In any Middle Eastern state that has pretensions towards democracy Islamist groups are dominating the political field. The most spectacular example was Hamas’ victory with 56 per cent of the vote over Fatah, the secular party that had governed in Palestine for the last thirty years. In Egypt’s recent elections the Muslim Brotherhood put up independent candidates and consequently won 20 per cent of parliamentary seats. They would have won more if rumours are true of a deal made with President Mubarak that restricted them. Iraq’s most recent elections, heralded as a triumph for democracy, saw not the secular, non-sectarian and multiethnic party of former interim Prime Minister Iyad Allawi claim dominance. Instead 81 per cent of Arabs elected were campaigners from sectarian and Islamist lists. Allawi saw just nine per cent of the vote.

With the rise of Islamist parties some are doubting that democratisation will bring the security that the US is looking for. The views that these parties represent are often overtly hostile to US ambitions in the region, or simply to America itself. Hamas, for example, has refused to recognise Israel. For foreign policy analysts dubious of Bush’s democratisation drive, this is evidence that the US’s immediate security and foreign policy agenda is being jeopardised. F. Gregory Gause III in a Foreign Affairs article has noted that there is in fact little data to support the notion that democracies directly diminish the prospect of terrorism.

Citing the survival of ETA after Spain’s transition from dictatorship to democracy, the IRA in the UK, one of the oldest democracies, terrorist attacks in India, the world’s largest democracy, the Red Army Faction in West Germany and the Oklahoma City bomber, Gause attempts to demonstrate that democracies are equally susceptible to terrorism. State Department statistics from the ‘Patterns of Global Terrorism’ report show that between 2000 and 2003 more terrorist activity had in fact taken place in ‘free’ countries compared to ‘partly free’ or ‘not free’ ones. China is also mentioned as an authoritarian state that had no incidence of terrorism at all.

Yet the biggest and most notorious examples are Iraq and Afghanistan where the first stages of Bush’s policy to spread democracy have already taken place. Both countries in recent times have held elections under the supervision of international actors. Yet both have still suffered terrorist attacks since. It seems, as Gause says, ‘that democratisation did little to discourage terrorists from operating there’.

The problem here is that ‘democracy’ is assumed to be a simplified construction and ‘terrorism’ a single entity. Democracy is incredibly complex, taking hundreds of years to evolve in some countries. The vast spectrum of terrorism that exists in the world and the variety of terrorists that operate across it mean that no single solution, no one transformation is likely to neutralise the threat.

The IRA fought for a cause based on perceived historical and political grievances, aggravated by social ones. The fight remained domestic, contained within the sphere of British politics, despite money and mediators from the US. Since the incorporation of Sinn Fein, the political wing of the IRA, into the political process in Northern Ireland disarmament and peace have been greatly successful. ETA, in its own domestic and localised campaign, has diminished as a force since the death of Franco in 1975 and more recently with greater autonomy granted to the regions. Popularity of the terrorist group is at its lowest ebb for decades, due to a combination of depleted support and the devastating attack perpetrated by al-Qaeda in Madrid on 3/11.

Yet the IRA and ETA are from a completely different branch of terrorism compared to organisations such as al-Qaeda. The former were restrained within national fields of vision, had realistic (if not popular) political ambitions and often gave warning of imminent attacks. Whereas the latter is blind to national borders, demands the impossible imposition of a world caliphate based on sharia law and never gives any advanced noticed of its activities. In between groups such as the IRA and al-Qaeda are those with a mixture of these characteristics. Hamas’s cause, for example, has crossed boundaries expanding from a Palestinian to a Muslim one. Yet its primary ambitions remained somewhat realistic, demoting the importance of destroying the state of Israel to promoting the creation of their own state.

Clouding this distinction is a language constraint hindering our understanding of these organisations. The only aspect that links terrorist groups, in some respects, is the fact that they have employed terror as a tool to further their ambitions. Otherwise, they are really quite distinct entities. It is like comparing Starbucks to Saatchi & Saatchi. You cannot simply note that they are both ‘businesses’ trying to make a profit. Their structure, aims, employees, target audience and internal philosophies are markedly different. Similarly with terrorist organisations, the hierarchical, army-based structure of the IRA is very different to that of the individualised and autonomous cells that sustain al-Qaeda.

Creating the label of ‘terrorist’ can lead people to fall into a similar trap. Personal motivations vary enormously. To prevent people from believing in groups that employ terrorism, to prevent them from adopting their methods and beliefs, understanding that is crucial. Has the terrorist chosen this path because familial destitution and a lack of economic opportunity have fostered hatred for the perceived perpetrators? Has a profound spiritual belief been twisted and combined with a feeling of social exclusion? Perhaps a lack of political voice has stirred activism amongst an excluded minority? More than likely there is a complicated mixture of these motivations, further influenced by local culture, personal experience, national history and government influence. In any case, there is no singular ‘terrorist’, no one way to ‘drain the swamp’ of support for terrorist organisations.

Yet the overriding approach for dealing with organisations that employ terrorism and the terrorists that join them should be one of democratisation of the countries that sustain them. Providing non-violent and viable means for people to express grievances, giving space for economic prosperity and creating the structures for social stability are all possible within the realms of democracies because the people can inform the government of what is needed. If it fails, it gets voted out. Furthermore, with stateless groups, such as al-Qaeda, where you cannot easily democratise those within the structure, it is better to whittle down the number of countries they can operate from by spreading democracy. What ‘democratisation’ means in practice, however, is particularly complicated, for ‘democracy’ itself is not a one dimensional creature.

Superficial democracies, as seen in Iraq and Afghanistan, are more likely to hamper security initiatives and promote supporters of violence and terrorism in volatile regions such as the Middle East. The presence of democratic elections is simply not enough. The ballot box is only the most obvious and cosmetic symbol of a democratic regime and cannot support the consequences democracy implies. It is akin to calling the shell of a vehicle a ‘car’. Only really when combined with the components inside that allow it to function will it be one. A regime that implements democratic measures will only function when buttressed by wider forces.

True modern-day democracy is therefore effective democracy. This requires a cacophony of voices to give weight in government decision-making to as many groups as possible. An important element of this is a large middle-class with a vested interest to keep an eye on government (unlike, say, subsistence farmers that must stay focussed on eking out a living). Following this, freedom of speech allows people to criticise and suggest alternative policy to government leaders. Freedom of the press provides a medium for these opinions to be aired. Freedom of association permits those of a similar disposition to lobby their cause. A mature civil society gives minority groups a stronger influence in policy. A decent education system underpins it all, fostering rational and logical debate, creating innovative solutions to problems and relieving people from the spectre of superstition and prejudice.

These are the obvious requisites for a functional democracy and are recognised as such by many in the US. The problem for some policy makers in America is that a democratically elected Arab government is unlikely to be as sympathetic and cooperative as today’s authoritarian regimes. This would not be a result of fervent anti-Americanism. Polls by the Pew Global Attitudes Project and Zogby International in the last few years have shown that many Arabs support US values, such as democracy and freedom, and even believe that democracy would work in their own countries. Civil and personal rights were ranked as the most important political issues, above health, Palestine and the economy.

US policy in the region, and not what America stands for, is the major cause of anti-Americanism in the Middle East. Gause admits that it is this that ‘drives the sentiment’. This strong reaction of people in the Middle East to US policies is perhaps an indication that they are the wrong ones – so the policies themselves are the problem and are what need revision. Yet it is a rather arrogant assumption that the people of these countries should be denied the virtues of democracy in order to sustain regimes that can be more easily persuaded to accept US foreign policy. If the US approach to the Middle East was applied to Europe and a similar dissatisfaction arose, it would not be difficult to fathom an overtly anti-American government being elected to Westminster.

Gause still doubts, however, that changing tactics would have any effect on public opinion and therefore also elected governments. Iran is an example where people are favourable toward the US but did not vote for the candidate that wanted rapprochement with America. The flawed logic that flows from here is that the rise of Islamic parties and groups that are anti-American is independent of US foreign policy. The assumption is, of course, that citizens of Middle Eastern countries vote on single issues and that that issue is the US. As shown earlier, they have many greater concerns, including health, corruption, education and employment. These were the main reasons that Hamas came to power, not for its dedication to destroy Israel. For similar reasons Iranians voted for President Ahmadinejad. His fiery rhetoric did not just heat nationalist pride but focussed on domestic concerns based on promises to revive the economy. Presenting himself as a common man also appealed to the people and his campaign was assisted by members of the Revolutionary Guard that supported his candidature and persuaded others to do so, too.

A second assumption is that Islamic parties are undesirable for leading governments. Instead, secular and non-sectarian parties should be favoured and supported by Western governments. But what is an Islamic party? Again, there are many hues and not all policies will necessarily revolve around the Koran. A certain hypocrisy also arises when looking at political parties outside the Middle East. What of the Christian Democrats in Germany? The Christian Union in the Netherlands? The Christian People’s Party in Norway? The Bharatiya Janata Party (Hindu) and Punjab Popular Front (Sikh) in India? Even the Republican Party in the US has its influential evangelical base. All these parties try to pull on the loyalties people have with their religions; all will have their policies affected by the will of their religious voters. Why are they not received with similar caution?

In the Middle East democratically elected Islamic parties functioning within the context of a real democracy will not necessarily promote or tolerate terrorists organisations within their midst. Security and foreign policy interests will prevail in order to remain in power. Yet the promotion of nationalist, liberal, secular, right- or left-wing parties in Middle East countries should be on the Western agenda for the sake of plurality of choice. A level of competition between political visions is needed so that parties will seek to represent the views of the majority and not just provide the electorate with the choice of choosing the best of a bad bunch.

The immediate fears of Western governments should not lead to the kind of meddling in the Middle East that has lead to today’s world. Focus should be upon securing themselves from terrorist attacks from international organisations such as al-Qaeda. The incidents of 9/11 in New York, 3/11 in Madrid and 7/7 in London do demonstrate that democracies are still vulnerable to attack, but it does not follow that they are not suitable to defeat it. If anything, the solidarity that emerged in the wake of these attacks has shown the commitment of the citizenry to the democratic cause and exposed those supportive of terrorist methods. The Muslim community in the UK has been able, through the mechanisms existent in democracies, to voice their concern over extremists claiming to represent their faith. The peaceful rally in London against the cartoon depictions of Mohammed outnumbered the aggressive one that featured mock suicide bombers and plaques calling for the massacre and destruction of Europe. The latter were subsequently isolated with some even apologising for their actions. The former were able to mobilise the mainstream of Muslims in their protest while evoking their Britishness and condemning those tending toward violence.

Democracy, in all its shades, complexities and depths, remains the best means for any country to tackle the threat of terrorism, exported or domestic. So long as policy-makers and the public recognise that ‘terrorists’ and their organisations come in all shapes and sizes will progress be made in addressing and overcoming them. Teaching and not just spreading Western values on freedom will help fully functioning democracies to bloom so that people can mould their governments to suit themselves. Assisting them in the fragile and dangerous transition toward becoming true democratic regimes will be the role for those already there. The West must resist trying to direct or influence the final outcome to avoid a backlash. Allowing them to evolve with assistance will be the way to bring democracy to bear upon terrorism and bring the Middle East into the democratic age.

It was a finely judged offer, balancing the minimum acceptable to his European partners, against the maximum which his Chancellor of the Exchequer, Gordon Brown, was prepared to concede without provoking a government crisis. Nobody was ecstatic about the outcome, but there was enormous relief that a settlement had actually been reached (subject to the approval of the European Parliament). The alternative would have been too ghastly to contemplate.

The deal that emerged was probably the best that was possible in the circumstances. It will enable the core activities of the Union to proceed in an orderly fashion over the next few years, will permit multi-annual planning of the structural funds and it provides for a comprehensive review by the Commission of all expenditure in three years’ time (but with no guarantee that it will be amended at that stage).

It takes account of at least the short-term concerns both of recipient states and those, such as the Netherlands, which felt they were paying over the odds. Having said this, the spending limit of 1.045 per cent of GDP is on the low side.

A figure rather closer to the 1.24 per cent proposed by the Commission would give more assurance that the ambitious targets of the Lisbon process (particularly the urgent need to increase research expenditure) would be met, while giving more leeway to the development of the EU’s neighborhood policies.

Yet satisfaction that Blair’s performance came good ‘on the night’ should not obscure the fact that it was his own obstinacy and lack of realism which prevented a much better deal being reached a year earlier (or one which would have been generally acceptable last June under the Luxembourg presidency).

Blair missed a fine opportunity in 2003 when he refused to negotiate on the basis of the Commission proposal for a ‘generalised corrective mechanism’ (GCM), which would have dealt with the British rebate on a comparable basis to the need to tackle the excessive payments of some other member states, notably the Netherlands.

If he had done this, he would have had the support of a large majority of member states, instead of putting himself in a minority of one. He could then have used the detailed negotiations to ensure that the British share of the pot was as high as possible.

Instead, Blair declared that the British rebate was completely non-negotiable, and put himself into a totally unrealistic bargaining position. It gives me little pleasure to recall that I argued this at the time in the pages of European Voice.

The cost to Blair has been to put his good relations with the new member states under great strain, while the failure to adopt a GCM means that the issue of the British rebate will re-surface whenever future financial perspectives need to be agreed.

It was no doubt his fear of being called a traitor by the Europhobic press in Britain which prevented him from taking a more statesmanlike line in 2004. A fat lot of good that has done him: the same allegations have been thrown at him over the past week.

When Blair was first elected in 1997 there were high hopes that he would finally bring Britain into the mainstream of the EU rather than remaining a ‘semi-detached’ member. It has not happened, and the main reason is that he has never been prepared to face up to the Europhobes.

Almost invariably he has adopted a defensive posture whenever European issues have come up, rather than taking the offensive and spelling out with conviction the enormous cost to Britain and to its partners of our half-hearted commitment.

It may be true that Britain has gained some marginal advantage from the various ‘opt-outs’ it has secured from EU policies, but the cost in terms of lost influence within the Union has been far greater. In the case of the most important opt-out of all – the euro – it has unfortunately been a question of the British shooting themselves in the foot.

Apart from appeasing Europe-haters in the Conservative Party and right-wing press lords like Lords Rothermere and Black, and Rupert Murdoch, it is difficult to discern any advantage that Britain has gained from its self-exclusion from the single currency. On the contrary, it has saddled British exporters to the Eurozone, and individual British travellers, with hefty transaction costs and has condemned Britain permanently to higher interest rates than in the eurozone.

Blair and his colleagues have never explained this to the British public. Instead, they devised phony ‘economic tests’ which affected to show that the adoption of the euro would have disadvantageous effects, though very few economists have taken them seriously.

It is almost 33 years since Britain joined the then EEC in January 1973. There were teething difficulties, of course, but historians will surely conclude that it is an extraordinary state of affairs that, after all these years, it is still not fully committed, while the Irish, who started from a much less favourable position, have long since joined the mainstream.

Blair, whose days as Prime Minister are numbered, has probably left it too late to make a decisive difference. It will be left to his successor to show the statesmanship to lead his country towards its full European destiny.

Neither Gordon Brown nor David Cameron have so far shown themselves to be deeply committed Europeans; if anything, rather the reverse. One can only hope that, once they have achieved power, one or the other of them will rise to the occasion.

Dick Leonard is a former Assistant Editor of The Economist.

Yet under the 1985 agreement, it has continued to receive aid approximately equal to what it was getting before from the EU’s regional fund. Last year, the EU contributed around 7 per cent of Greenland’s budget (or around €40m.), while Denmark provided another 60 per cent, and the balance was raised by the Greenlanders themselves.

The main source of EU finance has been money paid, under a fisheries agreement (due to run out at the end of 2006), for the right of EU vessels to fish in Greenlandic waters and to help to restructure the Greenlandic fishing fleet. This arrangement recently fell foul of the EU Court of Auditors, who pronounced that the Union was paying far too much for the minimal amount of fish caught.

The Court’s criticisms were backed up by the European Parliament, and the Commission resolved to seek a new basis for the Union’s relations with the Danish dependency. Late last year it set up a task force, under the senior Luxembourg official Etienne Reuter, who had previously represented the EU in Hong Kong and Japan, to thrash out new proposals.

This could be a good time to reopen the question with the Greenlanders. Ever since 1983 its government has been dominated by the left-wing Siumit party, which had led the campaign for withdrawal. In elections last November, the governing coalition lost ground, and though the Siumit leader, Hans Enoksen, remains Prime Minister, the centre-right Atassut party, which was pro-EU, has since been brought into the government.

It is unlikely that the Greenlanders will want to re-run the referendum, at least in the immediate future, but they may now be more open to a new, and possibly closer, relationship with the Union. At the very least, they will want to ensure that a firmer basis is reached for the payment of EU money.

In an interview in his office, Reuter spelled out to me what was in it for the EU. It’s not a matter of charity, he explained; it is in the EU’s self-interest to re-shape its relations with its northern neighbour. There were several fields in which the EU, as well as Greenland, could benefit from closer co-operation.

One of these was geo-strategic. Greenland provided part of the ‘missile shield’ for Western Europe, through the Thule radar base (the largest in the world), leased to the United States, and staffed by Americans and Danes. The EU Galileo satellite system might well be able to use Thule.

Then there was the EU’s interest in managing North Atlantic fishing in an ecological way, while Greenland constituted an excellent laboratory for scientific research in climate change, a vital interest for Europe.

Greenland also had an excellent potential for the development of energy sources, including hydro-electricity, while under the ice cap and the Arctic Sea there may well be extensive mineral resources, as yet untouched.

It is still early days: the task force, which will report directly to the Secretary-General, and is working in close co-operation with around a dozen different directorates-general, is likely to take several months at least before coming up with a draft proposal. This is unlikely to take the form of a treaty, which would require ratification by all the member states.

It would, however, clearly have to be acceptable to the Danish government, which will find itself on both sides of the negotiating table, when the talks start with the Greenlandic authorities, who do not enjoy sovereignty.

This is much to the chagrin of many Greenlanders, who are (at least in theory) in favour of independence, though they are only too aware of their financial dependence on the Danes.

Copenhagen has granted a large measure of autonomy to the Greenlandic government and Parliament, based at Nuuk (formerly Godthåb), a town of 4,000 inhabitants on the south west coast. It has, however, retained control of monetary affairs, foreign and defence policy and justice and immigration.

So, the road to reaching an agreement may not be too smooth, but it is so obviously in the interest of both sides to set the relationship on a new and former footing that it is very much to be hoped that common sense will prevail.

Dick Leonard is author of The Economist Guide to the European Union.

Last June the Commission did table a draft Regulation to establish such an agency, but this has been heavily criticised for its minimalist approach, in particular that actions by member states, except when they are directly applying European laws, have been excluded from its remit.

This is still being examined by the lead committee in the European Parliament, the Civil Liberties, Justice and Home Affairs Committee, but critical reports have already been tabled by two other committees, those on Foreign Affairs and Women’s Rights. When the Parliament gives its opinion, probably at the May plenary session, it is likely to propose extensive amendments.

Watson and his colleagues are anxious that the Austrians should back these when the Regulation comes up shortly afterwards in the Council of Ministers. Although they are taking the lead in the European Parliament, and the chairman of the Civil Liberties Committee is a French Liberal, Jean-Marie Cavada, they are confident of solid support from the other mainstream groups in the Parliament, and believe that it will endorse a demand for an agency with real teeth.

The EUMC is the smallest (25 staff) and one of the most recently established specialised agencies of the EU, set up only in 1998. Its main task so far has been in collecting and publicising statistics and other information, as well as issuing a number of reports on specific problems.

One of these, on racialism in sport, drew attention to the presence on websites and official publications of football clubs in several member states of racially provocative remarks, prompting football authorities to take a more active role in combating racism.

The EUMC has not hesitated to criticise member governments for failing to provide information. In its annual report for 2005, it states:

“Whilst there are adequate statistics to enable an overview to be given of trends in racist violence and crime in seven Member States, in many other countries there is shown to be a complete absence of usable data in this area. Only when more Member States start to take the recording of racist incidents more seriously will it be possible to gauge the true extent of the problem, and target adequate measures against it.”

Amnesty International has campaigned strongly for the establishment of a really effective Human Rights Agency, and its forceful representative in Brussels, Dick Oosting, has been particularly active in lobbying MEPs. He is dismayed by the evidence that human rights has taken a back seat to anti-terrorism measures since 9/11, and that even the success of these measurers is likely to be undermined if individual rights are seen to be lightly over-ridden.

The situation has been made more serious, he argues, by the collapse of the projected constitutional treaty, following the French and Dutch referenda. This has meant that the Charter of Fundamental Rights, which was intended to be incorporated into the EU constitution, now remains only in the form of a declaration. Furthermore, the planned accession of the EU to the European Convention on Human Rights has been delayed, and perhaps put permanently in doubt.

The EU was very active in monitoring progress on human rights in the ten candidate countries which gained full membership in 2004, and is continuing its close scrutiny in Bulgaria and Romania, as well as in the three other countries, currently recognized as candidates, Turkey, Croatia and Macedonia.

Nobody doubts that such scrutiny has had a highly beneficial effect. Yet if it is to come abruptly to an end, through the exclusion of Member State activities from the projected agency, there would clearly be a risk of back-sliding.

Graham Watson is clear that the new agency should not be given judicial or quasi-judicial, powers, but it must, he said, be given the right to investigate alleged human rights abuses, with the possibility of drawing them to the attention of the Commission or the Court of Justice.

The member states of the Union have already accepted that there should be a European human rights agency. It is now up to them to accept, hopefully following a strong lead from the Austrian presidency, that it should be effective and not a sham.

Dick Leonard is author of The Economist Guide to the European Union.

Yet such an analogy is flawed. The Union is not a mechanical institution that sputters but an organic one that is evolving. Viewed in this light the binary perception of the EU that grades progress in terms of ‘success’ or ‘failure’ reveals territory in between; a space the EU has in fact inhabited since the beginning.

The history of the European Union demonstrates this resemblance to a living organism that learns from its mistakes, rather than a contraption that needs tweaking. The episodes surrounding the Maastricht and Nice treaties provided plenty of food for thought to the European Commission and national governments; no doubt the same will happen in the wake of the Constitution. Yet the EU never stopped working. Instead, it adapted and moved on.

It must continue to do so in quickly changing surroundings: rising nationalist movements in member states; the adapting dangers of terrorism and transnational crime; and, economic threats from India and the Far East. It is only now that it is emerging as a global actor after fifty years of adolescence. As it takes on greater responsibilities on the international stage it will need to develop the capacity to carry them out.

It is for these reasons that the EU must embrace change. Yet it cannot be made by European institutions alone. National governments must also face the challenges that will dominate their agendas in the next few decades. Not only are populations aging, but economic performance across the board has been falling relative to the US, the ‘Asian tigers’, China and India.

The Lisbon Agenda’s goal to make the EU a hub of innovation is critical for Europe to stay competitive, draw in investment and create jobs. Yet current trends suggest that prospects are dim. This is partly due to a failure of the European Commission. The EC does not, however, have the powers to accomplish the Agenda; these lie with national governments who set the goal themselves in 2000.

The European Union also appears out-dated with its heavy support for the agricultural sector. Although the CAP has had its funding reduced since the heady days of the post-war period, the forty per cent slice of the budget and associated trade-distorting regulations only hinder Europe’s attempts to transform itself. Agriculture, and for some culture and identity, do not have to suffer from reform. National initiative and political will are the only forces that can make this change. Capping farm subsidies so that large wealthy farmers do not benefit more than poor ones, combined with allowing national governments to subsidise their own farmers if they feel it necessary, will go a long way to realigning the EU budget along parameters that reflect the Continent’s priorities for the future.

The idea of Subsidiarity therefore needs to be given more credence. Projects and regulations need only be made at a European level if cooperation benefits the participants, or if competition profits the consumer. Europe need not become a monolithic superstructure directed from the centre. Such an edifice would prove incredibly unwieldy and inflexible. Instead, numerous national centres of power should crystallise into a set of interconnecting nodes that coordinate their activity.

The European Union is at its most effective when it integrates sections of society and sovereignty that benefit from larger cooperation and competition. This argument is expounded by Mark Leonard in his conception of a ‘Network Europe’. It eschews the assumptions that the EU can only be a free trade area or a federalist state. In their place is recognised a system of networks that provide the benefits of both worlds: increased productivity and growth from competition at a European level, as well as improved social mechanisms at national and local levels, like in health or crime, that come from cooperation and exchange of ideas through European institutions.

These institutions and programmes would promote cross-border learning so that national governments, as well as students, could gain the most from a larger pool of experience and education. Parallel regulations would free the exchange of goods and ideas across the Continent, stoking efficiencies and competitiveness. Expanding the Common Market through the Services Directive would be a start in this direction.

Yet it is a psychological handicap that stifles this organic Union. Functional relationships between national leaders are crucial for the continued running of the EU. This is shown by the animosity existent between Tony Blair and Jacques Chirac, as well as the negotiating skills of Angela Merkel. One measure for assuring that the EU works better is to simply wait for the next generation of European politicians. That is no guarantee, however. A better method is for the EU and, importantly, member states to implement more effective public diplomacy in support of the Union. There will be no need for propaganda, simply the better provision of information on what the EU does, who and how it benefits people, along with problems faced and how to remedy them.

While the people learn more about the EU, governments need to stop feeding contradictory information. It remains paradoxical that Chirac can simultaneously be one of Europe’s longest standing proponents while blaming Brussels for the economic and social travails he faces from Paris. Yet his is not a singular case and can be found wherever politician and opportunism conspire to meet.

The British press perform the same role, pushing anti-European stories that often lack veracity or are only a fraction of the truth. The press should be prepared to investigate and criticise wasteful EU practices, yet also inform the public of beneficial developments that concern them. One indicator of the lack of adequate information reaching the public is the fact that many tabloids or regional papers do not post reporters to Brussels. The result of decades of Euroscepticism from the press has created an ‘us’ and ‘them’ mentality that hinders British acceptance that they are part of Europe.

The European ‘elites’, however, will never be able to impose a European identity. Individuals view themselves with varying levels of identity, but a supra-national one will take time to develop. In the meantime reforms should continue so that when Brits and Finns alike see themselves as European there will be something for them to be proud of: a more transparent and less corrupt European Parliament; better leadership through longer Presidencies; a Budget to reflect the realities of the Union; and, presence as a global influence and a force for good in the world.

The European Union has a great deal of potential. So much so that other trading blocks, like ASEAN, stay attentive of developments and copy what works. While to some the EU may seem to have stalled, it has simply stopped for breath as it pioneers new political mechanisms and creates fresh perspectives on ideas of sovereignty. Now that it begins to move again the EU will continue to evolve. There will be no need for one view to dominate or for an ‘elite’ to direct or lead. Instead, a network will perform the job of delivering what people want from the EU, with coordination through European institutions, and giving the EU a single voice to project its common interests across the globe.

Formally, these will only be recommendations. The actual decision will be taken some time later by the Council of Ministers, but few expect them to go against findings which are based on a strict interpretation of the Maastricht treaty.

This set out four criteria which must be met:

• Currency stability within the narrow band of the ERM (exchange rate mechanism).

• Not to be running an excessive budget deficit.

• Long-term interest rates no higher than 2 per cent more than the average of the three best performing member states.

• Inflation, over the previous year, not more than 1.5 per cent of the average of the three best performing states.

Both countries easily meet the first three; Slovenia meets all four, but Lithuania loses out over inflation by the narrowest of margins.

The reference level for inflation is 2.63 per cent, based on an average of just under 1.2 per cent for the three best performing states – Poland, Sweden and Finland.

Lithuania’s inflation rate in 2005 was 2.7 per cent, 0.07% above the target, but much lower than that achieved by existing members of the Eurozone, such as France, Germany, Italy, Belgium and Greece.

The Lithuanian government argued forcefully, in a letter which Prime Minister Algirdas Brazauskas recently sent to Commission President José Manual Barroso and ECB President Jean-Claude Trichet, that the reference figure should be rounded up to 2.7 per cent, which would mean it would clear the hurdle.

An even stronger argument was that it was unfair to include Sweden and Poland in the calculation, as they are not members of the Eurozone. If the three best performing members of the zone were taken as the benchmark, Lithuania would clearly qualify, he argued.

Brazauskas’s argument received heavyweight backing from two distinguished London-based economists in an article in the Financial Times on 3 May. Citing the Shakespearean maxim that “the law is an ass”, the two authors, Professors Willem Buiter and Anne Sibert, argue that it was against the spirit if not the letter of the Maastricht treaty to enforce “a harmful and senseless rule”.

Not only Lithuania, but Slovakia and Estonia (which recently put back its application until January 2008) would qualify for immediate entry if this common-sense interpretation of the criteria were followed, they assert.

The Commission and the ECB have not publicly responded to these arguments, but are believed to consider that they have no alternative but to stick to the letter of the treaty, which clearly specifies “three member states”. rather than Eurozone members as the reference base.

They also doubt the sustainability of Lithuania’s low rate of inflation, which is forecast, both by the IMF and by the Commission, to increase to 3.5 per cent later this year. Economic and Monetary Affairs Commissioner Joaquin Almunia earlier visited Lithuania to warn that there might well be an inflation problem.

There is also a distinct disinclination to bend the rules, after the experience of admitting Greece to the zone, in 2001, on the basis of what later turned out to be seriously inaccurate statistics. There have also been serious retrospective doubts as to whether it was wise to accept Italy and Portugal when the Eurozone was first set up.

Brazauskas may well raise the issue at the European Council meeting in mid-June, which is – in any event – likely to review the situation in the light of the anticipated applications of other new member states, all of which, except Poland, have now set their own targets for entry (see table)

Country Target date
Slovenia 2007
Lithuania 2007
Estonia 2008
Cyprus
Malta 2008
2008
Latvia 2008
Slovakia 2009
Czech Republic 2010
Hungary 2010*
Poland ?
*Likely to be postponed until 2012.

The new batch of left-wing governments in Latin America has led some to hail a new dawn for the region, and others to shudder, claiming an era of totalitarianism is upon us.

Argentina, Brazil, Bolivia, Costa Rica, Chile, Panama, Uruguay and Venezuela have all elected leftist leaders over the past few years, and Peru will follow suit this month. In this context, it is clear that the neo-liberal policies espoused by the current US administration are losing credibility among Latin Americans.

But whatever one’s view of leaders like Venezuela’s Hugo Chávez or Bolivia’s Evo Morales, we should continue to engage with those heads of state who are legitimately elected. It is the West that stands to lose out if we cut them off from international exchanges.

As the BBC put it, ‘there is a wave of profound anti-American feeling stretching from the Texas border to the Antarctic,’ and it is clear that the neo-liberal remedies advocated by the current US administration are losing credibility among Latin Americans. If Western leaders fail to recognise the voice of a democratic Latin America, they cannot expect governments in other parts of the world to follow suit and abide by the democratic process.

With democracy identified as a key diplomatic objective in the Middle East, the West must demonstrate a wholehearted commitment to democratic values in Latin America. Democracy cannot be a principle that is revered only when it suits the West.

Brazilian President Lula’s visit to London in March shows that Blair is keen to further Britain’s role in Latin America, but only with leaders of his choosing. So it is essential to ensure that Britain does not reach the same tense stalemate as the US has found with the region’s less moderate regimes.

Some British politicians have already pointed out that ‘Latin America is the one continent that seems to have disappeared from our radar’. Latin America has become an anomaly in world politics, with only the United States and Spain really demonstrating an interest. Though our geographical distance, relatively small diaspora and lack of colonial history in the region are the immediate reasons for this, there is no obvious reason why there have to be so few relations between our respective regions. With an average GDP growth of 5.94% across the continent (3.57% and 17.85% in Bolivia and Venezuela respectively) last year, Britain and Europe cannot afford to ignore the region.

As Labour MP Colin Burgon put it, Britain needs to avoid ‘subcontracting’ its foreign policy to other countries, to what he labels ‘right-wing elements in the US’. It is clear that it is not just left-leaning MPs who feel this way either – Conservative MP Daniel Kawczynski pointed out during a debate on Venezuela that it is possible for allies of the USA to disagree with American foreign policy, and that they do not suffer as a result. ‘We must pursue first and foremost our own interests, rather than just complying with what the Americans suggest to us… Venezuela is the third largest economy in Latin America, so it provides the United Kingdom with a tremendous opportunity for direct foreign investment. That might be more difficult if we are deliberately provocative and antagonistic to its leaders’.

With this month’s Presidential election in Peru now between two left-leaning leaders, the influence of the left continues to grow in the region. Equally, ALBA (the Bolivarian Alternative for the Americas), the recent agreement signed by Hugo Chávez, Evo Morales and Fidel Castro, seeks to establish a new power bloc in Latin America to stand up to the United States and its allies.

It would therefore be unwise to dismiss this as a passing phase. The Times’ description of Chávez as a ‘ranting, populist demagogue’ does little more than play into Chávez’s hands, and goes no way towards restoring relations.

Chávez has a mandate, yet his policies have been derided in the West, and he has been portrayed as an illegitimate leader. His rhetorical flourishes have not helped his chances of acceptance by the international community, but Blair must rise above this name-calling by engaging Chávez.

The President’s visit to London last month was potentially a very significant step towards creating links between London (if not the UK as a whole) and Venezuela. Through the fog of controversy, Chávez made clear that he is willing to create ties between our two countries, and this should be encouraged. The Tories’ boycott of Chávez’s speech in Camden on Sunday helped nobody – isolating ourselves from Venezuela would certainly affect us for many years to come.

In Bolivia, Evo Morales last month surprised many by nationalising the natural gas industry – his first real demonstration of his leftist credentials since taking office at the beginning of this year. Though this was a blow for Western firms, they nevertheless still stand to gain from investment in the country: indeed, this has already been noted by BP and BG Group, the two largest British investors in Bolivia.

Both Morales and Chávez have indicated that they are keen to establish relations with Western nations other than the US, which has hitherto been the largest provider of aid to the region. Blair might do well to consider following the lead of Spanish Prime Minister Jose Luis Rodriguez Zapatero, who appears to have seen the potential for future trade opportunities in Latin America. His assistance to Bolivia will doubtless give Spain the advantage in obtaining future contracts in the region.

It would seem that many commentators place Latin American leaders in one of two camps: those characterised at best as populists, at worst as extremists, such as Chávez; and the more Blairite, moderate leftists spearheaded by Bachelet and Lula.

Blair may agree with the Guardian’s Simon Tisdall, in seeing Chávez and Morales as part of ‘an anti-American, or at least an anti-Bush administration, radical front’, along with Fidel Castro in Cuba, and now, potentially, Humala in Peru. But in siding wholly with the Bush administration, he risks isolating a number of economically significant powers, and may jeopardise Britain’s chances of gaining an advantage in the region.

Those on the right in South America, such as Mario Vargas Llosa, argue that Morales’ and Chávez’s use of indigenous rhetoric are as racist as the language of Spanish colonialists before them. Western leaders should not be cowed into making the same accusations. To employ this argument is to ignore a genuine concern for the poor of Latin America (who often happen to be indigenous Americans, victims of colonialism), and to mislabel their plight as racist.

In this year of elections, a change is clearly occurring throughout South America, and may be spreading to Central America’s key powers too: with left-leaning leaders already in power in Costa Rica and Panama; and Mexico’s Andrés Manuel López Obrador likely to emerge victorious in July. This is a crucial turning point in Britain’s relations with Latin America – now is a time when ties can be formed to new governments, favouring British interests in the region; or new enemies can be gained by shunning potential allies on the basis of a difference in opinion. At a time when democracy is lauded by our governments as a key objective throughout the world, its existence in Latin America should be celebrated, not ignored. Both Britain and Latin America stand to gain far more from interaction than from isolation.

James Royston is a Policy Analyst on the Foreign Policy Centre’s Latin America Programme

But surely this does not sound like the wily machinations of a country trying to impose its own doctrine upon an ideologically distinct EU? In fact, since the U-turn on Europe and Labour’s arrival to power in 1997, the UK has been increasingly pro-European in its foreign policy. The Government has often had to suffer for it at the hands of the Euro-sceptic press.

Compromise and the ambition to make the European Union workable, prosperous, safe and a force for good in the world form the essence of a productive European member. A reluctant European would be more prone to blame Brussels for domestic failings, use obstructionist tactics if it does not get what it wants and even risk the very Union itself if it feels it’s leadership compromised.

Counter-intuitive as it sounds, but France seems to fit the bill. The dagger of disappoint at France’s failing economy has been directed toward the heart of the EU, Brussels, when in reality the inability to reform business legislation and improve competitiveness falls squarely upon Chirac’s government.

When it came to improving the Union’s prospects for the future, CAP reform was central. Instead of accepting the idea that the other 24 members need not subsidise France’s farmers, Chirac held steadfast, proclaiming an attack upon the very soul of the country.

At the prospect of becoming part of a more manageable EU with a simplified treaty system, the French sacrificed it all to save themselves from an apparent hostile takeover by fabled Anglo-Saxon capitalism. The prospect of having to emulate their arch-nemesis, Britain, was simply too much.

France’s approach to the EU is insightful for purposes of analysing the French psyche. If all the evidence is pieced together, mixed with the rhetoric that flows from Paris and set in a historical context, one begins to see something interesting.

France has always been a great proponent of Europe, everyone knows, but only ever one fashioned in its own image. Alliances with Germany have taken priority over all others, one can surmise, because it is the only nation that can threaten France’s position as a leader. France only really participates in Europe when it can take a lead, hence its anxiety over the arrival of ten new members that might dilute its power.

Put very bluntly, France does not seem to be in favour of a European Union that brings together millions of citizens in equality for the benefit and promotion of all. Instead it seems to desire the restoration of French hegemony over the continent: Napoleon by the back door. A little polemical and exaggerated, perhaps, but it provides a fresh look at French motivations.

Seen in this light, France seems thoroughly un-European and detrimental to all the good that comes from the Union. In future, as London is scolded for being ‘half-hearted’ and ‘tentative’ in its approach to the EU, one should think twice as to whether it really is a reluctant European. Further thought may reveal that it is in fact, France.

It may all seem rather insignificant but Condoleeza Rice’s plan to increase funding for a range of new “public diplomacy” activities targeting Iran is a fascinating development in the ongoing struggle between Washington and Tehran.

The new expenditure reportedly includes $50m to increase US government TV and radio broadcasts into Iran; $5m for student exchange and scholarship programmes; $5m to support non-government TV, radio and websites; and $15m for civil society groups.

Such an increase is the equivalent of about a quarter of the entire annual budget of the BBC World Service – and it signals a major expansion of such activities.

The announcement does not come as a total surprise. In recent years, broadcasting has become a key element of Washington’s policy towards Iran. In December 2002, the US-funded Radio Farda (meaning “Tomorrow”) began regular broadcasts in Farsi (the majority language in Iran) on short-wave, medium-wave and satellite.

Radio Farda is a classic example of what is known as “public diplomacy” – the activity by which governments seek to communicate and engage with foreign citizens. Replacing the old Voice of America Farsi service, the new 24-hour service has been broadcasting a blend of music and news aimed at Iranians under the age of 30. With an opening broadcast penned by President George Bush, the service has clearly had high-level backing from the outset.

Although radio has traditionally been the US public diplomacy tool of choice, television has also had a role. In 2003, the US government began weekly satellite broadcasts of a half-hour current affairs programme in Farsi called News and Views. The broadcast was reportedly launched in response to student demonstrations that summer.
In a 2003 press statement announcing the launch of the broadcast, Kenneth Tomlinson, the chairman of the US Broadcasting Board of Governors, said that “by reporting what’s happening in Iran today, we can help further the struggle for freedom and self-determination in Iran”.
Whether or not one believes such broadcasts might genuinely facilitate “regime change” from within – apparently Washington’s favoured option – they are clearly being taken seriously by the State Department.

As part of the new initiative, there are even signs that US policymakers will begin funding some of the many independent Iranian exile TV stations based in Los Angeles, something Congress has previously blocked.

All this is evidence of an innovative battle being fought by Washington and Tehran over the international airwaves. Iran, for its part, has not sat back and let the Voice of America and its colleagues do as they please. Much as the Soviet Union sought to do during the Cold War, Iran has used jamming technology, reportedly purchased from Cuba (another key broadcast target for Washington), to prevent Iranians tuning in to the American broadcasts.
At the same time, the Iranian government has been on the offensive. For example, despite the best efforts of the Coalition Provisional Authority to dominate the “information environment” in 2003 post-war Iraq, Iran worked hard to establish an influential media presence there.

The Tehran government made good use of its geographical advantage over rival broadcasters, and links with Iraqi shi’ite groups, to get in on the act very early. Iran’s chief success was the launch of its terrestrial Arabic-language television station al-Alam (meaning “The World”).
Available 24 hours a day via satellite in much of Europe, the Middle East and Asia, al-Alam was broadcast from a powerful transmitter 150km from Baghdad, just inside the Iranian border, which, at the time, made it the only foreign television channel receivable inside Iraq without a satellite dish.

As Ms Rice moves to expand US public diplomacy activities into Iran, we may well see – or hear – the broadcasting equivalent of an arms race. Extra transmissions from Washington or Los Angeles targeting Tehran may be matched by equivalents emanating from Tehran targeting Baghdad and Kabul.

Things may also get increasingly technical. The US military has a number of large transport aeroplanes – codenamed Commando Solo – capable of broadcasting TV and radio signals over long distances. Commando Solo, flying at a height of 20,000 feet, has a broadcast range of about 170 miles, beyond which communications reception deteriorates. But a Gulfstream or Global Hawk jet flying at a height of 60,000 feet would have a broadcast range of 300 miles – enough to reach traditional television sets in the Iranian capital from a plane flying inside Iraq.

In a world where the power to influence has genuine and serious political implications, expect to see the old enemies, America and Iran, continuing to apply their invention and imagination to outwit each other in the enduring battle for hearts and minds.

• Philip Fiske de Gouveia is the director of the public diplomacy programme at the Foreign Policy Centre

In June the Swiss government will be publishing a fundamental reappraisal of its relationship with the EU which could – but probably won’t – lead to a reactivation of its membership application. This was shelved in 1992, when Swiss voters narrowly rejected entry into the European Economic Area (EEA).

Since then the Swiss relationship to the EU has been governed by 16 painfully negotiated sectoral agreements, only half of which have yet come into force. The choice facing the government in June will be whether to persevere with this route, with the prospect of a perhaps never-ending series of further agreements, widening and deepening the relationship but still on a fragmented basis; to have a further attempt to persuade their voters to join the EEA, or to go the whole hog and seek full EU membership.

The sectoral agreements were originally sought by the Swiss government, aghast at the prospect of being totally excluded from the EU’s internal market when, to their horror, their voters unexpectedly rejected the EEA alternative. The first group of seven agreements, known collectively as Bilateral One, were negotiated between 1994-99, and came into force in June 2002. They covered Research, Technical barriers to trade, Free movement of persons, Air transport, Land transport, Agriculture and Public Procurement.

The second batch, known as Bilateral Two, of nine agreements and one declaration of intent, were negotiated between 2001-2004, and will come progressively into force, sometimes with transitional periods, over the next decade. They concern Processed agricultural goods, Statistics, Media, Environment, Pensions, Education and occupational training, Taxation of savings, Schengen, Asylum policy and the Fight against fraud.

Much the most difficult of these to negotiate was that on the taxation of savings, which was absolutely essential if the EU’s own directive was to be effective. Along with other European tax havens, such as Andorra, Liechtenstein, Monaco and San Marino, Switzerland was finally persuaded to introduce a withholding tax on non-resident investors in order to prevent massive tax avoidance by EU citizens.

A detailed assessment of the sectoral agreements, and how they are working out, has just been published by the Brussels-based think-tank, the Centre for European Policy Studies (CEPS), and the Europa Institut of Zurich University. Entitled Integration without Membership, its authors are Marius Vahl and Nina Grolimund.

Their overall verdict is that – so far – they are working smoothly with a minimum of disputes, only one of which, concerning Zurich airport under the Air transport agreement, has resulted in a reference to the European Court of Justice. Their main criticism, which is shared both by EU and Swiss officials, is that the control function, exercised by 16 different joint committees is an unwieldy one, and will get more so as further agreements are negotiated.

Some kind of over-arching authority is clearly needed, but the authors found no consensus on what form it should take. Whatever institutional changes are made, however, will not remove the major handicap from the Swiss point of view: that they are committing themselves to the adoption of policies – within the areas covered by the agreements – which they can have no part in shaping.

That problem could only be solved by full membership – and this would mean surmounting the hurdle of the Swiss custom of referring all important (and many more trivial) decisions to referenda. The recent experience has been quite encouraging – with all three referenda occasioned by the sectoral agreements being approved – most recently that extending the free movement of persons to the new EU member states in Central and Eastern Europe.

Yet the biggest obstacle is represented by the rule that popular majorities must also be accompanied by a majority of cantons. In the EEA referendum, in 1992, the voters said no by only the slenderest of margins – 0.6 per cent. Sixteen out of the twenty-six cantons, however, returned a negative verdict.

It will only be when the small, German-speaking rural cantons – like Obwalden and Innerrhoden – become as Europe-minded as Geneva, Lausanne and Berne that EU membership will become a realistic option. In the fullness of time, that may well happen, but almost certainly not before the other EFTA states – Norway and Iceland – have finally decided to take the plunge.

• Dick Leonard is author of The Economist Guide to the European Union.