Speech

The Prime Ministers speech at Børsen Executive Club on the occasion of the publication of Peter Ludlow’s book “The Making of the New Europe”.

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Thank you for the invitation to speak here at Børsen Executive Club on the occasion of the publication of Peter Ludlow’s book “The Making of the New Europe”.

Firstly, I would like to comment on a couple of issues in the very interesting book. Secondly – and partly based on the final reflections in the book - I will address the European policy challenges for Denmark in 2004 and onwards.

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The Danish Presidency ended more than a year ago. Already, much has been said and written about the Danish Presidency.

Still, I very much welcome Peter Ludlow’s book. It succeeds in giving a very detailed but at the same time a very comprehensive overview of the political process and considerations leading up to the decisions at the Copenhagen Summit. The focus of Ludlow’s book is broader in scope than the previous descriptions and analyses of the Danish Presidency. It illustrates the positions on many of the important actors in the EU in the enlargement negotiations – in particular the Commission, the earlier Presidencies, the Member States. And it opens the “black box” of decision-making and seeks to answer the question why and how a concrete result was reached. The book also explains the many complex negotiations that took place. It shows the need for a strong and committed Presidency to achieve results.

Books like Ludlow’s are beneficial in order for the public to gain a better understanding of the functioning of the Union.

I am not going to comment on the specific details regarding the internal set-up of the Danish Presidency. Suffice it to say that the Danish Government has been immensely satisfied with the way in which the Presidency was conducted at all levels. The book shows that a pro-active European policy can create results on a European scale. This is underscored by Ludlow’s conclusions that the Danish Presidency was highly successful - and indeed a model for future presidencies.

The main priority of the Danish Presidency was enlargement of the Union. We made no secret about that. This was the hand that was dealt us by previous presidencies. This was the major challenge and the issue on which our efforts would be judged.

Peter Ludlow traces the development from the Summit in Copenhagen in 1993 to the decisions in Copenhagen in December 2002. He shows how the earlier Presidencies achieved significant results and closed many of the difficult chapters with the ten.

But the most difficult problems were still unresolved. This was the case not least regarding the question of the price of enlargement. This is quite natural. The question of who is going to pay the bill is normally left to the final negotiations. That is the rule of the game.

However, before commenting on the enlargement negotiations let me emphasize that the Danish Presidency was not a single-issue presidency. Significant results were achieved in other areas as well – in the liberalisation of gas and energy, the opening of the single European sky and new rules on food safety to mention but a few. But also for instance in the process of developing the Road Map for peace in the Middle East or finding a mutually acceptable compromise with the US on the International Criminal Court.

Turning to enlargement, the Brussels summit was meticulously prepared. As emphasized by Ludlow, we used the new Seville format for preparing European Council meetings to its fullest. I believe this paved the way for the Council to focus on the important areas and to reach a couple of important decisions regarding: firstly, the total amount for structural fund efforts in the new Member States; secondly, the question of budgetary compensation and thirdly, a model for the phasing-in of the candidate countries in the system of direct payments in the agricultural sector and in this context a decision on a ceiling for agricultural expenditure in the enlarged EU.

Attention has been focused on the Copenhagen summit in December. I believe that the Brussels summit was an equally decisive moment in the process. We paved the way for the last round of negotiations with the Candidate countries. This point is very well reflected in Peter Ludlows’ book. The next phase covers the period until the Copenhagen summit. We negotiated intensively with all 10 candidates – in close cooperation with the Commission. Much was achieved during these weeks. But the final decisive questions were left for the Copenhagen Summit. It had to be like that.

As Ludlow demonstrates in his book, we chose to present our own final offer without approval from the other member states. This was the only way to ensure the right balance between the wishes of the Candidate countries and what the present Member States considered feasible.

In Copenhagen an agreement was reached after 24 hours of difficult and complicated negotiations. The final negotiations covered a lot of different topics – many concerned with money but also very specific issues of a highly sensible nature in the different countries.

In the final negotiations we dealt with issues as diverse as free movement of nurses, managed hunting of the lynx, milk quotas and so on. Many of these specific issues risked opening up a Pandora’s box of new issues to solve. But in any negotiation it is important that both sides feel they have reached a satisfactory result.

In the end an agreement was reached. From May 1st the Union will have ten new member states.

The Copenhagen summit also reached a decision regarding Bulgaria and Rumania who will hopefully become members in 2007, if they are ready. The membership perspective of the other Balkan countries was confirmed. Finally it was decided that if Turkey in 2004 fulfils the criteria for membership, the Union will open accession negotiations without delay.

All in all the decisions on enlargement in Copenhagen were historic. They were only possible because of the will and commitment of all involved. We shared a vision. And we had the will to let action follow words. It was – in the words of Peter Ludlow – Europe at is best.

Ludlow quotes the President of the European Parliament for saying that in Copenhagen the heads of state and government managed, despite everything, “to go the few extra yards”. I could not agree more. The decisions in Copenhagen were a result of the collective will and wishes of the 25 individual nations.

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Ludlow’s book on the Making of the New Europe is well written and an important contribution to further the understanding of how the EU works. It is also an important testimony of the Danish Presidency. I would like to thank Peter Ludlow for his work.

Ludlow ends his book, however, by arguing that nonetheless it was enlargement on the cheap. He argues that at the cost of 120 euro per year for every citizen of the 15 Member States, the price of enlargement is very modest. This is, of course, not a large amount. But if you divide even a large number by 350 million the result is going to be relatively small. However let me mention that the extra total cost of enlargement is around 46 billion Euro during 2004-2006. This means that EU will contribute over 3 pct. of the new Member States’ GDP annually in this period.

The question of enlargement cannot be narrowed down to a price tag. Previous enlargements have led to significant progress in the new member states when membership is combined with vigorous structural reforms. Already now most of the new member states have impressive growth rates. In this context, it is important to give due regard to the new members states’ ability to absorb structural funds and agricultural support. I sincerely believe that the new members will benefit greatly from enlargement.

But of course Ludlow is right in emphasizing the importance of financial solidarity in the Union. This has always been an important feature of the EU. And this should also be the case in the future. As in each individual country there will be a strong need to reprioritise spending in EU25 and making sure resources are allocated to those countries and regions with the greatest need. The answer is rarely to spend more but to spend more wisely.

This will be one of the main challenges for the coming negotiations on the new financial perspectives.

* * *

In that sense Ludlow’s book also points to one of the challenges that will face the EU in 2004 – the negotiations on the next financial perspectives. This is but one of the issues on a very compressed agenda in the coming year that also include the continuation of the IGC, elections to the European Parliament, the appointment of the new Commission, the actual accession of the 10 member states, the continuation of the enlargement process, the question of Turkey etc.

But besides these primarily institutional issues it is paramount that we not forget the most important role of the EU: To deal with matters that concern the European citizen. After all, policy is more important than institutions. It is of crucial importance for the public acceptance that the EU continues to create better opportunities for citizens and business in Europe. I will come back to this later.

* * *

Let me say a few words on the intergovernmental conference.

There is no reason to hide the fact that with no result in the IGC, the EU is facing a more complicated agenda in the time to come. But there is no reason for excessive pessimism.

Historically the EU has always been able to deal with complicated and complex agendas. And I am sure that in the end we will be able to find solutions acceptable to all. And solutions that will bring European cooperation forward.

It was highly regrettable that we did not reach an agreement on the IGC in December. We were quite close. But in the end the will to go the few extra yards at that particular time and place were not present.

It is meaningless and probably even counterproductive to speculate about who was to blame. Suffice it to say that it would be utterly wrong simply to blame the Italian Presidency. They performed well and proposed balanced and sustainable solutions on practically every item on the agenda.

Now it is time we look ahead. I think it is important to note two positive elements:

Firstly, there is a good basis on which to continue negotiations. The text from the Convention was good and balanced to begin with. And during the Italian Presidency a number of issues were clarified further for instance on ESDP, and a consensus was emerging on the composition of the Commission, the scope of QMV etc. It is important for Denmark that negotiations - when resumed - will continue on the basis of these preliminary results.

Secondly, in December in Brussels we did agree on the next step of the IGC. The European Council asked the incoming Irish Presidency to take stock of the IGC at the European Council meeting in March.

It is still too early to say whether actual negotiations will begin and if so when. Regardless of this, the Presidency can count on Danish support for a swift result. The ambition is unchanged – an effective framework for an enlarged EU.

* * *

The breakdown of the IGC negotiations demonstrates that the EU is a fragile process that cannot be taken for granted. That the EU is no more than the common will of the 25 individual nations working together. And that all have a responsibility to make things work.

This brings me on to one of the most important challenges for Danish EU policy in 2004 and onwards: To make enlargement a success. As described in Peter Ludlow’s book the European Council in Copenhagen 2002 committed itself to a continuous, inclusive and irreversible enlargement process. This continues to be a major Danish priority.

The first major event will be the actual accession of the ten member states on May 1st. The monitoring reports from the Commission have stated that all 10 are ready but for all countries also that some urgent work is still needed on a few outstanding elements of the acquis. I am confident that the new members will get the final obstacles cleared out of the way before May 1st.

I am also certain that enlargement will have a positive influence on the EU. The new member states will bring with them an optimism and will to reform from which we can all learn and benefit. The Union should make use of the opportunities created by enlargement.

The next step in the EU-enlargement process will be Bulgaria and Rumania. Both countries have made promising efforts. I expect the Commission to present its proposal regarding the financial package in the beginning of 2004. If the two countries are ready I hope to finish negotiations during 2004.

The enlargement process must continue even further. We must continue to build a common European perspective for the 5 countries in the Balkans. Their objective of integration into the EU structures must be pursued.

Making enlargement a success depends more than anything on the enlarged EU being able to deliver concrete results to the benefit of the EU-citizens.

The enlarged Union will have a huge potential for growth. In many areas Europe is lagging behind other big economic powers like the US. Productivity in the US is higher than in Europe, and the gap is growing. The same is the case with the technology gap. And whereas in Europe the population as a whole is growing older, in the US the number of people of working age will tend to rise in the years to come.

Economic reforms must therefore be accelerated in the enlarged Europe and this should be reflected in the Union’s overall budget. Our priorities must be reflected in the way we spend our money. This should be a guiding principle in the discussions on the next financial perspectives.

The Danish policy on budgetary issues in the EU has always been clear. We will continue to pursue a restrictive policy. Public money should always be spent wisely. In view of the consolidation efforts in Member States our citizens will not understand if the EU-budget were exempt from a budget restrictive approach.

But in the context of discussing the next financial perspective we must also consider the objectives of the policies we undertake together at a European level. The first question to be answered is which policies that should be given particular priority and then to assess the consequences for the EU budget.

If the EU wants to be a success in the 21st century we will have to close the economic, technological and educational gap between the EU and the most dynamic global economies. Our ultimate aim must be to close the technology gap with the leading innovative countries of the world. Our policies and spending nationally and at the EU level has to be redirected towards this objective. This will require tough decisions.

Denmark is deeply committed to the principle of European solidarity and to the maintenance of cohesion in the enlarged Union. Accordingly – as I mentioned previously – expenditure should be refocused on the areas that need it the most.

We must continue to reform the common agricultural policy and make it more market oriented. A first step has been taken with the midterm review of the Common Agricultural Policy but further reforms are needed.

We must increase our efforts in the field of research and development. The objective is to increase innovation at all levels and in all sectors.

We must speed up the completion of the Single Market. A well-functioning single market is the precondition for growth and prosperity in Europe. It will be vital in integrating the ten new members into the Union. It is one of the main ways in which the Union can demonstrate to its new citizens that Europe makes a difference. The single market is, however, not a static creation. We must continue to nurture it to the benefit of all citizens and companies.

We must intensify the liberalisation of our markets. This is crucial to ensure effective competition to the benefit of consumers and the business sector alike. Many concrete steps have been taken for instance regarding electricity and gas. But our efforts must continue.

The enlarged single market with its additional mobility of labour and capital will create further scope for economic improvement to the benefit of all citizens in all member states. We have an obligation to seize the momentum of enlargement.

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This brings me on to my final point. In the end, making the enlargement a success depends more than anything on defining a common vision and common projects for the enlarged Union. Visions and projects that unite rather than divide. That is what has made the Union work in the past. The enlargement is a good example. But now we have to look ahead. In this task, the Commission has a crucial role to play. Just as the Commission played a key role in the enlargement process from Copenhagen to Copenhagen the Commission will have to take upon itself the role of promoting new, concrete European projects. We need a strong, efficient and visionary Commission that can perform this task. That will be one of the key challenges for the next Commission.

* * *

I would like to end where I began. In his book Ludlow comments that sometimes the countries of the Union are able to go the extra distance and reach significant results to the benefit of all.

We once again stand at a crossroads where the will to go the extra distance is called for. In making sure that enlargement will be a success and that the enlarged Europe will be able to deliver on its potential for growth and prosperity.

Thank you.