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Mr. Kelvin Hopkins (Luton, North): May I, too, say how pleased I am to be serving in Committee under your chairmanship for the first time, Mr. Illsley?

I draw my right hon. Friend's attention to the first page in the European Community document, which refers to the importance of a ''strong and united Europe''. Does he agree that the larger the EU becomes the more difficult it is to keep Europe united and strong? There are problems of unequal living standards and very different economies, and agriculture causes immense difficulties. Is it not inevitable that that situation will lead to a looser association of co-operating but essentially independent nation states?

Peter Hain: My hon. Friend puts his finger on the foundation of the British, Labour Government's view of the European Union: that it should not be some kind of federal superstate with power centralised in Brussels, but rest on independent nation states freely co-operating together within the Union.

I have talked to the candidate countries—on my recent visits to Slovenia, Hungary and the Czech Republic, when their Ministers have visited me in London and when I met all the Government representatives at the European Union convention, on

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which I am the British Government representative—about their ideas for the future of Europe. What struck me was that many such countries have freshly won their nationhood and independence as proud peoples after decades of oppression under the old Soviet empire. They are not about to want to give that up by surrendering power to the centre. They, along with the majority of European member states, are as keen as us to retain decision making at national level, where it is best to do so. We co-operate with other member states on decisions taken at the Brussels level only when, as in cases such as anti-terrorist measures and the single market, it is in our interests to do so.

Although my hon. Friend is right to say that the enlargement of the European Union to take in another 10 countries, which is the biggest enlargement in Europe's history, is a formidable undertaking that will impose strains and stresses on the EU's decision-making structures, the prize of reunifying Europe is nevertheless very exciting, and we must grasp it.

Dr. Nick Palmer (Broxtowe): Does the Minister agree that there needs to be further progress in the Baltic states towards the integration of minorities who do not speak the majority language? In particular, I note that in Estonia those who do not have Estonian nationality are restricted in the political parties to which they can belong. That restriction is unique in the world; does he agree that it remains a cause for concern?

Peter Hain: Perhaps I should not confess this, but my hon. Friend has told me something that I did not know. I am grateful to him because he is an expert on Europe and a valued contributor to debates in the House. I want to have a closer look at the Estonian example, but in general terms minorities' rights—whether it is the Roma in central European countries such as the Czech Republic or the minorities in Estonia—must be safeguarded. Such rights are part of both the acquis and the Copenhagen criteria, which candidate counties must meet in order to become full members of the European Union, and they are another benefit of Europe and the European Union. Because we have such high democratic standards—they are not perfect and we are continually trying to improve them—by enlarging our membership we enlarge not only the zone of stability and prosperity, but the zone of democracy and human rights. Estonia will need to abide by those criteria along with every other candidate country.

Mr. Heathcoat-Amory: On cost, the Commission's opinion is that it will be possible to finance an enlargement of up to 10 countries without breaking the financial ceilings agreed in Berlin in 1999. That statement is unremarkable because it is obviously possible, provided that we do not give very much more money to the applicant countries. Those countries, however, take a different view. They do not want, for instance, to receive less under the common agriculture policy than farmers in the 15 existing member states. Has that statement been agreed with the applicant

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countries, or is the Commission's view simply that they can be forced or bullied into accepting a restriction on extra money to squeeze the process into the existing financial perspective?

Peter Hain: Nobody is going to bully or force anybody to do anything. The applicant countries are negotiating, and the budgetary chapter has been opened along with those for agriculture, the structural funds and regional policy, which are some of the toughest issues to crack. The applicant countries will obviously want to win the best deal that they can, but we will insist, as will the Commission, that the ultimate settlement remains within the budget set by the Berlin Council in 1999, and we are confident that that can be the case.

Specifically on agriculture, there is no provision for increasing the budget in respect of the applicant countries. Discussions in parallel will of course take place on CAP reform once those countries are in. Such discussions, which introduced changes, started in Berlin in 1999. That reform must be completed by 2006, which will involve a tapering off of CAP support for direct payments for existing member states, and a tapering up of support for the candidate countries, so that we meet at a point of equilibrium. That is the objective, but meanwhile the CAP needs radical reform. Instead of just supporting all sorts of dubious agricultural practices, support should be directed at regenerating the rural economy and assisting with development and modernisation.

Mr. Hopkins: I thank the Minister for his answer to my first question on Turkey, which I thought was very helpful. Turkey is a possible future applicant, although not part of the immediate wave. It is rather surprising that it is included, because it would not be considered a European nation in cultural terms—although it is undoubtedly a fine nation in other ways. Does he agree that it is odd that it is included, when many other nations that are culturally European are currently excluded? Is he concerned that we are drawing lines that have more to do with strategic issues in the world than with the European family of nations?

Peter Hain: We enjoy association agreements with countries other than Turkey. In the Balkans, Croatia is a country that my hon. Friend could cite as apparently more geographically part of Europe than Turkey. However, Turkey is a country that is strategically very important, wants an alliance with the European Union, and eventually wants to join the EU. It is a long way from doing so, but we should encourage European standards of democracy, human rights, economic modernisation and peace and stability to spread, within reasonable limits, as far as is practicable. Turkey is anxious to join, and we are keen to encourage that.

However, the 10 candidate countries that could complete negotiations by the end of the year are engaged in a process for which Turkey is not yet ready. It is not even near the stage reached by Romania and Bulgaria, which are immediately behind those 10 and have opened the process of negotiating on the acquis. It is in our interest to encourage that process of

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modernisation, good governance and democratic transformation in Turkey, so that at some point serious negotiations can begin to determine whether it can comply with the acquis.

Mr. Spring: I ask the Minister to elaborate on the helpful reply that he gave to my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) on CAP reform and agriculture in general. The Spanish Foreign Minister said, quite explicitly, that there should be no debate on reform of the common agricultural policy until after enlargement. The Minister will be aware of the concern among accession countries about raising the spectre of reform ahead of their accession, because they realise its budgetary implications. Should not the outlines of the future structure of the CAP be in place—at least in minimum—when the accession process gets under way? Otherwise, there will be a lack of clarity about how the long-term budgetary aspirations of the European Union will work. There will also be all sorts of political difficulty concerning the vested interests of agriculture, particularly in the accession countries. Will he marry up the dates of 2006 and 2004 and explain whether we are setting out what the lines should be for the future of agriculture so that they are clear to the accession countries?

Peter Hain: The Commission recently proposed to phase in direct payments for member states, starting at 25 per cent. It discussed a 10-year programme in which that could occur. We believe that such considerations and funding would be better directed at transforming the agricultural and rural economies of those countries and existing member states, so there is still a discussion to be had.

My concern, and the Government's strong belief, is that allowing reform of the common agricultural policy to become the central negotiating issue now and introducing that into the negotiations with candidate countries could act as a veto on progress to enlargement and is unnecessary because the CAP regime is due to run until 2006. As a matter of policy, principle and strategy, it is better to conclude enlargement, including fulfilment of the agricultural chapter--the hon. Gentleman will be aware that that chapter must be fulfilled and has only just been opened--and to get that out of the way. The CAP in its present form will not then bear the weight of enlargement, but it will have to be reformed for that reason if for no other.

In common with the majority of member states, we believe that the CAP should be reformed so that support is targeted at regenerating the rural economy and not at wasteful and inefficient subsidies. Enlargement should be concluded, including fulfilment of the agricultural chapter, and to some extent that prefigures subsequent CAP reform. The hon. Gentleman made a fair point. Enlargement should not be conditional on CAP reform, because some member states with vested interests could use that as an excuse not to proceed with enlargement which, as I am sure he agrees, is not desirable.

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