Select Committee on European Union Minutes of Evidence


Examination of Witnesses (Questions 20-39)

THURSDAY 27 MARCH 2003

DR DENIS MACSHANE MP, MR PAUL JOHNSTON AND MR DOMINICK CHILCOTT

  20. So American law says that the United Nations can freeze assets but the Americans can get their hands on it whenever they want. Is that right?
  (Mr Chilcott) I do not want to put it too crudely, but in this particular case I understand that American law allows the United States' Government to unfreeze the frozen assets and to make use of the funds for the purposes of providing for the people of Iraq.

Lord Inge

  21. Is that different money from UN money or is it the same money?
  (Mr Chilcott) This is different from UN money. This is money that was frozen after the first Gulf war. The United Nations' money, which is the money which comes from oil revenues which is held in an escrow account, is run by the United Nations under the rules governed by Security Council resolutions, and none of the Member States of the United Nations can get their hands on it separately. It all has to be done through the UN.

Baroness Park of Monmouth

  22. Is it correct, as I have read somewhere, that the money is supposed to have been administered within Iraq by the UN but in practice they have allowed decisions on where the money is to be spent to be made by the Iraqi Government?
  (Mr Chilcott) The position is that the Oil-for-Food Programme provides for the Government of Iraq to contract the humanitarian relief that enters into the country and provides also for the Government of Iraq to sell its oil. But within Iraq there is a group of people called the Iraq Oil-for-Food Programme people who check, who authenticate that the goods that come into the country are the goods that have been ordered and that the oil leaving the country is indeed the oil which the Iraqi Government are saying they are selling. So it is a sort of combination. But the contracting authority is the Government of Iraq, and that has always been the case.

  Chairman: Are there any more questions on this aspect of the General Affairs Council? No. Let us move on to the main issue that we wanted to talk to you about which is recent developments in CFSP. I think, Minister, a lot of people think that things may never be quite the same again—though that is probably putting it mildly.

Lord Powell of Bayswater

  23. Minister, you said that one of the conclusions of the European Council was that we should strengthen the capacity of the EU on the CFSP and the ESDP, but the widespread perception outside the inner circle of the EU itself is that the CFSP has collapsed, that there is no CFSP and no immediate prospect of restoring one. Yet we are devoting an enormous amount of time to discussion of institutional improvements for the CFSP. Is there not a risk that we—by which I mean Europe—make a bit of a laughing stock of ourselves by discussing institutional questions, when it is quite clear that on the issues of substance, which should be the driver here, there is no agreement or any prospect of agreement? Would it not therefore be better simply to reach the conclusion that on CFSP no institutional change is necessary or feasible at the moment because nothing can be achieved on the substance?
  (Dr MacShane) I think we have to make a distinction between what, for the sake of convenience, I call a single foreign policy for Europe—a bit like a single currency—which I believe is certainly not likely to see the light of day in maybe my lifetime or a generation or two to come, and common foreign policy, where we can agree to advance as 15 (soon as 25) and implement it and see it put into effect. We have actually seen that, particularly, in the case of the Balkans; particularly, in the case of the Middle East peace process; in relationship, on the whole, to Russia and China; and I would like to see it extended to relations with Latin-America, where there are big divergences between the EU. But we have to recognise that on great issues like Iraq but also on much smaller issues, there will be profoundly held national beliefs that express a nation's interests through foreign policy that cannot be reconciled with the views of other nations. Examples might be: I find it hard to imagine at the moment France and Spain agreeing on how to handle the Western Sahara and Polisario; I find it inconceivable that tomorrow Britain and Spain might agree on Gibraltar; we had the recent fall-out over Zimbabwe. There are positions which countries hold that are very dear to them and they will be expressed through what that country wants to do in terms of its foreign policy. But that is no reason to say: "Let's have 15 (soon 25) competing foreign policies from the Member States of the European Union." Let us work very hard to agree where we can agree—and that does require, I think, stronger institutional relationships—and where we cannot agree, then so be it. But I would add that in a Europe of 25 I would have been quite content to put to a majority vote a decision on what policy to take on Iraq, and I hope that some of the more powerful nations of Europe would have obeyed the will of the majority.

  24. What your answer says, Minister, is that we have been able to achieve a fair amount under the present institutional arrangements, but that there are major difficulties when important decisions arise on which we are never going to agree. I am not quite sure why you see such a strong case for further institutional change. I can see a strong case for trying to work harder to reach common views, but I do not see why the institutional change is necessary. It would surely, in a way, be easier to say that the system has worked to a point and let us rest at that point. Indeed, to a degree that does seem to be the Government's position. It says that CFSP must remain intergovernmental. It says—and I quote the Secretary of State for Wales last week in the House of Commons—"Nor is there much sense in extending QMV to foreign policy"—though that is absolutely not the answer we have received from every other spokesman for the Government on this issue. If that is the case, why are we going to all this trouble to try to come up with new institutional arrangements? Why not just stay where we are?
  (Dr MacShane) I give you a specific example. Mr Solana the High Representative has just 22 people working for him. Dr Busak, who is responsible for the South-Eastern Stability Pact of the EU, has 33. There are 135 European Union delegation officers around the world. Some people have the rank of ambassador who run them. These are integrated into the external affairs policy of the European Union as a whole. Our view is firmly—and it is shared I think by the majority of governments in Europe—that foreign policy or external policy is a matter for the Council of Ministers; that is, it remains intergovernmental. How do we give effect to it? I do not think anybody is really happy that the present means gives effect to it as well as we would wish. So it is an area of discussion and work, but my colleague the Secretary of State for Wales was right in saying—and he was not speaking for Britain, he was reflecting a number of other countries—that this is going to remain an intergovernmental matter. I have had very intense discussions on the problem of qualified majority voting with German and other friends, and as you examine it they see the difficulties, but I do not think we should simply tear it all up and say that what we have at the moment is perfect and cannot be improved.

  25. Or that what we have at the moment is all that we can reasonably expect to work. I deduce, Minister, from what you say that the only significant institutional proposal you want to see is that of a single foreign affairs spokesman, combining the roles of both the existing Commissioner for External Affairs and Mr Solana. Is that right?
  (Dr MacShane) That is one of the proposals being discussed. Our position is very much that that person, if he or she comes to see the light of day, is the representative of the Council of Ministers, not, as it were, part of the College of Commissioners and under their collective authority or the authority of the President of the Commission. But, in terms actually of giving effect to foreign policy, we think obviously the Commission controls the purse strings of the European Union. We want to see more European presence around the world, not in any sense of wanting to promote Europe but in response to the very strong desire and demand of many governments and countries around the world that want a stronger collective European presence. I think we will have to work this through the Convention discussions and then through the intergovernmental conference and it will arrive out of practice and co-operation, not—and there I think I agree with you, my Lord—out of devising an institutional scheme and then hoping that it will stand the test of real time, which in foreign policy terms can be the ultimate expression of national concerns and indeed national passions.

  26. The statement, again made by your colleague the Secretary of State for Wales last week in the House of Commons, that a single foreign policy representative would be "answerable to the Council but with a foot in the Commission" describes exactly how you and the Government view this?
  (Dr MacShane) I might say a seat in the Commission, but I think in broad terms, yes, of course.

  27. I suppose if his foot is there, probably his seat is going to be there too.
  (Dr MacShane) I think that would be where we are at the moment, yes.

Lord Williamson of Horton

  28. I want to follow up this point, not on the institutional points, the possible changes in institutions, but on the timing of the operation of the CFSP in the light of the recent disagreements, and, particularly, in relation to the United States, not just bilaterally but in other areas where the US has a huge role, such as the Middle East. Do you have a view on the timing? Is it wise just to push on with everything as though nothing had changed or is it perhaps wiser at the moment to imitate the humble hedgehog and to roll up a bit, leaving a few spikes sticking out but not running about the countryside? For myself, I think we need to be a bit cautious at the moment in pushing the CFSP, particularly vis-a-vis the USA, where it is not the main element of their contact with European nations at the present time. It might be wise to keep a low profile for a while. That is the question I put to you.
  (Dr MacShane) There is a 10-ton gorilla that rampages through all foreign policy questions and it is called public opinion. Public opinion I think does not want Europe to roll up like a hedgehog, as we did in the 1990s over the Balkans, and do nothing until there is such an obscene sense of slaughter on our screens that we are moved to do something. So, no, I think foreign policy has to be a continuing 7/24 process of active engagement. I am very confident that in the Europe of 25 there will not be a view that CFSP should be other than something that strengthens the transatlantic relationship, even if we at times will have different priorities in areas from that of the United States. While I agree with you that probably post Iraq we need a period of reflection, I would be very hesitant to say that the European Union should simply be a curled-up hedgehog showing only spikes. I think we have to be involved in considerable movement.

  29. I am not sure if you know more about hedgehogs than I do but I did not actually say that we must go into hibernation, which is what hedgehogs do, I said we must roll up. Hedgehogs actually roll up for a relatively short time, until they see that the situation is better, then come out and get a move on. That was basically my point. I am very conscious of the fact that at the moment the USA does not think much of the CFSP. That is the position. They have a lot of relations to the European nations but they do not think much of the CFSP. I think it is quite important that we should rebuild but not try to rebuild so fast that we run into further difficulties.
  (Dr MacShane) I do not disagree with that at all, my Lord. I am not sure, from my contacts in Washington, that the United States does not appreciate the common European position and involvement in the Balkans and in some other areas. We worked collaboratively on the "road map" in the context of the quartet on the Middle East peace process, and, again, I do put it to you that the notion of 15 competing foreign policies, either in the Balkans or in the Middle East, would do no service either to America or to the problems in that region or to Europe. But I do accept that Iraq has exposed important differences that will require quite considerable reflection. I think it is a feeling that is shared largely in other European capitals; it is not just a British point of view.

Lord Inge

  30. If I may make one comment, Minister. You talked about the Balkans, and I would agree with you that what Europe did at the time that the Balkans Crisis started was appalling. But, whether we had had the CFSP and an institution, to me what Europe lacked at that time, particularly Germany—was the political will to do anything about it. It was nothing to do with institutions; it was a total lack, in my view, of political will. But that is a different issue. When you were talking about Iraq, if I was paying attention properly, you were saying that you would have been supportive of having qualified majority voting to deal with Iraq. Is that what you were saying?
  (Dr MacShane) No. I said in the Europe of 25 I would be confident that there would be a majority for a strong line on Iraq, and that point was actually put very, very firmly by all the incoming Member States. But, clearly, on an issue such as Iraq we are not going to move to either a qualified or an absolute majority vote. But, if I may, on the Balkans the political will was absent but also absent was the framework and the institutions that would allow the discussion and consultation and co-ordination that might have agreed a tougher and more robust position. My view of CFSP is that it will allow deeper, more reflective consultation, co-ordination and co-operation without fundamentally compromising a nation's individual assertion of what it considers to be a fundamental point of sovereign policy. It is why political will and institutions and better policy are a permanent dialogue or dialectic, if you like.

  Lord Inge: We could go on discussing it but it is a slightly red herring for this session.

Lord Maclennan of Rogart

  31. In the context of considering the institutional aspects of the CFSP at the Convention, there has been some discussion about enhanced co-operation. Can you say what the Government's view might be about that direction of strengthening, potentially strengthening, the effect of this upon policy decision and widening the ambit of agreement?
  (Dr MacShane) Clearly, CFSP is going to require coalitions of the willing to see implementation. Not all countries are capable of applying military presence or, indeed, force to implement CFSP, so we want to keep all doors open, including that of enhanced co-operation. But all these will be tested, it seems to me, in actual cases and it seems to me it is rather difficult to draw out today clear architecture, because in my experience of foreign policy each new crisis, each new development, is so sui generis in particular you have to respond to it. My own view of CFSP is that it sets up more serious discussion on this that allows, where possible, and where governments are willing to pool their policy decisions and implementation, a more effective, combined voice of Europe as whole to promote the desires we all have of more democracy, more prosperity and less terror and tyranny in the world.

  32. Do you see any case for seeking to strengthen the definitions of objectives in this context, so that those who seek to sign up for or be committed to common foreign policy objectives are clearer about what they are signing up to?
  (Dr MacShane) Yes, but we want to make sure that we do not have, as it were, freelance foreign policy, even if agreed by a number of countries; that the relationship between the EU and NATO must be maintained; that countries, if they agree to do something, do so within the context of CFSP and ESDP, so it is understood that it is the whole of Europe and the whole of NATO that is engaged. Countries that want to do something on a bilateral or trilateral basis, that remains their business. The British position is that if we are going to do something as Europe then we do it on a joined up basis and we do it in a way that does not threaten NATO and does not threaten the transatlantic relationship.

Baroness Park of Monmouth

  33. Minister, I understand that the debate on Article 14 on foreign policy is being deferred until May. One question I would like to ask is: Have we any idea of the date? Will we have any opportunity to hear what your position is likely to be before that? But I would particularly like to ask you what position we are likely to take on the proposal which is made in the Franco-German submission which says—and I am translating from the French, so forgive me if it is not straight through—
  (Dr MacShane) You can do it in French, Lady Park, if you prefer.

  Chairman: No, that would be out of order, I am afraid! We will have it in English, please.

Baroness Park of Monmouth

  34. "On issues of foreign policy and common security, decisions are taken in general by qualified majority. However, decisions which have implications on the issues of security and defence are taken by unanimity. If a Member State invokes a national interest in order to oppose such a decision, the European Minister of Foreign Affairs"—who was being discussed earlier, as you know, in the paper—"is invited to look into the possibility of a solution with that State. If he does not succeed in doing so, the President of the European Council does the same. If no solution is found, the European Council addresses the question in order to take a decision by qualified majority." That is completely undermining the principle of unanimity, so I would be very interested to know what line we intend to take, particularly since Article 14 also says that "Member States are refrained from action contrary to the Union's interests or likely to undermine its effectiveness" - which is presumably going to be the argument that will be used. Could I have your comments on that.
  (Dr MacShane) Yes. On the date, I am not sure - sometime in May, but I do not think we have a fixed date for that. The Franco-German proposal is interesting but in discussions I have had with my opposite number in Germany, we have discussed, say, foreign policy in respect of promoting trade issues, like the sale of arms, and he immediately saw that we could not really have a common foreign policy position on that because each country has its own arms it wants to sell to other countries around the world. I said, "What about foreign policy to promote trade. Should we be supporting a Siemens product or an Alcatel product?" and he said, "No, we could not do that." As you dig into this a bit more deeply, you realise how the proposal is not terribly realistic. I think other governments are also beginning to appreciate that and Iraq has put that very firmly into relief, because any country can declare a national or a security opt out. I think that we have, under existing articles, what is called the emergency brake that can stop—

  35. The Luxembourg compromise.
  (Dr MacShane)—further discussion. We think that is an important mechanism and I would be very surprised, particularly after Iraq has thrown into relief all of these issues in a way that did not exist when that paper was tabled, if in May people are not beginning to pull back from the notion that just using the agreeable term QMV will bring the necessary unity and unanimity around key foreign policy issues.

Chairman

  36. Minister, I am sorry, you have not answered Lady Park's question.
  (Dr MacShane) No, I did not. But I will now try to.

  37. She wanted to know what the Government's attitude would be for there to be a residual decision-taking progress on defence done by heads of government by QMV. That is what it amounted to. That is a crucial matter for this Committee.
  (Dr MacShane) I think it would be fair to say that the Government would be reluctant to see any derogation ultimately of intergovernmental control of foreign policy. The issue of whether one could move, say, to QMV on the discussion of a policy, in other words adopting a policy position, beyond the sensitive areas that we have already mentioned (stretching from Iraq to issues which are of profound importance to each individual nation), we could have QMV on adopting the policy but if it came to implementing a policy that might involve, say, the deployment of soldiers, that would remain a question of unanimity.

Baroness Park of Monmouth

  38. Forgive me, Minister—
  (Dr MacShane) If I may, I am also nervous of Europe finding itself in three or four years' time unable to move on foreign policy issues because Estonia or Luxembourg imposes a veto. We have to look at it from the other direction, where there is a broad desire amongst ourselves, the French, the Germans, a majority of European nations, to take a position in the name of Europe but one country says, "No you cannot." And I am talking about a policy position here, not, as I say, its actual implementation in terms of committing resources or particularly, ultimately, as foreign policy can end up, with committing soldiers. We ought to be very careful that we do not find ourselves blocked, jointly with major European or a large majority of European partners, because we have insisted on the veto right for every country in every aspect of foreign policy.

  Chairman: We have opened a hornet's nest here and I see people wanting to come in on this. Time is a problem but I think it is so important that we must pursue it.

Baroness Park of Monmouth

  39. I want to take the Minister back to the statement in the House by his colleague the Secretary of State for Wales, "There is not much sense in extending QMV to foreign policy." Is that or is that not our position? Of course, even more so as far as defence is concerned, I cannot see how one can possibly subscribe to a policy and then refuse to implement it. You either do or do not subscribe to the policy and what flows from it, surely. Is that not the point of policy?
  (Dr MacShane) The point is that we all subscribed to a Council decision saying that Saddam Hussein should be disarmed and where we fell out was over how that should be implemented. That is one of the areas where, in real life, foreign policy becomes difficult at the point of implementation. Clearly QMV is out of the question for anything involving military deployment. That is very important.


 
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