                                               14
 ratification could take place before 2002, i.e. in appropriate time before the first
accessions of new States (and, symbolically, at the same time as full realisation of economic
and monetary union).

The European Movement would point out that the political agenda of the next three years is
particularly propitious to this initiative and this procedure :

-      on the one hand, the realisation of monetary union (decided in May 1998, with
       implementation commencing in January 1999) will provoke a timely political impetus,

-      on the other, the fifth election of Parliament by direct universal suffrage (and its 20 th
       anniversary) will take place in June 1999 and the election campaign could be the
       opportunity to democratically initiate the constitutional process and to place the subject of
       reform of the Union at the heart of the political debate,

-      lastly, the Commission will be renewed in January 2000 on the basis of a “contract of
       confidence” with the newly-elected Parliament1 .

In the spirit that inspired Parliament‟s draft Treaty on Union, drawn up by Altiero Spinelli, and
approved by the European Parliament in 1984, the European Movement considers that any
of the Fifteen States unwilling to be associated with this large -scale reform would be
perfectly justified in requesting a reworking of their future relationship with the Union on
different foundations. Likewise, applicant States should take this reform fully into account
when negotiating their accession to the new Union.




1
    Pursuant to the Treaty of Amsterdam, Parliament must approve the appointment of the President of the Commission, who
          shall henceforth frame the institution‟s “political orientations”. By virtue of the Treaty of M aastricht, Parliament must
          also approve the appointment of all Commission M embers.
                                                                  15
                              ECONOMIC AND MONETARY UNION


1. SITUATION

a) The coming into force of stage three of EMU is laid down in Article 109j(4) of the Treaty
   which establishes that, before 1 July 1998, the European Council "shall, acting by qualified
   majority, ... confirm which Member States fulfil the necessary conditions for the adoption
   of a single currency".

   Apart from special clauses and derogations for which provision is made in the protocols on
   the United Kingdom and Denmark1 , this decision is automatic and binding in nature 2 .
   The decision in principle and the agreed date may not be challenged and the list of
   participant countries must be established on the basis of objective considerations
   ("economic criteria").

   The Amsterdam European Council confirmed this process, whilst adding two
   complementary aspects in the form of a "Stability Pact" and a "Resolution on Growth and
   Employment".

b) The five main stages of final implementation of EMU are clearly agreed :

   -    3 May 1998 : confirmation of which Member States shall participate in the euro, the
        fixing of bilateral parities between the currencies of these States and the appointment of
        the President and Executive Board of the European Central Bank,

   -    June 1998 : establishment of the European System of Central Banks and of the
        European Central Bank,

   -    1 January 1999: irrevocable fixing of parities between the currencies of the participant
        States and with the euro; entry into force of the euro;

   -    1 January 2002: issuing of euro notes and coins;

   -    1 July 2002 (at the latest): final date on which national currencies serve as legal tender.

c) It already seems clear that almost all the Member States will probably be judged, on 3
   May 1998, eligible to participate in the single currency. Around 11 Member States out of
   15 should make an irrevocable commitment to economic and monetary union on the


1Pursuant to Protocols 11 and 12, annexed to the Treaty of M aastricht, the United Kingdom and Denmark have confirmed their
        intention not to take part in stage three of EM U, but they may request to be allowed toe participate at any time.
2 In Protocol 10, the Treaty of M aastricht declares the “irreversible nature of the Community‟s movement to the third stage
       of EM U”. Consequently, all the M ember States “shall ... respect the will for the Community to enter swiftly into the
       third stage”.

                                                            16
    expected date. The non–participation of other States will therefore be an exemption, for a
    minority and temporary in nature, as provided for in the text and the spirit of the Treaty on
    European Union.

    The considerable efforts being made by the Member States to fulfil the economic criteria –
    and the unexpected results they have achieved in a very brief period– demonstrate their
    ability to make a resolute commitment to pursue integration when faced with a close,
    precise and binding deadline, –and when threatened with even temporary exclusion from
    the core of Europe. This precedent should be kept in mind with regard to progress to be
    made in other areas such as foreign and security policy (see below).


2. POSITION OF THE EUROPEAN MOVEMENT

a) Monetary union, European integration and reform of the Treaties

    The European Movement confirms, firstly, its very strong attachment in principle to the
    launch of the single currency at the earliest opportunity. It recognizes that the
    agreement reached in Amsterdam, in spite of its shortfalls, reinforces the decision for the
    launch of monetary union as planned on 3 May 1998.

    The European Movement would point out, however, that monetary Europe remains a
    substitute for a faltering political Europe : the euro is being used as the driving force of
    European integration1, whereas the political dimension of this integration has not been taken
    into consideration. Such lack of symmetry is dangerous and eventually unsustainable.

    Participation in the euro has required and will continue requiring of citizens not only real
    financial efforts (reduction of budget deficits), but also an unprecedented act of faith and
    confidence (relinquishing of the national currencies in favour of the single currency).
    Following the entry into force of the euro, the solidarity of national public opinions could
    well be put to the test through corrective measures necessitated by an international
    economic or monetary crisis (for example, an attack on the euro on international financial
    markets) or in a Member State (e.g. as a result of domestic social conflicts).

    The European Movement would also draw attention to the weakness of democratic
    control over future European monetary policy. While national parliaments will be totally
    dispossessed of their authority in this area, the European Parliament will have no real
    political control over the action of the Council and the Central Bank. Its role will be
    restricted to one of simple information or consultation on major decisions such as: the
    entry into force of the single currency, selection of the States participating in the system
    (from the start or subsequently), appointment of the President and Members of the Bank‟s
    Executive Board, the Bank‟s annual report, the eventual establishment of an exchange-rate
    system between the euro and the other currencies and implementation of the Stability Pact
    (including sanctions against Member States in cases of excessive budget deficits).

1
       M onetary policy is becoming truly supra-national and is being entrusted to a body (the ECB) that is federal in nature.
                                                              17
  For these reasons, the European Movement takes the view that monetary union will not be
  viable without a reinforcement of political union. By the time EMU is fully in place, in July
  2002 at the latest, the in-depth reform of the Treaties it is recommending must provide
  the indispensable political legitimacy needed to accompany full realisation of EMU.

b) Internal consequences of economic and monetary union

  EMU is a genuine “economic cultural revolution”. Its working will require much more
  coordination of economic policies than has been imagined –or recognised- until now,
  involving Member States‟ monetary, budgetary and fiscal policies, as well as social, wage
  and employment policies. Further, EMU will require an acceleration of the process of the
  harmonisation of legislations on fiscal and commercial matters (for example, company
  statutes and taxation), as well as social matters (working time, for example). The necessity
  of an approximation of Member States‟ economic structures will inevitably emerge, as
  will that of gradual agreement on a common economic vision of concepts such as
  globalisation and liberalisation of the economy, the social market economy, balance in
  employment/inflation/growth, the social role of public powers and so on.

  The European Movement considers this to be a positive development but believes it must
  first be recognised and asserted publicly, so as not to be perceived as being decreed from
  on high and possibly challenged at a later time. It would add that current Treaty
  provisions by no means confer upon the common institutions the legitimacy and
  competences necessary to manage such an acceleration of economic integration.

  The European Movement would also point out –because this has sometimes seemed
  contested in discussions on EMU- that the European model of society by which the Union
  is inspired places the currency at the service of the economy, one of the main functions of
  which is to ensure employment and earnings for citizens. EMU, however, will be created
  at a time when Europe is suffering from high unemployment. By leading to an increase in
  competition (through the simplification of price comparisons and financial transactions),
  EMU risks –at least temporarily- destroying jobs, especially in small and medium-sized
  enterprises. It would be difficult to explain and secure citizens‟ acceptance of such a
  consequence. It is therefore vital to publicly assert that management of EMU must not
  be a hindrance to Member States‟ concerted efforts, on the one hand, to preserve
  economic activity and, on the other, to pursue an active employment policy, as agreed
  at the Luxembourg European Council on 21 November 1997.

c) External consequences of economic and monetary union

  The necessity of common representation and action by the Union in its international
  monetary and financial relations must be recognised and clear conclusions drawn at an
  early date. It is important to avoid creating an ambiguous situation as regards the sharing
  of responsibilities by the Union and the Member States, as was the case in the GATT
  (Uruguay Round) and is still the case in the WTO (for financial services). In the event of
  an international monetary crisis, the Union‟s interlocutors (the American Treasury
                                                  18
    Secretary, for example) must be able to rapidly identity their European counterparts 1.
    International investors must have guarantees that the euro will be managed efficiently and
    that European officials are capable of reacting rapidly.

    The European Movement therefore deems that the Union must have a single position
    and spokesperson in international organisations (IMF) or fora (G7) –and in its relations
    with the major monetary powers (USA, Japan)– especially so as to guarantee the strength
    and stability of its currency. The role and powers of the President of the European Central
    Bank and of the President of the Council of the Union will have to be clarified from the
    outset.2

    Also in this regard, the European Movement notes the ambiguity of the terms of the
    resolution (§ 9 and 10) adopted by the Luxembourg European Council on the international
    representation of the Community, an ambiguity that reflects the lack of precision of Article
    109 of the Treaty, moreover.

    The European Movement therefore considers that, in this area as well, the reform of the
    Treaties it recommends must contribute the necessary clarifications before 2002.

d) Member State participation in the euro

    The European Movement considers that all Member States of the Union which fulfil the
    economic criteria laid down by the Treaty should join economic and monetary union on
    the date established by the Treaty, i.e. on 1 January 1999. The refusal –or postponement–
    of such participation for political reasons or for reasons of simple economic opportunity
    appears incompatible with the spirit of the Treaties and with the common resolve to pursue
    economic integration. The European Movement would point out that, in any hypothesis,
    such abstention would quickly prove incompatible with the working of the internal market.

    The European Movement therefore trusts that the three Member States (United
    Kingdom, Denmark and Sweden3 ) which have voiced reservations about their
    participation will join, as soon as possible, all the other Member States, while respecting


1
       During the recent Asian financial crisis, the Union does not seem to have played a role or exercised influence
       corresponding to its share in the capital of the IM F (30%, compared to the United States‟ 18%). For example, at the
       Ecofin Council of 19.01.98, “M inisters held an informal discussion of the Asian financial crisis during lunch (…). They
       noted that the impact of this crisis was being studied primarily in the framework of the IM F and the G7” (M inutes of
       the Council sitting).
2
       “It is impossible to imagine that M ember States sharing a single currency could have different positions in the IM F, for
       instance. A single seat for the European Union as a monetary union would be logical, but this will take time.” Karl
       Lamers, Royal Institute of International Affairs, 20/1/1998.
3      S weden does not have a formal derogation like the United Kingdom and Denmark and fulfils participation criteria. The
       Swedish Government and Parliament have nonetheless decided to postpone Sweden‟s participation in the euro for
       reasons both political (lack of public support) and economic (fear of a weak euro), thus creating a formidable precedent.
       In this connection, the ambiguity of the political consequences of the euro was stated exactly by Prime M inister Persson
       : “The Swedish people has not agreed to join a federation” whereas EM U “could well require a European fiscal policy
       that would constitute precisely an element of federation”. Veckans Affarer, 10/97.

                                                              19
    the common rules laid down in the Treaty. Failing this, their participation in the new
    exchange-rate mechanism linking the euro group to States not yet taking part seems vital
    for ensuring stability in economic and monetary relations between the two groups.

    The European Movement considers, moreover, that Member States participating in
    the euro should be able to freely agree amongst themselves measures of concern to
    them –and that they must do so officially, i.e. in the framework of Community rules and
    institutions, with the participation of the Commission, under the control of the European
    Parliament and giving all necessary publicity to their debate and decisions. In this
    connection, current Treaty provisions1 and the European Council‟s interpretation2 do not
    provide guarantees of clarity and efficiency vital in such an area.

    This situation risks leading to serious inconveniences, especially in cases where the Council
    must act unanimously and in the event the Member States participating in the euro area –
    before or after the next enlargement- do not have a qualified majority in the Council.

    The European Movement therefore takes the view, in this area too, that a revision of the
    Treaties should enable States participating in the euro area to introduce among themselves
    a form of autonomous action inspired by the enhanced cooperation procedure established
    by the Treaty of Amsterdam.




1
       Under Article 109K, § 3, of the Treaty, M ember States of the euro area are only entitled to take decisions alone on
       measures related to the Central Bank, exchange rates and relations with international organisations. All other decisions
       linked directly or indirectly to economic and monetary policy must be taken by the Council representing all the M ember
       States and acting in some cases by unanimity (e.g. on tax harmonisation).
2
       According to the conclusions adopted by the Luxembourg European Council on 14 December 1997, “the M inisters of
       the States participating in the euro area may meet informally among themselves to discuss issues connected with their
       specific shared responsibilities for the single currency (…). Decisions will in all cases be taken by the ECOFIN Council
       in accordance with the procedures laid down in the Treaty”.

                                                             20
                           EMPLOYMENT AND SOCIAL SOLIDARITY



1.        SITUATION

a) “The Amsterdam European Council of 17 June 1997 marked a turning point for
   employment policies in the Union. With adoption of the Title on Employment1, the Heads
   of State and Government recognized that employment has to be considered a question
   of common interest.” 2

     Henceforth, the Community has the mission of contributing to the achievement of a high
     level of employment by encouraging cooperation between Member States and supporting
     and completing their action. To this effect, the Council sets guidelines for the employment
     policies of Member States and may forward recommendations to States on this subject.
     Acting under the codecision procedure with Parliament, the Council may adopt actions to
     encourage initiatives in favour of employment developed by the Member States. An
     “Employment Committee” is also created to promote cooperation between Member
     States.

     Moreover, the Amsterdam European Council‟s resolution on growth and employment
     confirmed the necessity of “resolutely maintaining employment in the forefront of the
     Union‟s political concerns”.

     In parallel, the Social Protocol was integrated into the Treaty. As a result, the Council
     may now adopt –under the codecision procedure with Parliament- decisions related to
     working conditions, the consultation of workers, the integration of excluded persons and
     the equality of men and women in the workforce. Acting unanimously, it may adopt
     measures related in particular to social security and co-management.

b) On 21 November 1997, in Luxembourg, the first Extraordinary European Council in
   the history of the Community was devoted to employment. In their conclusions, the Heads
   of State and Government recognize that “the question of employment is at the heart of the
   concerns of European citizens and all means must be used to fight unemployment, whose
   unacceptable level threatens the cohesion of our societies”. The European Council agreed,
   to this effect, on early implementation of the provisions of the Amsterdam Treaty on
   employment, the development of a coordinated macroeconomic policy, the implementation
   of a coordinated strategy for national employment policies3, the mobilisation of Community
   policies at the service of employment (internal market, taxation, major networks, structural
   funds) and two new financial initiatives through the EIB and the Union budget.


1
  The new Title VIII of the Treaty (Articles 125 to 130) is placed after the provisions on economic and monetary policy (Title
         VII).
2
  Communication from the Commission on “Guidelines for Employment Policy in 1998” (1/10/97).
3
   This involves creating “for employment, as for economic policy, the same determination to achieve convergence towards
         verifiable objectives agreed in common and regularly updated”.

                                                             21
c) Guidelines for the employment policies of the Member States in 1998 were adopted by
   the Social Affairs Council of 15 December 1997 on a proposal from the Commission.
   These guidelines cover the encouragement of the business culture (SMEs, new
   technologies, risk capital and tax system), the employability of the unemployed (especially
   young and long-term jobless persons), modernisation of the organisation of work in
   companies and the equality of men and women in matters of employment.


2.          REMARKS

a) Eighteen million jobless in Europe, or 10.8% of the workforce; 20% unemployment
   among young people; 50% of the unemployed without a job for more than a year : the
   alarming evolution of the employment situation in Europe forced the decision by the Heads
   of State and Government in Amsterdam and in Luxembourg.

There is reason to applaud the fact that, thanks to the pressure of public opinion –very
  effectively relayed by the European Parliament- employment has finally imposed itself
  as one of the most important challenges facing Europe as this century draws to a
  close,1 on the same footing as EMU and enlargement. One might also note the parallel
  drawn by the European Council between the convergence of employment policies and the
  convergence of economic policies linked to EMU (see above). Lastly, the ambition of the
  guidelines proposed by the Commission to reduce unemployment from 10.8% to 7% in
  five years, i.e. by 2002, is noteworthy.

b) The success of this undertaking will depend firstly on the development of the general
   economic situation in Europe, particularly growth, but also on Member States‟ will to
   “proceed with bold structural reforms in their employment systems”2. Irrespective of
   ideological considerations on the economic role of the public powers, it must be agreed
   that the creation of jobs cannot be decreed like an interest rate or a budget deficit, but
   results from independent decisions by millions of economic operators. Further, account
   must be given to the very contrasting employment situations in the different Member States
   and, even more so, in the different regions, which tends to relativise the efficacy of actions
   taken at Community level.

c) Serious uncertainties also weigh on the possible consequences on employment of
   upcoming decisions on EMU and enlargement.

The introduction of the euro –in parallel with completion of the internal market- is likely to
  result in an abrupt increase in competition, threatening numerous enterprises, especially
  small and medium-sized ones, and thus making the job situation even worse. The


1
    It is worth noting that the legitimacy and necessity of an employment policy were recognised by the G8 itself at its meeting on
           22.02.98 in more explicit terms than those used by the Union. The G8 called for “an international programme for the
           promotion of employment and the fight against unemployment and social exclusion”.
2
    Communication from the Commission dated 1/10/97 (cited above). N.B. : From 1970 (EUR 6) to 1995 (EUR 15), the taxation
           of wages as a percentage of employees‟ earnings rose from 28.7% to 42.1%; in terms of GDP, the percentage of taxation
           on labour rose from 14.5% to 21.4% (Eurostat, 12/97).
                                                                 22
     requirements of the Stability Pact will continue restricting the fiscal or financial intervention
     capacities of public powers in favour of employment.

The consequences of enlargement could prove to be even much more alarming in terms of
  employment for the Fifteen. The abundance of qualified and inexpensive manpower in the
  applicant countries is likely not only to heighten competition, but also to provoke
  phenomena of immigration of workers or –on the contrary- of relocation of companies at
  the expense of the employment situation in the Union of Fifteen1.

Before economic and monetary union and enlargement eventually produce the expected
   benefits of a “unified, large continental market” in terms of growth and employment, it is
   essential for the Union to truly consider employment a “question of common interest” and
   to implement a common strategy that is both economic and social in nature.


3.        POSITION OF THE EUROPEAN MOVEMENT

     “Citizens will not support the European undertaking without a clear and positive
     response to the ills eating away at our societies : unemployment, poverty and
     social exclusion.”2

a) The European Movement cannot but welcome the fact that a European employment
   policy has been given legitimacy and instruments –albeit at a late date- further to the
   decisions of the Amsterdam and Luxembourg European Councils. It pays tribute to those
   involved in this development (the European Parliament, the Commission, the French and
   Luxembourg governments). It would point out that the coordination of national policies on
   matters of employment will prove in any event to be indispensable once monetary union
   has been completed (see above).

The European Movement observes that use of the Community budget and of the EIB to
  provide support for actions for the promotion of employment –to the extent this is
  economically justified- will make it possible to mobilize funds without destroying balance in
  the national budgets, to readily secure substantial financial resources and to implement
  economic solidarity between Member States in the battle against unemployment.

The European Movement recommends a common and coordinated approach at European
  level to problems related to the modernisation of economic and social structures with
  a view to protecting growth and jobs in the medium term in Europe. For the social
  partners, enterprises and the public powers, such concerted action will be more readily
  accepted, more credible and a source of emulation.


1
        To date, there does not seem to be any official economic study on the possible impact of enlargement on the
        employment situation in Europe.
2
        Excerpt from the “Political Declaration of the Permanent Forum of Civil Society” adopted on the eve of the European
        Council on Employment (20 and 21 November 1997).

                                                            23
b) The European Movement would also observe that the policy of employment promotion
   cannot be dissociated from social policy just as, in real life, the precariousness of
   employment and unemployment are linked to poverty1 and social exclusion. One of the
   elements of the European model of society the Union must promote and defend in the
   context of globalisation of the international economy is the preservation of employment and
   social protection for the unemployed.

The European Movement therefore regrets that the social dimension of employment policy
  was not sufficiently emphasised by the European Council and that no legal (or budgetary)
  means were provided to this effect. The European Union must play an active role in
  fighting for employment and against social exclusion not only because it is co-responsible
  for the economic situation and consequently for employment, but also because the
  emerging “European citizenship” implies active solidarity between workers and the jobless
  at European level.

c) The European Movement considers that the strengthening of social Europe must be an
   integral part of the political relaunch it recommends in parallel with the entry into force of
   economic and monetary union and on the eve of enlargement. It therefore recommends :

    - that the “common employment policy” should be asserted more simply and more
    clearly in the Treaty as one of the Union‟s objectives2,

    - that a European investment policy –coordinated and partially financed by the Union-
    should support the development of employment in harmony with the objectives of EMU,

       -      that majority voting should be substituted for unanimity for all measures aimed at
    the creation of a unified social area and related to the financing of measures in support of
    employment.




1
  A Eurostat study (1993, EUR 12) demonstrates that around 17% of the population (i.e. 57 million people) live below the
poverty threshold, defined as less than 50% of average earnings.
2
  This would replace the clumsy wording adopted in Amsterdam : “ the promotion of coordination between M ember States‟
employment policies with a view to strengthening their effectiveness through the development of a coordinated employment
strategy” (Article 3i).

                                                          24
          A EUROPEAN AREA OF FREEDOM, SECURITY AND JUSTICE

1. SITUATION

      Europe was long the business of governments alone. Today it must be principally the
business of citizens. This requirement emerged during negotiation of the Amsterdam Treaty,
which was dominated, rather unexpectedly, by the subject of “a Union closer to citizens”.

       In Amsterdam, the governments were confronted with a paradox : whereas
development of the Union (and in particular completion of the single market) was leading it to
intervene increasingly in people‟s daily lives, the people were apprehensive and there was
even a growing loss of affection for a Community construction seen as being exaggeratedly
complex, technocratic and centralised, without consideration for –or any real hold on-
practical concerns. The difficulties with ratification of the Treaty of Maastricht in several
Member States –and reflected in opinion polls on the popularity of the Union- convinced
governments of the need to proceed with sweeping reforms capable of bringing the Union
closer to its citizens.

      The results achieved in this area by the Treaty of Amsterdam are based, in short, on
four main themes :

-   the development of social policies such as employment and social rights (see above), the
    environment and consumer rights,

-   the protection of freedoms through the assertion of fundamental rights (the fight against all
    forms of discrimination and violation of human rights) and of the total free movement of
    persons,

-   the reinforcement of democratic principles through a greater role for the European
    Parliament and the involvement of national parliaments, greater transparency in the
    Community decision-making process and confirmation of the principle of subsidiarity,

-   the protection of security through judicial and police cooperation on matters relating to
    crime (organised crime, terrorism, drugs, corruption, fraud, etc.) and cooperation in the
    control of granting third country nationals access to the Union (visas, right of asylum,
    immigration and so on).

       In addition to the development of social policies, the creation of a European area of
freedom, security and justice is undoubtedly one of citizens‟ principal concerns. The
combined effects of the growing interpenetration of societies at international level and the
abolition of frontiers in a Union soon to be enlarged to new States cannot but add to their
concerns and expectations in this area1. In Amsterdam, the governments no doubt

1
 With enlargement, the eastern frontier of Poland will become the Union‟s frontier –for a distance of 1.761 km- with notably
Russia (Kaliningrad), Belarus and Ukraine.
                                                            25
understood that they would be judged by the public opinion in terms of their ability to come
up with effective responses to this new challenge.

      The outcome nevertheless leaves an impression of improvisation and ongoing
blocking.

       Of course, real progress was made, particularly on the protection of fundamental rights
and non-discrimination (e.g. the suspension of a Member State‟s rights in the event of
violation of fundamental rights), free movement (abolition of controls at internal frontiers and
implementation of controls at external frontiers within a period of five years) and the placing
under the Community sphere of measures related to asylum, immigration and judicial
cooperation on civil matters. Likewise, intergovernmental cooperation on police matters is
somewhat strengthened (especially through the framing of actions to be conducted in common
and of Europol‟s operational capacities).

      But, on the whole, the reforms adopted could prove to be extremely
cumbersome, very complex and consequently of limited efficacy given the almost
generalised maintenance of the rule of unanimity, the continued use of intergovernmental
mechanisms in the most sensitive sectors (such as police and judicial cooperation), the
growing number of “à la carte” exemptions for certain Member States 1, the possibility of
“enhanced cooperation” by certain Member States on certain specific issues, and so on.

      Three striking examples of the relative inefficiency of the system might be
mentioned :

-      the considerable delay in ratifying the Europol Convention, which, though decided by the
       Maastricht European Council on 10 December 1991, will not enter into force until 1999,

-      the considerable administrative and legal difficulties affecting cooperation by national
       immigration control services in dealing with the problem of Kurdish refugees,

-      the recent “Geneva appeal” by seven European judges, expressing their powerlessness in
       the face of international organised crime given the compartmentalisation of national judicial
       systems…

2. POSITION OF THE EUROPEAN MOVEMENT

       The European Movement regrets that, in an area as sensitive as citizens‟ security, the
governments did not resolve to take the qualitative leap required, namely to accept the
total switch from intergovernmental cooperation to the Community method, which alone
offers the necessary guarantees of clarity and efficiency, as well as democratic and judicial
control.



1
    United Kingdom, Ireland and Denmark.

                                                      26
      The public opinion would have probably been favourable to such a reform, which in
any event will prove inevitable.

       These are admittedly issues (justice and police) which –like defence (see below)- touch
upon the very heart of State sovereignty and go well beyond the original mission of the
Europe of the “common market”. This is precisely why the European Movement considers
that the communitisation of this action through reform of the Treaties must be matched with
a new “constitutional pact” (see above) giving solemn legitimacy to the Union‟s competence.
It also maintains that this step must be taken as part of the next revision and therefore prior
to the entry into force of new accessions.

      More specifically, the European Movement would suggest the following proposals with
a view to reinforcing the European area of freedom, security and justice:

a) The Union‟s objectives with respect to internal security should be defined as follows :

-   the abolition of controls at the Union‟s internal frontiers must be matched with a
    reinforcement of controls at external frontiers,

-   immigration must be the subject of a common policy taking account of the demographic
    situation in the Union, employment needs and possibilities and Member States‟ traditions
    with regard to admission. Any immigrant legally admitted to the Union must be free to
    reside and work in any of the Union Member States,

-   there should be a common approach to admission or asylum requests submitted by
    refugees entering the Union. The burden resulting from the possible admission of these
    persons must be shared fairly by the Member States,

-   all forms of crime or international delinquency (terrorism, drug traffic, financial crime,
    corruption, channels of illegal immigration, etc.) must be placed under a common policy of
    prevention and repression capable of guaranteeing a high level of security for citizens and
    residents of the Union whilst assuring strict respect for fundamental freedoms;

b) Decision-making procedures and instruments capable of ensuring the attainment of these
objectives should be as follows :

-   the Commission should be made responsible for supervising control of the Union‟s
    external frontiers (persons, goods and capital) without ruling out the eventual integration
    of customs services and border police;

-   a European area of criminal justice should be created along with a public European
    ministry charged with prosecuting crimes and offenses of an international nature; criminal
    legislations concerning crimes and offences should be harmonised, while nevertheless
    remaining under the jurisdiction of national criminal courts (in this area that traditionally
    falls under the legislative sphere, a specific procedure could be considered making it

                                                   27
    possible to closely involve the national parliaments in the decisions of the Community
    institutions);

-   Europol should be given powers of investigation and pursuit of international criminals in
    liaison with the police forces of Member States under the authority of the European
    public ministry, in the context of a common legislation;

-   judges should be given the possibility of cooperating directly from one Member State to
    the next wherever the needs of an investigation so require;

-   in the event these provisions aimed at establishing a European area of freedom, justice
    and security should not be approved by all Member States, their implementation could
    be limited to the States that are willing, it being understood that the other States could
    join them at any time.




                                                  28
                   COMMON FOREIGN AND SECURITY POLICY

1. SITUATION

      Further to the Yugoslav crisis and in anticipation of the deadline set in the Brussels
Treaty/WEU for March 1998, the Treaty of Maastricht formally recognised and announced
the necessity of a comprehensive revision of provisions relating to CFSP (Article J4 § 6).

      The Amsterdam Treaty did in fact reinforce certain principles (such as the Union's
competence for peacekeeping operations) and improved certain analysis and decision–making
mechanisms (creation of a forward studies unit and CFSP “high representative”), but there is
nothing in this Treaty guaranteeing a firm and definitive commitment by all Member
States to pursue henceforth a genuine common foreign and security policy. The
Treaty is defined, moreover, as a further step towards this goal, the concrete implications and
deadline of which are vague or as yet unspecified.

     There is still considerable ambiguity about Member States' determination in this
area –and about the very concepts of security and defence– even as decisive deadlines
approach, such as the ongoing reorganisation of Western security (reform of NATO) and the
upcoming extension of the Union to Central and Eastern Europe.


2. GENERAL POSITION OF THE EUROPEAN MOVEMENT

     The European Movement maintains that, at the dawn of the 21st century, the time has
come for the European Union to :

1)      pursue a common foreign policy at world level,
2)      guarantee the collective security of its Member States.

      It is important to put an end to the institutional odyssey and labyrinth of a CFSP whose
cumbersome and complex procedures are responsible for the flagrant powerlessness of
the Union in recent crises and conflicts (Middle East, Balkans and Africa) and to the de facto
leadership the United States consequently continues to assume even in Europe's "natural"
areas of influence.

      Enduring cultural differences between Member States –accentuated by the latest
enlargement– are one of the principal causes of this stalemate the Union is endeavouring to
break by means of inventive, but in the end ineffective, provisions. The new provisions of the
Amsterdam Treaty illustrate this situation well: paradoxically, they allow the Union to engage in
peacekeeping operations in a third State but do not give it the means to act in the case of an
external aggression against one of its own Member States... The next enlargement of the
Union towards Central and Eastern Europe is likely to aggravate this failing and this
contradiction while increasing the risks of geostrategic tension and instability.


                                                   29
       For these reasons, the European Movement maintains that a truly qualitative leap
must be made by the European Union in the areas of diplomacy and defence , that the
Union must be vested with a genuine diplomatic capacity, adapted to its strength and its
political, economic and commercial interests, that a genuine "European security architecture"
must be established in a complete, lasting and unambiguous way, prior to any further
enlargement, and in relation with the reorganisation of NATO 1 now in progress.

      This thorough reform of the CFSP obviously requires a revision of the related Treaty
provisions. Where appropriate, and in a preliminary phase, it could be implemented by a
central core of Member States willing to pool their diplomatic and defence means in the spirit
of Article J7, § 4, of the Amsterdam Treaty. It would nevertheless be advisable to set into
place mechanisms enabling this cooperation to develop within the framework of the Union
and not on a purely intergovernmental basis.


3. POSITION ON FOREIGN POLICY

The European Movement proposes the establishment of the following guidelines :

-   The Union should develop and pursue a common foreign policy in relation to the
    world’s major powers 2 and important international strategic problems (disarmament, for
    example). Its powerlessness in the face of virtually all recent major diplomatic and military
    conflicts (Middle East, Balkans and Africa) –including those directly affecting it, such as
    Cyprus- is regrettable. The most recent example is that of the Iraqi crisis, where the
    absence of a common position by the Union is not only keeping Europe from playing any
    role in the United Nations (see below), but could even provoke serious tension between
    Union Member States, in particular between the United Kingdom and France.

- The absence of a common foreign policy could prove to be even more dangerous after the
  next enlargements. Without strong strategic conceptions shared by the Union Member
  States, there could be a real danger of seeing a Union enlarged to 25 or 30 Member
  States splitting –at diplomatic level- into regional blocs (Centre-East, Baltic, Balkans,
  Mediterranean, etc.) pursuing disparate and possibly conflicting foreign policies 3.




1     It is noteworthy that three States that have applied for admission to the Union (Poland, Hungary and Czech Republic)
      will be joining NATO in 1999 and that several others could also join prior to their admission to the Union.
2
      The Union concludes economic and commercial agreements with a great number of States, including the USA and Russia.
      The partnership agreement with Russia that entered into force on 1 December 1997 covers a wide range of subjects,
      including education, culture, crime, human rights and “political dialogue” (for example, on enlargement of the Union).
3
      The present Union M ember States already participate, each on its own behalf, in a number of so-called “regional
      cooperation” agreements (Black Sea and Baltic Sea Agreements); likewise, the recent reconstitution of diplomatic
      “triangles” –like those of Weimar (Germany, France and Poland) or Ekaterinbourg (Germany, France and Russia)-
      should also be noted.

                                                           30
- In parallel, the Union should conduct a coordinated policy in major international
  conferences and organisations (UN, OSCE, NATO)1 ; the problem of the Union‟s
  representation in the most important bodies (especially the United Nations Security
  Council2) should be discussed openly, along with the issue of raising to embassy level the
  Union‟s delegations in the major powers (complementary to Member States‟ embassies).

- The Union‟s external economic policy should no longer be seen as an extension of
  internal policies (i.e. agriculture, commerce and, shortly, currency) but as a branch of its
  general external policy, probably the most important one. In this area, the “added value”
  of joint action by the Union is particularly high and visible and every effort should be made
  to promote and extend it to all economic sectors3.

- On institutional matters, the proposed reform of the Treaties should give priority to
  placing the CFSP within the Community sphere, i.e. clearly introducing it into the Union‟s
  normal decision-making mechanisms4. This reform should in particular make the majority
  principle the general rule, with exceptional possibilities for “constructive” non-participation
  for certain Member States on certain issues. The Commission‟s (non-exclusive) role of
  proposal and execution should be asserted in foreign policy matters and especially in
  external economic policy (and not simply in trade policy alone). Lastly, democratic control
  by the European Parliament should be assured under arrangements adapted to these
  matters.


4. POSITION ON DEFENCE POLICY

   Although constituting an essential factor of the credibility of its foreign policy, the Union‟s
common defence policy remains a controversial issue and especially one that is not being
debated sufficiently by Member States. The Union‟s historical and ultimate goal is
nevertheless to preserve peace between Member States and, more generally, to guarantee
the collective security of European citizens.

    In the face of this essential and pressing duty, the subtleties of institutional quarrels and
rivalries between different international organisations sometimes appear to be pretexts masking
a lack of commitment, solidarity and, perhaps, reciprocal confidence between Member
States. The complexity of existing structures of “defence Europe” (see attached table) is

1     Collectively, M ember States of the Union finance 35% of the United Nations‟ operating budgets and of peacekeeping
      missions, but are far from exercising the corresponding influence. Likewise, the Union and its M ember States provide the
      bulk of aid to the Palestinians (0.7 and 1 billion ecus respectively from 1993 to 1997), out of proportion to their
      political role in the M iddle East peace process.
2
      On a transitional basis, the Union‟s representation could be assured in the Security Council while retaining the
      permanent seats of the M ember States concerned.
3
      In this regard, the recent Kyoto Conference on the Environment (December 1997) demonstrated the decisive weight of
      the Union at world level when it negotiates collectively. On the contrary, the Amsterdam European Council‟s refusal to
      confirm the Union‟s general authority to negotiate in the WTO (Article 113 EC) runs counter to the interests of the
      Union and its M ember States.
4
      In the present institutional system, the separation between the first pillar (economic Community) and the second pillar
      (foreign policy) prevents the pursuit of a global and coherent external policy.

                                                             31
neither a guarantee of effectiveness nor a demonstration perceptible by public opinion of
European solidarity in this area. This complexity and diversity could be amplified, moreover,
after accession to the Union of the Central and Eastern European applicant States, former
members of the Warsaw Pact.

    The European Movement recognises that defence lies at the heart of national sovereignty
and that the different Member States‟ traditional ideas on matters of armed action vary. It
nonetheless considers that, in this area as well, the time has come to clarify the Union’s
positions and means of action, so that it may cease “importing” its collective security (cf.
Bosnia and Cyprus). It considers that significant progress -far beyond the timid steps taken in
Amsterdam1- must be made before enlargement of the Union makes the task even more
difficult, or perhaps compromises it definitively.

In this spirit, the European Movement suggests the following guidelines :

- The Union should clearly assert in the Treaty the principle of solidarity and collective
  guarantee (diplomatic and military) between all Member States in the event of an
  attack against the integrity of the territory of the Union (cf. clause of WEU Article 5) 2.

- WEU should be fully integrated into the Union prior to any further enlargement3 and
  all the Union Member States (present and future) should undertake to participate
  fully in European security policy4 . The European Union‟s defence capacities and
  missions should therefore be defined precisely, as regards both peacekeeping missions
  (“Petersberg” tasks) and collective security (Article 5, WEU).

- In the framework of the current reorganisation of NATO, the “European security and
  defence identity” should be asserted and its role and means of action agreed. It is
  essential to seize this opportunity to give specific form at last to Europe‟s role and place in
  the Atlantic Alliance.

- The setting into place of a genuine common defence capacity would also require a
  programme of specific actions in the following fields :
                 - a European intervention force,
                 - common means of communication and military transport,


1
      Article J 4 of the Maastricht Treaty states : “The common foreign and security policy shall include all questions related
      to the security of the Union, including the eventual framing of a common defence policy, which might in time lead to
      a common defence.” The new Article J 7 of the Amsterdam Treaty states : “The CFSP shall include all questions
      related to the security of the Union, including the gradual framing of a common defence policy (…) which could result
      in a common defence if the European Council so decides”.
2
      The Treaty of Amsterdam nevertheless adds to the CFSP‟s objectives, “the protection (…) of the integrity of the
      Union” (Article J 1).
3     It is noteworthy that Protocol A to the Amsterdam Treaty makes provision for adoption of an agreement on
      “cooperation arrangements” between the European Union and WEU one year after entry into force of the Treaty, at the
      latest.
4     This will imply the start-up of a difficult debate -in the M ember States concerned and at Union level- on neutrality, non-
      alignment and participation in military alliances (WEU and NATO).
                                                              32
                    - a common industrial and commercial policy on matters of
                    armaments1,
    as well as collective study of the conditions governing the use of nuclear forces.

- On institutional matters, the proposed reform of the Treaties should ensure, as with
  foreign policy, the placing of defence policy within the Community sphere, the majority
  principle (with the possibility of non-participation) and appropriate control by the European
  Parliament and Community financing of actions undertaken on behalf of the Union and of a
  considerable part of arms expenditure2 .


Enhanced cooperation on defence matters

        The Amsterdam Treaty (Article K 15) creates the possibility of “enhanced cooperation”
between certain Member States in the framework of the Union but excludes the CFSP from
the scope of this article –while maintaining the Treaty of Maastricht provision (Article J 7 § 4),
which authorises “closer cooperation between two or more Member States at bilateral level,
in the framework of WEU or of the Atlantic Alliance”.

      Numerous forms of intergovernmental cooperation on defence matters have been
developed in recent years between Member States outside the context of the Union3.

      Without an early and firm commitment by the Union to develop a common defence, it
would be advisable for the willing Member States to be allowed to undertake among
themselves –but in the framework of the Union- an organised and structured form of
cooperation in this area and to thus constitute the initial core of “Defence Europe” open to
the other Member States which would like to join subsequently. With appropriate alteration
of details, a process comparable to that which led to EMU –namely, matched with conditions
and a timeframe- could be considered in the area of defence and the necessary provisions
added to the Treaty at the time of the next revision.




1
      It should be noted in this connection that it is urgent to restructure national defence industries at European level, because
      their short-term survival is threatened by the creation of powerful multinationals.

2     M oreover, all national public security spending (research, development, equipment, training, etc.) should be coordinated
      so as to ensure better use of funds.
3
      For example, Eurocorps, Eurofer, Euromerfor, the Organisation for Joint Cooperation on Armaments (OCCAR), etc..
      These actions sometimes include the participation of non-Union States.

                                                               33
                                        AGENDA 2000

      On 15 July 1997, closely after the signature of the Amsterdam Treaty, the Commission
came forward with a Communication entitled “Agenda 2000” which presents proposals based
on the same logic and matched with a single timeframe on:

- the future financial framework,
- reform of the common agricultural policy and cohesion policies,
- candidacies for accession.

      The timeframe covers the period 2000 to 2006. The future financial framework and
policy reform should take effect on 1 January 2000. The first wave of accessions is slated for
2002.

      The “package” logic on which the proposals are based consists of linking all these
problems and consequently developing the planned reforms in the perspective of a Union
enlarged to 20 or 21 Member States.

       Moreover, all the proposals put forward by the Commission are conceived in terms of a
prior condition, namely the placing of a ceiling on Community expenditure.

                                            -o-

     In its resolution of 4 December 1997, the European Parliament adopted a position on
the Commission‟s proposals (see below), whereas the European Council of 12 December
1997 merely “welcomed” the Commission‟s Communication and pointed out the imperative of
budgetary discipline and efficient expenditure.




                                                  34
                         AGENDA 2000 - THE UNION’S FINANCES

1. GENERAL FRAMEWORK

     The Commission‟s proposals on financial matters are aimed essentially at fixing the
global amount of the Union’s expenditure and revenue for a further seven-year
period (2000/2006) -taking into account both the impact on the budget of a reform of the
major common policies (CAP, social and regional funds) from 2000- and the accession of
new Member States 1 beginning in 2002.

       In short, the Commission proposes the renewal of the present general framework,
in particular the maintenance of :

- a spending ceiling amounting to the equivalent of 1.27% of Member State GNP2 ,
- the four main expenditure headings and their relative share of the budget,
- the current own resources system,
- compensatory or correcting mechanisms for certain Member States (United Kingdom).

Remark : This proposal is aimed at consolidating the entire existing system, probably so as to
avoid difficult negotiations or even Member State blocking of a very controversial subject.
Thus, any substantial reform of highly debatable mechanisms would be postponed to 2006
-i.e. nearly ten years- and would then be put before more than 20 Member States for very
unlikely unanimous agreement3 ..

Proposal : The European Movement maintains, in contrast with the Commission, that a
comprehensive reform of the Union’s financing system is necessary and that this reform
must take place on the occasion of the adoption, in the year 2000, of the new multiannual
financial framework:

        It also considers that it would be advisable to limit to five years the duration of
future financial frameworks, coinciding with the term of office of the European Parliament
and the Commission and to make them part of the “legislative contract” between these two
institutions. Thus, the new framework would cover the period 2000 to 2004 and the following
–which would take fully into account the first financial consequences of enlargement (see
below)- the period 2005 to 2009.

2. EXPENDITURE CEILING

     The Commission is suggesting renewal of the principle and level of the ceiling on the
Union‟s expenditure. This ceiling links the development of the Union‟s budget to that of


1     The first “wave” of accessions of six States (Poland, Hungary, Czech Republic, Slovenia, Estonia and Cyprus).
2     This amount is estimated at 96 billion ecus in 2000 and 116 billion ecus in 2006.
3     The Commission is not considering the possibility of a subsequent Treaty reform making it possible to adopt this
      reform by majority vote.

                                                             35
Member State GNP, freezing this ratio at 1.27%. In practice, the maximum annual budget
increase averages +2.5%, which corresponds to Member State GNP growth projections for
the period under consideration.

Remark : The Commission‟s proposal confirms the principle of linking increases in
Community spending to economic activity, irrespective of financial needs related to
deepening Community action. The principle of a relative “freeze” on the Union‟s budget
implies a freeze on economic (and political) integration. It particularly excludes further
transfers of charges from national budgets to the Community budget, thus considerably
restricting the advancement of burgeoning common policies (e.g. research, energy, education,
cooperation, etc.) and the implementation of new policies (e.g. defence). This freeze also
precludes allowing the Union‟s budget to attain the critical threshold necessary to play a role in
stabilising economic cycles in the future monetary union1 .

Proposal : The European Movement would point out that this a priori putting of a ceiling to
the budget is likely to hamper all future development of the Union. Given the necessity of
keeping public -national and Community- spending under control, however, it suggests that
the level of the ceiling remain linked to the evolution of national GNP, but that it may be
overrun where additional Community expenditure results from a transfer of charges from
national budgets to the Community budget, i.e. without provoking an increase in total public
expenditure by the Union and its Member States. The European Movement considers that
such a clause should apply to the new financial framework for 2000/2004.

3. MAIN CATEGORIES OF EXPENDITURE

       The Commission proposes for the period 2000 to 2006 a virtually identical renewal of
the relative share of each of the main categories of expenditure 2 existing in the preceding
financial framework (1994/1999).

Remark : The freeze on the breakdown of spending for such a lengthy period paralyses all
political will (or practical possibility) for modifications to Community action in the course of
the period. It perpetuates in particular the historical lack of balance benefiting agricultural
expenditure and policies; it leaves no substantial financial margin for a reorientation of
spending to the benefit of new actions transferred from Member States to the Union
(development assistance and defence, for example). While it is useful politically and at
institutional level3 to set in advance the amount of expenditure per main heading, it is
unproductive for the development of common policies.




1     M oreover, the reforms proposed under Agenda 2000 for the CAP and structural policies are highly influenced by the
      concern not to exceed the pre-imposed expenditure ceiling (see below).
2     From 1998 to 2006, the share for agriculture would drop from 44.03% to 43.7%, and external actions from 1.2% to
      0.4%; structural actions would rise from 35.9% to 37.4% and internal policies from 6.2% to 7%.
3     It was invented in 1983 to facilitate the annual budget negotiations between the M ember States and between the Council
      and Parliament; it is worth noting that it does not result from the Treaties but from a simple interinstitutional agreement.

                                                              36
Proposal : The European Movement considers that the current breakdown of the general
budget into separate categories of spending should be abolished and that the budgetary
authority of the Union (like that of Member States for national budgets) should maintain its full
control over the annual breakdown of credits according to circumstances and the institutions‟
political will. At the very least, the European Movement would suggest that a significant
variation co-efficient (10% for example) enable the budgetary authority to annually transfer
a margin of credits from one heading to another or to a new heading. Such a provision
could be applied to the new financial framework for 2000/2004.

4. OWN RESOURCES

        The Commission proposes, here too, the renewal to 2006 of the current system of own
resources. Conjecturing upon its future report on the functioning of this system (due out in
1998), it envisages subsequently a gradual evolution towards a system based entirely on
Member State contributions based on a percentage of their GNP. It considers that the
financing of the budget out of genuine own resources levied directly by the Union “would have
little chance of being approved by Member States in the present phase of the integration
process”.

Remark : The European Movement regrets that the Commission plans to abandon the
philosophy of own resources and the financial autonomy of the Union. This is
tantamount to aligning the Union‟s financing mechanism to that of classic international
organisations, making the Community budget the hostage of national budgets.

       The European Movement also deems it necessary to establish a direct relation -a tax
link- between the European citizen/taxpayer and the Community budget 1 to make the
notion of European citizenship a concrete reality. The European Movement would also point
out that, here too, any reform not adopted by the Union of Fifteen would stand little chance
of being adopted following enlargement2.

Proposal : The European Movement calls on the European Commission to come forward in
1998 with a proposal for the creation of a new own resources system assuring 1) the
Union‟s financial autonomy, 2) direct levying of income taxes by the Union, 3) a fair sharing of
the financial burden. This system could be applied to the financial framework 2000/2004.

       The European Movement is also convinced that the next revision of the Treaties should
give the European Parliament -the direct representative of taxpaying citizens- the power of
codecision on matters of own resources.




1     As is the case between the citizen and his town, region and country.
2
      The European Parliament regretted that the Commission does not propose “creating a financial relationship between
      taxpayers and the European institutions” and takes the view that the “time has come to show political courage and
      imagination in addressing the revision of the own resource system” (resolution of 4/12/97).

                                                         37
5. FAIR SHARING OF THE BUDGET BURDEN

      The problem of the negative budget balances1 of certain Member States -raised by the
United Kingdom in 1980 and now being brought up by Germany and the Netherlands 2-
threatens to block any revision of the Union‟s financial system and even to affect other
aspects of the Agenda 2000 negotiations (policy reform and enlargement).

       The European Movement would first point out that the political charge of this issue is
out of proportion with the facts, whether in relation to the amounts concerned or the economic
reality of the supposed “injury”3 .

      The European Movement next considers that the budget is an instrument of
solidarity between Member States and that it is intended to finance policies necessary for
the development of the Union as a whole. It is therefore logical -and even desirable- for there
to be a net transfer of resources to the benefit of the least affluent Member States.

       It would nonetheless be worthwhile to develop a general correcting mechanism that
could remedy any serious and temporary lack of equilibrium between States‟ budget balances
and their relative wealth. The Commission could be invited to come forward with proposals
on this matter.

      When all is said and done, it might be concluded that the importance attached to this
problem reflects a certain scepticism about the efficacy (or even the regularity) of spending
more than any real concern for budgetary balance. The solution might, in this respect, reside
in an improvement of spending management and the fight against fraud, objectives the
European Movement also fully supports.

6. THE BUDGET PROCEDURE

       Modification of the annual budget voting procedure is one of the changes to the Treaty
the European Movement would like to see brought to a successful conclusion at the time of
the next reform, i.e. before 2002. It particularly considers that the time has come to abolish
the artificial distinction between so-called “compulsory” (essentially agricultural) expenditure
and “non-compulsory” expenditure (the rest of the budget). Within the sole limits of the
global and multiannual ceiling on resources and expenditure, the ultimate responsibility of the
European Parliament (the direct representative of European taxpayers) for the levying of
revenue and the allocation of expenditure should be fully confirmed.




1     Namely, the difference between amounts put in and amounts derived from the Community budget.
2
      It is worth noting the dates of national legislative elections in 1998 in the Netherlands (M ay) and in Germany
      (September).
3     Germany, for example, draws considerable indirect benefits from the Community budget, for example, industrial orders
      linked to projects financed by the structural funds and the partial shouldering by the Union of aid benefiting the CEECs
      previously paid by Germany.

                                                             38
7. THE FINANCING OF ENLARGEMENT

      With its proposal for the new financial framework for the period 2000 to 2006, the
Commission works from the assumption that an initial wave of accessions involving six
applicant States will take effect from January 2002.

      The “financing of enlargement” therefore includes :

- from 2000 to 2002 : pre-accession aid for 11 applicant States
- from 2002 to 2006 : aid for the six new Member States and pre-accession aid for the five
remaining applicants.

     In all, the “financing of enlargement” –which accounted for 1.3% of the budget in 1999-
would thus rise to 3% in 2000, 8.4% in 2002 and 16.3% in 20061.

Remark : Given the expenditure ceiling, enlargement would be financed principally through
deductions from agricultural expenditure (further to the planned reform of the CAP) and from
structural spending (further to the reform of the agricultural, regional and social funds).

      Moreover, the Commission‟s estimates are based on three uncertain premises :

                     the date of the entry into effect of the first accessions (2002), which
                      presupposes the conclusion of the negotiations in early 2001,

                     the real cost of the first accessions, which will depend upon the outcome of
                      complex negotiations that will only be getting off the ground in 1998,

                     the modifications to be made to the working of the CAP and the structural
                      funds for which the Commission will be making specific proposals in 1998
                      (see below).

Proposal : The European Movement takes the view that the considerable financial effort being
made by the Union since 1993 to the advantage of applicant States must be continued and
expanded throughout the pre-accession period, and that, simultaneously, the management and
productivity of this expenditure must be improved upon, as recommended insistently by the
Court of Auditors.

       As mentioned above, it would no doubt be more prudent –or more realistic- to limit
the next financial framework to the period 2000 to 2004 and not to make provision
for the actual defraying of the first accessions until 2003 or 2004. Under any
hypothesis, the new financial framework will not be adopted until 1999, the date at which
decisions on reform of the CAP and the structural funds will be taken and the prospects of the
various accessions made clearer.



1
      Thus, for 2006, a total of 18.7 billion ecus, of which 2.6 billion for structural funds and 3.8 billion for agriculture.
                                                                39
                   AGENDA 2000 : REFORM OF MAJOR POLICIES


       In its communication on Agenda 2000, the Commission presents the outlines of an
ambitious reform of the common agricultural policy and cohesion policy (structural funds).
This reform is due to be implemented as from 1 January 2000.




REFORM OF THE CAP

1. Situation

a) The Commission includes reform of the CAP among the proposals set out in Agenda
   2000 for the following reasons : the necessity of continuing the reform undertaken in 1992
   and preparation for the consequences of enlargement and the next international trade
   negotiations (WTO).

b) According to the Commission, this reform should have the following objectives :
   improvement of the competitiveness of European agriculture on the world market, taking
   into account of environmental needs and those related to the organisation of rural areas,
   simplification and decentralisation of mechanisms.

c) The principal measures being considered are : the gradual replacement of direct aid (to
   which a ceiling is put) by price support measures (and therefore substantial reductions in
   intervention prices), aid integrated to productions and less-favoured regions, aid being
   made conditional upon respect for environmental standards.

      These Commission guidelines will be developed into specific proposals in the course
of 1998 and the proposed reforms should take effect as from the year 2000.

      In its resolution of 4 December 1997, the European Parliament emphasised the
“necessity of preserving an agricultural policy for the medium term” and observed that
“the success of enlargement is linked to (…) the Union‟s ability to adapt its own agriculture,
without renationalising the CAP in the process and penalising all European production”.

      In its Conclusions of 13 December 1997, the European Council declared that the
“Union is determined to continue developing the present model of European agriculture while
seeking greater internal and external competitiveness (…). The reform must culminate in
economically sound and viable solutions that are socially acceptable and make it possible to
ensure fair earnings (…)”.



                                                  40
Remarks :

a) Historically, the CAP was the Union‟s first common policy and played in this respect a
   key role in the gradual building of economic and political solidarity in the Union. Along
   with the single market, competition policy and, very shortly, economic and monetary union,
   it remains one of the Union‟s most integrated policies, which serve as the driving force of
   Community integration.

    The particular economic importance of agricultural production in Europe (including with
    regard to employment), the strategic nature of food security and agriculture‟s role in
    improving the European territory fully justify the efforts, particularly financial, made in
    support of the CAP.

b) However, further modernisation and improvements to the competitiveness of European
   agriculture in line with the reform begun in 1992 appear indispensable.

    It is in particular necessary to provide assistance at European level for the adaptation of
    agricultural production to the real needs and conditions of the internal and international
    markets, especially with regard to major production structures of an almost industrial type 1 .
    At the same time, special protection of certain types of specific productions, regional or
    linked to traditional ways of life, should be guaranteed.

    Likewise, protection of the environment -the cost of which should be borne by producers
    themselves- and improvement of rural areas have become inseparable from the CAP‟s
    objectives.

    Against this backdrop, the streamlining of CAP regulations, along with its
    liberalisation and decentralisation, should serve as the basis for further reform.

c) This reform must necessarily be progressive given the physical and human characteristics
   of agricultural production, but a major step forward has to be taken, as the Commission
   proposes, before the year 2000.

    This said however, the close link established by the Commission with the upcoming
    international negotiations on agricultural trade in the WTO and with the start-up of the
    enlargement process may be premature because the possible consequences of these
    negotiations will not be known for five to six years and cannot be taken into consideration
    in concrete terms at this stage. What is more, this link should not have the effect of
    compromising the reform of the CAP, which is necessary in any case.

    It would therefore seem judicious for the reform of the CAP to continue at its own
    pace and on the basis of the Union’s currently identifiable own needs, and for the




1      At the present time, 80% of EAGGF-Guarantee financing goes to 20% of farms.
                                                          41
     adjustments required as a result of the aforementioned deadlines to be made at a later
     stage, when the time comes, and with full knowledge of the situation.

2. Position of the European Movement

     Without entering into detail in the technical debate on adaptation of the CAP, the
European Movement would nevertheless point out the following :

-      the CAP remains one of the Union’s most important common policies , especially
       because of its considerable economic weight and the strategic nature of food supply,

-      the CAP must nevertheless continue to be modernised and simplified in order to
       adjust to the new conditions and rules of an open international market,

-      the opportunity offered by the “package” of structural and financial reforms planned for
       the year 2000 should be seized as a means of speeding up modernisation of the CAP.
       Around the year 2002 or 2003, subsequent adjustments could be made so as to
       take account of the results of internal (enlargement) and external (WTO)
       negotiations conducted by the Union.




REFORM OF THE STRUCTURAL FUNDS

1. Situation

a)     The Commission includes the subject of economic and social cohesion in its Agenda
       2000 proposals because such cohesion “is one of the three pillars of European
       construction, along with EMU and the single market”. Moreover, the Commission is of
       the view that cohesion policy is directly linked to the promotion of employment.
       Lastly, it deems that the prospect of enlargement to new countries with very different
       levels of development adds to the necessity of strengthening cohesion policy.

b)     The Commission therefore proposes the following guidelines :

       -     financially, total cohesion expenditure would remain within the ceiling of 0.46%
       of GNP1 . The percentage earmarked for the Fifteen, however, would be gradually
       lowered, to the benefit of the new Member States;

       -     the bulk of the cohesion effort would focus on three objectives: regions
       generally lagging in development, regions experiencing clearly defined specific
       structural difficulties and the promotion of employment;



1      Given expected GNP growth, total funds available would rise from 200 billion for 1993-1999 to 275 billion for 2000-
       2006.
                                                             42
      -    the cohesion fund would be renewed in its present form1 but its total
      appropriation would remain limited to 3 billion;

      -     management of the structural funds would be decentralised (to the advantage of
      Member States and regions) and simplified, although evaluation and a posteriori
      control would be strengthened;

      -     the new Member States (pre- and post-accession aid) would receive a growing
      part of total structural fund assistance, totaling 30% in 2006.

c)    The Commission‟s proposed guidelines will be developed into precise legislative and
      budgetary proposals in the course of 1998. The reforms would be applicable as from
      2000.

       Whereas the European Council of 13 December 1997 did not adopt a position on this
aspect of Agenda 2000, the European Parliament –in its resolution of 4 December 1997-
approved the general stance of the Commission's proposals, while taking note of the reduction
in the share of financial assistance allocated to the Fifteen (from 0.46% to 0.39% of GNP).

Remarks

a) Economic and social cohesion policy, written into the Single Act in 1986, has been
   productive in terms of economic development and political solidarity. Important disparities
   nonetheless remain between the States -and especially the regions- of the Union.
   Moreover, the perspective of EMU and the employment situation are arguments for pursuit
   of the cohesion effort.

b) With the global ceiling to be put to Community spending, however, and the tremendous
   needs of new Member States2 , the Commission makes provision for a considerable
   decrease in the share of aid allocated to the Fifteen3 .

c) The tying-in of the different forms of aid (five different funds are maintained) remains
   complex.        The decentralisation of decisions and administration, with more
   responsibilities in the hands of national, regional and local authorities (and the
   corresponding withdrawal of the Commission), entails a real risk of loss of control and
   renationalisation of the system in the form of global allocations. The notion of “regional
   planning” at Community level seems to have been dropped. The risks of distortion of
   competition and unproductive investments could rise as a result.


1
      Aid to M ember States (in the framework of preparation for EM U) with per capita GDP of less than 90% of the
      Community average. In practice, it benefits four M ember States : Spain, Greece, Ireland and Portugal.
2     The entire territory of applicant M ember States is eligible for ERDF (Objective 1) assistance; the Union‟s total eligible
      population would thus rise from 100 to 150 million (accession of six States) or 200 million (accession of ten States); the
      average per capita GDP of applicant States is less than one third of the GDP of the Fifteen.
3     30.2 billion in 2006 as against 34.3 billion in 1999, i.e. a 12% reduction.

                                                               43
2. Position of the European Movement

       In the absence of specific proposals at this stage and without entering into the very
complex problem of the Union‟s role in the practical implementation of economic and social
cohesion at Community level, the European Movement could support the following general
guidelines :


For the Union of Fifteen

-     the reform being considered should at this stage give priority to the Fifteen‟s own needs,
      in particular problems related to employment;

-     the sizeable development gaps between the different regions of the current Union justify
      a continuation of the Community effort, which should give greater consideration to
      sectors such as the environment and transport;

-     the necessity of concentrating Community aid is a point in favour of replacing the
      approach in terms of Member State taken to date with an approach in terms of
      region. A partnership between the Commission, Member States and regional and local
      authorities could be organized for this purpose under the future structural fund
      regulations;

-     present cohesion mechanisms should be simplified and modernised well beyond what
      the Commission proposes. Greater use of European borrowing capacities (especially
      with the EIB) could be considered.


For the enlarged Union

        The scope and specific nature of applicant States‟ needs -which will not become
apparent until the conclusion of accession negotiations- could render difficult the pure and
simple application of renovated cohesion mechanisms developed by -and for- the Fifteen. A
financial effort and specific arrangements could therefore be justified, at least during a
transitional period in the wake of accession. It would be advisable to deal separately and
successively with the reform of the structural funds for the Fifteen and the adaptations made
necessary, when the time comes, by the first and then the second wave of accessions.


                                              




                                                   44
On Agenda 2000 as a whole

       In conclusion, the European Movement shares the Commission‟s will to modernise by
the year 2000 the two policies that underpin the Union, namely agriculture and economic and
social cohesion (accounting for 80% of all Community expenditure).

       It would nonetheless express concern about the overall policy approach decided by
the Commission in Agenda 2000. This approach seems to lack real political ambition. It
appears much too conservative and restrictive in budgetary terms. It establishes a premature,
excessive and dangerous link between necessary internal reforms and the next enlargements.
Inspired by the arguable “package” logic, it risks in fact proving harmful to the handling of all
the issues concerned by provoking confrontations, even lasting divisions between the Member
States just when the need for new impetus in the integration process is recognized by all.

       On the eve of the actual opening of negotiations on the different elements of Agenda
2000, it remains to be hoped that the institutions and Member States will take the true
measure of the political stakes involved, taking inspiration from an ambitious and resolute
vision of the European model for the 21st century.




                                                   45
                                           ENLARGEMENT


1. INTRODUCTION

      On 21 June 1993, the Copenhagen European Council agreed that the associated
Central and Eastern European countries wishing to become members of the European Union
would be allowed to join and that accession could take place as soon as they fulfilled
membership obligations, by meeting the required economic and political conditions.

      In accordance with the mandate given by the Madrid European Council of 16
December 1995, the Commission submitted on 15 July 1997 -in its communication on
Agenda 2000 -its opinions on the different candidacies. It recommended opening accession
negotiations with -in addition to Cyprus1 - five applicant States : Hungary, Poland, Estonia,
Czech Republic and Slovenia (whilst specifying that the simultaneous opening of negotiations
did not imply that they would all conclude at the same time).

      The Commission also proposed the creation of a “European Conference” so as to
“bring together within the same body the Union Member States and all the European countries
whose vocation is accession to the Union and which are linked to the Union by means of an
association agreement”. Consultations would be held in this body on matters falling under the
second and third pillars.

       In its resolution of 4 December 1997, the European Parliament pronounced a view
in favour of enlargement “in line with a global project for developing European integration”
which will only be “possible after institutional reform of the Union”. It particularly insisted that
all applicant countries should simultaneously begin the accession process in early 1998,
it being understood that the duration and pace of negotiations could vary from one country to
the next.

       The European Council of 13 December 1997 in Luxembourg decided to launch the
entire enlargement process, which it described as “a comprehensive, inclusive and ongoing
process, which shall take place in stages; each of the applicant States will proceed at its own
rate”. The Council also pointed out that “as a prerequisite for enlargement of the Union, the
operation of the institutions must be strengthened and improved”.


2. REMARKS

       The liberation of the Central and Eastern European countries and their gradual
integration into the Western world (Council of Europe, OECD, NATO) is a process whose
historical importance and necessity -at European and world level- must be underlined. The


1     The Florence European Council of 22 June 1996 had decided that accession negotiations with Cyprus would commence
      six months after the conclusion of the IGC.

                                                         46
admission of these countries to the European Union, a federative type of political and
economic organisation, represents the logical and desirable culmination of this process.

       The number and diverse nature of these States are such that their future accession is an
unprecedented challenge for the Union, requiring prior reinforcement of its political unity
(through further revision of the Treaties), its main common policies (especially the CAP and
structural policies) and its financial resources.

        The opening of negotiations in 1998, to be hoped for, is only the beginning of a process
that will last more than a dozen years but which in itself will be a decisive contribution to the
stabilisation and modernisation of the societies and economies of these countries.


3. GENERAL POSITION OF THE EUROPEAN MOVEMENT

       Since its creation in 1948, the European Movement has always demonstrated its
attachment to the unity of the European continent and has unceasingly supported the
principle (written into the ECSC and EEC Treaties from the outset) that it is the vocation of
every European State to become a member of the Community.

      From 1989, the European Movement has therefore taken a clear and firm position in
favour of the eventual accession to the Union of the countries of Central and Eastern Europe,
considering that only political and economic integration into the Union will ensure lasting peace
and prosperity on the European continent.

       The European Movement therefore declares its support for the opening of accession
negotiations with the Central and Eastern European countries. It takes the view that the date
of accessions will depend upon the real state of applicants‟ political, social and economic
preparedness. The profound transformations of political systems, the controlled liberalisation
of economic systems, the modernisation of social structures are indispensable prerequisites.
At the same time, the European Movement welcomes the European commitment of the
leaders of applicant States and calls for weight to be given, during the accession negotiations,
to the specific nature of the problems facing the economies and societies of these States.

        Internal reform of the Union is also an inevitable prior condition : only a Union
with restored cohesion, strengthened institutions, advanced democracy and efficiency can
provide applicant States with the solid framework of security and prosperity to which they
aspire to belong. The hasty accession of insufficiently prepared new Member States into an
insufficiently reinforced Community would indeed be likely to lead to destabilisation of the
Union, with unforeseeable consequences.


4. PREPARATION FOR ACCESSION

a) The importance of popular assent : the European Movement considers that admission to
   the Union should not result from a diplomatic or technocratic process, but that it should be
                                                   47
    the reflection of the will of all the peoples concerned, i.e. enjoying the large-scale,
    explicit and conscious support of public opinion in future and present Member States alike.
    The repeated experience of past enlargements of the Union has demonstrated that this is a
    vital condition for guaranteeing real and sustainable solidarity between peoples and States.

    Opinion polls conducted within the Union reveal a certain reluctance concerning
    enlargement, the most favourable opinions being expressed in regard to non-applicant
    States (Switzerland, Norway and Iceland). In the applicant States themselves, one
    cannot rule out the danger of a certain upsurge of nationalist feelings that could be nurtured
    by the severity of the process of setting aright the economy and the society as a
    prerequisite to accession1.

    The European Movement therefore deems necessary and urgent the launch of a large-
    scale information campaign on enlargement, in Member States and applicant States
    alike2. It also believes that popular assent should, when the time comes (namely following
    negotiations but before the signature of the accession agreements), be expressed in an
    appropriate form.

b) Internal reform of the Union : the European Movement considers that the main reforms
   underway in the Union (further revision of the Treaties, completion of EMU, strengthening
   of CFSP and adaptation of finances and structural funds) will have to be conducted well
   before the signature of the accession agreements and constitute a necessary preliminary to
   enlargement.

    It also maintains that the two processes (internal reform and accession negotiations) can
    begin simultaneously as from 1998 but must be kept strictly separate from each other. In
    practice, internal reform of the Union should be concluded two to three years before the
    entry into force of the first accessions, i.e. around 2001 or 2002.

c) Preparation of applicant States : the prospect of accession has already triggered in these
   States a reform of structural and social policies and the modernisation of economic
   structures. The scope of the efforts to be made in certain areas (economic competitiveness,
   rule of law, environment, etc.) should not be underestimated, nor the necessity of
   establishing measures to alleviate the consequences of the accessions on the society and
   economy of the Fifteen (especially on immigration and employment).

    As proposed by the Commission, this evolution must be assisted through Community pre-
    accession aid, but most importantly, it should be framed within a contractual programme
    for preparation of accession. Such a programme would necessitate precise
    undertakings by applicant States in certain priority areas (democracy, macroeconomic
1
       Cf. Parliament‟s resolution of 4/12/97 (cited above) : “Aware of the lack of information on European integration among
       citizens of the CEECs (…) and of the same lack of information in the Union on the CEECs and on the consequences of
       enlargement to the East”.
2
       In accordance with the recommendations of the Council of European M unicipalities and Regions, popular support for
       accession could be fostered in the applicant States through greater involvement of these States‟ regional authorities in the
       preparation process.

                                                               48
    stabilisation, and adoption of the acquis, nuclear safety and so on) matched with
    implementation timetables.

    In this regard, applicant States need to be convinced that the goal of accession is not to
    enable them to benefit from a simple financial assistance mechanism (limited, moreover, by
    the demands of budget stability), but rather to give them a guarantee of political solidarity
    and economic development. Above all, it is essential for applicant States to be fully aware
    of the Union‟s federal goal1 and to adhere fully to this objective and simultaneously to a
    “European model of society” shared by all the Member States.


5. PRACTICAL ARRANGEMENTS OF THE ENLARGEMENT PROCESS

a) The European Conference : The very concept of a permanent conference bringing
   together into a single body the Member States of the Union and the States with the
   vocation of becoming members is of paramount symbolic and political importance. It is
   likely to reassure and stimulate applicant States and their public opinion regarding their
   mooring to the West and their membership in the Union‟s sphere of solidarity, from the
   very start of the process of accession negotiations (which will vary in difficulty and involve
   differentiation from one applicant State to the next).

    This structure would be the best possible forum for the gradual initiation of the
    applicant States in the workings of the Union and would constitute valuable practical
    experience for the Fifteen in the future organisation of the work of a Union of 20 to 25
    Member States.

    The European Movement therefore supports this proposal, which was confirmed by
    the Luxembourg European Council on 13 December 1997, while nonetheless reiterating
    that issues relating to internal reform of the Union, a prerequisite to enlargement, must
    remain outside the scope of the competences and work of this Conference.

    Moreover, the European Movement considers that it would be in the interests of the Union
    to encourage the participation in the Conference of the four European States temporarily
    on the fringe of the accession process (Switzerland, Norway, Iceland and
    Liechtenstein) but whose vocation of one day being part of the Union has been clearly
    expressed by the public opinion of the Member States (see above) and is dictated by
    history, geography and economics, and which could be given concrete effect in the coming
    years.

    The European Movement also favours Turkey’s participation in the Conference. It is,
    indeed, in the clear interests of both parties to confirm the membership of a country as
    important as Turkey in the sphere of European and Western solidarity.


1
       Cf. Parliament‟s resolution of 4/12/97 : “1. Declares that the Union is open to all European democracies (…) wishing to
       support its objectives as laid down in the Preamble to the Treaty of Rome of 1957, namely “to lay the foundations of
       an ever closer Union among the peoples of Europe and (…) resolved to preserve and strengthen peace and liberty”.
                                                             49
b) Timetable for accessions : With the European Parliament and the European Council, the
   European Movement favours the opening of a comprehensive, inclusive and ongoing
   process of enlargement, which will take place in stages with each applicant State
   proceeding at its own rate in terms of its degree of preparedness. It is possible to envisage
   the accession of a first group of six applicant States around 2004 and the other accessions
   around 2008. The current political and economic situation in the four States of former
   Yugoslavia and in Albania do not allow for an opinion on their candidacies and possible
   accession at the present time, but the possibility of their being part of the second wave
   cannot be ruled out as a foregone conclusion.

    The European Movement also agrees with the Commission that post-accession transitional
    arrangements must be developed for the application of Community mechanisms to the new
    States. However, no permanent derogation or special status 1 that could endanger the
    principle of the unity or equality of all the Member States of the Union should be
    considered.

c) Admission to other organisations : Most applicant States have confirmed, obtained or
   requested their admission to other Western European organisations (Council of Europe,
   OECD, IMF, WTO, etc.). In most cases, these accessions precede or will precede their
   admission to the Union. This time lag is fully justified by the federative nature of the
   economic and political commitments entailed in Union membership, unlike classic
   international organisations.

    In this regard, it is likely that most of the applicant States will be joining NATO before
    being admitted to the Union. If, as the European Movement proposes, WEU is merged
    with the Union under the next Treaty revision (i.e. around 2002), the admission of these
    countries to the Union will reinforce the European security architecture being envisaged for
    the start of the next century.

    The European Movement would point out once again that enlargement of the Union as
it is currently programmed is of exceptional scope : in 10 to 15 years, the Union could
count 30 Member States and 500 million citizens.

   It will therefore have to undertake a comprehensive internal reform, necessarily calling into
question the current balances between the North and South and East and West of its territory,
and notably placing Germany at the heart of a more Eastern Europe 2.

   This enlargement consequently must not result from a thoughtless and relentless pursuit of
an enlargement policy through a diplomatic and technocratic process sometimes tainted with


1      With respect to EM U, CFSP or Justice/Home Affairs, for example.
2
       Cf. “Reflections on European Policy”, CDU/CSU, September 1994 : “It is in Germany‟s fundamental interests to see
       the Union enlarge to the East but also to pursue the integration process (…). Its location, its size (…) confer upon
       Germany particular responsibility with regard to the integration of the eastern part of Europe”.

                                                           50
demagogy. Nor should it be limited to seeking new commercial outlets and less costly
manpower, or to interposing a strategic and protective buffer zone between the Union and the
eastern part of the continent (Belarus, Ukraine and Russia).

   This enlargement requires, on the contrary, a political overview and thorough public study
of Europe‟s dimensions and role in the world of the 21st century. As with its ultimate
objectives, the Union cannot continue side-stepping the issue of its geo-political area
nor that of its geographical limits, using the legal pretext of the “open” nature of Treaty
provisions on the accession of new members. The question of the “optimal Community area”
should be raised directly and in political terms in parallel with the next enlargement1.




1
      “Enlargement in itself does not worry me, on the contrary. What does worry me is an attitude to this enlargement
      ranging from blind confidence in the existing system to resignation in the face of what some see as an inevitable loss of
      substance in the enlarged Union.” Commissioner Oreja, EP Committee on Institutional Affairs, 19 January 1998.
                                                             51
                                        REFLECTIONS ON
                                      A EUROPEAN MODEL
                                     FOR THE 21ST CENTURY




The different European models

       The upcoming entry of the Community into the 21st century after nearly 50 years of
existence1 , the opening of negotiations with a view to doubling its membership within 15 years,
the necessary reform of the Treaties and the institutions, imminent decisions on currency,
defence, common policies and the budget, etc. : It is permissible to believe that the importance
of these matters justifies a large-scale public debate on the European model citizens,
States and the Union wish to build for coming generations.

     This debate is not theoretical in nature. There does exist two different notions of
European construction, with vastly diverging political and economic consequences :

-     the model of the Union with a federal goal set out by the founding Treaties,
-     the model of the single market matched with intergovernmental economic cooperation.

     The respective characteristics and implications of these two options are well known
because they have been in opposition since the very inception of the Community.

        The model of the federal goal has more or less explicitly spearheaded the development
of the Union up to -and including- the Treaty of Maastricht, despite concessions viewed as
being temporary in nature (use of the intergovernmental method in the second and third
pillars). Following the 1995 enlargement and especially given the perspective of the “great
enlargement” to Central and Eastern Europe, many are starting to have considerable doubts.
Is it possible henceforth to reconcile an “ever closer Union” with an ever larger and more
diversified Union? Is there enough evidence that all the present and future States of the Union
are favourable to the sharing of powers involved in federalism? Will it be possible for the
citizens of a Union extending from Ireland to Romania and from Finland to Cyprus to
experience solidarity with one another in a single political community? Some are doubtful2 ,
but few dare say so for fear of alienating the good will of the future partners…



1     On 1 January 2002, the date the euro will be placed in circulation, the Community will celebrate the 50th anniversary of
      the entry into force –and of the expiration- of the Treaty founding the ECSC.
2     Cf. in particular Valéry Giscard d‟Estaing : “This continental-sized greater Europe, to which we carelessly -but
      irreversibly- committed ourselves, can entail only a limited degree of integration. Too many economic, historical and
      cultural differences separate the way of life of its peoples, too many contradictions appear between these States‟
      diplomatic and military options for it to be otherwise (...) : the greater Europe will be developed a minima.”
      L’Express, 10 October 1996.

                                                            52
        This issue was not raised in Amsterdam... and was therefore not resolved. Neither the
institutions nor the major policies (especially economic policy and defence policy) were
strengthened.

      Aware of the risk of paralysis and collapse of such a framework linking together 20,
and then 30 Member States, the European Council has created mechanisms for so-called
“enhanced cooperation” enabling certain Member States to move forward in certain areas.
But no one should maintain any delusions about the real scope of these institutional artifices 1 ,
which are totally incapable of preventing the risk of dilution or “destratification” mentioned
above.

       One might endorse the moderate judgment of two academics on the failure of
Amsterdam : “Quite obviously, in a Union destined to become larger and more diversified, it is
unrealistic to expect Member States to permanently demonstrate the same degree of
commitment to the development of integration. It was therefore desirable to allow the
determination of a few to lend dynamism to the process of European construction by
developing and extending it to new areas without pushing the slowest and most reluctant
States off the playing field. This objective was at the heart of the IGC negotiations on
enhanced cooperation. The least one can say is that the text adopted in Amsterdam does not
really match this ambition.”2


The federal model and the core strategy

       The European Movement, for its part, intends to remain faithful to the original
federal model and the founding inspiration of European construction, essentially that of
preserving peace and prosperity through unity and solidarity. It believes this model can be
extended to a larger Union provided the comprehensive reform (in particular the
constitutional pact) and the procedure it proposes (adaptation of the institutions and policies
prior to enlargement) are implemented within the next five years.

      It therefore intends to actively oppose any tendency to transform the Union into a free
trade area and to contest the viability of a “flexible” Union mixed with “enhanced cooperation”
for exclusively economic purposes and without real political substance.




1     In the Amsterdam Treaty, “enhanced cooperation” concerns only the first and third pillars . It may only be used as a
      last resort and provided it affects neither the “interests of participant M ember States nor Community policies, nor the
      efficiency of the Union”. All M ember States have the right to veto a decision to initiate a cooperation act ion. Where
      appropriate, implementation decisions shall be taken jointly by the Council -where only M ember States participating in
      the action shall sit- and by Parliament, where M embers from all M ember States sit. The constellation of participating
      States will vary from one cooperation action to the next, etc..
2     F. De la Serre and H. Wallace, Groupement d‟études et de recherche “Notre Europe”, September 1997.

                                                            53
       Should the federal course the European Movement recommends not be taken,
however, it would probably prove necessary to implement an intermediate strategy
capable of preserving the essentials of the original model, i.e. maintaining a leaven of
unity and solidarity at the heart of Europe.

       This strategy would be based on the federal core brought up as early as the first
discussions on the accession of the United Kingdom in the 1960s1 . It was updated in 1994 -
given the prospect of enlargement to Central and Eastern Europe- by the CDU/CSU group in
the Bundestag2 . President Delors endorsed it more recently under the term “Federation of
Nation-States”3 .

      The idea of the federal core could be briefly described as follows :

-     given the risk of dilution of an enlarged but as yet non-reinforced Europe, a “re-
      founding” of the Union by the Member States willing to pursue the original federal goal
      is desirable. These States would constitute an avant-garde capable of making a joint
      undertaking to proceed faster and further than the other Member States in implementing
      the policies and actions provided for by the Treaty, perhaps even of agreeing to go
      beyond these policies and actions,

-     the federal core would exclude no Member States; on the contrary, it would remain
      open to all those interested in making a total and lasting commitment. All the Member
      States of the core group would also participate in all the objectives being sought,

-     the federal core would remain within the Union : the Member States would remain
      individual members of the Union; the core would respect the acquis and the Union‟s
      superior interests and would use the Union‟s institutions in accordance with specific
      arrangements4,




1     P. Pflimlin, Council of Europe, September 1962: “I believe that we should deal with the problem (reconciling
      enlargement and integration) head on and that we should study ... a differentiated system with a solid core of countries
      that would gradually constitute a genuine Community, highly structured and with bodies capable ... of assuming the
      highest and perhaps the most dangerous responsibilities.”
2     Schäuble and Lammers, September 1994 : “The Union‟s institutions must ... attain an elasticity capable of compensating
      for the tensions inherent to a Community extending from the North Pole to Gibraltar and sufficient differentiation to
      take account of the different countries‟ capacity (and will) to pursue integration.... Otherwise, the Union will remain
      limited to intergovernmental cooperation favourable to an „à la carte‟ Europe.... The hard core already composed of
      the countries favouring integration and prepared to cooperate must be strengthened ... but it must be open to
      any M ember State willing and able to meet its demands.”
3     Jacques Delors, Le Nouvel Observateur, M arch 1997 : “Enlargement must be accepted and we must even rejoice over
      this reunification. But to keep the Union from being reduced to a large economic area , we must agree at the same time
      that, of the 30 future members, some will be allowed to go further than others, constituti ng a Federation of
      Nation-S tates. These countries will constitute the avant-garde of Europe as a world power, autonomous in defence and
      foreign policy matters and with the goal of one day including all 30 members of the Union.”
4
      However, if the creation of the federal core should run up against the veto of States refusing to take part, there would be
      no choice but to establish it in parallel with the Union.

                                                              54
-    the competences of the federal core could extend -or exceed- those of the Union in all
     its main areas of action, but in particular in economic and monetary union, foreign and
     security policy and justice and home affairs.

     The experience in progress in the area of monetary affairs has already demonstrated
the extraordinary power of attraction exerted on non-participant States by the other
Member States’ determination to move forward.

     The European Movement considers that the time has come to undertake a
systematic and comprehensive study, both political and legal, of the strategy of the
federal core model, in ample time for preparation of the next revision of the Treaties.




                                                55
                                            CONCLUSION




      “It would be a mistake to believe that peace, freedom and prosperity can be
taken for granted in Europe in the 21st century (...) . A genuine political union,
respectful of the identities of each of its peoples, remains to be built. It will not be a
reproduction of any existing federation; but what takes place -or fails to take place-
in the final years of this century and the first few years of the next century will be
binding on Europe (...) for a century or more. Rarely, in the life of any people, have
we known with such certainty that our destiny is in our own hands and that it is being
acted out at this very moment.”1 .


      On the eve of an enlargement process that constitutes a genuine change of dimension,
Europe is nevertheless hesitant. It is not clearly opting for either determined pursuit of the
federal model outlined by the founders of the ECSC and the EEC and confirmed by the
subsequent Treaties2 , or for consolidation of a vast common market leaving open the
possibility of à la carte intergovernmental cooperation.

      In Amsterdam, the Member States did not clear up this ambiguity3 and the Union -“an
unidentified political object”- remains faced with the dual uncertainty of its ultimate political
goal and its final frontiers. It did not sufficiently strengthen its institutions to enable them to
accompany at political level the powerful integrationist effects of mechanisms being set in place
(especially the single market and monetary union). Nor did it solve the political dilemma
posed by the perspective of an enlarged and consequently less uniform Union and perhaps
lacking in solidarity, but nevertheless necessitating more majority decisions and greater
delegation of powers to the common institutions.

       The European Movement therefore trusts it will at last see the launch of a public debate
on the ultimate purpose of the “Greater European Union”. It considers that the reference to
federalism must cease being “shameful” and that, on the contrary, only by reasserting the
Union’s federal objective will it be possible to reconcile successively the objectives of
integration and enlargement. During the five years of negotiations for the first wave of
accessions -i.e. by 2002- the necessary choices and reforms can be carried out,
beginning with the constitutional initiative and revision of the Treaties advocated by the
European Movement.


1     Raymond Barre and Jacques Delors, Le Monde, 2 October 1997.
2     Preamble to the Treaty of M aastricht : “Resolved to continue the process of creating an ever closer union among the
      peoples of Europe”.
3     Unlike the Single Act (1986) and the Treaty on European Union (1992), the Amsterdam Treaty does not contain a
      preamble reasserting the objective of integration laid down by the ECSC and EEC Treaties.

                                                          56
       Without such a debate and such reform, the only possible alternative would be a “re-
founding” undertaken -within the enlarged Union- by a core of Member States loyal
to the original federal objectives. “Pitting a consolidated centre against the centrifugal
forces due to constant enlargement”1 , this group would preserve a stable pole and a leaven
of unity at the heart of Europe, as well as an active European presence in world affairs. This
hypothesis cannot be ruled out even at the risk of being misinterpreted at political level and
proving complex at institutional level. On the contrary, it deserves thorough study, so as to
constitute, if necessary and at the right time, the necessary safeguards.


                                                




1     CDU/CSU (Schäuble and Lammers), September 1994
                                                       57
            CALENDAR OF PROPOSED REFORMS AND DECISIONS




1. Constitutional pact and reform of the Treaties

- Proposal from the Commission and a group of distinguished citizens           1998
- Review by the European Parliament and national Parliaments            1999
- European Parliament/Council negotiations                              2000
- IGC agreement                                                                2001
- Ratifications                                                                2002


2. Economic and monetary union

- Accession of all eligible States                                      1999
- Strengthening of Treaty provisions on EMU                             2002


3. Employment and social solidarity

- Coordinated modernisation of economic/social structures
- Greater recourse to Community budget and EIB resources                1998
- Implementation of European social solidarity                                 1998


4. European area of freedom, security and justice

- Placing of the third pillar under the Community method                2002


5. Common foreign and security policy

- Construction of “European security architecture” in context of NATO   2000
- Integration of WEU into the European Union                            2000
- Reinforcement of Treaty provisions on CFSP                            2002


6. The Union’s finances

- Adoption of a new financial framework for 2000/2004                   1999
- Possibility of overrun of ceiling and modification of breakdown of
  expenditure                                                                  2000
                                                   58
- New system of own resources and new correcting mechanism        2000
- Modifications to Treaty provisions on budget procedure                 2002

7. The common agricultural policy and structural policies

- Reforms applicable to the Union of Fifteen                             2000
- Adaptations applicable to the enlarged Union                           2004


8. Enlargement

- Opening of European Conference and first wave of negotiations          1998
- Effective accession of first-wave applicants (estimate)                2004
- Effective accession of second-wave applicants (estimate)        2008




                                                 59
                                             SUMMARY




      On the eve of fundamental changes, the European Union must enter into a large-scale
public debate on its long-term objectives. The European Movement proposes confirming the
federative process in a constitutional pact and proceeding with comprehensive reforms before
the next enlargement.


1.    The Union has entered into the two most important changes in its history –the single currency
and enlargement to the East- in a conceptual vacuum. The Heads of State and Government failed
both in Amsterdam and in Luxembourg to fix the political objectives and purposes of this newly
emerging Europe. The public opinion remains concerned and disoriented.

       The European Movement considers that a major public debate of clarification of the “European
model for the 21st century” must begin in 1998. For its part, it clearly recommends a federal model
ensuring solidarity among citizens and the decentralisation of powers . As a step in this
direction, it proposes a number of reforms necessary to enter into a new and decisive phase before the
entry into force of the next enlargement.

2.    The cornerstone of this reform will be the adoption of a constitutional pact matched with a
thorough revision and simplification of the Treaties. Parliament and the Commission, renewed in
1999, will have to take the initiative for the reform that will then be negotiated with the Council and
could take effect in 2002. Those of the Fifteen not wishing to be associated therewith could negotiate
a new basis for their relationship with the Union.

3.     EMU must enter into force in accordance with the planned timetable. The proposed reform of
the Treaties will provide the vital political counterweight and the necessary strengthening of mechanisms
for the coordination of economic policies. This reform will also have to specify the arrangements for a
single representation of the Union in international monetary and financial organisations. All the Member
States fulfiling the criteria should join EMU immediately upon its entry into force and should be allowed
to decide freely among themselves measures of concern to them.

4.     Employment is a “question of common European interest” and requires a coordinated
economic strategy on the part of Member States, especially given the possible consequences of EMU
and enlargement in this area. A significant contribution from the Community budget and the EIB to
joint action for the promotion of employment will make it possible to reconcile the objectives of
efficiency and solidarity. The Union will also have to coordinate the gradual modernisation of
employment and social structures in the Member States and implement in parallel with the Member
States a social policy aimed at combating the exclusion and poverty linked to unemployment.



                                                   60
5.    The Union must be more attentive to the daily concerns of citizens and must particularly provide
them with adequate protections in matters of freedom, security and justice. The Community
method alone –in contrast with intergovernmental cooperation- is capable of offering the necessary
guarantees of efficiency and democratic and judicial control in this area.

6.     Forty-four years after the failure of the European Defence Community, Europe is still hesitating
to pursue a genuine common foreign and security policy. Even as the Atlantic Alliance is proceeding
with a reorganisation, and on the eve of the next enlargement, the Union will have to take a decisive
step in the area of diplomacy and defence. It must take on the means of acting in the international
arena, expressing itself with a single voice among the world‟s major powers, both on foreign and
defence policy and on economic and trade policy.

       In parallel, the Union will have to guarantee its citizens‟ collective security, integrate WEU into its
structures, assert its role and part in the European and Atlantic security architecture and gradually
build a common defence. Where appropriate, the necessary impetus could be provided by an initial
core of Member States acting within the framework of the institutions.

7.    A substantial reform of the Union‟s finances is necessary prior to the next enlargement. It must
introduce the flexibility required for the global evolution and breakdown of Community expenditure in
order to favour the development of the integration process. The own-resources system will have to be
renewed to establish a direct tax link between European citizens and the budget. The budget must
remain an instrument of solidarity between Member States, even if a general mechanism for the
correction of gross imbalances in the budgetary situations of certain Member States can be established.

      The budget procedure will have to be modified in order to confirm the European Parliament‟s
role and responsibility in this area. The duration of the financial perspectives should be limited to five
years (i.e. from 2000 to 2004) and should coincide with both the European Parliament and the
Commission‟s term in office.

8.    The programmed reform of the main common policies must be conceived in terms of the
foreseeable needs of the fifteen Member States and subsequently adapted to the consequences of
enlargements. Its arrangements must take account of financial constraints but cannot be predetermined
by them. Modernisation and simplification of the CAP, which shall remain one of the most important
of the Union‟s common policies, must be completed. The effort of economic and social cohesion
must be pursued in the Union, but made more efficient through a geographical concentration of aid.

9.     The European Movement supports the gradual enlargement of the Union to all democratic
European States. As a prerequisite, the Union must bring vital internal reforms to a successful
conclusion and applicant States must follow a contractual programme of preparation for accession.
The new accessions will have to enjoy the wide, explicit and conscious support of public opinion in all
the Member States and in the applicant States alike. The European Conference must bring together
not only all the applicant States but also all nearby democratic European States interested in
participating. Given the perspective of the doubling of the number of its Member States within fifteen
years, the Union must undertake immediate strategic and political study of its geographical limits and
the adaptation of its internal structures.

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10. The European Movement considers that the institutional reforms accomplished (or announced) in
Amsterdam will not be enough to prevent the risks of dilution or of destratification of an enlarged
Europe. It therefore calls for the opening in 1998 of a debate on the “European model” capable of
preserving the unity of Europe in the 21 st century. It considers, for its part, that the original
federal model must be confirmed and set into place prior to the next enlargement. It calls for
immediate examination of an intermediate strategy in which an open group of Member States would
constitute –within the Union- the initial federal core.


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