Thank you Mark for the opportunity to speak to you today. Let me start by paying tribute to the Foreign Policy Centre for organising today’s event.

It is good to be amongst friends old and new.

Now of course the context in which we as a party meet here in Brighton was fundamentally altered by the events of September 11th in New York.

And while that day changed a great deal, it reinforced in my mind, I have to say, that the world is smaller that it has ever been It’s 6 billion citizens in many senses are closer to each other that ever before in history. Of course we were aware of this when many of us sought to make contact with family or friends in New York, but beyond that, each of us is increasingly connected to people we will never meet from places we will never visit. Many of our clothes and shoes will have been made by people thousands of miles away. The fuel in our cars, the microprocessors in our computers, the coffee in our cup. So many of the products we buy in the High Street have journeyed half way around the world. Yet at the very point in our history at which books like Thomas Friedman’s ‘The Lexus’ and ‘The Olive Tree’ seek to celebrate this process of globalisation, it’s legitimacy is increasingly questioned.

Remember back to Gothenburg or the G8 Summit in Genoa. The plan for Africa was lost in media coverage of the protest. A city was devastated, a protestor died and hundreds of Police Officers and protesters injured. Yet as well as the violent protest that caught the headlines, there were many more people there protesting, united in their hostility to globalisation.

Articulating these concerns, Kofi Anan has asked the question that I believe informs today’s discussion “How can we ensure that globalisation becomes a positive force for all the world’s people instead of leaving billions of them behind in squalor?”

I have no doubt that that question challenges not only companies but government as well.

We must deliver an international rules based framework for fare trade, which provides poor countries with a pathway out of poverty. But there are also big challenges to business. It is not acceptable for a company to make highly priced clothes for highly paid consumers in the developed world by ruining the health of women and children in the sweatshops of the developing work.

It is not acceptable for a company to make beautiful furniture for the homes of rich families in the west but leave a devastated forest landscape in Brazil.

Businesses have come to understand the very considerable corporate risk involved in such actions.

Shell encountered enormous public concern over its activities in Nigeria regarding the Ogoni people and the death of Ken Sarawiaa as well as over the Brent Spar. Nike and Gap both suffered as a direct result of conditions that were exposed in the factories run by some of their sub contractors.

And the actions of such multinationals are important not only for their own bottom line, but the world in which we live. Of the 100 largest economies in the world today, 51 are corporations. The top two hundred corporations have sales equivalent to one quarter of the world’s total economic activity.

And while few will deny the challenge of building a common view as to how corporations can make a positive contribution at local, national and international level, the debate tends to bring out what Simon Zadek’s book calls “Evangelical Optimism” or “Narrow Cynicism”.

To try and find a way through such divergent views, we need first to be clear as what we mean by corporate citizenship. While there is no single definition, I believe a company pursuing this approach does three things:
– It recognises that its activities have a wider impact on the society in which it operates
– In response, it actively manages the economic, social, environmental and human rights impact of its activities across the world.
– And it seeks to achieve these benefits by working closely with other groups and organisations.

In turn this approach to working can bring clear benefits to the businesses concerned:
– by reducing risk
– by enhancing brand value
– by opening doors and creating good will
– and by improving its staff efficiency and morale

This approach is underpinned by various international conventions and codes, some of these – such as the UN’s Universal Declaration on Human Rights, are of general relevance to business activity.

Others, such as the OECD’s guidelines on multinational enterprises – are more specific and are important in setting standards against which, companies operating abroad, can assess their performance.

Here a range of departments, from the Foreign and Commonwealth Office to the Department for International Development, my own Department, the DTI, and the Department for Work and Pensions and DEFRA all make a contribution to this discussion.

Of course there will ultimately be limits to how much we can expect from corporate citizenship in addressing issues such as enduring inequalities in health, education, and income. Yet those limitations should not encourage us to turn away from the agenda of corporate citizenship. I believe it should also inspire us to ensure that alongside the choices exercised by private enterprises we also make public choices through our government about the kind of market, society and world in which we wish to live.

Introduction
The kidnap and ransom (K&R) insurance industry has long been regarded with scepticism in policy circles. In the 1980s, Margaret Thatcher went so far as to instigate an investigation into the sector, prompted by her concern that it encouraged the proliferation of kidnapping. Her arguments hinged on the issue of ransoms: firstly, she was concerned that insurance encourages policyholders to pay; secondly, she was worried that cover allowed policy makers to be less cautious about how much they paid given that they would be reimbursed later. The result, she argued, would be more frequent and higher ransom payments – and this would ultimately lead to a proliferation of the crime.

Mrs Thatcher didn’t get her way, and the K&R insurance industry is still going strong today. It has been estimated that it is growing at 15-20 per cent each year and British underwriters can boast much of the FTSE 100 companies as clients. However, while K&R insurance is fast becoming a mainstream part of doing business in high risk areas such as Latin America and parts of Asia, the industry’s negative image has not faded.

The case for non-concession
However, the scepticism with which K&R insurance is viewed is as much a reflection of the way the kidnapping policy framework is constructed as of misconceptions about the nature of the sector’s business activities. The current focus for kidnapping policy is on how individual cases are resolved and, in line with Thatcher’s policy stance on kidnapping in the 1980s, the UK government holds non-concession as the principle method for delivering the shared objective of reducing the number of Britons kidnapped each year. And in line with this, K&R insurance seems at odds with UK government policy.

But can this type of policy deliver results? Where one group, say national governments, is able to control responses, it is possible that this policy will help to reduce the number of kidnappings. But in cases where anyone can take control – as is increasingly the case where money rather than politics calls the shots – this consistency is difficult to achieve. While reducing ransom payments must always be a central aim for all policy makers – government, business, charities and individual families – we must accept that this alone can no longer deliver the objectives we want to achieve.

The case for K&R coverage
We need a new preventative focus for kidnapping policy that can bring results in the short-term while such important long-term policies are being pursued. We should focus on reducing the opportunities for kidnapping through enabling those who are at risk to manage their risks more effectively. This is an area of policy where there is much potential for success – and where the insurance sector is already playing a key role.

Firstly, and most importantly, kidnap and ransom insurers are actually interested in minimising the risks of their policyholders in order to reduce the likelihood that they will have to pay-out. In order to do this, underwriters add incentives and penalties for ‘good’ and ‘bad’ behaviour – as is true in homeowner’s insurance, where coverage may make policyholders less concerned about burglary, as they know they can recoup the costs. To counter this, underwriters offer lower premiums to those willing to act to reduce their risks by, for example, fitting locks to windows.

K&R insurers have adopted similar mechanisms to encourage the responsible, low-risk behaviour of their policyholders. The pricing structure of premiums alters according to the amount of effort that the policyholder is prepared to make to reduce their risk.

Secondly, and related to this, many of the largest underwriters exclusively secure the services of a particular security consultant for their policy-holders in order to ensure that they are taking their security policy seriously. In this sense, the K&R insurance industry has contributed towards an accumulation of expert professional knowledge about economic kidnapping and helped to promote methods that lower the policyholder’s susceptibility to the risk of kidnapping.

Thirdly, when a kidnapping does occur, there are safeguards in place to minimise the amount of money that will be paid out. The total amount that a person or organisation can be insured for is relative to a policyholder’s ability to pay, and this means that the insurance policy recovers the amount that would have been paid without insurance cover.

Learning from the experience of others
This argument is backed up by the fact that policies only pay out retrospectively, preventing ransom payments from spiralling out of control. And policies also cover the cost of an expert to handle the case and advise about negotiation techniques and practices, a role that may previously have fallen to a CEO or regional manager with no previous experience of handling such a high-pressure incident as kidnapping. As a senior security manager from a major multinational company commented, “We as a company have a very strong central security and employee security capability. But we haven’t had a kidnap since 1989 so we need the experience of people who have”.

Whether the motives of the K&R insurance industry are altruistic or financial, it is important that policy makers harness all activities that could deliver the objective of reducing the number of kidnappings each year. Such an overarching framework could bring clarity and help to ensure that individual efforts come together as a whole to be worth more than the sum of their parts.

The insurance sector is far from perfect, and there is undoubtedly more that it could do, but while we continue to have an unbalanced debate in which those who pay are bad, and those who don’t are good, we will not realise the objectives that are universally shared. And as the investment and operations of UK companies in risky areas of the world grows, this is an issue that must be faced head-on.

The background

Over the last decade attitudes towards development have changed significantly. The short-term ‘aid for commercial gain’ thinking of the past has been replaced by a much greater focus on development as a long-term concern enveloping a wide range of issues such as conflict prevention and resolution, trade and investment, and environmental protection. There has also been a major shift away from the old paradigm that development policies should first and foremost promote economic growth, with the realisation that development must be based upon the three pillars of growth, sustainability and justice. Only when poor countries are helped to tackle head on illiteracy, high infant mortality rates and corruption, to name but a few social ills, as well as develop economically, will they be able to break free from the poverty that blights their people’s lives.

The challenges

While highlighting the achievements of the first term, the Secretary of State focused attention on some of the challenges that still need to be faced:

· The Department of International Development

For far too long, development issues have been seen merely as an add-on to seemingly more important issues, such as trade and industry. Short commented on how back in 1997 the DTI was angered by her newly constituted department telling its people how to go about conducting British trade. She added that this attitude is also reflected in the fact that the international development is still viewed as the obvious portfolio of a female minister of lowly rank. Short was adamant that much more needs to be done to build capacity and make international development central to all other policy areas.

· Security

The nature of conflict has changed dramatically. Wars now occur more often than not within rather than between states. Civilian populations are often targeted deliberately by the warring factions leading to massive refugee flows over international borders. Rapidly rising Third World population figures are also putting great strains on natural resources, causing irreparable environmental degradation. Short explained that we need to have a greater awareness that the underdevelopment of much of the world caused by these and other problems is the greatest threat to our own security. She argued that the 20 per cent of the world’s population living in OECD countries can never feel secure while the remaining 80 per cent live in abject poverty. The challenge facing us is to find new international tools to tackle these new security threats.

Solutions

Clare Short expressed forthright views on several areas of policy in which positive change and progress are possible.

· Raising DfID’s profile

Short noted that her department has come a long way in raising its profile within the government. She was rightly proud of the fact that her team won the argument over the merits of debt relief and that subsequently British trade representatives are now happy to stand out from other trade delegations on the issue. She also mentioned the joint pool of resources that DfID, the Ministry of Defence and The Foreign Office now share in relation to security issues. Yet the lack of parliamentary time dedicated to debates on international development and the still lingering feelings within government that development issues are not of the highest priority shows that there is still much scope for improvement.

· Resources and political will

When challenged with the claim that the instruments at the government’s disposal – such as debt relief and the global fund for HIV – are meagre in scale and do not appear to match the problems faced by Africa, Clare Short robustly refuted it and highlighted the progress made at the recent meetings in Genoa between G-8 and African leaders. Leaders such as Presidents Thabo Mbeki and Olesegun Obasanjo brought with them their own initiatives for solving their continent’s problems, which tied in with the Prime Minister’s own commitment to Africa. However, Short did admit that there is a general overestimation of what a tool such as debt relief can achieve alone. Stating that aid is also required, she went on to explain that a high quality of aid to Africa, untainted by mixed motives, is imperative if Africa is to see the 7 per cent growth needed for it to achieve its international development targets.

Touching on the topic of conflict prevention, Short pointed out that while she is positive about the prospects of success in Sierra Leone, there is a need to strengthen international tools to deal with the increasing number of regional and civil conflicts in Africa and elsewhere. However, resources need to be matched by a greater political will and determination on all sides if success is to be achieved.

· Strengthening institutions

During Labour’s first term, the positive linkage of development and security issues was a major achievement. But what of plans for the security sector in the second term? Short commented on several areas of policy. Recently, an extensive World Bank study entitled Voices of the Poor pinpointed disorder and corruption as major concerns of many respondents in developing countries. To tackle these problems, the Department of International Development has begun to work closely with the Foreign Office and Ministry of Defence. Army reform in Sierra Leone and Indonesia, and the training of peacekeepers in Africa, are being promoted to help increase accountability and prevent coups. Reform of justice systems is also high on the agenda. It is estimated that 40 per cent of African private wealth is held overseas. Through the gradual establishment of the rule of law in Africa, the causes of this capital flight – political corruption, tax evasion, conflict – can be overcome and this money can instead be invested in the countries themselves. By strengthening state institutions and giving poor countries the tools to help themselves, we can therefore prevent the descent into chaos and anarchy that has blighted so many countries and help the poor to build modern, effective states.

· The role of NGOs

Following the mayhem that ensued at the G-8 summit in Genoa, there is clearly a need for a new form of dialogue between international institutions and NGOs.

Controversially, Clare Short suggested that lobby groups should not waste money by travelling to international meetings to demonstrate, but should instead use the resources more efficiently to fund campaigns and hold their governments to account at home. She commented that such financial waste was unacceptable considering that thousands of Africans sell all they have to make the treacherous journey to Europe to find a better life. Short also said that NGOs should become accountable to their own publics in order to become more effective.

Short called for a more nuanced understanding by northern NGOs of the role they can play, a theme taken up in a recent Foreign Policy Centre pamphlet by Michael Edwards entitled NGO Rights and Resonsibilities: A New Deal for Global Governance. Often northern NGOs dominate the debate to such an extent that they are regarded as constituting civil society and representing southern NGOs and peoples. However, civil society is an amalgamation of many groups that needs to be nurtured in all countries as a prerequisite of establishing effective modern states. Short therefore suggested that northern NGOs should play a more supportive role, transferring skills to southern NGOs and encouraging them to speak for themselves to the world. Only through a more equal dialogue can poor countries make their own voices heard.

· Increasing public engagement

During the 1980s, public interest in development issues dwindled. Due to the corruption and chaos endemic in much of the Third World, there developed among Western publics a feeling that the money they donated to charities was going nowhere. However, over the last decade there has clearly been a globalisation of human concern – what one might call a global ethic – about development issues. This has been brought about by the empowerment of ordinary people through the mass media and the subsequent acceptance of the reality that we all depend on each other. This growing interdependence was graphically illustrated by the Asian financial crisis, which directly affected businesses in the UK. There has also emerged a growing anger at the injustice globalisation has caused. However, Clare Short noted that within the UK, despite the growing public support for development issues, there is still the belief that charity constitutes development. To change this opinion and engage the public directly, the Labour government is taking many positive steps: DfID now advertises everything it does; it is also working with the Department of Education to introduce lessons on citizenship to the national curriculum; and it is undertaking tracking surveys on attitudes towards development issues. Through this work, development policies which involve not only DfID and NGOs, but also the public at large, will emerge and flourish.

The prospects of success

Despite the many positive developments over recent years, Clare Short’s objective assessment was that the situation of the world’s poor will worsen before any improvements are seen. She commented that in order for the UK to take a leading role in reducing world poverty and spreading the benefits of globalisation, more money and political commitment will have to be forthcoming. She also added, “I wish my department did not have to exist”, lamenting the fact that such a vast scale of development assistance is still required by much of the world at the beginning of the 21st century.

This was the first in a series of Foreign Policy Centre lectures by government ministers and their special advisers.

For details of future lectures, please see our website at www.fpc.org.uk, or contact Phoebe Griffith on 0207 401 5358.

OF GNOMES AND BRITONS
(or: WHY ARE WE AFRAID OF THE EUROPEAN UNION?)

by Fabien Curto Millet –

“A dark laughter rises from one of the Commission’s glass towers in Brussels. Inside, a Eurobureaucrat briskly rubs his hands together. He has just devised a new set of regulations to ban bacon from breakfasts, and to standardise the diameter of yolk. A turn in the ongoing struggle to squeeze Britishness out of the British? […]”

Laughable as this may be, it is only a slight exaggeration of many people’s view of the EU. The Union is seen as a legislative, identitarian highjacker, quietly undermining nations behind closed doors. Further steps on the road of European construction are welcomed with polar warmth. What stands behind this fear of the European Union? Much of it is the Union’s own doing, in terms of policies and processes. But on top of this come a wealth of nationally idiosyncratic reasons. Most interesting here is the British case – a nation exhibiting particular surdity to the sirens of Brussels.

There is certainly much good to be said about European construction. Nevertheless, several disgraceful policy decisions hide behind the euro-rhetoric. These are tragic enough on their own, but also contribute to paintbrush the profile of the Union with mud, taking some shine off its achievements. The most glaring example is the Common Agricultural Policy (CAP). This de facto subsidy to 4% of the EU’s population is the single biggest item in the budget, accounting for almost half of it. Its result, other than the familiar wine lakes and wheat mountains, is an increase in the price of food by 15-20% according to OECD estimates. The policy is expensive to Europe’s consumers and – worse still – contributes to maintaining the third world in its misery. The UK is the second largest net contributor to this madness, and the resentment against the policy is proportional. Misusing half of a budget does provide some foundations for raising eyebrows. But the CAP does not cap the criticism. The Union is also associated with lacklustre economic policies. The painful monetary contraction of the early 1990s across Europe due to the EMS has not been forgotten. Now, with the advent of the Euro, other puzzling economic creatures have appeared. A notorious one is the charmingly called “excessive deficits procedure”, which forces upon Eurozone countries the obligation to keep deficits under 3% GDP except in ungenerously defined circumstances . This straightjacket is too tight, clumsily designed and arguably unnecessary. It moreover gives the Commission the unpopular role of a policeman catching nations budgetarily “dirty-handed” – a perfect recipe for arousing brainless nationalistic feelings. One could go on taking examples. Although policy failure is far from being a monopoly of EU institutions, it hardly contributes to making them enter people’s hearts.

But there is an additional problem: the processes through which the Union outputs policy – good or bad. For a start, few people have an understanding of what the Union does, outside a few photogenic policy areas. How many could label the Community’s three policy pillars, and explain the legal decision-making implications? As for most things, what is not understood is feared. The Union suffers from a considerable lack of transparency and a deep democratic deficit. The Council of the EU, its main legislative institution, meets behind closed doors. The general political direction of the EU is determined by the political horse-trading taking place at European Summits, beyond the eyes of the cameras. What is more, the European Parliament – the principal breeze of democracy in the Union – has limited co-decision powers and deals mainly with issues of breathtaking technicality. One can even doubt who really is in control of policy; 10,000 people are believed to be employed in the lobbying industry located in Brussels – and this misses those who fly in to put forward their case . In fact, the bureaucratic machine is so complex it seems to have a life of its own: around 20,000 civil servants, carrying out over 620,000 financial operations every year . Decisions, then, seem to emerge from a godly cloud, and appear imposed by a clique of omnipotent politicians. Such complexity also opens the door for abuses. The Commission’s General Directors themselves admit the difficulty of controlling certain budgets . Furthermore, all European citizens remember the shameful events of 1999 that forced the resignation of the Santer Commission, under accusations of fraud and nepotism. And these problems are in addition to the waste of resources that is visible, such as having two locations for the European Parliament – Brussels and Strasbourg. All in all, a cocktail explosive enough to scare most people.

And then, there are nationally idiosyncratic reasons for mistrust, especially important in the British case. They are to do with history, EU experience, political incentives and the sovereignty tragicomedy.

A critical difference between British history and that of other EU members is the proximity of its “global superpower” status – the Empire. That status is very much gone in the temporal dimension, but still glows brightly in the depths of the mental one. For other European countries, the wrinkles of time have buried the cognitive wreckage of such past glory (e.g. Spain), a transformation of mindsets often accelerated by wars on their soil and the experience of defeat (e.g. France, Germany). Such a background makes it easier for the national logic to consider a rational pooling of sovereignty, when one better serves the country’s aims; indeed, they can even push the country into such supranational constructs more or less subconsciously, in an effort to escape from a sullied past (e.g. Germany). Britain, in contrast, was a superpower only yesterday, and stands uninvaded for almost a thousand years. Its influence waned at the pace of its relatively slow GDP growth over the past century, while others caught up and the US marched on. This historical and cognitive reality manifests itself in a variety of statements, as ridiculous as they are common – “Britain is in a league of its own” and the like . Furthermore, the Continent is not a historically neutral player with respect to Britain, and past wars or rivalries have sipped through the ages, condensing into the layer of mistrust with which it is appropriate to scan anything that comes from across the Channel. This works both ways, and one can note with interest that the Nazi propaganda machine exploited latent anglophobia in France to make the Reich look better ; and that nowadays, a touch of francophobia always makes good copy for British tabloids .

Moreover, British experience whilst in the EU was far from a sequence of merry moments. By the time the British government abandoned its go-alone plans and knocked at the EU’s door, it found itself shut out by De Gaulle’s presidential NON (the French again!) – a humiliation like there are few in the velvet world of diplomacy. When Britain did finally enter, much damage had already been done – especially through the CAP –, but Britain was nonetheless forced to absorb all such Acquis Communautaire, an obligation that has since fuelled much resentment. The problem was not only that the policies absorbed were indigest, but the mere fact that they had to be absorbed – a matter of David spoon feeding poison to Goliath for the defenders of the Empire faith. Never mind the fact that had Britain got its act together sooner, such unpleasant syrup could have been avoided. As if this were not enough, Britain joined in turbulent times. Membership had been championed significantly on grounds of economic benefits (reduction of trade barriers etc). But the 1973 OPEC oil crisis was the uninvited guest to the party, making such benefits hardly visible through the economic pain. Later down the timeline, after some traumatic monetarist shock-therapy and a little DM-shadowing, the UK jumped into the EMS boat – and into the next crisis. A “humiliating” devaluation followed, again on an issue relating to Europe – never mind the overvalued rate at which the pegging took place. All in all, the least one can say is that Britain has hardly had the best circumstances in its European venture for its people to shed their mistrust – however undeserved.

Furthermore, the incentives facing politicians encouraged them to tackle the fire with oil. A favourite story of anti-Europeans is that Britain was traitorously cornered into surrendering Her Sovereignty. Was this European enterprise not known as the “Common Market” in the dark 1973 days? Historical evidence to the contrary is but a mere inconvenience, such as: 300 hours of Parliamentary debate dominated by the theme of sovereignty, an explicit government white paper , unambiguous public statements etc. The dishonest rhetoric, however, pays off. It is obvious that machiavelic continentals did it! Brussels on its own is a complicated place; hiding it under layers of myths and lies makes it impenetrable, reinforcing the impression that the bureaucratic, political and lobbying activities there have a life of their own, bent on crushing peoples’ democratic oxygen. Such a hellish beast is moreover a highly convenient scapegoat, as it is incapable of self-defence (who is Brussels?). Political trouble ahead? Blame continental gnomes! A classic example is provided by the Commission’s efforts to regulate the motorbike industry at the European level, with the aim of generating economies of scale. This was pushed by the Council of national ministers to save the industry from death under Japanese competition. National legislations were so divergent that a compromise had to be found, including a limit on the maximum power of motorbikes. Such a limit had not previously existed in Britain, and soon Hell’s Angels converged on the Houses of Parliament to uphold “Britain’s ancient right to rocket-driven superbikes” . Where would you guess accusing fingers pointed?

But on no topic does the hysteria reach such formidable heights as on that of “Sovereignty”. Sovereignty is often spoken of as if it were a sacred flame, passed down the ages from generation to generation, rather than as “something to be used for the advantage of our fellow citizens” . After a few such moving thoughts, rabid anti-Europeans usually move on to some Brussels-bashing, and set up a fictitious scarecrow: The Superstate. Federalism is often “explained” in Britain as being synonymous to centralisation whilst – when properly understood and implemented – it means placing power at the lowest possible point in the system. Presented in this way, it would be nothing more that a comprehensive and hopefully sensible application of the principle of subsidiarity , to which many British people are attached. But there is more behind the rhetoric than stoking history’s ashes of mistrust. British people are proud of their institutions (“tested by time”, as is often heard) and are especially so of their Parliament. These national institutions are the main custodians of democratic legitimacy in the EU, and often their sovereignty has been felt to be eroded by the European project. This is a real problem, which is partly structural, and partly self-inflicted. Structural, because Ministers take decisions at the European level largely behind closed doors, ultimately producing legislation that takes precedence over national one. Self-inflicted, because certain Parliaments, and Westminster especially, have been less than diligent in monitoring European developments. The gap is especially glaring when contrasting their efforts with that of the Finnish Parliament’s, in which a committee grills ministers both before and after Council meetings.

If the Union seriously wants to be closer to the people it has the duty of serving, it must certainly take a hard look at itself. Many of its policies are a liability to it and its citizens, and its processes are about as comprehensible as certain cubist paintings. But much of the fear it induces is irrational, and this dimension feeds on what is rationally wrong with the EU. To save the ship, reform is a priority. But so is responsible public-speaking to deconstruct fallacious arguments either way. This will have the added advantage of providing much amusement on the political scene (“The gnomes strike back”?).

Why Are We Afraid of the European Union ?
Timisoara is a beautiful town in the western part of Romania. It is considered as one of the cities with the strongest economical potential in the country and the citizens of Timisoara are known as the most open-minded, with the strongest pro-European convictions. Timisoara is also the town where in 1989 the wind of changes that crossed Europe, entered Romania. This is the town that first said ”no” to the totalitarian yoke.
I have lived here since I was born. I have seen the struggle for the present that God gave them and the whole country on Christmas 1989: freedom. And yes, many things have changed since. However, changes have not always been benefic. Now we are struggling for a better life and what you can hear in every news flash: the admission into NATO and the European Union.
The politicians in our government want to make the people believe that their efforts are tremendous and that they are paid off well, but this usually turns out to be untrue, especially when it comes to paying up the debts or keeping some agreement with the international monetary institutions (like IMF or the World Bank). Also the positive effects for an average citizen are invisible, social measures work very badly, investors do not queue at the borders of Romania and the gap between the rich and the poor grows continuously. However, the officials claim that it is ”realistic” to believe, that Romania will join the European Union in 2007. My reaction is merely a bitter smile. But how do the other people see these things? Do they believe (like the government wants them to) that the membership is a kind of ”Holy Grail” that we have to reach regardless of what might cost the population? Or do they react adversely, blaming the European Union for the wrong direction for which the country is heading? Do they really know what the European Union is?
When I heard of the competition organized by the Foreign Policy Centre (actually I read about it in a students magazine distributed freely in the campus of my university), I decided to write myself about what is on the mind of the people of Timisoara. I refused to look for official figures or reports and decided to start this one from scratch: I grasped my sister’s tape recorder and went for a walk in the streets, to ask the people (especially the young) a few questions about the European Union, focusing on their fears.
What I have experienced, was of absolutely no surprise to me. But this time I had hard evidence, not just the propaganda of the government or (which naturally never includes negative aspects of a possible membership or reports on problems that still have to be dealt with in order to become a member of the European Union) or personal opinions of my best friends. I did not intend to conduct any survey whatsoever. I am lacking the necessary means and knowledge. Still, I believe the opinions I have heard give a genuine and undistorted insight into what people really believe about the European Union. And the final conclusion is no doubt that the vast majority is not afraid of the European Union. On the other hand, though, they have no idea about what the European Union could be… One of the questions I kept asking first, was: ”What is the European Union?” Most of them looked at me in surprise, speechless at least for the next five seconds. Some of them remained silent even longer, others admitted that they did not know and many invented some kind of vague definition. Let me give you a few examples: ”something we won’t be in very, very soon”, ”a gathering of political forces”, ”a wider horizon”, ”contact with the civilized world”, ”Europe without us”, ”something good”, ”a better way of living together”, ”a world-wide organization” (!). There were a lot of people who made a complete confusion with the NATO. This because they are unable to determine the very nature of these two organisations: the NATO is a military alliance and the EU is (mainly) an economical and political union. I was glad to also meet people who had a clear idea about what the European Union looks like. These are (mainly) graduates (e. g. an en-gineer in the field of military equipment, a team leader at a mobile phone company), a handful of students and the manager of a small company.
Nevertheless almost nobody was against joining the EU. The only exception was a middle-aged man, who refused to be recorded on tape, but who told me that ”Romania has everything it needs” and that ”we are begging for worse”. Only a few said they would not like the idea at the time being, because Romania could not face such a radical changing. And one person refused to answer this question. I was rather confused about this because the same person said she could not see any disadvantages connected to the admission into the European Union. This was indeed my next question: ”What disadvantages could this membership have?” Most of the people saw absolutely no disadvantage of course. The only opinions which were different, referred to the economical differences between the European Union and Romania. Somebody said that right then, joining the European Union would ”mess up” everything. Other disadvantages mentioned were that we were unprepared for that step, un-able to meet the requirements, like extra costs. And there was the minority that could make no difference between the NATO and the EU, represented by people who thought that a war could be the most dangerous thing, because then we would be obliged to fight side by side with the rest of Europe. This actually is true to some extent, but the members of the EU are also members of NATO and being a member of NATO involves first of all military support.
When I asked what Romania should give up to reach its aim and join the European Union, answers came promptly: number one were mentality and theft. A young man cried: ”Oh! Yes! The actual regime first!” A 16 year old girl said we should have more private companies. This was the only important thing related to that she retained, she confessed.
In my opnion people do not care much about the European Union. Many of them admitted that or used this to explain their refusal of answering the questions. Others did not want to answer because I caught them off guard. (The people who refused to be questioned were at least as many as the ones who accepted.) Their concerns are more immediate, simple, regarding everyday life, the constant and unstoppable rise of prices, especially fuel, electricity and heating and, as a consequence, that of food; the numerous deficiencies encountered in the area of social protection, like the lack of medicine and the carelessness of the medical personnel, which changes its attitude only if you show up with an envelope full of bills. This represents one of the major reasons for which so many things go wrong and why investors stay away from Romania: corruption at every level. A former classmate, who later joined a political party, revealed to me that once you bribe someone in Hungary, you can consider ”the case closed”. But not in Romania! You bribe someone to be sent to someone else who, at his/her turn, has to be bribed to do something and so on. Bureaucracy in Romania offers an ideal medium for this.
With all these (and many other) handicaps, the road to the European Union is long and hard. The thing I am most afraid of is competition. I am afraid that we will be completely run over. If we do not want to be disqualified, we must change our mentality. And mentalities change with difficulty. The Romanian behaves like a child that has been locked up for a long time, and now, having escaped, wants to grab everything that shines. But not everything that shines is gold and for gold you have to work. It takes a lot of patience until you teach to everybody that. However, I strongly believe, that at the end of every tunnel, there is a little light.

Tony Blair’s scathing attack on the failures of successive governments to take advantage of Europe’s opportunities was a welcome attempt to stoke up the european debate. But it also showed how far pro-Europeans have failed to connect the euro debate to issues which capture the popular imagination. In a week when even the most eurosceptic newspapers have complained about how far behind we are on health and public services – it is the arch-Eurosceptic Iain Duncan Smith and not the Prime Minister who is looking across the channel for inspiration.
Pro-Europeans have relied too much on the traditional arguments for Europe. Looking back over fifty years – to the days of Churchill, Monnet, De Gaulle, and John F. Kennedy – it’s easy feel nostalgia for the political giants that bestrode the forties, fifties and sixties. Their speeches are at once magical and hypnotic, capable of stirring hearts and minds and of articulating hope and inciting action. How different, it is tempting to feel, from politicians in the thrall of pollsters and spin-doctors – a world where they only feel safe reciting the five economic tests in a monotone, just in case they find themselves inadvertently launching a “Euro offensive” in the next day’s papers.
But unfortunately the Great Europeans of the past are part of the problem. The pro-European argument has failed to move on from their legacy: from visions of peace in the early post-war years, arguments for prosperity between the 1960s and the 1980s, to the democratic mission of Europe to reunite the continent after the fall of Berlin Wall.
This narrative no longer connects to a new generation. Today’s teenagers have never known an all-out war – but they do remember the EU’s failure to stop the bloody break-up of the former Yugoslavia. Economic prosperity is not something voters associate with the European Union, except in countries like Spain and Ireland where the impact of European money and membership has clearly bought material benefits and self-confidence. As for democracy, people fear as much that Europe will take it away as help to secure and enhance it.
In the absence of a convincing new case, the temptation has been to point to the failures of the past. Because Britain has never been in at the beginning, we have never been able to draw up the rules – whether of the EU’s budget, the Common Agricultural Policy, the European Monetary System, the Exchange Rate Mechanism or even the euro. But wallowing in this history of half-hearted engagement has stopped pro-Europeans from making their case on its merits. Citing the list of missed opportunities since Messina and Schengen does not itself supply positive reasons to make a different choice now. The public are more likely to be swayed by fear of the unknown than by fear of missing out again.
A debilitating defensiveness means that Europe continues to be seen as a threat to our way of life, rather than as a tool to fulfil our ambitions. The press has often goaded successive Governments – including this pro-European Labour Government – into adopting the occasional macho pose: rattling off boasts of crazy EU directives they have thwarted and British-inspired initiatives to inject Europe with transatlantic dynamism. It is easy to see why this is done: a referendum will only be won by changing the perception that the EU has a voracious appetite for devouring the powers of nation-states. But if British Ministers never mention the EU without exhorting it to change, then voters are entitled to ask why they should invite the European Central Bank to run our macroeconomic policy.
It is time to present Europe as an opportunity. If pro-Europeans do not benefit from the pioneering spirit which they had in the past, they do have one significant advantage – Europe today is no longer some alien imposition, but a fact of our everyday lives.
In areas as diverse as sport, culture and even the fabric of our cities, Europe is an ever-present and positive influence. Almost everybody has been on holiday to another European country. Half of British teenagers speak a second language well enough to have a conversation in it. The shelves of every supermarket in Britain are laden with fresh pasta, French cheeses, Greek olives and Danish bacon. And the polling evidence shows that a large majority of people accept that it makes sense to co-operate with our European neighbours to solve shared problems on the environment, on drugs and organised crime, on security and defence. Europe today is not an ideology but a lived experience that most people never want to do without again.
Pro-Europeans have not shifted their arguments enough to take account of this, which is why we remain stuck in a shadowy debate about abstract notions of sovereignty and identity which make little sense to most people. Instead of banging on endlessly about how to reform the EU, Ministers should set out the examples of success worth emulating. The European good life should be contrasted with our tired and crumbling infrastructure. They should show how European values can capture the public’s aspirations: a better balance between work and family, combining growth with environmental well-being, and achieving economic dynamism with social cohesion. A powerful script for a new European debate screams out from the European Commission’s comparative statistics which show Britain languishing at the bottom of tables on education, public services, health and literacy.
The Prime Minister’s promise this week that health spending should reach the European Average in four years might do more for the European argument than all of his keynote speeches on European reform combined. But he needs to go much further by developing a political programme which aims to have trains as reliable as the French, schools as effective as the Germans and industries as innovative as Finland.
Of course the economic arguments for the euro will be aired endlessly in a referendum campaign, but the polls won’t shift until the Government finally destroys the argument that all our problems come Europe and all the solutions come from the English-speaking world.
· Dick Leonard was one of the 69 Labour MPs who voted against the party whip in favour of British membership of the European Community. Mark Leonard is Director of The Foreign Policy Centre and a Council Member of Britain in Europe. They are joint editors of The Pro-European Reader (Palgrave, £16.99) an anthology of the most powerful historic and contemporary arguments for Europe.

The Unlikely Counter-Terrorists
Rachel Briggs

Introduction
Counter-terrorism is currently the preserve of the state. Traditionally the main target for terrorists, the government and its agencies lead the UK’s fight against terrorism. However, as the threat, most notably that posed by Al Qaida, becomes more diffuse and increasingly determined, business is more likely than ever before to be targeted.

This is now received wisdom. More rarely explored is the role that companies could play in minimizing the impact of terrorism – ensuring that terrorists, if they penetrate our security net, do not succeed in inflicting massive human and economic casualties. The cinematic scale of September 11th has led to a sense that homeland security cannot defeat a determined terrorist threat – if thousands can be murdered in downtown Manhattan, it can happen anywhere. What use are the old precautions – bomb-proof curtains or fire alarms – if we face flying bombs or, worse, biological and chemical weapons? This is to ignore the real, practical lessons of September 11th. The death toll might have been far worse if the Twin Towers hadn’t practiced evacuation procedures after the unsuccessful bomb attack to bring the towers down in 1993. And those companies with contingency plans – new accommodation from which to resume operations almost immediately after an attack and insurance against losses – were far more likely to weather the storm in the short- to medium-term. Though business can never predict terrorist attacks or even stop them from succeeding, evidence shows that it can limit their impact. Therefore the UK requires a new breed of counter-terrorist – based not in Sandhurst or Scotland Yard but in the City of London.

The Case for Business Involvement in Counter-Terrorism
The case for business involvement in counter-terrorist activities in the UK is a combination of self-interest and social responsibility. The corporate world is an increasingly important target for Al Qaida. Intelligence shows the group has been linked to plots against a number of companies, including US companies in Singapore and Microsoft. Targeting companies not only achieves economic disruption, it also creates fear and panic among the population at large. Some companies are more attractive targets than others, most notably those companies comprising the UK’s so-called critical infrastructure, such as water and energy suppliers, transport and telecommunications networks and financial institutions. In 2000, the scale and speed of disruption caused by the fuel crisis illustrated vulnerabilities within and between these infrastructures – but the damage caused by peaceful blockades would be dwarfed by the impact of a determined and ruthless terrorist network. Even where the business community is not directly targeted, companies may suffer collateral damage from an attack on government, military, cultural or religious buildings, especially given the scale of impact sought by Al Qaida.

Companies have a responsibility to their staff, shareholders, investors, suppliers and neighbours to take their risks seriously and do everything they can to tackle the threat head-on. Responsible and vigorous action by companies against the threat from IRA/RIRA did much to reduce the impact of those attacks and, arguable, to make the City of London a much harder target.

Companies as Counter-Terrorists
Many companies, though, are shirking their responsibilities to tackle terrorism. In a recent survey of 5000 companies, just 45 per cent had business continuity or consequence management plans in place. Some companies may wrongly assume that the scale of the threat is so large that it can’t be managed. Other may assume the policies they already have in place will be able to cope with new and emerging threats. In fact, adopting these policies against some of the new threats could at best prove ineffective, and at worst actually worsen the impact. Ultimately, there is little pressure exerted on companies that choose not to act. There are no agreed standards of best practice, and this makes it difficult for a company’s stakeholders – its staff, shareholders, suppliers, neighbours, and so forth – to question the policies it adopts.

It can take up to two years, though, to implement risk management into business operations, and maintaining the momentum over this period – particularly if there is not an attack or there are long periods between them – requires buy-in from the board. Often easier said than done.

While there is little companies can do to detect or interdict planned attacks – that is indeed still the role of the state – they can prepare contingency and crisis management plans to ensure their response reduces rather than exacerbates the impact of a successful attack. Here, preparation is key. ‘Thinking the unthinkable’ has been a much-used phrase since September 11th; companies must not just be prepared for the last attack, they must anticipate what’s coming next. Companies must run regular scenario sessions, preferably in collaboration with the government, and should have a trained and permanent crisis management in place to take ownership of this work. These plans must then be revisited on a regular basis.

Many companies wrongly believe that the plans they developed to counter the threat from IRA/RIRA will protect them from possible attack from Al Qaida. However, the nature and scale of these attacks would render many policies at best ineffective and at worst worsen the impact. Companies must prepare for losses and damage on a much larger scale than they have ever faced before. It is highly unlikely they will receive a warning, and there is evidence that Al Qaida has tried to obtain weapons of mass destruction. As John Smith remarks in The Unlikely Counter-Terrorists, “It is now prudent to consider and plan for damage on the geographic and time scales of Chernobyl, Bhopal or Toulouse. A police cordon for 3-4 days some 400 metres around the site of a conventional vehicle bomb explosion may be a thing of the past. Successful chemical, biological or radiological attacks may deny access to large segments of cities for significant periods.” The possibility of large-scale loss of life requires companies to take succession planning seriously. Loss of the entire Board is a risk that should be planned for, and companies must have succession plans in place for this possibility. The so-called ‘golden hour’ after an attack is now more important than ever before; a company’s response in the minutes after an attack will determine whether or not they survive.

Companies must also revise their relocation plans. Many establish alternative offices where they can relocate operations in the event of an attack – so-called ‘hot’ and ‘warm’ sites. These tend to be near enough to the original office to limit the amount of disruption to staff and operations. In the event of a large-scale attack, though, access to such ‘hot’ sites may also be denied, as was the case with some companies in the World Trade Center.

Even with the best crisis management plans in place, a successful response depends on the willingness of the workforce to follow instructions. For example, in the event of a chemical or biological attack, workers may be safest remaining inside the building. But with the images of the Twin Towers firmly etched in their minds, some may choose to vote with their feet and leave the building. Not only would this put the individual at risk, it would also increase the movement of air, thus spreading the substance yet further. In his recent article in Security Monitor, Garth Whitty makes a series of sensible and relevant recommendations.

The Role for the Government
Of course, the role for the government is still as important as ever. It has a responsibility to provide a framework within which companies can carry out their counter-terrorist responsibilities in order to create the momentum needed to maintain this important work into the long-term. While the foundations for this framework have been set, there is much more work to be done.

If the government is to embrace the concept of business as counter-terrorists it must not let companies face the threat blindfolded. Corporate security managers currently only have access to relatively low-level intelligence, which undoubtedly impacts on their work. While some, through personal contacts, may have access to more, the government must address this deficiency and ensure that access to intelligence is deepened and widened and delivered in a more systematic way. Of course, there would continue to be sensitivities around certain types of
intelligence and it would need to balance often-opposing concerns. But ultimately, the government has a responsibility to make information sharing work. Towards this end, Dr Sally Leivesley has suggested it establish a one-stop shop link for companies within government and the creation of a link between the Cabinet Office and industry leaders to share information and intelligence. John Smith has recommended it also up-date the well-respected Home Office pamphlet, Bombs: Protecting People and Property to include information about chemical, biological, radiological and nuclear (CBRN) attacks.

A co-ordinated response necessitates co-ordinated planning. Joint government-business scenario planning sessions and exercises that test their plans would allow lessons learned and experience in one area to be transferred to other parts of the country. This practical partnership would also help to build the trust between public and private sectors that is often lacking, especially in relation to matters of security.

Public-private partnership should not be regarded as being one directional – the government depends on business in a number of ways. The business community is responsible for developing the software and technology that can help tackle cyber and other forms of terrorism; many of the country’s critical infrastructures are now privately-owned; the long-term stability of the UK following an attack depends on the business community getting back on its feet as quickly as possible; and there are now infinite dependencies between systems. Public-private partnership in tackling terrorism must be based on genuine principles of partnership. Businessmen may be unlikely counter-terrorists, but a national policy without them will make the UK a softer target for attack.

Rachel Briggs is Risk and Security Programme Manager at The Foreign Policy Centre. The Unlikely Counter-Terrorists, which she edited, was published by the Centre in November 2002 (£19.95 plus p&p). The Collection includes a foreword from Ken Livingstone and contributions from John Bray, Bruno Brunskill, Roger Davies, Bruce George MP, Dr Sally Leivesley, Richard Sambrook, John Smith, David Veness and Natalie Whatford. It was kindly supported by BAe Systems, Control Risks Group and the RSMF. To order a copy of the collection, contact Central Books (tel: 020 8986 5488, email: mo@centralbooks.com).

We can still win the euro referendum – but Mr Blair must get his act together
By Roy Jenkins
06 June 2000
This season is marked by three anniversaries of great importance in the mostly unhappy history of Britain’s relations with western Europe. The first of course is Dunkirk, of which nobody can have remained unreminded. But it is less central to the argument than the other two because, according to taste, it can be mobilised by either side. The antis can say that in some perverse way we were happier when we were driven out of Europe and on our own. The pros can say that once we had allowed ourselves to be extruded, it took us four very difficult years to get back.
The second, and 50th, anniversary is that of the launch of the Schuman Plan for the European Coal and Steel Community, which was the beginning of post-war European integration. Britain in its unwisdom stood aside, and I regret to say that I, as a very young and new member of Parliament, followed my party whips and voted against. I can since point to 45 years of consistent Europeanism, but it was a bad beginning, both for Britain and for me. It was bad for Britain because by that act of standing back we renounced the leadership of Europe, which in the early post-war years had been ours for the asking. We threw it to France and Germany, who not only overcame a hundred and more years of destructive enmity to come together and jointly seize it , but prospered far more than we did in the ensuring 25 years.
Since that 1950 mistake we have made a national habit of always joining every European enterprise late. It is not that we successfully and defiantly plough a lonely furrow on our own. (We have now been in the Coal and Steel community for the past 27 years). It is rather that we always join late and reluctantly, and consequently with less influence and on worse terms. That has been the dismal pattern with the Economic Community, with the European Monetary System and now with the Euro. We never seem to learn that there are considerable advantages to being in on the ground floor, as opposed to having to struggle up many flights of difficult stairs.
One consequence has been that nearly every British prime minister of this period has had his or her reputation besmirched by hesitation or equivocation on Europe. It began with Anthony Eden, whose refusal to go to the Massina Conference of 1955 which led to the Treaty of Rome did more harm than even his ill-fated Suez adventure and it has continued through to Mrs Thatcher, whose long reign ended in chagrin on the issue, and to Mr Major, whose whole premiership was rendered almost a nullity by it.
Harold Wilson, whose reversal of position in 1971/2 destroyed his own self-confidence and zeal in politics even more than it damaged his reputation, and James Callaghan, who kept us out of the European Monetary system, did not do much better. The exception was Edward Heath. There were many faults to his leadership and his premiership, but like the hedgehog he had one big idea and he stuck to it.Any true friend of Mr Blair would want him to avoid joining this dismal procession which extends. He has the most genuine and instinctive European feeling of any Prime Minister since Heath, and much greater political skills. The question is whether he can combine the two to make the political weather in Europe, and not just be tossed about by it like a forlorn rower in a small boat. That, and not first winning another election, will be his test of statesmanship over the next two years.
The third anniversary is that of what is still the only national referendum that has ever been held in Britain. Twenty-five years today the votes were being counted – and there were a lot of them to count for the turnout was the rough equivalent of that in a general election – which came out by two-to-one in favour of Britain’s commitment to the European Community. This was despite the fact that six months before that referendum theopinion polls were approximately as unfavourable to the “Yes” case as they are today to our joining the Euro.
The lessons I draw from this experience, in which I was President of the Britain in Europe “yes” campaign, and from the other pieces of history I have cited, are the following: First, it is the most idle dream to think that Britain can be a leading player in Europe so long as it does not participate in Europe’s main thrust at the moment, which is the euro. Eleven of the 15 member states are already in. One (Greece) is about to join. Two (Sweden and, a little more doubtfully, Denmark) are moving hard and ahead of us in this direction. To imagine that in a community where 14 countries could be in and one is out, the 14 will look to the one for leadership is manifest nonsense
Second, a Euro referendum must not be long delayed after the coming general election. If it is, Germany, France and the other core members will conclude that we will always hover on the brink, and will settle their minds firmly on going ahead without us, which indeed they are already showing signs of doing.
Third, a successful pro Euro referendum campaign must be fought on a cross-party basis , as was that of 1975. But, more than this, it must be more than an opportunistic alliance of suspicion and manoeuvre. It must be done with mutual confidence and even a little love. That again was achieved in 1975. I have never enjoyed a campaign more. I, and many others, felt liberated us from a lot of the claptrap of political party politics. My mind retains a particularly vivid memory of one of the more satisfactory meetings in which I have ever participated. It was in Norwich on the penultimate evening of the campaign. I shared the platform with Willie Whitelaw and David Steel. The British public showed every sign of liking the spectacle of politicians co-operating for a cause in which they believed rather than hurling routine insults at each other across the floor of the Commons.
Fourth, a successful campaign requires a sustained build-up The Government cannot convince the British public in a fortnight, after previously taking the view that the Euro is a subject which must not be discussed, rather like the Victorian attitude to piano legs or Harold Wilson’s Sixties aversion to devaluation, which became known in Whitehall as the “unmentionable” and which, as a result, was done nearly two years too late.With a properly conducted campaign, a referendum in 2001 can be won. But the Government is leaving it dangerously late to start throwing its weight behind a strong, positive case.

Fear is one of the most basic human conditions. Being afraid of fundamental change or seemingly incomprehensible institutions, moreover, is something to be found in almost all historical periods and places. To a certain degree, there is nothing wrong with some kind of basic fear. As long as it remains healthy scepticism, it makes people immune against populist extremism. But Britain’s relationship with the European Union and its predecessor institutions over the last fifty years appears to be no longer in the category of healthy scepticism. Some continental Europeans would even argue that Britons show obsessive scepticism towards the European Union.
Undoubtedly, Britons are among the most eurosceptic citizens in Europe. But nonetheless, the uniqueness of British euroscepticism is often easily overstated. Part of the problem is, of course, that neither politicians nor academics can agree on a good definition of euroscepticism. It would be wrong, for example, to equate euroscepticism with anti-Europeanism. Because it is perfectly possible to feel European in a geographical and cultural sense, but to oppose the European Union on political and economic grounds, it is vital to distinguish properly between antipathy towards Europe and scepticism towards the European Union. And, clearly, most Britons are afraid of the European Union as an institution rather than Europe as a continent.
Another crucial element for defining euroscepticism is to take seriously the notion of scepticism on the basis of substantive issues. All too often, the problem is presented as a stark choice between outright support and complete opposition. However, in the grey area in-between, there are a lot of people who support European integration in principle, but oppose the specific direction it is developing. In other words, they want European integration, but they resent the European Union currently on offer. For that reason, it is futile to ask whether Britons regard themselves geographically as Europeans, or whether they support supra-national integration as a matter of principle. On both counts, Britons are not much different from their fellow Europeans. To suggest, for example, that Britons are eurosceptic because they are more nationalistic, while Germans are denationalised, is mistaken since issues like Anglo-Saxon-style hostile corporate take-overs or ethnically-based immigration laws demonstrate the existence of German nationalism. But the crucial difference is that German nationalism seems to be compatible with the specific nature of European integration. The real question is, therefore, to seek the reasons why Britons – more than others – find it so problematical to combine domestic and European patterns of rules and norms, and why they consequently aspire to a different kind of European Union.
In order to locate the sources of British euroscepticism, then, it is crucial to consider this puzzle in a comparative manner. The reasons why some countries support the existing pattern of European integration can be as illuminating as the reasons why Britain stays on the sidelines. Finally, since almost all attempts to understand European integration face the problem of what is sometimes compared to blind men trying to identify a giant elephant, it is perhaps useful to discuss four general questions of why Britons are afraid of the European Union.
First, how is European integration defined? As any other ‘social thing’, European integration is not a natural phenomenon out there that can be defined objectively. How people perceive and understand European integration has immense influence on the way they react to this process. For the people in most member-states, for example, European integration has clearly a positive connotation of identity since it refers to the guarantee of peace (e.g. France and Germany), the rescue of nation-states after war (e.g. Benelux and Italy), or the enhancement of democracy and development (e.g. Spain, Portugal and Greece). For Britain, in contrast, joining European institutions was associated with national decline and the loss of great power status.
In addition, belonging to European institutions is regarded by most Europeans as reaching out to the world, either because their countries are too small (e.g. Benelux) or were too nationalistic in the past (e.g. Germany). But for Britons, who came from pursuing a global agenda as a colonial power, the European experience was necessarily one of narrowing options and adopting a more inward-looking stance. Likewise, if a number of European countries attempt to define today the European Union as a counter-weight to America, it carries a positive connotation because it is regarded as extra room for manoeuvre in international affairs. For Britain, in contrast again, this is perceived as endangering the ‘special relationship’ with America and thus rather seen as reducing foreign policy options. In general, therefore, depending on where countries were standing before the integration process started, Europeanisation can carry positive or negative identity connotations. No wonder, then, that Britons look differently at the European Union than, for example, Germans do.
Second, what is the basis of decision-making? Whether people agree with a certain mode of integration depends not only on the kind of identity they ascribe to it. Equally important is the overall assessment of their strategic interests within that framework. Put simply, it is more likely to be enthusiastic about the European Union in the case of benefiting visibly from membership than vice versa. For some countries, like Ireland, membership has clear and tangible advantages in the form of regional aid funds. For others, like Germany, tangible disadvantages such as net payments are balanced by intangible advantages such as gaining post-war sovereignty and security. As often, however, any supposedly rational cost-benefit analysis depends on perception. It is thus not only that Britons object to being the second biggest net contributor to the EU budget; but it is the general impression of paying without a reason – because they cannot identify sufficient intangible gains from membership.
However, it is only one side of the coin to know what the results of a cost-benefit analysis are. Perhaps even more importantly, the other side of the coin is to look at who the actors are that formulate and implement decisions in European affairs. In a special Eurobarometer survey in 1996 analysing elite-mass differences in attitudes towards the European Union, for example, one of the most startling results was that attitudes among the masses in Britain and Germany were at an almost identical (low) level. The crucial difference was, however, that Germany’s political and economic elites were significantly more pro-European than their British counterparts.
Almost any public opinion survey demonstrates fairly widespread disillusionment with the European Union; certainly much higher than the ‘normal cynicism’ towards politics within states. But in some countries, like Britain, this kind of popular eurosceptic disgruntlement appears to have greater impact on decision-making elites. Particularly in recent years, for example, referendums about EU treaties in a number of countries have almost always stirred up eurosceptic movements. In the case of Britain, moreover, the binary nature of the political system, in addition to a typically confrontational political culture, opens up space for eurosceptic movements which would not be found in ‘grand coalition’ states like Germany with a strong consensual political culture.
Third, what should European integration achieve? European integration started as a deliberate strategic security project in order to solve the ‘German Question’ and, later on, to establish an anti-Communist bloc. Quite soon, however, a second agenda emerged with the success of the continental European welfare state model. Indeed, in the light of the growth of globalisation in the 1990s, a process that is often perceived as eroding the welfare state, the protection of this European model – mostly defined around distributive social justice and a strong regulatory regime – has become arguably the most important priority for the vast majority of EU member-states.
The dilemma for Britain is obvious: Either Britain continues to follow the Anglo-Saxon model, which accepts only some aspects of the continental European welfare model; in which case Britain would remain an ‘awkward partner’ in Europe. Or Britain abandons both Thatcherism and Blairism in favour of a more continental-style welfare state; in which case Britain itself would have to undergo (again) fundamental domestic change. A ‘third way’ somewhere in the middle may seem tempting from a British perspective. But because most continental Europeans are not in the mood of moving further towards an Anglo-Saxon model, this is not a real alternative.
In addition to this principal dilemma, there is of course the other big issue regarding the overall goal of European integration: federalism. At a basic level, it starts with the apparent linkage that existing federal systems naturally tend to favour federalism at the European level. Nothing tells more about this problem than the different meanings attached to the word federalism in German, where it stands for decentralisation, and English, where it is associated with centralisation. At a deeper level, even if Britons and Germans finally realise that they both aim for subsidiarity, however, the real divide is over the exact type of federalism. So far, the European Union has followed the path of German-style co-operative federalism, which is characterised by overlapping joint-decision networks and a strong regulatory regime at the central level. If at all, in contrast, most Britons would rather prefer a US-style competitive federalism with clear separation of powers and exclusive policy domains for each federal level. To give an example, co-operative federalism would eventually lead to tax harmonisation, whereas competitive federalism would be principally against it. Again, there is no viable ‘third way’, and the European welfare state model is inherently in favour of co-operative federalism.
Fourth, finally, what is the past experience? For quite a long time, Britain’s awkward role in Europe was attributed to the ‘latecomer effect’. Without doubt, it is rarely without problems to join a club with established rules that cannot be changed easily. This is particularly true if there had been an acrimonious debate about the pros and cons of membership. Yet, newcomers such as Spain, Portugal and Greece are examples of a trouble-free entry experience. What is perhaps more important in a long-term historical relationship, however, is the issue of trust. For example, Britain’s attempts to sabotage the early European unification process after 1957, or Thatcher’s fight over the British Budgetary Question in the 1980s, led other member-states to constantly mistrust British motives and perpetuated the image of Britain as the ‘awkward partner’. Regaining trust, however, is a long uphill struggle.
In conclusion, there is no doubt that Britons are more expressively eurosceptic than others. However, as a closer look at those four core questions illustrates, there are crucial cultural, rational, institutional and historical reasons for why Britons are afraid of the European Union. To some extent, the depth of those arguments leads even to the conclusion that British euroscepticism is indeed over-determined. In general, the underlying cause is quite simple: Britons are afraid of the European Union because they are forced to adopt their specific cultural and institutional rules and values towards what emerges as a common European norm which they dislike. Crucially, given that due to specific historical circumstances European integration started as a project around particular continental – perhaps even Franco-German – rules and norms, Britons regard European unification as a process where they have to change considerably more than their continental counterparts. On too many issues, Britons stand alone in Europe. In this sense, apart from protest movements on the fringes, general British euroscepticism is not so much a movement against Europe or integration itself, but rather an expression of aspiring to another kind of European Union.

Dot.bomb The Rise & Fall of Dot.Com Britain: Rory Cellan –Jones (Aurum Press 2001)

The Internet Galaxy: Reflections on the Internet, Business and Society: Manuel Castells (Oxford University Press, 2001)

For most people, the dotcom revolution is something that happened in 1999. Those hardy perennials of British retailing who were turfed out of the FTSE 100 to make way for silver-tongued graduates armed only with sketchy business plans must feel vindicated: – the Nasdaq is ailing, used office furniture is the only hot commodity in Silican Valley. Even in Britain, OFTEL recently reported the first fall in home internet use.

J. David Kuo’s Dotbomb – Inside an Internet Goliath gives an insider’s view on what it was like to be on the cusp of the wave. He joined ValueAmerica.com six weeks after it floated on the stock-market for $2.5 billion. This was a company that sought to cut the overheads normally associated with retail by liasing between manufacturer and customer to co-ordinate direct delivery from one to the other. Like clickmango or boo.com, it was a nice idea undetained by the prosaic realities of retailing. Manufacturers tended not to put their back into delivering one-off orders punctually (the designer ice-cream was invariably melted when it arrived) and the internet wasn’t sufficiently entrenched in people’s lives to make the economics work.

Kuo’s is a freewheeling account, hot on personalities, excitement, adventure and misadventure. It combines a kind of Jack Kerouac narrative urgency with that faith in providence shared only by true believers: ‘Craig Winn had been waiting for a revolution like this almost his whole life … It was, he argued, a historical inevitability that retail underwent a revolution every decade or so”.

With scarcely less vim the BBC’s Technology Correspondent Rory Cellan Jones serves up a picaresque tale of the rise and fall of Dotcom London. We get the predictably lurid anecdotes of swagger and excess –first class trips to New York for no clear purpose, call centre staff paid to do nothing for months, a culture that dismissed profit-making as the preserve of those who weren’t prepared to invest for the long-haul. He skilfully describes the forces behind the maelstrom. PR companies promoting their dotcom clients and newspapers hungry for stories of instant riches conspired to vastly inflate prices. Bulletin boards in which small shareholders could swap tips led to huge stock market fluctuations as fact, rumour and misinformation became indistinguishable. Conflicts of interest arose as analysts, supposed to give impartial advice to institutional investors, were drafted in to publicise the latest internet floatations.

What is most striking is that everyone knew they were in the grip of madness – but they knew that if they were prepared to pay vastly over the odds for shares, someone else would be willing to buy them in a week for even more. But Cellan-Jones is a canny enough observer not to entirely believe the bright lights, big city cliches. The dotcom kids were more likely to be slumped over their keyboard at three in the morning than snorting lines in a Soho members club. For all the talk of taking on the old boy network, ushering in a brash, American business culture – many of the movers and shakers had met at Eton and Harrow and retained a decidedly English reticence about their bank-balances. Though the net was supposed to allow “virtual communities” to thrive and make “face to face” contact an irrelevance, all the entrepreneurs were clustered around Oxford Circus and hung out in the same bars. Far from being an atmosphere suited to the introspective geeks, the student newspaper vibe appealed because of its sociability.

Long-term, Cellan Jones sees the dotcoms as contributing towards a modernised Britain – the tyranny of dress-down has replaced the tyranny of pinstripe, and the financial service and budget airlines continue to be revolutionised by online sales.

In end, though, these books work better as navel-gazing romps through the beautiful people of London and California than they do as analytical works. They cover the seductive trajectory of bubble and burst at the expense of the quieter companies and less excitable voices. They play down the fact that serious figures in e-commerce retained a degree of circumspection at the time the market started taking notice of them, and justifiably retain a fair degree of optimism now, even when they are out of the limelight. Kuo’s A to B narrative – demonstrated by his hysterical subtitle from Lunatic Optimism to Panic and Crash ignores this, because it would complicate the story – and doubtless make the film-rights to his story far less lucrative. A bulletin board-message quoted by Cellan-Jones reads: ‘“Lastminute.con [sic] may be well known amongst the Islington media luvvies as they’re sipping their caffeine-free guacamole, but as far as most of the world’s concerned it’s “who gives a fuck.?” Quite.

For chapter and verse on what dotcom revolution really meant we have to turn to that seer of the information revolution: Manuel Castells. In his new book, The Internet Galaxy, he remains convinced that the internet will prove as revolutionary as the electrical grid and the electric engine. The web is the means through which we can harness the flexibility and adaptability of networks for the first time. Until now, networks were out-performed by organisations able to muster resources around centrally defined goals and “vertical chains of command and control”. Three explosive social trends will bring about a new world: “management flexibility; the globalisation of capital, production and trade; the demands of a society in which the values of freedom and open communication become paramount; and the extraordinary advances in computing and telecommunications made possible by the micro-electronics revolution”.

But he gives obvious warning, often lost in the fizz of the late nineties, that the web is “neither utopia nor dystopia” but “an expression of ourselves”. September 11 showed the dark side of networks – if the web means that despotic regimes cannot banish the BBC, it also means that democratic regimes cannot keep out Al Quieda. In Bogota, enterprising kidnappers have taken to spreading their demands via email as gated communities become more difficult to access. Finally, he proves that the campus culture of individual freedom that motivated the web pioneers is alive and well: “Users are the key producers of the technology” who “adapt it to their uses and values, and ultimately transforming the technology itself”. This is the true story of the web – best represented by the teenagers who took the phone companies by surprise by developing their own private language of text-messaging. In comparison, the antics of Martha and her mates were a just a sideshow.

Mark Leonard is Director of the Foreign Policy Centre