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The Future of Europe - a speech by Tony Blair

Tony Blair delivered the following speech for The Confederation of British Industry at the London Business School on Monday 2 June 2014.

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The key to winning the battle for Britain’s future within Europe is to win the battle for the future of Europe itself. To do that, we in Britain must make the debate more than about the repatriation of certain competences and rules. It has to be a debate elevated to a Europe wide level, with Britain playing a leading role in the reform of Europe, not just a negotiation of Britain’s terms of membership. It has to be about what is good for Europe as well as what is good for Britain. The election results matter. They are a wake-up call to Europe and to Britain. Our response in Europe as in Britain should be to lead not follow.

Interpreting election results, especially when turnout is not high, is always a risky business. People vote in European elections for all sorts of reasons. The results weren't uniform. The most spectacular result was actually in Italy, where a pro-reform, pro-Europe new PM won 40% of the vote. Chancellor Merkel won in Germany and there was a strong vote for the SPD also. In some cases, the vote just tracked the domestic politics of the country.

However the victories of UKIP in the UK and the National Front in France and the election of parties across the continent on explicitly ‘anti the status quo in Europe’ platforms signify something. They cannot be ignored. They point to a deep anxiety, distrust, and alienation from the institutions and core philosophy of the Europe.

More than that, even amongst those who are in favour of Europe, there is a keen sense that the moment is right for Europe to think carefully about where it goes from here, how it reconnects with the concerns of its citizens; and how it changes in order better to realise its ideals in a changing world.

So, when some European politicians say that despite the showing of the far right, nonetheless there is still a majority for a pro-Europe position, that is true but it is also complacent and therefore dangerous. Even ardent supporters of Europe think there has to be change. Whatever the correct interpretation of last week’s vote, it was not a vote for the status quo.

The vastness of the ambition of the single currency project with its inherent flaws of execution, the agony of the financial crisis and its aftermath, and then the link between the two in the sovereign debt crisis; the enlargement of Europe in a decade from 15 nations to 28; and simply the scope, scale and speed of change in the modern era, in technology, trade and geo-politics: all of these factors have combined to create a much larger set of challenges for Europe and a hugely increased degree of uncertainty and unpredictability about meeting them.

Within the Euro zone, Europe suddenly went from being merely important, to determining bluntly and in plain view, the future of nations’ spending plans and policy. The pain of countries adjusting to changed reality and making deep cuts in public spending but without the flexibility of adjusting also the exchange rate, has been profound and in many ways, the surprise has been that the outcry has not been greater. But even those of us outside the Euro zone, have been deeply impacted by what is happening inside it, and have seen a set of European institutions at once more visible and more under siege.

Add to this, a feeling over a long period of time and not confined to Britain, that Europe does too much of what it need not do, and too little of what it must do, and you have the perfect confluence of dissatisfaction that seems to define Europe today.

And yet, take a step back, examine Europe from the perspective of the broad sweep of history, and it is clear both what it has achieved and why it remains absolutely necessary for our future. A continent at war became a continent at peace. Prosperity came to nations that had scarcely known it. In time, countries under the heel of the Soviet Union, emerged from it, reformed themselves, and East and West of Europe were re-united together. Now the EU is the largest political union and commercial market in the world.

None of this happened easily. None of it happened without leadership of exceptional vision and courage.

As for the future, in a world becoming dominated not only by the power of America, but of China, soon no doubt India, not to mention Russia, Brazil, Turkey, Indonesia, Philippines, Vietnam and in time the big nations of Africa; and where GDP and population will increasingly be correlated, there is no question that the rationale for Europe is stronger than ever. Together the nations of Europe can wield genuine influence and weight. Alone, they will over time decline in relative importance. The 21st century world order will be dramatically different from that of the 20th century. The rationale for Europe today is not peace; it is power.

So how do we make sense of this paradox: that though the broad rationale for Europe is stronger than ever, the actual workings of the present EU are coming under sustained attack and criticism? And how do we avoid a retreat by Britain to its side-lines?

We have to accept that there is, presently, a disjunction between the governing vision of Europe and its operating reality.  I believe this has come about for a reason to do with the origins of the union.

Because the original impetus – see for example Churchill’s brilliant Zurich speech on the United States of Europe - came from the rubble of the two world wars and WW11 specifically from the aggression of a Nazi State that manifested rampant nationalism, the philosophy underpinning the European institutions was from the beginning that the route to peace in Europe lay through integrating the nations of Europe in a manner that diminished the nation state.  The nation state was seen as intrinsically prone to this aggressive nationalism. So the federalist dream was of a time when European citizens would see themselves as part of a well-defined European polity; and though national identity would remain, the institutions of the nation state gradually would reduce in importance relative to those of Europe.

The European institutions of course reflected a compromise between opponents of this dream and supporters of it – the Council, the Commission and the Parliament; but the governing zeitgeist of Europe since its inception has tended to move with the federalist notion that integration must mean pushing more and more power into the Commission and the Parliament, and away from the Council.

This trend has been augmented by an entirely sensible argument that if you want a coherent European policy, you have to have the power at the centre of Europe to override the individual interests of nations, because otherwise one country can hold up the progress of all. And to be fair the single market could not have been achieved without this.

However, that reality has come into conflict with another. The people of Europe have not lost their sense that the primary politics of their country is national and not supra-national. They do not particularly identify with Brussels. Any European polity is tenuous or at least limited. They do not feel close to the European Parliament. They're not ready for the submerging of their national politics in Europe. Yet they now see, especially if in the Euro, that European politics is indeed wielding enormous power in the life of their country. So, in the USA, people dislike Washington and feel close affinity with their state. But at the federal level, they accept the President of the USA as their undisputed leader and, if asked, will say proudly that they're American. In Europe, we're not in that position. For us and by us, I mean the Germans or French as much as the British, the nation state still comes first.

This is a big problem. It has been growing steadily over time. But now it has risen to its full height; it is there for all to see and it is active in its effects. In this way, the British issue with Europe is not really a British issue. It is actually a European issue. It is just that for historical reasons and reasons to do with the healthy pugnacity of British politics, the British are the most out there. But why is there a genuine desire on the part of a large section of European opinion, including in France or Germany or Italy or Poland or Spain, for the UK to remain in the EU? Not out of sentiment. But out of a self- interested desire to keep that counterweight to Federalism alive and well in Europe, precisely because it also chimes with a significant part of their public opinion.

So this is a challenge for Europe as well as for the UK. What is the answer?

In the longer term, there will have to be quite radical reform of Europe’s institutions. The balance between nation state and the EU will have to be re-addressed from first principles and institutions reformed in a fashion that will truly make them more accountable and closer to those they govern. This will mean a closer union; but that closeness may not be expressed exactly as it is today.

But this is a major task. There is no appetite right now for such an enquiry and the massive political questions that it will raise. Governments struggling with getting out of recession, still fragile and under intense political pressure, have no desire at this moment for such a root and branch debate.

So I think we have to distinguish between the long term and the immediate. The immediate challenge is to do what can be done with the minimum of Treaty change and the maximum change within the existing framework of European institutions and Treaties.

This should encompass both a new approach and a new agenda.

The new approach should be for the Council to set out a clear, focused and strong platform of change for Europe, one that connects with the concerns of the people of Europe; and one that has the possibility of transforming the view of what Europe can actively and not reactively achieve. And then the new Commission and new President should be charged in specific terms with implementing it. In other words, the Council has to assert powerfully and plainly its responsibility to give Europe direction, to match the policy ambitions of Europe with a set of concrete proposals to realise them and then task the Commission with carrying them out. The Parliament will debate the measures necessary, and have to pass any laws relating to them. The Council and Commission should have a method of engagement with the Parliament which does not leave individual Commissioners swinging in the wind when they come under attack. Council and Commission have to be working – in respect of this agenda – in unison with each other.

The agenda for reform should address the overarching issues where at present without a European approach, the nation states are unable to advance their interests.

Within the Euro zone, this means an even more explicit deal that, in return for the continuation and deepening of profound structural reform in member states, there will be greater fiscal flexibility and monetary action to allow stronger growth and avoid deflation. The key here will be the positions of Germany on the one hand; and Italy and France on the other. Reform is happening. As the leaders of both countries know, that reform has to be accelerated and deepened. There isn't another way to long term competitiveness. But they need their economies to grow. For all debtor countries unless there is stronger growth, we're imposing political and social strains in the debt reduction programmes, which are hard to sustain. This will have to be accompanied by a resolution of the banking union framework to give genuine security against future crises.

This is all easier to bring about and to sell in the public opinion of each nation, if it is part of a ‘grand bargain’, in which pain and gain are seen to be fairly balanced. The Euro has survived when many said it wouldn't; the European economy is receiving investment and growing, albeit slowly. But we shouldn't forget: any progress has been as a result of determined decision-making either in Europe or at a national level. It didn't just happen. So the lesson is clear: do a lot more of it.

For the Union as a whole, there should be a big push on the single market especially in the service sector; and on trade, where the prospect of a Transatlantic Trade and Investment Partnership offers big opportunities for the future. All of this effort should be directed to showing how the jobs and industry of the future can be created by concerted European action. There are also good ideas in Europe around infrastructure and a European jobs programme. The best of these should be taken and incorporated into the agenda for change.

Energy policy is now of vital importance, not only for the competitiveness of Europe, but also as a result of events in Eastern Europe and Ukraine. A Common Energy policy with integrated energy markets, would bring benefits to business, to consumers (not least UK consumers), and reduce the dependence of Europe on foreign energy. We have never really pursued it with the vigour it requires and justifies. Yet its impact would be transformative. And at present the energy policies of many European nations are a mess.

European defence should not be bedevilled by straw arguments about a European Army. No one serious wants that. Nonetheless there are obvious possibilities for enhanced cooperation in defence. If Europe wants to exercise power commensurate with its economic weight, it has to have the capacity to play its part both in military operations that may be necessary; and in the essential role of security sector building in countries emerging from turmoil or conflict and with whom we want a close relationship. This is not just about spending. It is also about synergies. Recent experience from North Africa and then again from Sub-Saharan Africa shows how such a capability could be used.

There are other areas which I will simply list here for reasons of time: the fight against illegal immigration and organised crime; action in respect of climate change; cooperation in the fields of science, technology, research and higher education; and in art and culture.

In each area, Europe should focus not on the process for making decisions; but on the decisions themselves. What is it that we want Europe to do to make people better off, more secure, more confident about their future? Instead of trying to bring Europe ‘closer to the people’ by an endless introspective dialogue about the institutional relationships within Europe, bring it closer by concentrating on measurable outcomes that affect the lives and living standards of people.

Of course one central part of this agenda would be a programme of subsidiarity such as the British Government and others are agitating for. Again, there is a wealth of suggestions on how such a programme would work and the content of it. The mood and timing is right and it would answer at least one element of Europe that causes anger across the political spectrum.

I want to be clear about what I mean about this agenda. I do not mean the normal Council conclusions put together at the last minute of a packed and routine Council meeting. I mean a proper programme – almost like a manifesto for change – that is sufficiently precise that afterwards the Commission knows exactly what it is supposed to do and has the full support of the Council in executing it.

In the immediate term, this is the best that Europe can do to meet the aspirations of its citizens for a Europe more in touch, and more effective at addressing the challenges of their daily lives.

Self-evidently, Britain would welcome such a change programme. It could and should lead it. But to do so, it has to elevate its own debate beyond a debate simply about Britain and Europe; and make it a debate about the future of Europe in which Britain is playing a leading role.

 If the present Government is re-elected, there will almost certainly be a referendum on our membership of the EU, with the possibility of us leaving the Union altogether. Leave aside the wisdom of this referendum for the moment. The crucial point from the perspective of Europe’s future is that we ensure that the British ‘issue’ with Europe does not disable us from playing our part in the larger question. This will require us to be careful in framing the argument for change in Europe in a way that builds alliances for the good of Europe as a whole, including the UK, not in a way that satisfies simply a narrow gauge dispute between the UK and the rest of Europe.

 This is both good tactics and good strategy. Otherwise we will be left in a classic fight of one against the rest, daring the others to let us go. Any agreement we get on Britain’s terms of membership will have to be unanimous. That will mean we need some heavyweight support in fighting our corner.

 Anyway that much is obvious. For the purposes of this speech, I am making the point that Britain, properly positioned in this debate about Europe, has a great opportunity to lead it and solve both its own issue and promote necessary reform in Europe.

Part of winning our debate, of course, is to point out the folly of Britain leaving the EU.

 Britain leaving Europe would put jobs at risk and cause a haemorrhage of investment. The economic arguments are powerful and resonate. Anyone in the real world knows that though we would survive, we would be less economically attractive to the outside world. The UK not being in the Euro has not harmed the City because it has a mass of other attractions and can in any event trade in the currency. Withdrawing from Europe altogether is a completely different matter.

The comparisons with Norway or Switzerland, favoured by the sceptics, are instructive. Norway has a SWF of almost one trillion dollars. It is unique in Europe. Switzerland has a very particular sort of economy that we could not replicate. And both have a very tough time negotiating the terms of trade with Europe where they're often subject to the rules without the ability to influence them. These comparisons should offer us no comfort whatever.

However there are higher reasons of State why membership of the EU is emphatically in the national interest of Britain. One is the geo-political argument we share with other large nations in Europe, about the change in the power structures of the 21st Century. When Churchill made his Zurich speech, India was still under British rule. Churchill advocated in that speech political union between France and Germany. But in respect of Britain, he saw our future still with the Empire.

Today we, like France or Germany face the same challenge. At present we still can have strong bi-lateral relationships with the emerging powers. But in time, that may diminish; and moreover, for countries like China and India they regard our membership of the EU as strongly additive to that bi-lateral relationship.

So leaving Europe would for sure be adverse in our relationship with them.

But turn that negative penalty for leaving into something different: the positive opportunity for us, in a Europe that does reform and makes itself stronger and more effective. Think not of what we lose by leaving now, but what we gain in the future by helping Europe reform in the direction we desire.

This is important at virtually every level of strategic contemplation. For trade. For jobs. For living standards. For defence. For the environment. For our alliances and membership of international organisations. If Europe is stronger and more capable and we are a leading and not a peripheral player in it, then as the world changes and new poles of power become fixed and clear, our ability to advance our interests is anchored in something that in its own right, has real reach and sway. The very rationale for Europe today applies to us par excellence. We are a country used to playing a role, at home with ambitions abroad, conscious that outside our boundaries are events that we must affect lest they affect us in ways not to our liking. 

It is not those who argue that Britain should be in Europe who are at odds with our nation’s history, but those who under a false banner of independence, would make this country dependent on global powers and their manoeuvres that we would be powerless to influence or inhibit; who would have us exit from a principal stage of the world, on the grounds that we would be better able to write our own script, when all that would in reality happen is that the stage would remain, the play would continue, the actors would act, but without our participation. This is not satisfying our national interest; it is traducing it.

 It isn't coincidence that the anti-Europe parties are also anti-immigrant. They represent within the UK as elsewhere, a strain of politics. It is one that ebbs and flows somewhat; but it is ever present beneath or above the surface.

Its defining characteristic is a belief that a nation’s identity consists in a sense of belonging to a group of similar look, culture, history and interests. They regard a world that brings change in established patterns of these things as essentially a threat. It is not a surprise that both here and in France, they praise President Putin. His brand of socially conservative nationalism appeals to them.

But - not as a matter of politics but of instinct - reflect on that belief. It is wholly contrary to the grain of the modern world. The chief characteristic of this world is change. Globalisation is pushing us closer together. Technology and capital are mobile. The internet and social media are revolutionising the way we live, work and interact. The world works today through connectivity. The more connected you are, the better you can cope. It is, for sure, at times frightening and insecure. But it is a deception to tell people that they're better off, shutting down in the face of it; or stigmatising those that are different in race, colour, nation or faith.

The answer to the white, working class, unemployed youth in alienated communities in Britain, is not to tell them their problems would be solved if there were fewer Polish people working in the UK; it is to provide them with the education and the skills and the connectivity that gives them the ability to face the world’s challenges and overcome them. Anything else is worse than a delusion; it actually holds them back by giving them a grievance, rather than a chance.

Britain’s identity lies in its spirit. This spirit is intimately linked to its history, but it is not constrained by it. Part of what makes the country great, is precisely its capacity to change, its outward-looking and adventurous character, its openness to new ideas and to new people. Over the course of history we have shown this spirit many times. But always we have had the ability to apply it to changing times.

After the War, when the first institutions of what is now the EU began, our leaders saw no necessity for us to be there. But very soon, a new generation of leaders realised that as the world changed so we had to be part of it. Finally we joined. Since then no British PM has ever suggested leaving it. Amongst all the reasons of State and geo-politics, I think there has been a more profound sensibility at work. This is an instinct that we, the British, engage with the world we don't retreat from it. This alliance isn't perfect. No alliance ever is. But breaking it up because we don't think we're able to reform it? That is not what made this country great or has kept it despite all our limitations, at the forefront of world events for centuries.

So this is a big debate. There is none bigger. It is about the future of the European nations, their destiny and ours; and whether we follow that destiny together. For us, this should not be simply a dispute over the power of the Brussels bureaucracy, no matter how important, but about who we are as a country, what really inspires and motivates us and our place in the grand scheme of things for the future. It should be a debate without intimidation or rancour. But it should surely be one that recognises the enormity of what is at stake. This will define us for generations to come. So we better get it right.