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Mr. John McFall (Dumbarton): Given that France, Portugal and Italy have been given more time to eliminate their budget deficits, is there not a need for us to examine the stability and growth pact with more flexibility? Is it not a good thing to have small public deficits sometimes, if they lead to investment?

The Prime Minister: It is necessary to keep the basic principles of the pact because that is important for the stability of the euro. What my hon. Friend says about necessary flexibility to take account of different circumstances is right, and that is our position too.

Sir Teddy Taylor (Rochford and Southend, East): As the Council unanimously accepted the proposal for the European border police, will the Prime Minister confirm that it was agreed by the members taking part, or spelled out in the conclusions, that Britain's exemption was there, and was legal? Secondly, what was agreed about Gibraltar, which is part of the EU? Will the European police force operate in Gibraltar?

The Prime Minister: First, in respect of the position on our protocol agreed at Amsterdam, that is in the treaty. I point out once again that nothing new was agreed on European border police at the Seville summit. A study has been ongoing for about eight months, and that study was referred to in the conclusions. No new position was taken at Seville. For the reasons that I have just described, I think that it is entirely acceptable that a study be undertaken. It imposes no obligation on us. As I have said many times, perhaps especially because of our European relations, it is important for Gibraltar as well as Spain and Britain that we try to reach agreement.

Mr. Bill Rammell (Harlow): I welcome the changes to the workings of the European Council of Ministers, which I think can help to ensure the primacy of elected governments over the unelected Commission. Should we go further and appoint a president of the European Council for a period of up to five years? What progress was made on that issue?

The Prime Minister: There are many interesting ongoing discussions, and that is something that will form part of the agenda of the European convention. It is clear that with 25 members it would be foolish for us to continue with the existing rotating six-monthly presidency. I cannot see that that would be in the interests of Europe. It cannot be efficient and it cannot be right. There is increasing recognition in Europe that that is the case.

Mr. Ian Taylor (Esher and Walton): If the Prime Minister had a setback in Seville last weekend, it was because in anticipation, he had over-hyped the claim that he was setting the agenda. Does he accept that it is unlikely that we will really set the agenda until we have

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joined Europe's biggest project, the euro? Does he accept that unless he goes out and explains to the British people, and some of the journalists who write editorials, it will not be understood that some issues are now European issues that can be solved only at a European level, which therefore override national blockages, just as we overrode a national blockage during the 1980s, when we were opening up the single market? The only way to solve the asylum problem is at a European level. Does the Prime Minister agree that it would be critical if we failed the nations that are joining us, and did not help them with their policing of a common border, and with the institutions right across Europe, against traffickers in people who are exploiting their countries as well as ours? [Interruption.]

The Prime Minister: They always shout on the Opposition Front Bench, but the comments of the hon. Member for Esher and Walton (Mr. Taylor) would strike most people outside as reasonably sensible. Yes, the issue is a European issue, and it is important that we try to deal with it at a European level, for the simple reason that whatever measures we can take in this country, there is a limit to what we can do as one country alone. That is precisely why we put the matter on the agenda. Because of that, a substantial additional element of European policy was decided at Seville. Until now, that did not form a mandatory part of the negotiation with any country of a new co-operation or association agreement. Now that will be the case. In respect of existing agreements, obviously there was a compromise, which I have just outlined. However, it is not the case that no progress was made on that agenda. Progress was made; we would like to have seen more, but if we had not tried to set the agenda we would have got nowhere at all.

Mr. Tam Dalyell (Linlithgow): Paragraph 14 of the conclusions refers to the European Union taking over from NATO in Macedonia. From the Prime Minister's previous answer, is it not clear that there is a very dangerous situation in Macedonia? What is being done by the Community as a whole to carry out the promise that we thought was made during the bombing, that there should be a rebuilding of the Balkans?

The Prime Minister: On the first point, in relation to Macedonia, de facto the Europeans, with a NATO hat on, have undertaken that. The conclusions make it clear that it would be sensible for European defence to do so,

That is the complete answer to those who say that that conflicts with NATO; it does not. Yes, it is correct that it was anticipated that European defence could do that.

In respect of the other point about the Balkans, we are rebuilding the region. In Kosovo, Serbia, Macedonia and other places in the Balkans, we are doing an enormous amount of work. A great deal of aid and help is being given to those countries. One of the most exciting prospects for the European Union is the prospect of those countries, which were riven by civil war and ethnic strife, sorting themselves out so that in time—it may take some considerable time, obviously—they can become members of the European Union. Such a project would have seemed

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impossible a few years ago—and I say respectfully to my hon. Friend that if Milosevic were still in Serbia, it would be well nigh impossible.

Mr. John Maples (Stratford-on-Avon): The Prime Minister has gone through some of the sensible steps that were taken over immigration and asylum at Seville, and of course there is a European dimension to that. However, the vast majority of people in this country would regard it as going much too far to allow a non-British police force answerable to the European Union to operate within the United Kingdom.

The Prime Minister has muddied the waters a little, as if it had nothing to do with him, but paragraph 31 of the conclusions states that the European Council, of which he has told us he is the leading member—presumably, if he sets the agenda, he has some say over the minutes—welcomes the study that has been carried out on the matter. The Prime Minister implied that he was instituting a study. In the final paragraph of the conclusions, paragraph 39, the European Council—presumably he was still its leading member at that stage—called for a report to be submitted at the June 2003 summit to see how

could be put into action. Of course we know that we have a veto, but what we want to hear from him is that there are absolutely no circumstances in which his Government would agree to the operation of a European border police force within the United Kingdom.

The Prime Minister: I have already explained to the hon. Gentleman why that is the case: the protocol in the Amsterdam treaty that we negotiated makes it clear that nothing can be done without our consent. Therefore, the whole idea of European police taking over from British police at Dover or anywhere else in the UK is fatuous and wrong. [Interruption.] We have no intention of consenting, as we have made it clear that we have the protocol that was negotiated at Amsterdam.

However, the point that I was making—I should like to correct the hon. Gentleman on this—is that the feasibility study is still being carried out; it has not yet been completed. I am not against its being carried out, for the reasons that I have just given. When the new countries are taken into the European Union—true, this is for us, but it is not directed at us, or, indeed, Spain or France—the issue is that when we open up the whole of our eastern European border to them, it is not foolish, although there are other ways of dealing with it, to say that some of those countries on that border will need help with policing their borders. Provided that we have a veto over what happens, which we do—

Mr. Maples: Will you use it?

The Prime Minister: I have told the hon. Gentleman already about our position on Britain. In respect of the rest of it, I will listen to what the feasibility study says, because I want to see what arguments there are. I will make up my mind on the arguments. [Interruption.] This is an astonishing thing to hear—apparently I should be saying that I am not going to listen to the arguments, but veto it anyway. With the greatest of respect—and we have just heard this from the Conservative party again—that is the Conservatives' policy: if something has the word

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"European" in it, we veto it, whether it is good or bad. That is why we ended up with no influence in Europe, and it is a policy that I will not adopt.

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