Article: Business must back a reforming Europe. By Michael Rake and Sir Martin Sorrell
A year ago the pro-European movement was at its lowest ebb. The European Union's constitutional treaty was voted down in France on May 29 by 55 per cent to 45 per cent. Three days later the people of the Netherlands followed suit. This was particularly galling for pro-Europeans as these two countries were founding members, signing the Treaty of Rome in 1957. The pro-European cause in the UK, which had been mobilising its resources for a potential referendum, was left to reflect on these momentous results. Certainly the results in the referendums on the continent were a blow to the British government's European policy. At the time the prospect of signing up to anything that involved European co-operation seemed remote.
If a week is a long time in politics, as Harold Wilson, prime minister in the 1960s and 1970s, once famously remarked, a year is an eternity in the politics of Europe. In some ways, the reverse of the doom and gloom scenario has occurred. The UK, buoyed by its presidency of the EU last year, has been at the forefront of arguing for liberalising measures (the services directive) and an enlarged Union (the proposed accession of Bulgaria and Romania in 2007). Furthermore, the pro-European movement has rallied and re-mobilised. We have established a coalition of business leaders with a positive vision of the EU. The aim of our new group, Business for New Europe, is both to highlight the benefits of the UK's membership of the EU and to articulate a positive case for economic reform. Too often Europe's detractors use economic reform as a smokescreen to point to the faults of the Union. All the business leaders involved with Business for New Europe, though they may have real concerns over the draft constitution, share a common positive vision of the EU.
As it happens, many of the measures of the constitution reinforced the role of member states and would have been helpful to the business community, bolstering Europe's attempts to strengthen the dynamism and competitiveness of its economy. Indeed, many voters in France saw the constitution as promoting Anglo-Saxon values and neo-liberalism. Importantly, the constitution asserted that the EU should act only if the objectives in a policy area "cannot be sufficiently achieved by the member states", as well as proposing a twin-track approach (which would have suited the UK in areas where it wished to move slower than other member states). Furthermore, while it proposed an increase in the areas to be decided by majority voting, it reasserted the veto for members in areas such as taxation, defence and foreign policy. However, there were a number of concerns with the draft constitution, including those from the business community about the impact on flexibility of the charter of fundamental rights.
However, proponents of the constitution certainly cannot be so arrogant as to brush aside the results of the referendums. The overriding lesson is that many people are uncomfortable with grandiose schemes emanating from Brussels. Giving the collection of measures the title of constitution was a mistake. This was not a Philadelphia 1776 moment, more an attempt to make the machinery of Europe, which had been designed for six states, work for an enlarged Union. The European Commission seems to have taken this message on board, adopting a more humble tone and calling for a comprehensive review of the single market with a view to completing the free movement of goods, capital, persons and services. Furthermore, it has made clear that its focus is on jobs and growth rather than institutional reform. The present situation of 20m people unemployed in Europe requires the urgent attention of the EU and member states.
So where do we go from here? We are now in the "period of reflection" or, as one commentator labelled it, more a "period of deep sleep". We should drop the idea of adopting the constitution as currently construed. We need to think about how we create an effective EU of 25, soon to be 27, member states. The ultimate target should be to produce a treaty - not a constitution - containing the measures for reforming the structures and procedures of the EU. This could be agreed by member states in whatever manner they best saw fit.
The German presidency starting in January 2007 offers an opportunity to seize the initiative again. Angela Merkel, Germany's chancellor, recently remarked on the need to create a "Europe that has the power to act". José Manuel Barroso, Commission president, has suggested a shared statement of values and ambitions to be signed by political leaders in 2007 (to mark the 50th anniversary of the Treaty of Rome). This would be helpful in reminding people of the purpose and usefulness of the EU, and act as a bulwark against federalism.
Other groups should follow this example. That is why Business for New Europe will be working to produce a similar statement for the business community in 2007. Europe has consistently demonstrated its value to business since 1957. It is now time for business to commit to a reforming Europe.
Sir Martin Sorrell, chief executive of WPP Group, and Michael Rake, international chairman of KPMG, are members of the advisory council of Business for New Europe.
