After Copenhagen, onward to political integration

Roy Denman
The International Herald Tribune

LONDON The European Union's decision last week to admit 10 new members in less than 18 months has been hailed on all sides as momentous. It will end a division of Europe that has lasted more than 50 years, and it will give the new states the prospect of a massive increase in prosperity. It will also do something equally momentous, but which has not yet been understood: It will change the way Europe is run and how it will develop.

The process of the unification of Europe started in 1950 as an economic venture, but the explicit aim from the start was political - the creation of a political federation. The first stage was a customs union. The second was a single currency, now in place in 12 of the present members of the EU. The third stage, a political union, cannot now be long delayed.

A European Union nearly doubled in size cannot be managed without a degree of political integration far greater than before. More than 200 years ago the Americans concluded at Philadelphia that the loose gathering of 13 sovereign states embodied in the Articles of Confederation simply did not work,

But not all member states will want to proceed at the same speed. So in only a few years the EU will consist of three concentric circles.

An inner circle largely based on the founder members will have engaged in an essentially political union open to all other members once they accept the political commitment. France will initially find a form of federation difficult to accept, but President Jacques Chirac has already talked of a federation of sovereign states with a European minister of foreign affairs. And the French are sufficiently intelligent not to put at risk their traditionally powerful role in the construction of Europe.

Some members already in the euro zone will not be willing to go as far as this. Ireland would certainly have considerable reservations about a common defense policy. Italy under Silvio Berlusconi might have more general reservations. So might Sweden, even if it wins a referendum next September on the euro.

Some of the new members will want to join the euro within two years and fully accept the integration of their economic policies that this would imply. But the rules of the customs union at the very least will be accepted by all 25 members.

Where does this leave Britain?

Tony Blair has long been anxious for Britain to join the euro. Outside, he knows that Britain, with only one foot in Europe, cannot be a leading player. So he hopes to hold a referendum in the autumn of next year. But the widespread expectation at Westminster is that the referendum will have to be postponed until after 2005. The reality is bleaker. Britain will not enter the euro for another 10 years.

Before a referendum, Gordon Brown has to certify that five economic tests have been "clearly and unambiguously" met. The Treasury officials who will make the first judgment have long detested Euro-pean integration on the grounds that it would limit their power. Brown is no more likely to want to see his power constrained or to hand his rival, Blair, a place in history.

He gave some strong hints only a week ago that he did not want any foreign interference with his economic policy, which he regards as the eighth wonder of the world. So next year his answer is likely to be: "Interesting idea, Tony, but now is not the time." And that will be it. Even if Brown is sacked, the fact that he thought the timing wrong would scupper any chance of a "yes" vote in a referendum.

In any case, next year looks like being the worst year for labor relations for a decade. Left-wing militants are gaining control of the unions. The firemen's strike may well be followed by others across the public services. This will mean growing discontent with Blair's government. If over the next few months Britain is one of the few countries which joins the United States in military action against Iraq, discontent will rise to fever pitch. So a referendum next year can be ruled out. What of the period after the next election, expected in 2005? The crucial difficulty will be that the single currency will be increasingly seen by the British public for what it is but has never been frankly presented, that is, a step to a federation. And the mere mention of federation, lampooned by their politicians as a tyrannical superstate, will get the British rushing for the door.

It will take a long time before Britain emerges from the outer circle of a simple customs union to a more central role in Europe. In time it will. The opinion polls tell us that the majority in Britain expect it to be in a monetary union in 10 years' time. A similar realism will bring about a change in opinion about a federation. As Disraeli said to a foreign journalist the year before he died, "Pray remember, Sir, the British people are slow to move."

The writer is a former representative of the European Commission in Washington. He contributed this comment to the International Herald Tribune.