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The Rt. Hon. Patricia HewittEuropean Union - Challenges and Opportunities |
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I'm delighted to be here. Let me start by welcoming Minister Michal Kleiber and Ambassador Krysztof Bobinski. I must also thank the Unia Polska Foundation and the British Embassy for organising this conference – for having gathered together so many key business people and government officials here today. Two years ago, at the Warsaw Stock Exchange, Tony Blair set an ambitious target date for enlargement – 2004. The fact that we are on course to meet that deadline is testament to the political commitment of the EU to enlarge – and of the candidates to join. Today I want to talk about enlargement – and the huge opportunities this presents to boost the prosperity, security and strength of all Europe's citizens. But I also want to talk about the need for us to reform Europe if we are to achieve these full benefits. There are three key areas where we need to see reform as we move towards an EU of 25 - our economy; our approach to trade and our institutions. The enlargement process is now moving towards the final stages. Last week, the Commission published their recommendations on which candidates should complete negotiations. It recommended we should complete negotiations with ten countries – including Poland - by the end of the year. And, in just a couple of weeks, on the 24th and 25th of October, Heads of Government are meeting in Brussels, where the next important steps forward will be taken, and the scene set for the final push towards a successful conclusion of negotiations in December at Copenhagen. So we're almost there. And this is great news. The British Government is a staunch backer of enlargement. We're working closely with the Polish Government and our EU partners to help keep the process on track. 10 British officials are now working here in Poland to help the preparation for accession, on issues like structural funds. We're pleased to do this and are looking at other ways we can offer help on a bilateral basis. Proper use of structural funds is a vital part of operating in the EU. But also we need to prevent Poland being a net contributor – which would be absurd and unacceptable. There are three main reasons why we're backing enlargement so strongly. First – it will promote peace and stability across Europe. Peace and stability has been perhaps one of the most outstanding achievements of the European Union. After centuries of war, we have now had peace in Europe for over fifty years. But Europe won't be truly whole again – and our security assured - until West and East are reunited. As Pope John Paul II said. "Europe has two lungs. It will never breathe easily until it uses both of them." Enlarging the Union will be Europe's widest transformation since the Berlin Wall came down. After the bitter division of the Cold War, Europe will be re-united. The second reason we back enlargement is because it will make Europe stronger. And the stronger Europe is – the stronger we are in the world. In the modern world, national action alone is not always sufficient – particularly when you are talking about cross-boundary issues like crime and the environment. Common problems need collective solutions. In the UK, our membership of the EU has given us a much louder national voice on important issues. Take the recent protest against US steel tariffs – where the EU has been at the forefront of the debate. Or the successful trade round at Doha. No single country in the EU would have been able to achieve these results acting alone. Other countries around the world are seeing the advantages in acting together. Countries in North and South America have joined to make one huge free trade area. In Asia, there's Asean. An enlarged EU will have much greater influence on the world stage. The third benefit of an enlarged EU - it gives us the opportunity to take our economy to a new level; to make us the economic superpower – enhancing the prosperity of all our citizens. We'll be part of the largest single market in the world – larger than the US and Japan combined – with nearly 500 million consumers. Business will have easy access to a huge pool of customers. As well as a wider labour market and product market. We're already getting a taste of some of the benefits. Despite the tough conditions of today's global marketplace, the candidate countries are already growing more rapidly than other European economies. Even greater growth is likely to be achieved after joining – just as Spain and Portugal did for many years after their accession. Trade is increasing year on year between us, now the Europe Agreements have removed many of the barriers. Polish exports to the UK increased by 27% from 2000 to £1.2 billion in 2001. Each previous enlargement has seen more British exports to the new EU members. Within a few years of them joining, the value of UK exports to Spain increased by 23% in 1986; to Sweden in 1995 also by 23%; and to Finland in 1995 by 31%. We expect the same boost this time round. There are already 15,000 UK firms trading in the enlargement countries. Three quarters of these have fewer than 250 employees. So this is also an enlargement for small and medium sized businesses. Poland is attracting much more investment now. The accession countries are now perceived to be far safer by western European investors. And about two thirds of Poland's foreign investment comes from the EU 15. This includes a large number of British companies – some of our very best companies - like Glaxo SmithKline, BP, Shell, Cadburys Schweppes, Pilkington Glass, Energis – a significant investor in telecoms, and BOC. British investors have created well over 50,000 jobs here in Poland. Tesco alone now has 48 stores here – and employs 8,000. If your experience of this investment is anything like ours in the UK, you will see nothing but benefits. Investment brings new technologies, new ideas, new practices. The Nissan car plant in Sunderland is now the most productive in Europe. Investment also encourages domestic firms to compete – increasing productivity. And, after accession, with the enlargement of the single market complete, we know that Europe will enter a whole new ball-game. Competition will intensify. Forcing businesses to innovate and improve – giving them a better chance to compete in wider markets; and meaning lower prices, more choice and better quality for our consumers. Benefits for business and consumers. This will benefit the existing members as well as the new ones. The estimate is that enlargement will create 300,000 new jobs across the present EU. And it is suggested that UK GDP alone will receive a £1.75 billion boost. But obviously the UK will only receive these advantages if we rise to the challenges presented by operating in an enlarged more competitive Union. The candidate countries are already showing their willingness to compete and challenge our businesses… This will only increase as the candidates become full members. We, in the EU fifteen, must raise our game if we are to compete effectively with the Central and Eastern European countries – and, in particular, raise our productivity if we are to challenge your competitive labour costs. I think there are three important challenges that an EU of 25 needs to rise to if we are to meet our full potential. One, to our economy; two, on our approach to trade; three, on our institutions. Firstly to our economy. Unemployment remains Europe's biggest challenge. Even in boom times, we've never been able to match employment levels in the US. Unemployment in the EU has always stuck at 8%, against around 3% in the States. And you can't have a truly fair society when you also have high levels of involuntary unemployment. The stronger our economy – the higher our employment – the stronger our society. In Lisbon, two and a half years ago, European Heads of Government agreed an ambitious 10 year plan to match US levels of employment and productivity. To make Europe's economy stronger. Leaner, meaner, more dynamic. More effective. More open to new ideas, new technologies and new solutions. This represented a huge shift in European thinking - away from heavy handed regulation and intervention. Towards knowledge, skills, enterprise and innovation. In the two and a half years since Lisbon, we've seen real results. 5 million new jobs have been created across the EU. 30 million more homes are now online than two years ago. Just about every European school is wired up to the internet. And progress is continuing. At the Barcelona Summit earlier this year, we agreed to create a single financial market by 2005 – meaning cheaper borrowing for firms, higher returns for savers and cheaper insurance. We agreed EU wide broadband internet access from 2005 - meaning ten times faster internet access. And more internet services for schools, businesses and consumers. We've also agreed a series of new research programmes to help Europe compete more aggressively in such fiercely competitive high-tech industries such as biotechnology, ICT and sustainable development. But there are still areas where we need to do more. At Barcelona, we secured agreement to liberalise commercial energy markets by 2004. But now this must be rolled out to domestic markets. A decision is expected by the end of the year and it must be the right one. We also need to make sure the focus of our labour market policy remains on getting people into work. Instead of protecting those in work at the expense of those out of work. I know when Alan Johnson was here just a couple of weeks ago, he and Malcolm Wicks signed with Jerzy Hausner, the Polish Labour and Social Affairs Minister, a joint declaration on "Full and Fulfilling Employment in an enlarged European Union" - in which our countries agreed to adhere to the principles of achieving full employment and social justice through economic growth and labour market reform. The declaration also acknowledged that the EU already has in place decent minimum standards – and that further progress at EU level should be through the exchange of experience and the spread of best practice rather than through a single EU wide model which may not fit the wide range of different national circumstances and traditions. It's crucial we keep the Lisbon Agenda on track. I know that Britain has an ally on this with Poland - as with many of the other candidate countries. Tony Blair and Leszek Miller have committed their Governments to working together to make the Lisbon Agenda a reality. And I know Minister Kleiber shares this vision. And is actively taking forward steps to attain it. In particular, with efforts to promote small business – through the "Entrepreneurship Above All" package of measures. Britain has long experience in these fields – in managing the transition from heavy industry to knowledge based industries. We want to share this with you. The second challenge an enlarged EU faces is on our approach to trade. We need radical reforms to build a Europe which is not inward looking or protectionist. But open to the agricultural and textiles products which will allow poor people in Africa, South Asia, the Caribbean and elsewhere in the world to trade their way out of poverty. This means a new world trade round through the WTO which addresses the needs and concerns of developing countries and helps put an end to protectionism in the developed world – not least here in Europe. Because Europe can't just keep coming out with the rhetoric on free markets if it's not prepared to deliver where it really counts. Take the Common Agricultural Policy. A difficult and sensitive issue for all Member States – present and future. But we cannot and will not accept a system of subsidies that gives two dollars a day to every cow in Europe - but leaves 1,200 million men, women and children worldwide living on half that amount. It is not acceptable that half the European budget is devoted to farmers who make up less than 5% of Europe's population. Although agriculture employs about a fifth of all Poles and uses around 60% of the country's land, it only contributes to less than 5% of Polish GDP. The CAP's huge subsidies not only help keep the poor world poor, but are a grossly inefficient use of public money. CAP also encourages a system of food production which is neither environmentally or economically sustainable. We must press for reform of the CAP which:
Third, to our institutions The third challenge facing an enlarged EU is the need for institutional reform. The current debate on the Future of Europe in the Convention is an important one. It is not only about coping with the challenges of enlargement. It is also focussing on how to reconnect Europe with its citizens. We need to find ways to ensure the European Council can give much better and stronger political leadership, backed by a strong, independent Commission – and a more effective Parliament. We need an EU that is more efficient, that delivers real benefits to its citizens; that is open – so that the public understands and has confidence in the decisons we take together. If we cannot achieve institutional reform which ensures longer term continuity between Presidencies, and better co-operation between the Commission and the Council for a strategic agenda, successful initiatives such as the Lisbon agenda may be harder to achieve in an enlarged Union. These are important times. Europe is widening and deepening simultaneously. We have a huge opportunity here to build a stronger Europe. An enlarged Europe. A Europe that is better connected with, and delivers more for, its citizens. But we must face the challenges as well – if we are to gain the full benefits Enlargement offers. Reforming our economy; our approach to trade; our institutions. This is essential if we are to build a Europe that provides opportunity, prosperity and security for all. I know we're all working hard together to reach this goal – and I look forward to continuing to do so in the future. And I want to do that in ever closer co-operation with Poland. |
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Other speeches by The Rt. Hon. Patricia Hewitt
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