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Lord Grenfell: I should like to echo the words spoken by the noble Lord, Lord Taverne. It does not make any sense. I would say not conditional. I would go further and say, "held hostage to", because that, in effect, would be the result of this particular amendment. Clearly, for some time to come, it would exclude an enormous number of the provisions in the Amsterdam Treaty which could be brought into effect right away, to the great benefit of the Community.

I should like to return, for a moment, to the issue of Amendment No. 43G in the reports. The Community will be awash with reports on the progress of the applicant countries towards meeting the acquis communautaire and their readiness to enter into the European Union. I was, therefore, somewhat surprised by the query posed by the noble Baroness, Lady Rawlings, who asked why, nine years after the fall of the Wall, there were not applicant countries already in a position to come into the European Union. I should have thought that was really rather obvious. As the noble Lord, Lord Taverne, has already suggested, there are serious problems still faced by many of these countries. In the discussions that we had in Select Committee A on the cost of enlargement of the European Union, in our discussions with the representatives of applicant countries, they themselves, although they were enthusiastic about getting in as soon as possible--

Baroness Rawlings: I think the noble Lord misunderstood me. I meant that the European Union itself was not ready, not the applicant countries.

Lord Grenfell: I thank the noble Baroness for that correction. I think the same can be said in that respect. I do not think that the European Union could have been ready to receive them nine years afterwards. The European Union cannot be in a position to welcome countries into the European Union that are not ready. One has only to look at some of the work that still has to be done in those countries. Even if allowances are made in some cases and some countries do not have to fulfil all the conditions of the acquis communautaire for entry--it is perfectly realistic to say that they cannot overnight suddenly meet all of the provisions of the single market--there is nevertheless a huge amount of work still to be done. Nine years after the fall of the Wall, the European Union could not possibly consider that it was appropriate at this stage to accept them into the European Union.

Poland, for example, will have to spend about 3 per cent. of its GDP simply on cleaning up the environment. It cannot do that overnight. A long period of time will need to be spent in preparing for entry. I am afraid that a number of the governments of applicant countries will be disappointed. Poland speaks

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of coming in in 2003 or 2004 but it will probably be much later, and others will probably take even longer. Poland is expected to be the first to come in. The amendment asks for,

    "a report of any assessment made by the European Commission of the applicant countries to the European Union who have not been accepted into the first wave of applicants".

In this regard we are looking at a time far into the future.

I believe it would be a tremendous mistake to accept Amendment No. 47. That would hold the whole Amsterdam Treaty hostage. That would be a grave mistake.

The Earl of Clanwilliam: I agree that the treaty would be held up, but it seems to me that we are rushing headlong into the lions' den in a totally unprepared way. No matter how much re-weighting of votes occurs and no matter how many reports are issued, the fact remains that the applicant countries and the European Union--as has been said by those on all sides of the Chamber--are totally unprepared. I support what my noble friend Lady Rawlings said about the common agricultural policy. Unless that is reformed before any enlargement takes place, there will be total disaster. As the French or the Germans are determined that the CAP will not be reformed, it seems to me quite nonsensical to attempt further enlargement until those matters have been properly resolved.

Lord Grenfell: It is not true to say that the French and the Germans do not want the common agricultural policy reformed. They know that it will have to be reformed; the question is on what terms it will be reformed. On that point they have differences with some other countries.

Lord Pearson of Rannoch: It is not only a question of upon what terms it will be reformed; surely it is a question of whether the votes will be available to reform it. That looks extremely likely. That, in turn, makes European enlargement quite possibly a pipe dream.

Lord Stoddart of Swindon: I agree with all speakers who have said that if enlargement is to proceed there will have to be institutional reform, and indeed a radical reform of the common agricultural policy. Unless the agricultural policy can be reformed, and fairly quickly, I do not believe there is any prospect that other countries can join in the foreseeable future. At present 51 per cent. of the European Union's population enjoy either agricultural subsidies or regional aid. That simply cannot be right. Before these other countries can be admitted there will have to be reforms.

I should also draw the attention of your Lordships to the fact that there is grave reluctance on the part of existing member states to increase the financing of the European Union any further. The Germans in particular are not only refusing to increase their net contribution; they want it reduced. So there are very severe difficulties before the applicant countries can be admitted.

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My central point is this. Is enlargement desirable? I do not know about my own party, but noble Lords in the party opposite always saw enlargement as being a check to the centralisation of the European Union and its institutions. In fact, that is not proving to be the case. As Mr. Santer has already said, widening is not an alternative to deepening; if you widen, you have to deepen--and by deepening, you centralise. So what appeared to be the objective of the previous government--to prevent deepening through widening--is simply not going to happen, because if you widen, the Commission itself will demand more powers in order that it can control more people.

I therefore believe that we should examine the whole concept of widening. If this goes wrong, if the proper reforms have not been made, if we have not made it clear that there will be no further centralisation, then it will be a disaster not only for the European Union but for all those applicant countries which wish to join. They could be pauperised even more than they are already by some of the restrictive practices, particularly in relation to trade, imposed upon them by the European Union.

I could talk for a long time on this matter, but I know that your Lordships want to go home--perhaps unexpectedly. I shall therefore merely ask my noble friend to make some short comments on the points I have made.

10.45 p.m.

Lord Whitty: Perhaps I may begin by concentrating on the effect of the amendments, and then respond to the general points. I think that at this hour noble Lords will not want a response that is too wide-ranging on the whole strategy for enlargement.

Amendment No. 43G, although superficially sensible and attractive, is unnecessary. There is adequate reporting from the Commission on a regular basis on all of the central European applicants. Those reports will be accompanied by recommendations from the Commission to the Council, which could include a recommendation that they came in to the formal negotiations. Those reports, like other Commission opinions, will be depositable documents and will therefore be submitted to Parliament for scrutiny in the usual way.

I take the point lying behind the noble Baroness's advocacy of this amendment that the position of the second wave five, if I may so call them, needs considerable attention. It is certainly not the intention of the Council or the Commission that the resources going into those countries should be detrimentally affected by the fact that they are not immediately in formal negotiations; indeed, rather the opposite ought to be the effect. The allocation within Agenda 2000 represents the amount of money, the transfer of Community funds into those countries, that is assessed as being absorbable by them. There is a slight differential in favour of the first six, but it is not as substantial as the figures given by the noble Baroness. In any case, there is a need to ensure that those countries keep up and are in a position to take part in formal negotiations as rapidly as possible.

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Amendment No. 46 is a bit of a wrecking amendment. It trades off the advantages which we debated last night in terms of the extended powers of the European Parliament against the overall institutional agreements which the noble Baroness rightly says we failed to achieve at Amsterdam. However, we made rather more progress at Amsterdam than she suggested. We regard the advance in the powers of the European Parliament in co-decision as an important gain in its own right and would not wish to see those two traded off against each other.

As to the final amendment, as my noble friend Lord Grenfell implied, it is a wrecking amendment on a pretty grand scale. It makes ratification of the treaty subject not only to the institutional changes wanted by the noble Baroness but also to the reform of the common agricultural policy and the structural cohesion funds. That is a pretty tall order and I am afraid the Government must reject it.

I wish to make a few remarks tonight about the whole strategy on enlargement. I share the disappointment expressed by the noble Baroness, Lady Rawlings, that Amsterdam did not fully resolve the institutional reform. When we came to the negotiating table on 1st May there was already deadlock on the linked questions on the size of the Commission and the weighting of votes on the Council. We did our best to broker a deal in six weeks. At Amsterdam, if we had had a little more time we might have reached agreement, but ultimately there was no consensus. There was some progress: we agreed a protocol which represents a step forward. It sets out the mechanisms by which the outstanding issues will be resolved in advance of the next enlargement process. Explicitly, Article 1 of the protocol states that when the next enlargement of the Union takes place the Commission will comprise one national per member state, provided that the weighting of votes in the Council has been modified to increase the relative clout of the large members. In other words, we commit ourselves to reform of the Commission, but only provided it is subject to the more important issue of giving greater weight to Britain in the Council of Ministers' weighted voting.

The noble Baroness asked about the criteria for re-weighting. We argued for a system which went one way to rectify the gradual erosion of the representativeness of citizens from larger states. I was perhaps putting it too crudely--I have been in this debate for too long--by saying we wanted more votes for Britain. I should have expressed in a slightly more communautaire way what I said just now about rectifying the erosion in the representation of citizens from larger member states. I do not think it sensible at this hour to present the Committee with mathematics as to how we achieve that. Nevertheless the issues are eminently able to be resolved and must be resolved before we move to the first stage of enlargement. However, I do not believe that it is such a colossal problem for the existing members of the European Union to achieve agreement. I certainly do not think that it is something which should hold up the tremendous task of enlargement on which we are now embarked.

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The noble Lord, Lord Stoddart, asked me whether enlargement was desirable. It is eminently desirable. It is probably the most important task facing the current political leadership of Europe. It is desirable because it will finally bring an end to the divisions of the Cold War; it will bring democracy and prosperity to 100 million people and will re-unify this continent in a way that will give security, peace and prosperity to us for many generations. That is a prize worth working for.

It is, however, not an easy task. I was rather sad that the noble Baroness slightly denigrated the flying start to the enlargement process that we achieved during March. We had a very successful European conference. We have started enormously detailed negotiations with six countries and an almost equally detailed process of review for the other five countries. That is a quite important diplomatic achievement and it will show progress even in time for the Cardiff summit. Certainly, the process will take years in total before we achieve the final outcome. There will be setbacks, problems, trade-offs, difficulties and enormous diplomatic rows. But the prize is there and it is one which we have started to achieve in the months of the British presidency.

Changes are needed within the European Union itself. The institutional changes of which we have just spoken are actually the least difficult, particularly if people do not start re-opening the whole range of institutional change that was originally on the table in Amsterdam and confine themselves to resolving those issues which are covered by the protocol referred to in Amendment No. 43G. If those issues are resolved, we can move to the first stages of enlargement. If people start saying that major fundamental institutional reform is needed before enlargement can take place, they are really arguing against enlargement. I do not believe that that is in the interests of the peoples of Europe--east or west.

There are some much more difficult problems which the existing members of the European Union have to face--the reform of the CAP, the restructuring of the budget, the whole question of structural fund reform and the way in which the budget will be controlled and reorganised over the period 2000 to 2006, with some markers as to where we go beyond that. In my view, those budgetary issues are at least as important as, and much more difficult than, the institutional issues referred to in the amendments. But the task of enlargement ahead of us is a great task. It will be a huge political achievement if we make it. The Treaty of Amsterdam, while it may not have facilitated that process as much as some may at one stage have wished, it certainly does not inhibit it and has cleared the way for us to start on that road. The British presidency followed that up over the past few months in the way I described. I hope therefore that the noble Baroness can withdraw her amendment.

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