Extracts from Tony Blair's speech to the European Parliament yesterday:
"The issue is not between a 'free market' Europe and a social Europe, between those who want to retreat to a common market and those who believe in Europe as a political project.
This is not just a misrepresentation. It is to intimidate those who want change in Europe by representing the desire for change as betrayal of the European ideal, to try to shut off serious debate about Europe's future by claiming that the very insistence on debate is to embrace the anti-Europe.
It is a mindset I have fought against all my political life. Ideals survive through change. They die through inertia in the face of challenge.
I am a passionate pro-European. I always have been.I believe in Europe as a political project. I believe in Europe with a strong and caring social dimension. I would never accept a Europe that was simply an economic market . . .
There is not some division between the Europe necessary to succeed economically and social Europe. The purpose of social Europe and economic Europe should be to sustain each other. The purpose of political Europe should be to promote the democratic and effective institutions to develop policy in these two spheres and across the board where we want and need to co-operate in our mutual interest . . .
The broad sweep of history is on the side of the EU. Countries round the world are coming together because in collective co-operation they increase individual strength.
The US is the world's only super-power. But China and India in a few decades will be the world's largest economies. The idea of Europe, united and working together, is essential for our nations to be strong enough to keep our place in this world.
Now, almost 50 years on, we have to renew. If Europe defaulted to Euroscepticism, or if European nations faced with this immense challenge decide to huddle together, hoping we can avoid globalisation, shrink away from confronting the changes around us, take refuge in the present policies of Europe as if by constantly repeating them, we would by the very act of repetition make them more relevant, then we risk failure. Failure on a grand, strategic, scale . . .
For four years Europe conducted a debate over our new constitution. It was a detailed and careful piece of work setting out the new rules to govern a Europe of 25 and in time 27, 28 and more member states. It was endorsed by all governments. It was supported by all leaders. It was then comprehensively rejected in referendums in two founding member-states. The reality is that in most member states it would be hard today to secure a Yes for it in a referendum.
There are two possible explanations. One is that people studied the constitution and disagreed with its precise articles. I doubt that was the basis of the majority No . . .
The other explanation is that the constitution became merely the vehicle for the people to register a wider and deeper discontent with the state of affairs in Europe. I believe this to be the correct analysis.
If so, it is not a crisis of political institutions, it is a crisis of political leadership.
We are living through an era of profound upheaval and change. When such change occurs, moderate people must give leadership. If they don't, the extremes gain traction on the political process. It happens within a nation. It is happening in Europe now . . .
I have sat through council conclusions after council conclusions describing how we are 'reconnecting Europe to the people'. Are we? It is time to give ourselves a reality check. The people are blowing the trumpets round the city walls. Are we listening? Have we the political will to go out and meet them so that they regard our leadership as part of the solution, not the problem?
People say: we need the budget to restore Europe's credibility. Of course we do. But the right budget. It shouldn't be abstracted from the debate about Europe's crisis. It should be part of the answer to it.
I want to say a word about last Friday's summit. There have been suggestions that I was not willing to compromise on the UK rebate. In fact, I am the only British leader that has ever said I would put the rebate on the table. I never said we should end the CAP now or renegotiate it overnight. Any change must take account of the legitimate needs of farming communities and happen over time. [ But] we cannot agree a new financial perspective that does not at least set out a process that leads to a more rational budget.
What would a different policy agenda for Europe look like? First, it would modernise our social model. Again some have suggested I want to abandon Europe's social model. But tell me: what type of social model is it that has 20 million unemployed in Europe; productivity rates falling behind those of the US; that is allowing more science graduates to be produced by India than by Europe; and that any relative index of a modern economy - skills, R&D, patents, IT - is going down, not up.
And since this is a day for demolishing caricatures, let me demolish one other: the idea that Britain is in the grip of some extreme Anglo-Saxon market philosophy that tramples on the poor and disadvantaged.
[He cites the jobs and welfare reform programme of the British Labour government] . . . It is just that we have done it on the basis of, and not at the expense of, a strong economy.
Secondly, let the budget reflect these realities. A modern budget for Europe is not one that 10 years from now is still spending 40 per cent of its money on the CAP. Thirdly, implement the Lisbon Agenda . . . we are making progress that nowhere near matches the precise targets we set out at Lisbon.
Fourth . . . get a macroeconomic framework for Europe that is disciplined but also flexible. It is not for me to comment on the euro zone. I just say this: if we agreed real progress on economic reform, if we demonstrated real seriousness on structural change, then people would perceive reform of macro policy as sensible and rational, not a product of fiscal laxity but of common sense.
Then there is the whole area of CFSP. We should be agreeing practical measures to enhance European defence capability, be prepared to take on more missions of peacekeeping and enforcement, develop the capability, with Nato or where Nato does not want to be engaged outside it, to be able to intervene quickly and effectively in support of conflict resolution. Look at the numbers in European armies today and our expenditure. Do they really answer the strategic needs of today?
When the European Union agreed recently a doubling of aid to Africa, it was an immediate boost not just for that troubled continent, but for European co-operation. We are world leaders in development and proud of it. We should be leading the way on promoting a new multilateral trade agreement which will increase trade for all, especially the poorest nations. We are leading the debate on climate change and developing pan-European policies to tackle it.
A strong Europe would be an active player in foreign policy, a good partner, of course, to the US but also capable of demonstrating its own capacity to shape and move the world forward . . .
It would be a Europe confident enough to see enlargement not as a threat, as if membership were a zero-sum game in which old members lose as new members gain, but an extraordinary, historic opportunity to build a greater and more powerful Union. Because be under no illusion: if we stop enlargement or shut out its natural consequences, it wouldn't, in the end, save one job, keep one firm in business, prevent one delocalisation.
And in the meantime Europe will become more narrow, more introspective and those who garner support will be those not in the traditions of European idealism but in those of outdated nationalism and xenophobia.
In my time as prime minister, I have found that the hard part is not taking the decision, it is spotting when it has to be taken. This is such a moment of decision for Europe. "