Stockholm European Council: Statement to the House of Commons

26 March 2001

With permission Mr Speaker I should like to make a statement about the Special European Council held in Stockholm from 22-24 March.
At Stockholm there was from all our partners sympathy over the outbreak of Foot and Mouth Disease in Britain and support for the measures we are taking to contain and eradicate the disease. With your permission Mr Speaker, my Rt Hon Friend the Minister for Agriculture will be making a statement to the House tomorrow on the latest developments.

The purpose of the Council was to take forward the process of economic reform launched at Lisbon last year. This involved setting performance targets for the first time, benchmarking both between the nations of the EU and in respect of our main competitors outside Europe; and a massive programme of liberalisation in opening up our markets.

As American growth slows, this policy is even more vital for growth and jobs in the future. Since March last year, two and a half million new jobs have been created in the European Union. In the UK we have created over one million new jobs since 1997. These are figures which will be welcomed in the House, in the country, and throughout the European Union.

EU spending on information and communications technology as a proportion of GDP has outstripped the US for the first time. The proportion of homes with access to the internet has doubled to 28%. The figure for the United Kingdom is 41%.

But we must go further. Prior to the Summit, we agreed already:

• Rules for electronic commerce which mean that a company registered in its home state can operate on the basis of those rules everywhere in the European Union.
• Rules allowing businesses to operate as a European company.
• A programme for liberalisation of rail freight.
• The final steps in telecomms liberalisation, in a way which will bring cheaper bills and cheaper internet access. That's good news for consumers throughout Europe.

At Stockholm we agreed:

(1) To liberalise financial services, in a comprehensive plan which includes a single European company prospectus, common accounting standards, a far quicker procedure for changing financial service rules, and completing the single market in wholesale and retail financial services. The City and the CBI have welcomed this break-through as good for jobs in the UK and the rest of the EU.

(2) We have made a commitment to open up the electricity and gas markets across the European Union; most member states support the Commission's proposed timetable of full energy liberalisation by 2005, with intermediate targets for commercial liberalisation of 2003 for electricity and 2004 for gas. That proposal goes forward. There is widespread support for it in the Council, and crucially it can be agreed by Qualified Majority Vote. So while I regret we could not go further at Stockholm, the prospects for agreement at European level are good. Our aim is for the Council of Ministers to reach agreement before the end of the year.

(3) We agreed to reform competition policy and eliminate unfair state aids. For example, we expect British consumers will benefit from the changes to the so-called car block exemption in eighteen months time, where our aim will be to secure a fall in UK car prices.

(4) To finalise this year plans to deliver a Europe-wide patent. At present it can take nearly four years for a patent to be agreed right across the European Union, twice the time it takes in the USA and at five times the cost.

(5) To agree, hopefully, in June the Single European Sky. This will improve air traffic management in Europe, enhancing safety and reducing delays. A 25 per cent reduction in delays would save Europe's air transport industry and the public 2 billion euros a year.

In addition, the Council took further steps on employment, especially for women and the over-50s; on vocational skills; and on new technologies including third generation mobile communications and biotechnology.

On trade, Mr Speaker, we renewed our commitment to work towards a new WTO round later this year, an issue we will be pursuing when President Bush meets EU heads of government in Sweden in June.

Taken together, these changes are further steps along the way to an efficient and competitive economy.

Russia

President Putin met members of the European Council in Stockholm and I had a good separate bilateral meeting with him. Discussion focussed on economic issues. We expressed our support for continued Russian economic reform and for Russia's bid to join the WTO. We also underlined the importance of further steps by Russia to improve the investment climate.

Macedonia

President Trajkovski of Macedonia joined us in Stockholm at a critical moment for his country. We offered him our support, and condemned the activity of armed Albanian extremists. Macedonia has started to build a multi-ethnic society and it is in all our interests that the country succeeds and does not polarise into separate Slav and Albanian communities. The United Kingdom has acted quickly to help shore up democracy and peace in Macedonia. In Kosovo, NATO has diverted an extra 500 KFOR personnel to the Kosovo/Macedonia border, and I can announce today two new steps.

First, we are creating a new UK/Scandinavian battle group of some 400 troops from within our existing contingents for deployment by the KFOR Commander to help secure part of the Kosovo/Macedonian border.

Secondly, to reinforce KFOR's capacity to control Kosovo's borders, we are sending out a unit of Phoenix unmanned aerial vehicles with its 120 strong support team to provide extra aerial reconnaissance and intelligence-gathering assets to KFOR. The unit will be operational next month.

Conclusion

The EU also reaffirmed strongly our joint commitment to the Nice Treaty and its ratification. Failure to ratify would put at risk the entire enlargement process. Whilst we must, of course, go further in pursuing the policies of economic reform, the fact that this is now the clear economic focus of the EU is itself a huge advance. The agenda for it is being led by the UK. Once again it shows the advantages of constructive engagement and the folly of a policy of isolation.

Mr Speaker, that is the approach which we took at Stockholm. It is a policy which is delivering economic reform in Europe and jobs for this country. It is the policy I propose to pursue with the support of this House and the country.