For Europe, a decisive time

France, according to its prime minister, Mr Lionel Jospin, "exists as a fully-fledged sovereign nation, but can't be separated…

France, according to its prime minister, Mr Lionel Jospin, "exists as a fully-fledged sovereign nation, but can't be separated from Europe". Europe is a union of nations, freely and fully consented to by its peoples, he says; far from being the negation of the nation, Europe both extends and strengthens it. "European affairs are no longer `foreign' affairs; European issues aren't extrinsic to national ones."

Mr Jospin was speaking last month to the French National Assembly on his government's priorities for the forthcoming presidency of the European Union, the main focus of this International Report.

He spoke of a decisive moment in Europe, as historic prospects open up to end the continent's division, which will be given substance by the EU's enlargement. But real questions need to be addressed about how the EU will operate with 20, 25 or even 30 members, its future as a political organisation and its ability to exert influence on world affairs.

Mr Jospin outlined an ambitious programme for the French presidency, intended to restore, with its partners, "direction and meaning to the European enterprise". It covers three main sets of objectives: for a Europe which delivers on full employment and growth; which is closer to the people; and which is stronger and more effective.

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It is characteristic that such a strategic statement of French objectives should start with reflections on France's role in Europe. For many years there has been a consensus among French political elites that the two are inseparable, that "for France to remain France, it must become Europe", as one international relations analyst has put it. As a medium power of the first rank France cannot achieve its objectives alone. Hence the critical importance of European integration, which domesticates foreign affairs, and within it of the Franco-German axis. The long-standing relationship with Germany, traditionally the motor-force of integration, has been significantly revived in recent weeks and months.

This is in preparation for common approaches during the French EU presidency, culminating, it is hoped, in a new Treaty of Nice to complete the current Inter-Governmental Conference (IGC) at the European Council in that city next December.

French representatives deny their co-operation with Germany is exclusive or intended to monopolise or dictate the EU agenda - all the more so during a presidency which must mediate, bargain and broker compromises among the 15 member-states. Instead, they see it providing a continuing momentum to deal with the real questions of design and operation Mr Jospin referred to.

He acknowledged the legitimacy of the more ambitious ideas floated in recent months about radical reform of the EU institutions; the creation of a federation of nation states by a hard core or vanguard group, as suggested by the German foreign minister, Mr Joschka Fischer; or proposals to draw up a European constitution spelling out responsibilities and competences of the EU and its memberstates.

But, echoing several other French representatives (including the European affairs minister, Mr Pierre Moscovici in an interview in these pages) Mr Jospin said it is necessary to proceed pragmatically and realistically at this stage by concentrating rather on making it easier to allow groups of EU states the right to pursue projects of "reinforced co-operation" or "flexibility" by moving faster or further than other EU states are currently willing to go.

That bids fair to become one of the biggest ideas during France's six month presidency, following the endorsement by this week's European Council at Feira in Portugal of the proposal that the issue should become part of the IGC agenda. There has been extensive consultation with the Germans and other sympathetic states on the matter. Mr Moscovici says Ireland has nothing to fear from easing the tight rules on flexibility agreed in the 1997 Amsterdam Treaty. Ireland's economic record and euro membership would place it firmly in the ranks of any "advance guard" groups of states if it wished.

On a wider plain Mr Moscovici sees a crucial choice emerging between an enlarged EU which is a zone of free trade and politically weak, or one with a strong political dimension, which requires the potential for reinforced co-operation. He foresees not one but multiple, overlapping "advance guard" groups of states which can break the inevitable inertia of a 30-member EU. He wants to reduce the number of states which could form such a group. And he also raises the possibility that such groups would be able to decide on their own method of work.

It is just such ideas that disturb some of the smaller states such as Ireland. In his response to Mr Fischer's proposal for a federal core group, the French foreign minister, Mr Hubert Vedrine, posed a series of questions, including one about membership of a hard core group, which would no longer remain hard if it included potentially all of the enlarged EU member-states. That raises the question of whether there is a new kind of power politics emerging, disguised behind the legalistic issues faced by this IGC. All the more reason to devote more attention to the issues at stake, which go deeply into the shape of the new Europe and its political institutions.

The French government will be stretched to bring the IGC to a conclusion at Nice. Mr Jospin will work closely with President Chirac during it. Their political cohabitation has worked surprisingly well on EU and foreign policy matters, despite the competition between them as elections loom in two years time.

There is a consensus on other issues, such as the need to control economic globalisation by European and domestic regulation. Mr Jospin is determined to develop a social agenda to accompany the measures agreed at the EU summit in Lisbon last March to make European markets more competitive. There is an echo here of his own political competition with the British prime minister, Mr Tony Blair.

Mr Jospin made a revealing remark to journalists on a recent trip to Tokyo. "You will write less nonsense only when you understand that I am a person of rigid views who has evolved, that I am an austere figure who gets upset and a Protestant who is an atheist!" Such paradoxes help to explain his continuing popularity, despite several political hiccups earlier this year. They also reveal a skilful approach towards political management of the French economy. It is growing at a rate of 3 per cent per annum, with unemployment at 9.8 per cent, the lowest since 1991 and productivity increasing - not least because of new flexibilities introduced with the implementation of a 35-hour week.

Responding to globalisation Mr Jospin's government has spoken from the left but acted from the centre. The state's role in strategic industries such as insurance, telecoms, air transport, defence industries and banking was reduced and takeover activity escalated.

This buoyancy is reflected in France's economic relations with Ireland. Irish exports there were valued at £4.4 billion last year, making France Ireland's fourth largest customer and fifth supplier. Cultural, tourist and human contacts between the two countries are thriving, as several articles in this International Report make clear.

There are also many common interests within the EU, such as on agriculture, and several potentially divergent ones, such as defence. But it looks as if the French presidency is giving an absolute priority to completing its presidency with a successful treaty rather than pushing issues on which it has a particular interest.

Thus Mr Moscovici emphasises that "we can live, at least for the time being, for legal and political reasons, with the current treaty. So we do not want defence included in the IGC." They will concentrate on ensuring the member states pledge sufficient troops, police and resources to ensure the new EU Rapid Reaction Force gets effectively off the ground.

That will be a relief for the Government, which would much prefer not to have to fight a referendum campaign on that issue, which it assuredly would have to do next year if defence is included.

Legal opinion available to the Government is divided on whether a referendum will be required to ratify this treaty. Since it would probably be held relatively near to a general election the issue is all the more sensitive. This French presidency will have a direct bearing on politics in all the member states in what promises to be an increasingly interesting six months.