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Lord Inglewood: My Lords, I am most grateful to the Minister for his remarks. One of the difficulties that we have in considering public service broadcasting is that, rather like the elephant, it is very difficult to define it in words but we all know it when we see it.

I wish to make two points arising from the Minister's response. First, many of the characteristics which he ascribes to public sector broadcasting are, if not the characteristics, then frequently the aspirations, of those in the commercial broadcasting world.

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Secondly, I return to the comments I made at the beginning of my remarks. The form which public service broadcasting is now taking may well change, and change quite rapidly and significantly--I do not say it will, but it might--in the very near future with the changes arising from the digital television systems which we shall see.

Against that background, we need to be on our guard against the possibilities of abuse--and, of course, alert to the possibilities of good features which may arise from those changes. I am merely anxious to be sure that the European Commission shares the Government's present view as to what that particular protocol means.

The crucial factor in all this will not be what the Government of the United Kingdom or any other member state believes is the appropriate interpretation, but what the Commission believes is the appropriate interpretation. In theory, the matter may then go to the European Court. However, clearly we cannot have a determination in advance of an actual case.

However, I wish to reflect on the helpful remarks of the Minister and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Rawlings moved Amendment No. 6:

After Clause 1, insert the following new clause--

Conditions for enlargement of the Union

(". This Act shall not enter into force until a Minister of the Crown has laid before both Houses of Parliament reports on the measures agreed between the Member States of the Union to--
(a) reform the Common Agricultural Policy;
(b) reform the structural and regional funds; and
(c) streamline the institutions of the European Union, including the re-weighting of votes in the Council,
and such reports have been approved by resolution of each House.").

The noble Baroness said: My Lords, I strongly believe--it is a belief which I have held for some time--that enlargement and the institutional changes of the European Union must go hand in hand if we want the Union to succeed.

We have just witnessed the official birth of the euro. That is an historic step whether or not we become part of it. Without counting the euro forerunners of the snake and the EMS, the birth of the euro took seven long years. Yet nine years after the fall of the Berlin Wall, the European Union is still not ready for enlargement which the Amsterdam Treaty failed to address.

Enlargement is the present historic challenge. It is a real dream, as my noble friend Lord Howell of Guildford expressed it so eloquently earlier this evening. It is desirable not only for strategic, political and economic reasons but also for moral reasons. Based on the principle of democracy, fraternity and the need to heal the deep scars left by the Communist era, it will unite a continent that historically and culturally should be one. It will add 28 per cent. to the Union's population and 34 per cent. to its area. As a consequence, it will fundamentally change the nature and functioning of the Union.

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Major institutional changes and enlargement will have significant geopolitical consequences. I am not a great one for sketching scenarios for some 10 years hence. As was said in your Lordships' House only recently, it is dangerous to make predictions, especially about the future. However, it is obvious that relations between the European Union and its neighbours, both to the east and to the west, will be affected. These historical developments should, in no way, detract from our continuing relationship with the United States and the Atlantic alliance. It is for that reason that I would support the proposals of Sir Leon Brittan for a new transatlantic market place. These are not just proposals for a far-reaching trade and service liberalisation; they are intended to give a new political momentum to US-EU relations.

Sir Leon's proposals represent a further step in adapting that relationship to the post-Cold War period, building on the 1995 new transatlantic agenda. Our close ties with Europe should not preclude our relationship with our natural ally, the largest democracy in the western world; namely, the United States of America. I have always felt this, so much so that the purpose of my last report in the European Parliament was to further EU and US cultural relations.

Both Euro realists and those who would like to see the European Union's demise, agree that enlargement is desirable, and they say so; as, indeed, we heard from my noble friend Lord Beloff. I greatly respect him, but cannot agree with him on this matter. Enlargement is the acceptable--dare I say it?--politically correct stance on the European Union, yet rhetoric alone will not make enlargement happen. If it is not followed by consistent action, it will fail. At worst, enlargement could stagnate and degenerate into hollow talk. For example, the President of the European Parliament, Jose Maria Gil-Robles, said to the Romanian Parliament:

    "Enlargement must be carried out smoothly, without creating new divisions or blocs in our continent".

It seems unreasonable in these circumstances that the Commission is still insisting that Hungary should impose visa requirements on Romania. What would any noble Lord say if he were the man on the proverbial down-town Bucharest bus?

Much as we may say we want enlargement, it cannot happen without reforming the European Union and, in particular, its institutions. That is the main reason behind the amendment that I am introducing this evening. It is not a wrecking amendment; it is intended to raise the pressure to bring about reform. By and large, Amsterdam failed to prepare the institutions for enlargement. The Government acknowledge that fact. However, I differ with them on two grounds: first, the institutional issue is more important and more difficult to resolve than I believe the Government are prepared to admit. Unless the institutions are right, the policies that the Minister considers of the uppermost importance never will be right. Moreover, would it not be fairer to settle the institutions first so that the applicant countries knew what the club rules were before they joined?

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From my experience as an MEP, I learned what a cumbersome, rough beast the institution of the European Union and its procedures can be. I have also learned that trying to solve institutional and procedural issues can be wildly frustrating, time-consuming and complex. I remind the Minister of the interminable, on-going discussions on the site of the European Parliament, which I believe we shall discuss later.

I am not reassured by Article 1 of Protocol 11, even though it puts into place a specific mechanism. At the date of entry into force of the first enlargement, each member country will have only one commissioner, provided that the reweighting of the votes has been satisfactorily solved. As the accession of the first wave is likely to take much longer than the Commission predicts, the article in effect just delays reform. Reform is clearly necessary now and by the completion of the first wave accessions will be well overdue.

Secondly, I beg to differ on the degree of progress achieved at Amsterdam. I accept that capping the European Parliament's size and transferring most policy areas, subject to co-operation procedure, to the co-decision one is a significant change. In Committee the Minister gave the impression that the only outstanding issues of those originally on the table were the size of the Commission and the reweighting of the votes in the Council of Ministers. That simply is not the case.

There is also the reform of the Council presidency which appears to have dropped off the agenda. Even though I know that the discussion on the institutional matters dealt with by the Amsterdam Treaty cannot be reopened, there are, however, other institutional issues which need to be addressed quite urgently. I shall mention just two problem areas. Ten days ago the appointment of the president of the European Central Bank degenerated into a disgraceful squabble. This is the most recent of the melodramatic rows over top appointments to a European Union institution. It is imperative that the European Union looks at how the top posts are filled. This is presently done by unanimous decision by the heads of government. Surely some solution could be found and surely there is a more effective way to do this while still representing the rights of the member states.

There are now 15 members and 11 official languages. In a European Union of 26 there are likely to be 22 official languages. Can you imagine the nightmare: stacks of paper, armies of translators, interpreters and legal advisers? Can you imagine the dreary delays and the monster misunderstandings that could occur? It would be the ultimate babel. The number of official languages has to be drastically reduced. I anticipate the Minister's answer; namely, that these matters will be taken care of by Article 2 of Protocol 11. The article requires that the comprehensive review of the institutions is carried out at least a year before the Union exceeds 20. However, I have the impression that this is just another ruse further to postpone the necessary reforms because it is clear that enlargement must take longer than is officially claimed.

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In Committee I asked the Minister a series of specific questions which I am afraid he did not answer. I do not, of course, expect him to disclose any details which would undermine his negotiating hand. The extent of his silence, however, perturbed me. Could it be that the Government are not particularly focused on the institutional issues? Will the Government give their full backing to the committee proposed by the president of the European Parliament, Gil-Robles, to make proposals for the reform of the European Union's decision-making system? Will the Government make an announcement about the next IGC to resolve the institutional issues in Cardiff?

The purpose of the latter part of Amendment No. 6 is to put pressure on the European Union not to dodge the issue any longer. It makes the entry into effect of the Amsterdam Treaty conditional on the reduction of the Commission's size, which in turn is conditional on the reweighting of the votes. The Minister stressed the importance of getting our policies right. I agree entirely with that. We cannot admit more members without reforming the European Union's main policies as well as its institutions. Otherwise, as the Financial Times concisely put it,

    "Enlargement would bust the Union's budget".

That brings me to the first part of Amendment No. 6. It would make entry into force of the Act conditional upon reforms of the CAP and of the structural fund. Last month the proposals were outlined in Agenda 2000 embodied in a Commission package. The European Union has been slow in developing these proposals and it is doubtful whether they amount to a coherent strategy.

Some 75 billion ecu are expected to be transferred to the applicants between the year 2000 and 2006. These are not spread evenly. The second wave of countries, by and large the poorer countries, is expected to receive from the EU less money than the five front runners--400 ecu and 900 ecu per head each year respectively. The Minister disputed those figures. They have been taken by the Royal Institute for International Affairs from the agenda and confirmed by the Commission. Why is there that discrepancy between the first and second wave of applicants? I am not persuaded by the argument that the applicant countries cannot absorb more money.

Our response, however, appears to be inadequate, in particular towards the poorer countries. I have just been in Bulgaria and have seen the amazing recent improvements in a relatively small town, Blagoevgrad, outside Sofia, the site of the American University of Bulgaria, which is housed in the old Communist party headquarters. It is quite remarkable.

I fear that enlargement will require more money than the Commission estimates. However, it is imperative that the European Union stays within the own resource ceiling of 1.27 per cent. of the European Union GDP. That leaves us to square the circle. The Commission believes that a sustained rate of growth between the European Union and the applicant countries will solve the problem. I feel it may be over optimistic. If it is over

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optimistic, as I believe, it will only increase the pressure to find additional funds by reforming the existing policies.

If we wish to provide the applicants with the necessary funds, we shall have to face very tough decisions. This is particularly the case for the CAP. Far from reducing the CAP budgetary expenditure, the Commission proposals increase it. That is totally unacceptable. As regards the appropriateness of the proposals towards enlargement, I wish to refer to the damning opinion of the Agriculture Committee of another place on the outline proposals of Agenda 2000. The committee believes that the proposals are fraught with problems and therefore unacceptable. The proposals for the structural and cohesion fund also appear unsatisfactory. The criteria for distributing the overall allocations appear to be fundamentally flawed. They lead to an unfair distribution across the existing Union members and between those and the new applicants.

The decision to limit funding to 4 per cent of GDP has a perverse effect. In short, the richer you are the more you get. Yet the main purpose of the fund is to reduce the disparities with the Union. Furthermore, in all the applicant countries, the GDP per head is below that of Greece and Portugal. It is estimated that in 1999 Greece and Portugal, the poorest Union countries, will receive from the structural funds 400 ecu per head. It is also estimated that between 2002 and 2006, according to the Commission's proposals, the first wave applicants will receive 120 ecu per head, and a second wave group only 23 ecu per head. Moreover, the decision to maintain the cohesion fund in the present form, albeit with minor changes, flies in the face of fairness. It helps the relatively less poor countries and leaves the poorer ones out in the cold.

Perhaps we are not talking about the same Community or the same Union. We are not. It is increasingly clear that several countries are queuing outside the door. Some people ask, "What are the applicants joining?" Some people say, "A Community or a caste system?" Enlargement rightly developed almost as a natural response to the end of the Cold War. I hope that under the UK presidency the Government will make some real progress towards what has been described many times today as the central point of the Amsterdam Treaty; namely, enlargement. I beg to move.

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