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British Chancellor tells the EU to get real.


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Chancellor tells Europe: Get real

By Philip Webster, Political Editor

June 23, 2005

The Times


GORDON BROWN called on the European Union last night to end its integrationist ambitions and make the radical economic reforms needed to turn it from a trade bloc into a force able to compete in the world.

The Chancellor urged a “pro-European realism” whereby the Union rose to international challenges while accepting that identities remained rooted in the nation-state.

Mr Brown outlined in his annual Mansion House speech how he and the Prime Minister would make economic reform the centrepiece of Britain’s six-month presidency of the EU.

Mr Brown went on the offensive over the European budget and called for sheltered markets to be opened up, “starting with agriculture”.

Tony Blair will repeat that message when he addresses the European Parliament today, seeking to dispel the “caricature” advanced at the recent EU summit of Britain being a Dickensian economy.

Britain’s campaign for cuts in farm subsidies in return for cuts in the rebate was backed by José Manuel Barroso, President of the European Commission. Senhor Barroso supported plans by Mr Blair to reach a budget deal for 2007 to 2013 by agreeing to review the entire budget, including the Common Agricultural Policy, in 2008.

Mr Brown said that the postwar authors of integration had assumed that cultural and political integration would follow economic integration; in their wish to secure a Europe at peace they came to believe that a European identity could supersede national identities.

Referring to the recent “no” votes in France and the Netherlands, Mr Brown said that voters were making plain that globalisation had made them feel economically insecure.

Identities remained rooted in the nation-state. “The economic reality is no longer as it was in the 1980s — how this or that trade bloc develops on its own — but how each continent is part of and benefits from globalisation on its own,” he said.

He added: “ The political reality remains people’s attachment, for example on issues of what is taxed and by whom, to their national values. We need a pro-European realism that starts from the founding case for the European Union, the benefits of co-operation among nation-states for peace and prosperity, but strengthened by the insistence that Europe looks outwards as a global Europe and is driven forward by the need for reform.”

Mr Brown set out a plan for reform, starting with a political commitment to completing the Single Market and reducing and then eliminating aid to member-states. The budget should be spent on science and training instead of, as at present, 55 per cent of it being devoted to agriculture or subsidies for the richer countries.There should be a “modern social dimension” to meet the objectives of a full-employment Europe. He would continue to resist attempts to make the Working Time Directive apply to Britain. There should be labour market flexiblity to help the unemployed find jobs.

There should be a commitment to regulatory reform and an outward-looking relationship between Europe and the rest of the world, with an economic forum between European and American ministers to break down trade barriers. “Our task . . . is to move Europe from the old trade-bloc Europe to the new global Europe,” Mr Brown said. “We do so under the banner of pro-European realism where Europe looks outward to the world, where Europe sees the US as partners not rivals, where Europe becomes more competitive, more enterprising.”

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(Listen to Chancellor Brown's Mansion House speech in Real Audio here

Brown warns EU on economic future

BBC News

June 22, 2005

Europe's leaders must rethink the assumptions underpinning the EU to face up to the challenges of global competition, Gordon Brown has warned.

The chancellor said that current EU economic thinking was "not just out of date but counterproductive".

He was speaking as Tony Blair prepares to set out his plans for Britain's presidency of the EU in Brussels.

In his Mansion House speech, Mr Brown made it clear the UK will not back down on its calls for farm subsidy reform.

He said that with growing pressure from economies like China and the US, the EU could not delay on market reform and liberalisation.

The question for us is how Europe can move from the older inward-looking model to a flexible, reforming, open and globally-orientated Europe - Gordon Brown

Global pressures should "force Europe to rethink the most basic of political assumptions that have underlain 50 years of development", he said.

"Europe...is finding that as a result of globalisation the agenda relevant to its first phase - the era of trade bloc - has changed utterly.

"The challenge for Europe now is that of global competition."

Mr Brown warned that Chinese exports to Europe had gone up 100% in just three years - and up to five million European and American jobs could be out-sourced by 2020.

"The question for us is how Europe can move from the older inward-looking model to a flexible, reforming, open and globally-orientated Europe - able to master the economic challenge from Asia, America and beyond," he said.

Hard choices

Mr Brown said EU leaders had to accept that their "old assumptions about federalism do not match the realities of our times".

He said the rejection by voters in France and Holland of the EU constitution had finally overturned the belief that a "European identity could supersede national identities".

"The referendum results suggest identities have remained rooted in the nation state - and that familiar national, cultural and political attachments are important."

He said that as Britain had made hard, long term choices to achieve stability, growth and flexibility, the EU must make similar choices to be globally competitive.

Mr Brown said reforms should begin with the Common Agricultural Policy, which has caused clashes between Mr Blair and French president Jacques Chirac.

Red tape

The chancellor said that while the priority should be spending on research and development, in 2013, 55% of the European budget will be spent on agriculture or subsides for the richest countries of the union.

But Tory shadow chancellor George Osborne said while he agreed Britain and Europe faced big challenges from globalisation, Mr Brown was "not practicing what he preaches".

"His policies are putting Britain on a path to continental European levels of taxation and red tape," said Mr Osborne.

"That is no way to respond to competition from the likes of China and India. The chancellor has all the wrong answers to the economic challenges of the 21st Century."

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