1. What was the agenda at Helsinki, and what decisions were reached?

In December 1999, the leaders of all countries in the EU met at Tampere, close to Helsinki, for one of their twice yearly meetings. The main decisions taken were on further enlargement of the Union, the agenda for a major new Inter-Governmental Conference to be held under French chairmanship towards the end of 2000, and the establishment of an EU rapid-reaction force of up to 60,000 troops. Proposals for a 20% EU wide withholding tax were blocked by Britain, although revised proposals are likely to re-emerge this year. The French refused to lift their ban on British beef, despite clear instructions from the Commission, backed by the force of the law, that they should do so. Technical help to Russia will be curtailed as a result of the Chechen war, but the EU will not impose wider sanctions.

2. What will be the impact of increasing the number of EU Member States?

There are already six countries in the queue to join the EU, namely Cyprus, the Czech Republic, Estonia, Hungary, Poland and Slovenia. At Helsinki, another seven were added - Bulgaria, Latvia, Lithuania, Malta, Rumania, Slovakia and Turkey. Increasing the membership of the EU from the present fifteen Members potentially to twenty eight is bound to have a major impact on the way the EU is run. To avoid deadlock, there will be increasing pressure to have more and more qualified majority voting, thus undermining the ability of any one country to defend its own interests, even on vital issues such as taxation and defence. The number of commissioners is to be cut back in relation to the number of Member states, to avoid the Commission becoming unmanageably large. The objective is to have one massive state covering the whole of Europe, in which each Member will inevitably have a smaller say than now in the way policy is determined.

3. How are these plans to be taken forward?

The Helsinki summit agreed that to deal with this large and complex agenda, an Inter Governmental Conference would be held late in 2000, when the French will be in the chair. In these circumstances, with Commission President Prodi doing all he can, in his words, to see "the Commission as an emerging government for Europe", inevitably the pressure will be on all Member states to agree to surrender substantially more sovereignty in the interests of the Union, and to agree to give more powers to Brussels. At a time when opinion in Britain is hardening against the euro, and an increasing proportion of the electorate would rather be out of the EU altogether, it is hard to see how this agenda squares with the aspirations of the British people.

4. Do we need a Euro-army?

Highly symptomatic of the way in which federalist tendencies are manifesting themselves is the proposal agreed at Helsinki to set up the so-called EU rapid reaction force, scheduled to come into operation by 2003, and designed to undertake EU-led military operations in crises where NATO is not involved. There are three major problems about this proposal. The first is that the EU member States have a very poor record of co-operating together in military operations, as recent experience in the Gulf War and in former Yugoslavia have shown. Secondly, they may well provoke Russia into adopting increasingly nationalist and militarist policies. Thirdly, the strength of Western European defence depends heavily on American finance, advanced technology, firepower and manpower. Isolationist opinion, never far below the surface in the USA, could well be strengthened by what could be interpreted as the weakening of links inside NATO, leading eventually to an invidious choice for EU Members - weakened defences or a substantial increase in military expenditure.

5. What is now likely to happen with the withholding tax?

Despite a great deal of pressure, Britain refused to fall in line and agree to the EU withholding tax proposals. These would compel all Member States to deduct from all interest payments tax at the rate of 20% whether or not the recipient was domiciled in the home country. In an ideal world, this proposal might well make sense, as a measure to reduce tax evasion. In the real world, however, all it will do will be to drive investment funds out of management within the EU. As the City of London is far the largest centre for handling funds which are likely to be affected, Britain stands to lose far more than other Member States. In particular, the City's £3,000 billion eurobond market, on which 6,000 jobs depend, is likely to be driven outside the EU. Regrettably, however, the withholding tax proposal has now only been remitted for further consideration, rather than killed off. The difficulties in getting taxes collected at all in a number of Member States mean that in some revised form, the withholding tax proposals are all too likely to reappear. 

6. How are Britain's relations with its EU partners following Helsinki?

All recent governments have come to power in Britain determined to try to improve Britain's status in the EU, with plans to make Britain play a major and central role in the Union. The Labour government is no exception, but as the Conservatives have found out in the past, it is not so easy. There are just too many areas where our interests, traditions and ways of doing things are not the same as those of our neighbours on the continent. Interestingly, these realities have always been much more clearly mirrored in public opinion than in the actions of any of the governments in Britain of recent years. The conflicts of interest eventually work through to the surface, however, pulling ministers back from their previous enthusiasm for further euro-integration. Helsinki showed the usual tendency, with Labour leaders backing away from commitments to a referendum on the Single Currency, exasperated by French attitudes to their ban on British beef, and isolated on the issue of the withholding tax.

7. What do current opinion poll results show?

There is no doubt about the impact of recent developments on British attitudes to the EU. Opinions are steadily hardening against the trends towards further integration. The BBC's output has, often, and especially recently, been accused of pro-EU bias, but even Radio Four's Today programme recently carried a report on a ICM poll showing 69% of respondents against Britain joining the Single Currency, and 34% in favour of leaving the EU altogether, mirroring many other polls showing similar outcomes. The reality faced by the Labour leadership is that hostility to the way events are developing in the EU is very widespread among trade unionists and others who voted Labour at the last general election. Unless this starts being reflected more obviously in government policies, there is an increasing danger of a haemorrhage of Labour votes at the next election to other parties with views more in tune with public opinion.

8. Where does this then leave the referendum on the Single Currency?

There is little doubt that there has been a major reassessment by government strategists about the timing of a possible referendum on the Single Currency. Only a year or two ago it seemed likely that there would be a referendum soon after the next general election, with the government strongly advocating a "yes" vote. The increasing dislike of the euro among the electorate, combined with the current extremely high value of sterling, has evidently made this an ever more unattractive option. The Labour leadership knows full well that the last Conservatives administration never recovered its credibility as a result of Britain being ejected from the Exchange Rate Membership (ERM) in September 1992, after the government had stated repeatedly that its entire economic strategy depended on ERM membership. Of course what actually happened is that shortly after we left the ERM Britain began to recover strongly from the deep recession that membership of it had caused. The economy began to expand. Unemployment — then almost 3m - began to fall, as it has continued to do ever since. The government's finances improved. Living standards started to rise again. The British people — or most of them at any rate — began to feel more confident. These are conditions which any government throws away at its peril, and the risks of a repeat of the ERM fiasco on public opinion is something which the Labour leadership — surely rightly — dreads to contemplate

9. Where does this leave government policy on the European Union?

As events have unfolded at Helsinki, especially with the prospect of the 2000 Inter Governmental Conference - certain to propose further large steps towards EU integration - the Labour government’s policy options on the EU are gradually narrowing. A referendum on the Single Currency is steadily becoming a less feasible option. Public opinion is increasingly hostile to European integration. The gap between the way most people see the economy and society developing in Britain and other EU countries is widening. Convergence is not taking place. Inward investment shows no signs of falling. Britain’s trade and investment flows are increasingly not with the economies of other EU Member State, but with the rest of the world. Wim Duisenberg, President of the European Central Bank, said recently that he thought that Britain was years away from being able to join the euro. Even the CBI leadership — long fervent advocates of the Single Currency - have gone off the boil. Britain is carving itself out a different path from other Member States, and the Labour leadership has now increasingly little choice but to recognise that this is happening. Critical changes of perception often take place unexpectedly quickly. Was the summit at Helsinki the time when the Labour leaders present at last realised that the drive to put Britain at the heart of Europe was a policy that not only made less and less sense in itself, but was also one which might put a Labour victory at the next general election in jeopardy?

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