nm1172: er i'm going to talk about European politics but more particularly i'm 
going to talk about the European Union that's the E-U and the changing 
character of the European Union and er the reason for choosing this topic the 
reason for namex suggesting that we might tackle this topic is that we are er 
on the eve of a very important change in the European Union because of the 
imminence of the Economic and Monetary Union EMU E-M-U and the creation in 
Europe of a single currency that will be coming within the next year or two and 
preparations for doing that are already well advanced and not only will that 
mean that a new unit of currency the euro will be created for use throughout 
those members of the European Union who decide to join the er E-M-U er but it 
will also mean a considerable increase in the powers of the central 
institutions of the European Union and in particular it will mean the creation 
of a central European bank which will have quite important 
powers in relation to money and taxation er with respect to all those member 
states who have joined the union so er er because of its topicality and because 
of its importance this seems to be a topic to which er i can talk and which you 
might be interested in a a further element in the interest of the er in the 
European Union is more long term that is to say that in a great many areas of 
the country of the world i should say both in North America and in East Asia 
there is a certain amount of experimentation with er entities new regional 
entities which are more or less er er modelled on or inspired by the European 
Union er not that these other er organizations in other parts of the world have 
copied er strictly the formulae which had been reasonably successful in a 
European context that obviously wouldn't have been appropriate but the er 
success in quotes of the European Union as a regional economic and political 
organization has inspired countries in some 
other regions to come together er in order to do something rather similar and 
therefore when we're talking about the European Union we're talking about 
something which is of worldwide and of global interest and of course finally 
underlining the importance of our topic er an-, and thirdly we are living in a 
period in which we are more and more conscious of the global operation of the 
economy especially with regard to currency stability and potential currency 
devaluations and in a world of that kind the European Union will once it has 
its own currency be a major player alongside the United States er and Japan and 
therefore any kind of understanding of the way in which world politics and 
especially the economic aspects of world politics operates requires us to 
understand what sort of an animal the European Union is 
nm1172: i've tried to organize the lecture around three broad questions which i 
thought er might be of interest the first question is why was 
the European Union created in the first place and implicit in that question is 
also another question not only why was it created but why has it persisted why 
has it grown why has it prospered relatively speaking in the period since its 
creation in nineteen-fifty-eight er it's it's a it's a forty year old 
institution now so clearly we need to know something if we're going to 
understand it about the forces that were at work at its birth and even more 
importantly since its nature has changed over time those forces that have had 
an impact on it subsequently and have allowed it to persist and to grow the 
second question er i want to ask is what kind of an entity is this union is 
this European Union which exists we are accustomed to think of the world as 
divided into however many it is a hundred-and-fifty two-hundred nation states 
all of which enjoy a degree of independence from one another sometimes 
described as national sovereignty er and clearly when 
regional organizations are created and when they begin to acquire at least some 
degree of power over their member states then some new kind of entity which is 
not a national state and perhaps is not a even a supranational state i-, is 
being created and therefore i want to in my second question reflect a little on 
what sort of entity er is being created here is it a new national state on a 
larger scale or is it something rather different from that which i i think is 
more likely to be the the answer that we're going to reach involved also in 
that second question of what kind of an entity is the the E-U is er an answer 
in terms of er er beneficiaries if you like er i-, in politics we're always 
keen to know who who who's winning and who's losing and therefore it's 
important for us t-, to as as students of politics to ask who does the creation 
of the E-U benefit who is it likely to to to assist and who is it likely not to 
assist or even perhaps positively 
damage or handicap in certain ways in other words in terms of power who is 
going to benefit from this i-, this initiative this innovation in the 
organization of international relations and who is going to suffer and the 
third question i i want to ask which i think is probably less er less less 
crucial less fundamental in some ways but no no no l-, nevertheless of interest 
to you i'm sure is more specifically relit-, regarding the U-K and that is er 
what is the U-K's particular position vis-à-vis Europe and has that position 
been altered by the election of a Labour government last year led by Tony Blair 
in other words has that political change in the U-K which is no doubt 
significant in certain respects had any er major significance for the 
relationship between Britain and the European Union which many of you know has 
often in the past been a rather difficult relationship but my conclusion on 
that third question will be that it hasn't changed things very 
much 
nm1172: right let's begin with our first question then why was the er European 
Union created and i want to begin by giving you two wrong answers if you like 
because part of the way of course of answering the question is to is to is to 
suggest possible answers that you need to reject before you get to the correct 
answer and a popular well i think it's a popular myth anyway a popular myth 
that surrounds the motives underlying the creation of er the European Union in 
the nineteen-fifties was that it was a reaction to the danger of war and the 
those member states in particular France Germany and Italy who had been most 
directly affected by the ravages of a second world war decided to create the 
European Union in order to prevent future wars amongst themselves in other 
words the argument here which i'm going to suggest is a mistaken argument is 
that the European Union was conceived of as a solution to security problems as 
a solution to the problems 
of war and peace and how to secure for er Europeans a more stable and a more 
secure future i think that wasn't in fact the intention er and it wasn't the 
purpose which the European Union was er designed to serve although subsequently 
many politicians in order to win support for the European Union er have tried 
to play on people's fear of insecurity as a way of justifying the er er the 
existence of the union and and of and of justifying its expanded role the 
reason why i reject this argument is that the real threat to security as 
understood by Europeans in the nineteen-fifties came from the Soviet Union and 
the solution which was adopted to that threat and what was seen in the nineteen-
fifties as a solution to Europe Europe's er security problems was not the 
European Union but a qu-, a quite different sort of organization called NATO 
the North Atlantic Treaty Organization which was created much earlier er and 
was explicitly American led as opposed to the 
European Union of course of which America is not a member and which even has 
some er c-, some some anti-American or some some independent of American er 
elements in it so er it seems to me that NATO was the answer to security 
difficulties the the answer which u-, Western European countries sought to the 
security problem in the immediate post-war period was collective security under 
American leadership and the E-U wasn't concerned with that second wrong answer 
is to suggest that in some way with advancing prosperity with more 
international travel with easier and freer communication er between peoples the 
sense of national identity which Europeans felt was tending to decline and a 
greater sense of if you like cosmopolitan loyalty or of European loyalty or of 
loyalty to some broader entity beyond one's own country was growing so there's 
a there's a kind of an optimistic myth underlying much talk about the E-U that 
says well of course we live in an age when people er 
are no longer as obsessed as they once were by their own particular national 
identities they travel more they have more foreign friends and they have freed 
themselves of these th-, national and limiting perspectives and as a 
consequence forms of international organization and forms of regional 
organization which were once impossible er now become not only possible but a-, 
also perhaps desirable th-, that doesn't seem to me to be er in any sense part 
of the real story of how the European Union was created because er the European 
Union has always acknowledged and worked within the constraints established by 
national loyalties in other words it's not a club which has ever set its face 
against er national identity and it has always been a club whose members are 
the national states themselves not the individual European citizens and so in a 
sense it has from the first been an organization which accepts and works within 
the notion of national identities and 
national states 
nm1172: well i've given you two wrong answers so it's about time i gave you at 
least one correct answer and this correct answer comes in er i-, in three parts 
er broadly speaking the correct answer seems to me to be that the true 
understanding of the origins of the European Union arises er m-, or can be best 
understood by looking at the attitudes of individual European states in other 
words you have to ask why did the French want the European Union why did the 
Germans want the European Union why did the Italians why did the Belgians why 
did the Dutch why did the er Luxembourgers now we we can't go through all of 
those six cases in detail here but my contention is that th-, it's in doing 
that sort of thing in other words in looking at it from specifically national 
perspectives that you gain a real understanding of how this er international 
organization this regional organization was actually created now since we 
haven't got time to do all six we shall do three things we shall say a word 
about France we shall say a word about 
Germany because those are the two most important powers in the process of 
creation and then we shall say a brief word about all the others lumped in 
together 
nm1172: er the first word about France is to say that the French in the 
immediate post-war period had international ambitions above their station if 
you like they wanted to exert more power in the world than their military and 
economic position really permitted them to do so they were ambitious in some 
sense and they saw the creation of the European Union as the first step towards 
their being able to do that because they were reasonably confident that in the 
conditions of the nineteen-fifties when the European Union was created they 
were likely to be one of the leading if not the leading power within the 
European Union so that for them to create a European er entity which involved 
some degree of economic and even possibly political integration was understood 
as an extension of their 
own power rather than placing limitations upon it in other words they had an 
optimistic interpretation of the degree of power which they could eventually 
wield within this new regional association and as a consequence they saw the 
creation of it as an opportunity rather than a threat and we can't give too 
much of the background to that but that gives you some notion of the ways in 
which the French saw the creation of an organization which they sought to 
dominate and to some degree at least did succeed in dominating as an extension 
of their own national power you can see how this contrasts with the rather 
different picture that i was painting in my two false answers now the second 
the second element i suggested we need to say something about Germany and here 
the picture is more complicated because clearly Germany had the potential to be 
as powerful if not more powerful a member of the regional association than the 
French did and therefore you 
would have thought that if the French expected to create an organization which 
they would dominate then the Germans would have opposed such a development and 
that would have prevented it from taking place but what made this development 
possible of course was that Germany had just been defeated in er in the Second 
World War and those Germans who had held political power in in Germany in the 
nineteen-fifties felt a profound sense of responsibility and guilt surrounding 
the circumstances that had led to the Second World War and they sought in a 
sense therefore somehow to pay the price which they felt as a nation they ought 
to pay for the damage and the difficulties which Hitler's Germany in the past 
had caused in a sense therefore they were seeking international rehabilitation 
they wanted to be readmitted to the club of internationally respectable states 
and in order to be readmitted they were willing to pay a high price and that 
was why they were willing 
to join an association which they knew from the start would limit their 
national independence and would be likely to be dominated by the French third i 
said there were three parts to my my story and here i'm simplifying very 
drastically but if you take the other initial members the four other members of 
the the European Union as it was first created by its initially six members 
there are of course many more than six members now but the others are all 
latecomers er you could generalize by saying that the citizens and the 
politicians who managed these other four European states Italy Belgium Holland 
and Luxembourg felt either that their own regimes were so inadequate so corrupt 
or so weak in various ways that to join a newly created European organization 
would be a healthy step for them it would be a sort of an answer to some of 
their domestic political difficulties or a-, as in the case of the smaller 
countries they felt that er that they were 
handicapped as a very small very powerless state and could only benefit by join 
by joining some kind of larger association that of course would be an argument 
more applicable to the three very small countries so they in some sense were 
radically dissatisfied with their own domestic political arrangements or their 
own position in the international world and could see the creation of a 
regional organization of which they could be at least a part as er providing 
them with a more satisfactory er solution to some of their domestic political 
problems and with regard to their international position 
nm1172: i said that the first question had an element of of creation and i also 
said how has the organization persisted now clearly Germany cannot go on paying 
the price for a war which is more and more distant and more and more remote for 
er for ever the French cannot expect in the same way to dominate an 
organization which now has a great many 
more members in it er and as the circumstances of the nineteen-fifties faded 
away clearly new motives new mechanisms had to be er established in order to 
continue to make a regional association as attractive in new circumstances as 
it had been er in the circumstances of its birth in the nineteen-fifties and 
therefore er i turn our attention now to the nineteen-nineties and i say look 
what we've seen in the in the nineteen-nineties has been an acceleration of 
European integration the European Union ticked along in the nineteen-seventies 
and nineteen-eighties without changing in any very radical ways and the 
integration which had been achieved remained largely in the economic sphere and 
consisted very much of the promotion of free trade the free movement of capital 
and the free movement of labour within the boundaries of the newly created 
European Union but in the nineteen-nineties the political aspects of the the er 
union have become more prominent and 
a significant move towards greater political integration er has occurred first 
of all with the Treaty of Maastricht and following on that with the er so far 
successful establishment of a single currency area so you might say okay are 
the same kind of mechanisms operating surely circumstances have changed a lot 
now er we're no longer in the nineteen-fifties we no longer have the shadow of 
a recent devastating war er hanging over us and therefore if we're going to 
expand this organization we're going to have to find new ways of doing it er 
what i would like to contend however is that it seems to me that although there 
are some new elements in the mechanisms which underlie the persistence and 
expansion of the European Union in the nineteen-nineties some of the old 
mechanisms which are now er have now been working for forty or fifty years are 
surprisingly lively and surprisingly relevant under modern conditions 
nm1172: let me briefly relate the 
story of the origins of the Treaty of Maastricht which which is one of the most 
significant further steps towards greater political integration which the 
European Union has undergone in recent years the seams of Maastricht really lie 
in nineteen-eighty-nine with the collapse of communist rule in Eastern Europe 
and in particular the er breaching er of the Berlin Wall and the recognition 
that in the very near future a unified Germany er which would bring together 
what had been the old federal republic of West Germany and the er pro-Soviet 
and communist ruled East Germany would be coming together to form a single much 
larger and much more potentially politically and economically powerful German 
state and er the reaction to this development in both France and Britain 
members of the European Union was considerable alarm and fear because it seemed 
to the British and to the French to signal the sort of danger er which they 
felt er in periods er in 
the nineteen-thirties when Germany was growing in power and influence and in 
the period before nineteen-fourteen and there were faint but nevertheless 
definite echoes in the reactions of many French and British politicians mostly 
in private but occasionally in public er to er to this reunification and 
therefore enlargement of the German state so what was the solution to be under 
those circumstances well the the French thought first of all about trying to 
prevent it from happening and so did the British er but er they couldn't and 
therefore they decided well we'll have to make the best of it and the best of 
it seemed er particularly to the French to be well if we're going to er if 
we're going to harness German power and German ambition in a constructive way 
and to avoid the problems of rivalry between Germany and other European powers 
what we need to do is to integrate Germany more tightly into the European Union 
and as a consequence of that the French 
developed a project which they put to the Germans and which eventually led to 
the Maastricht Treaty which said okay under these new circumstances we move 
forward quickly we want national states to be more tightly integrated into this 
regional association now what do you see there you see exactly the same 
mechanisms er French ambition French fear of er Germany and a willingness on 
the part of the Germans to make sacrifices er in order to create a new form of 
regional association because they themselves are fearful of the possible 
consequences of German nationalism and they like the French want to see Germany 
tied into a stable er international order 
nm1172: now that is not exactly the same as the nineteen-fifties but it's a 
little bit similar to the story that i told you about the creation of the 
European Union now when i posed the question are things the same now in the 
nineteen-nineties are the mechanisms of persistence very much the same as the 
mechanisms of creation i said yes i thought they surprisingly were quite 
similar but i did concede that there are some new elements and one important 
new element which is present in the nineteen-nineties which wasn't present in 
the nineteen-fifties and which has spurred the further integration of the 
European Union is world currency instability now we can't tell the whole story 
here some of you are economists and will know more about it than me no doubt 
but in broad terms we had relatively stable relationships between the major 
world currencies in the period between the late nineteen-forties and nineteen-
seventy-one and since nineteen-seventy-one we have had a period er it's varied 
over time of very considerable instability and that instability is thought to 
cause economic and also sometimes serious political difficulties and therefore 
in an ideal world many political leaders especially European leaders would like 
to dispense with this instability if they 
could find a way of doing it well they they can't find a way of doing it for 
the time being but they can find a way of doing it partially of creating some 
degree of stability and that's what the European Monetary Union is partly about 
so to some degree the spur to more recent European integration has been the 
search for a mechanism which will allow Europe to enjoy greater currency 
stability and that is new because the currency stability problem was not a 
problem at the outset 
nm1172: i said that my second question was what sort of an entity is the 
European Union is it a new state some kind of a superstate with a much extended 
role and er again i want to begin by er er by er giving you some some wrong 
answers if you like the first wrong er well let's let let's just say that the 
simple answer to this question is no the European Union is a new sort of er 
political organization it's a one-off organization it's not a repeat version of 
or a replica of 
forms of political organization which have already existed it's an attempt to 
create something new which is neither a confederation or a federation or an 
extended national state or a supranational state or an empire or any of the 
other sorts of political animals er that we're familiar with from earlier 
history and what makes me say then that it's not it's not a state or even a 
nascent er national state in any sense the first reason for rejecting the 
notion of the E-U as a state is that it has no not as yet anyway no significant 
diplomatic or defence responsibilities as far as the use of force is concerned 
and as far as the use of international diplomacy as as it were a preliminary to 
the use of force the form of organization which remains most relevant for the 
modern world is still the nation state and the E-U the European Union although 
it has acquired centrally in Brussels powers in a range of policy areas has not 
yet significantly made any moves 
to acquire genuine authority in matters of diplomacy er and in matter of 
defence and these are extraordinarily important areas not that there haven't 
been attempts to do so and occasional very minor successes where concerted 
action between European powers has emerged but on the whole it's fair as a 
statement to say that this organization is irrelevant to defence and almost 
entirely irrelevant to diplomacy the second thing that we need to s-, to 
understand in order to be clear that the E-U is not a state is to say that er 
in most areas it still makes decisions according to what we in politics call 
the unanimity rule in other words it does not possess any kind of majority or 
collegial form of decision making the the fundamental form of decision making 
that operates within the u-, E-U in most areas although not admittedly all but 
in most areas and certainly the most crucial ones is the unanimity rule which 
is to say that until everybody that is 
to say until all the nation state members of the E-U are agreed on a new 
initiative that initiative cannot take place this is an extraordinarily 
cumbersome an extraordinarily conservative principle on which to operate it 
limits the freedom of manoeuvre of the European Union enormously and of course 
it is intended to er er and what it means is that the dynamics of the European 
Union the speed with which it can act the vigour with which it can act are 
enormously below what is possible within national states where this kind of 
unanimity principle generally speaking does not apply the third reason for not 
treating the European Union either as a state or as some kind of state in the 
process of becoming a state is to point to the question of individual attitudes 
which i touched on earlier here i think we can say without much doubt that in 
almost all the member states of the European Union individual citizens look to 
their own national governments 
principally for the supply of services for the provision of security for all 
the things that we as individuals look to our political leaders for and in so 
far as they are aware of the the European Union which they are of course in 
most cases they understand that it has contact with them which is largely 
indirect in other words it passes through their national governments the direct 
contact between the E-U and individual European citizens or citizens of 
European states is relatively unimportant we don't pay any for example we don't 
pay any direct taxes to the E-U and the E-U has no mechanisms of its own for 
collecting taxation all the taxation which the E-U receives is merely passed on 
to it as a consequence of agreements reached with member states and that makes 
an enormous difference if you were to say for example to to the American 
federal government okay you d-, you have no longer any power to tax American 
citizens directly the only revenue which you had 
is revenue which comes to you through agreements that you can reach with the 
member states New York Texas California whatever you would radically change and 
radically weaken er American federal government and that's the sort of position 
in which the er E-U has to operate 
nm1172: now i said that this second question about what sort of an animal the E-
U is would be answered in two parts firstly by asking is it a state and i've 
answered that by saying no it's not a state er and and certainly not a national 
state and secondly i said well we want to know who benefits from this in other 
words in terms of power who has gained and who has lost as a consequence of the 
creation of a European Union and there are three points that i want to make in 
answering that question the first is that er today strangely in many European 
countries a lot of the support for the European Union comes from those who are 
in the centre of politics or even a bit to the left of centre er in 
France the French Socialist Party led by Jospin is a strongly European party in 
the U-K the er Labour Party led by Blair is clearly more sympathetic although 
we don't know exactly how much more sympathetic but it's clearly more 
sympathetic to the European Union and British involvement in it than the 
Conservative Party led by William Hague and therefore in a sense there seems to 
be er in facts of that sort a suggestion that er th-, there is something s-, if 
you like progressive there is something left of centre there is something 
socially desirable in the European Union and the European Union itself tries 
through a range of programmes to promote itself in terms of er human rights it 
it it tries in a sense to sell itself to er a left of centre public as a 
socially progressive entity and some people both in Britain and in France and 
other European countries on the left who have despaired at the conservative 
character and the right wing domination of their 
own national politics have looked to the European Union where they think 
perhaps the centre of gravity in political terms lies a little bit further to 
the left now my feeling is that this is entirely misguided and that er that if 
they think that or pretend to think that then they are profoundly mistaken 
because it seems to me that er anybody with left of centre ambitions of any 
kind must be concerned with the power of the state to act collectively in order 
to realize collectively agreed goals if you have as you have in the case of the 
E-U as i've just pointed out a rather weak state which doesn't have the 
capacity to tax which doesn't have the capacity to spend which doesn't have the 
capacity to organize new public services directed at particular groups then you 
don't have the instrument for increased social justice at your disposal and 
therefore to my mind the first thing that we can say about who benefits and who 
loses in regard to the European 
Union is that the European Union is not going to be and cannot be in its 
present form er the tool for the realization of greater social justice it's not 
some kind of substitute for national states that have drifted in a right wing 
or a conservative direction that's what people would like you tho-, those of a 
pro-European disposition would like you to believe it's what the commissioners 
er and the members of the European Parliament would like us to believe but it 
seems to me to be er to be to be wrong because the European Union as an 
administrative as a political instrument doesn't possess the the authority or 
the power or the competence to do that sort of thing my second point of the 
three that i want to make here is that the E-U presents itself in wishing to 
appeal to a more right of centre public as an entity capable of enlarging the 
sphere of market exchange in other words it it presents itself as an entity 
capable of creating more free trade more free movement of 
labour more free movement of capital and through that creating increased 
prosperity and this seems to me to be a valid claim in other words if you 
believe that what Europe needs are larger and freer markets and that there are 
important advantages to be gained from breaking down existing barriers to the 
operation of large and competitive markets and if you believe that you or the 
groups with whom wi-, with whom you identify are going to benefit from a 
process of that kind then the E-U is on your side now of course there are all 
sorts of controversies about who benefits and how much from the growth in the 
operation of free markets er and and i don't want to enter into those but what 
i will say is that if you are i-, as it were generally pro-market in your 
dispositions then the E-U is for you and if you fear markets and wish to see 
them regulated and controlled and believe that only social that social justice 
can in certain important respects only 
be realized er through the use of regulatory powers of various sorts and in the 
use of taxation for redistributive purposes then the E-U is not going to help 
it might not necessarily stand in your way but it's not actually going to help 
you very much in in that particular battle the third point that i want to make 
about the E-U is that the E-U is on the whole bad news for the Third World er 
because what the E-U has done above all things during its long period of 
operation is to subsidize the creation of an excessive amount of food in Europe 
for which it pays farmers well above market prices having bought this food from 
farmers it doesn't know what to do with it and what it then generally does is 
to dump it at way below market prices in the Third World where it disrupts the 
the domestic markets of those Third World producers and has very bad 
consequences on Third World food production er so i-, it looks to me like a 
relatively conservative organization let's put it 
that way 
nm1172: the third question that i said i would i would er i would an-, answer 
or or ask or both both ask and answer i hope is to say something about the 
British position and w-, to raise the question of whether er the coming to 
power of a Labour government in Britain has really changed the position very 
much er i think that the first point we need to make by way of historical 
introduction is that Britain was a late joiner she wasn't one of the in-, 
initial members of the European Union and only became a full member in i think 
it was nineteen-seventy-three and that in itself is a significant evidence for 
the fact that the the relationship between Britain and the European Union is 
not likely ever to be quite the same as the relationship of its founding 
members to the union it's always going to be regarded as a latecomer er and the 
reasons that led to it being a latecomer are likely to continue to operate to 
create a certain 
distance between E-U purposes and British purposes the second point i want to 
make is er more specifically about the Labour Party and that is that for most 
of the history of the E-U that is to say during the period between nineteen-
fifty-eight and i suppose about the mid-nineteen-eighties the British Labour 
Party was quite strongly opposed or many elements in it the party was often 
divided but there were significant elements within the Labour Party that were 
quite strongly opposed to Britain's joining the European Union and to any 
further integration of the British state within that union and er for much of 
that time one could have quite fairly said that the Conservative Party was the 
pro-European party and the Labour Party or l-, a large part of it was s-, was 
significantly anti-European the position is now the opposite of that the Labour 
Party pretends to be pro-European and the Conservative Party is probably 
genuinely er anti-European but this 
conversion of the Labour Party is quite recent and to a very large degree 
opportunistic er when i say opportunistic what i mean by that is that having 
suffered a succession of very serious electoral defeats within the U-K the 
Labour Party felt that er er there was advantage for the left advantage for the 
trade union movement advantage er for left of centre causes in trying to 
associate Britain with an entity where at least the centre of gravity 
politically seemed a little further to the left than it was in a Britain 
dominated by Mrs Thatcher and her Conservative Party so in a sense the 
attachment of the Labour Party to the European ideal seems to me to be very 
largely built on this opportunistic response to their weakness and their 
difficulties within a domestic arena you might say well okay but you know 
opportunism is not to be discounted er it's the basis for many important 
political initiatives and er if the Labour Party is European for what are 
perhaps opportunistic and fairly recently discovered reasons nevertheless it is 
a bit more pro-European than er its Conservative er opponents and perhaps 
therefore the coming to power of a party led by Mr Blair is going to lead to 
closer relations in the long term between the British and the European Union 
now the answer that you give to to that question ar-, is there really going to 
be much of a change er depends upon whether you think there are long-standing 
er long-standing causes of tension or potential conflicts of interest between 
the British and their European partners er a-, and the answer that i would give 
to that is yes there are in other words whichever party is in power in Britain 
be it Conservative or be it Labour there are certain fundamentals which will 
continue to affect the relationship between Britain and Europe and will 
continue to create a more difficult and a more distant relationship between us 
and the Europeans than between many other 
European powers and the European Union 
nm1172: to conclude my lecture a little earlier than i had planned but i'm sure 
that won't that won't matter because you'll have more time for questions i want 
to make three points about what those persisting national peculiarities which 
explain this more difficult relationship are they're not very difficult to 
identify i don't think the first one is clearly that er as a nation both at the 
popular level and at the political level we are more closely linked with and 
more sympathetic to America than many of our continental partners er that in a 
sense almost goes without saying but it's it's a state of affairs which 
certainly goes back as far as the close relationship between Britain and 
America during the Second World War the collaboration of those two powers er on 
the exchange of nu-, of sensitive nuclear information which the Americans 
wouldn't exchange with other members of the European Union 
the purchase by Britain of nuclear weapons from America close personal 
relationships between a whole series of British Prime Ministers and American 
Presidents a common language a to some degree common history et cetera et 
cetera there are all kinds of reasons for it being very likely that the British 
will continue to see the world in terms that are marked rather more close to 
the ways in which the Americans see the world er and to that degree to some 
degree distinct from the ways in which Germans French Italians tend to see the 
world the second persisting er peculiarity er which will continue to create the 
kind of distance that i've talked about is that the British er and this is more 
a political than a popular factor are much less dirigiste than many of their 
European partners that is to say they tend in terms of state philosophy to be 
more reluctant to use the power of the state and especially more reluctant to 
use the power of the state to control and to intervene in economic matters we 
as a nation er both historically and even more in the last fifteen 
or twenty years have become a nation much more strongly convinced of the 
advantages to be obtained from the operation of free markets and most of our 
European partners especially those a little bit to the left of centre whilst 
they believe in a mixed economy and see great virtues in the operation of free 
markets also have certain reservations about the social consequences of markets 
and are therefore more willing than we are and will remain and continue to be 
more willing than we are to intervene in markets to control markets in order to 
achieve certain social or environmental objectives er that will continue to 
create a distance between us the final the final peculiarity seems to me to be 
that on the whole the British are relatively certainly the English not so much 
the Scots and the Welsh but the English at least let's let's change from 
British to English here the English are relatively content with their 
constitution and the mechanisms of their government 
they might be disappointed with the performance of government but they don't 
put down those er those er weaknesses in the performance of government to 
weaknesses in the system by which they are governed they believe that the 
system can be made to work er properly and therefore they are less inclined to 
seek new forms of political organization in other words we as a as a country 
the English are fundamentally relatively satisfied with the nation state 
principle with the principle that one nation one state and a high degree of 
concentration of power at that level is okay for us we're not too bothered 
about local or regional power within England we don't see the great necessity 
for developing that nor are we that bothered about trying to limit the er the 
power of the nation state by shifting power upwards to some larger entity we 
might be willing pragmatically to do that for certain purposes er from time to 
time but we don't see a general political or 
constitutional problem which can be resolved by organizing politics in a 
regional as opposed to a national manner and i think that does create a 
difference because many European nations and this this argument would apply 
much more strongly in some cases than others are to some very considerable 
degree dissatisfied with the operation of their own political systems and see 
the creation of a stronger European entity as at least to some degree a 
possible answer to their domestic difficulties and we don't have that impetus 
to greater European integration and therefore we're bound to be slower to move 
in the direction of Europeanization er than many of our European partners are 
and all of those factors it seems to me those three points the American point 
the dirigiste point and the er point about what you might call constitutional 
complacency all of those things apply pretty much as strongly under Labour 
auspices as they would do under Conservative 
auspices so my conclusion is that the coming to power of the Blair government 
is not going to and hasn't so far made any great difference in the kind of 
relationships which Britain Britain maintains with the er European Union and 
that th-, that position is i-, is is demonstrated or there is evidence for that 
being the case in the fact that the British er so far the British government 
certainly don't seem to be able to make up their mind as to whether they want 
to join the E-M-U or not for the moment they have said that they won't join it 
and they won't be joining it when it's first set up as to whether they want to 
join or intend to join at some later point er we are left er we are left 
waiting er the the words of of Gordon Brown or or Tony Blair thank you very 
much 
nm1172: i think the gentleman at the back is asking whether it's possible to 
make monetary union work without political union let let me let me first d-, 
explain to other members of the audience why there is a problem of the sort 
which the questioner quite rightly points to er when the European Monetary 
Union is created there will be a single currency called the euro and in order 
that that currency should be of any value it has to to to speak in very simple 
terms it has to maintain a certain rarity if if euro are created by all the 
national banks that are members of the newly created unity in large numbers if 
in broa-, crude terms the member nations print euros in large numbers simply in 
order to be able to spend them then inflation will ensue and the value of the 
euro will decline very rapidly and people will think that this is that the 
creation of the new er monetary union has been a very bad idea and in order to 
prevent that from happening the members of 
the eur-, European Union have set up a system which prevents national 
governments from doing the sorts of things which might be likely to cause a 
devaluation in the u-, E-U in other words the newly created European central 
bank has been given powers to prevent states from doing certain sorts of things 
that will undermine the value of the newly created European currency and 
everyone recognizes that the this central bank has got to have that sort of 
power in order that the new currency should be a value currency and a respected 
currency now what the questioner is suggesting is that if the currency is to be 
appropriately protected the things that need to be done at the centre in order 
to do that will grow as time occurs that all sorts of problems in the operation 
of the EMU would arise which can only be solved by adopting more powers at the 
centre in order to regulate at the European level some of the difficulties and 
some of the problems which have been 
created by the creation of a new currency for example it's often suggested that 
when the new currency comes into existence it may initially be of enormous 
benefit to some parts of Europe but cause enormous problems for others if that 
happens then clearly those people who have suffered will come knocking on the 
door of European institutions asking for some kind of corrective action to be 
taken in order to help them out and that corrective action can only be taken at 
a central level it won't be easy to take it at a national level and as a 
consequence the powers that are exercised at the centre may grow in order to 
protect the value of the newly created single European currency the euro and 
what my questioner is suggesting is that those powers will have to grow to a 
point where we can speak of a political union of some kind er and that would 
imply the exercise at the centre of a great deal more power than is being 
presently exercised er i i'm not 
dogmatic about that my feeling is that it's quite possible to run an 
organization such as the E-U with a single currency and inevitably having a 
single currency will require the exercise of some additional power at the 
centre but i would have thought that there are a whole range of matters er over 
which it is still possible for nation states to go their own way without 
endangering the single market and without endangering the single currency just 
to give one example it's important for the er for the value and the stability 
of the newly created European currency that er the member states keep their 
public deficits within certain limits that's to say they can spend a little bit 
more than they earn like most of us but they can't spend and ought not to be 
allowed and will not be allowed to spend too much more than they earn because 
that would allow would require them to borrow heavily and very heavy state 
borrowing has certain undesirable economic consequences so er 
it's important er to limit the borrowing power of the member states but what 
does that mean for example for a state which is intent on spending more what it 
means is that that state has got to face up to the fact that if it wants to 
spend more it has got to tax more and i don't think m-, speaking as a non-
economist at least i don't think there is any reason why there shouldn't remain 
very large disparities between the levels of taxation in the different members 
of the European country what must be standardized within limits is the extent 
to which these states borrow and run important public deficits but there's no 
reason why some states shouldn't be high taxing high spending states typically 
for example countries like er the Netherlands or or Sweden and other states 
should be much er much more inclined towards lower levels of taxation and lower 
levels of spending provided that their divergent policies don't threaten the 
value of the single currency 
then those divergencies can persist and it seems to me therefore that the basic 
answer is yes it is possible to have a monetary union without having a 
political union there seem to me to be a wide range of policies that can still 
be pursued distinctively at the national level whilst everyone agrees that 
everything that is necessary to protect the value of the newly created currency 
is done 
nm1174: one more question 
nm1172: that's a difficult question 
sm1173: how do you see the future of the European Union 
nm1172: h-, how do i see the future of the European 
sm1173: er i mean in terms of joining remaining countries after in Europe 
nm1172: cou-, could you just repeat the la-, the last bit i got the future but 
wha-, in terms of what did you say 
sm1173: the remaining countries after Europe er er to get joining in the 
European Union 
nm1172: did you get 
nm1174: expansion 
nm1172: expansion 
nm1174: yeah 
nm1172: ah expansion expansion eastward ah okay er i'm not sure 
that i can say anything about that that's not more or less common knowledge er 
the er th-, there seems to be a consensus er within the European Union that er 
in principle er quite a large number of those states in Eastern Europe which 
were previously governed by er single communist parties and were closely 
associated with the with the Soviet Union that those states should be admitted 
to er membership to full membership at some point in time er but that the 
process of their economies adjusting to the requirements of competition and the 
process of harmonizing some of their arrangements so that the single currency 
and the single market can operate for for them as well as for countries in 
Western Europe is probably quite a slow process and therefore i would have 
thought that in the long term a great many of those countries will join the 
European Union but that before they join there will be very long very 
protracted and quite difficult negotiations and 
some people will get through those negotiated stages more quickly than others 
and others w-, w-, will will find some of the conditions that are imposed 
difficult to meet or unacceptable and that therefore er more time will be 
needed before their membership can er c-, can be agreed to but there does seem 
to be a very a very broad consensus that it would be desirable to enlarge and 
extend the er community towards the east sorry not to be more specific about 
that 
sm1175: what do you think about the relationship between European Union and the 
mondial organization of commerce or this O-M-C the G-A-T-T or 
nm1172: and er and W-T-O and things like that 
sm1175: yeah [laughter] and then the organization 
nm1172: do you do you do you have a more specific version of that question er i 
i fe-, 
sm1175: er 
nm1172: i feel myself 
sm1175: just 
nm1172: i feel myself being drawn more and more out of m-, out of my depth 
[laughter] but but but tr-, see 
whether you can 
sm1175: just just 
nm1172: pic-, pin me down a bit more 
sm1175: can you talk about the problem with the Third World er with with the 
the European Union 
nm1172: yes 
sm1175: and with er with products and so what so what i'd like to know if the 
European Union will be will have problems with this agreement with trade 
agreements 
nm1172: trade agreements 
sm1175: yeah with 
sf1176: yeah 
sm1175: with the the the Uruguay rounds 
nm1172: yeah 
sm1175: please 
nm1172: yeah o-, okay you wouldn't be by any chance beginning the M-A in 
International Political Economy would you [laughter] because that's the sort of 
question which people will be spending er a l-, a large amount of time 
discussing er [laughter] i i i i confess to being not very well informed on the 
mo-, on on the on the details and they are very important matters of the 
relationship between the European Union and the World Trade Organization er wi-,
previously er the General Agreement on 
Tariffs and Trade GATT er what we're talking about for for for the for the for 
the non-initiated here are n-, are negotiations between major world players 
about the terms on which trade is permitted between themselves and we're 
talking about negotiations which affect in very fundamental ways the well-being 
of all sorts of people around the world the danger of c-, that economists 
constantly point to is that politically powerful groups will use their power in 
order to create protective arrangements which allow them to make money at the 
expense of others who would be willing to sell or would be willing to do work 
at at lower cost which would be er as it were globally advantageous but which 
are prevented from doing so because of their lack of of political power er er 
i'm i'm i'm thinking and and i'm hedging a little bit er my my my feeling is 
this that on the whole the differences which exist between the free trade er 
mission of the World Trade 
Organization the the mission of that organization to promote freer trade in the 
interests of global welfare the conflicts between that ambition and the 
ambition of the European Union which of course is to protect the interests of 
its national members er is a reconcilable divide in other words whilst there 
will be occasions on which the Europeans will take action which is good for 
them but bad for the rest of the world and which involves protecting certain 
European interests and in that way damaging certain out-, interests outside 
Europe although that will occur from time to time undoubtedly and certainly has 
occurred in a very serious way with regard to agriculture 
that in many other areas there was there is a sufficient recognition on both 
the part of the W-T-O and on the part of the U-S and on the part of the 
European Union that er in a sense there is some long term general interest to 
be maximized by making a progressive move towards freer and freer forms of 
trade and the the pattern whereby that can occur would be if you were to take 
an optimistic view that for example freer trade can develop er between Mexico 
and the U-S and Canada through the North American Free Trade Agreement and then 
a a a a growing understanding between members of NAFTA and members that the E-U 
can er can occur so that the advantages of free trade which have so far been 
realized within limited regional settings can be expanded