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1 63((&+ 6SHHFKE\5RPDQR3URGL President of the European Commission 7KHQDWLRQIHGHUDOLVPDQGGHPRFUDF\ &RQIHUHQFH «1DWLRQ)HGHUDOLVPDQG'HPRFUDF\7KH(8,WDO\ DQGWKH$PHUFLDQ)HGHUDOH[SHULHQFH» 7UHQWR2FWREHU

2 The nation, federalism and democracy are concepts that we have to grapple with if we want to discuss "Europe". The European Union is a community of nation states, and the debate about its future revolves, at least partly, around the organisational model that will best enable us to face and take up the major challenges of the 21st century: should that model be federal, or should we imagine something different? Some fifty years ago the European Community was founded on a radically new method of integration between nation states. Created on the basis of an international treaty, the European Community has succeeded, through a series of developments and transformations, in striking an innovative balance between different demands stemming from the obligation to respect national identities, the desire to manage relations between the member countries in a more democratic manner and the need to devise an efficient method of organisation. One of the main goals was to keep the peace between Member States, and in this we have succeeded. Since 1957, Western Europe has enjoyed an unbroken period of peace, something of which few other regions can boast. This stability has been underpinned by a specific institutional setup that differs from existing national models but is also quite distinct from any conventional international organisation. What we have is a model based on the coexistence, within the same structure, of a Union of states and a Union of peoples that have their say and take decisions on various aspects of the way we live together. The Community institutions are the highly original expression of that dual nature of the Union. The peoples of Europe make their voice heard through the European Parliament - the only existing example of supranational democracy. The Council is the embodiment of the Member States, while the European Commission represents the general interest of the Community. The Union s originality stems not only from the uniqueness of its institutions, but also and above all from the nature of the relations and interactions between the Council, the Commission, Parliament and the different levels of government operating within the Union. Cooperation and negotiation takes place at a number of different levels, and the institutional and political process develops in an organic and evolutionary manner, in successive strata, if I could describe it in that way. The entire institutional evolution of the Union hinges on the delicate and changing balance between federalist forces and national sovereignty, with increasing attention being given to the demands of democracy and legitimacy. From a formalistic standpoint, the Union is gradually moving towards a federal model as regards the relations between its legislative authorities, namely Parliament and the Council, and its executive arm, the Commission. But that process is not yet complete, and it is by no means certain to continue without strong political impetus in that direction. Let me make myself clear: I am categorically against the creation of a European "superstate". The aim of the European Union is to bring sovereign states closer to one another, not to abolish their sovereignty, which is and will remain the cornerstone of European integration. European citizens can and should be proud of their own nationality. 2

3 On the other hand, the affirmation of a new political dimension for the Union, from Maastricht onwards, prompts us to look for new ways of meeting the expectations being voiced in European society and which the Union itself has helped stimulate. I am thinking, for example, of the concept of European citizenship, the decision to create an area of freedom, security and justice, and the proclamation of the EU Charter of Fundamental Rights, which are transforming Europe from a Union of markets into a Union of citizens. So the question that we have to tackle today is this: how can we organise democracy beyond the national level and in a Union that is expanding across the European continent? The word "federalism" causes a lot of misunderstanding in Europe. In some countries, for example, it has become a byword for centralisation, whereas the real objective of a federal structure is to contain and control, not to extend, the powers of the higher authority. A Europe-wide federal Union, based on the principle of subsidiarity, could be the best response to the demands of decentralisation, the continuing existence of states and nations and the protection and promotion of cultural and regional diversities. Subsidiarity will take on ever-increasing importance as the Union is progressively enlarged. The more the Union expands, the more it will need a political identity and the more we will need to bring decision making and political action closer to citizens and local authorities. If we continue depoliticising what is discussed in Brussels, the Union risks paralysis. Unless we continue along our course of European decentralisation and subsidiarity which may involve the Union giving up some of its current powers the Union risks breaking down. If we fail to simplify the structure of the Treaties and to reach agreement on a type of constitutional Treaty (on the basis of the model prepared by the European Institute in Fiesole), we risk alienating and being rejected by our citizens. Yes, I did say constitutional. I am not afraid of the word, if we use it to describe a document that clearly explains what the Union is, what it is for, what its objectives are and what values it embodies. I believe a constitutional Treaty must incorporate the Charter of Fundamental Rights, since that document explains the underlying significance of European citizenship. This brings us to the problem of assigning competences within the EU. This is one of the main questions that need to be resolved at the next inter-governmental conference. Personally, I do not believe that in a complex, constantly changing world such as ours we can draw absolute demarcation lines between powers and competences of the Member States and Community institutions. Nor do I think a "catalogue of competences" can be carved in stone and remain unchanged forever. But it is vital that the Union tackles the problem and reaches an agreement that works. It is undeniable that the complexity of the Community system and the Union Treaty make it hard for people to understand the EU. 3

4 One of the most difficult challenges facing us today is how to win back the trust and support of the citizens of Europe. They have a right to know who does what in the European system. They have the right to know who is accountable for legislative, administrative and other decisions taken within the Community system. Ultimately, the people, the local authorities and the regions need to make "European democracy" their own. The White Paper on Governance offers an initial response to the question of how to reorganise the system without changing the Treaties, i.e. now, without going through the long-winded process of revising the Treaties and having them ratified by the Member States. The idea is to make the system more open and to encourage participation, simplification, coherence and effectiveness. This is an initial response. In Ghent in a few days, and above all in Laeken in December, the European Heads of State or Government will lay the foundations for a broader reform process to be completed (and ratified) in 2005/06. I hope, and am doing my utmost to ensure, that this reform process will address the question of the democratic basis of the European Union, starting with the method. I said "starting with the method," because we cannot think about building a new democratic Union if we leave the task of preparing and deciding on the new constitutional structure of the Union to Governments and officials. The Nice summit highlighted all too clearly the limitations of the intergovernmental method of revising Treaties: drawn-out negotiations, decisions taken in the middle of the night, exhausted Heads of State or Government, and so on. If it is that difficult for 15 countries to reach agreement, what will it be like when there are 27? In an enlarged Union it will be impossible to amend the Treaties by means of an intergovernmental conference. We have to find a better way. This is why I have for some time been supporting the proposal that a Convention (including among its members representatives of the European Parliament, national Parliaments and the candidate countries) should prepare the next institutional agreement. This should guarantee greater transparency, breaking with the old tradition of secret diplomacy. It should offer a broader political vision, since the life of the Union consists of pursuing major, jointly agreed political objectives. It should provide scope for reflection, overcoming the short-sightedness and national egotism that marked the Nice summit. It should encourage greater mutual trust, as the Community has developed thanks to the efforts made by the various parties to understand the thinking of the others and to solidarity between them. Above all, it would guarantee greater democracy by strengthening the role of the people and involving the European Parliament and national Parliaments more directly in the reform of the Union. 4

5 I repeat: we must complete the first-ever attempt to construct democracy at a level beyond that of the nation state. In the course of history we have passed through several stages of democracy: from the city-states of the renaissance to the British constitutional monarchy, from the American colonies to American federal democracy. Democracy, once found in only a few European countries, spread throughout Western Europe. It is now establishing itself in Eastern Europe and slowly taking hold in south-east Europe. The spread of democracy has been accompanied by the flourishing of State models - more along federal lines where the aim was to protect the diversity and balance between the various parties and more centralised where the objective was to extend a clear political, administrative and cultural model to a whole country. In today s world - the world that has developed since the Treaty of Westphalia - the need to regain capacity, efficiency and, ultimately, power is driving States to increase cooperation and integration. Of the many attempts, the European model appears to be the one that can offer the most democratic, effective and efficient response to globalisation. Today, this model must face a new test. The events of 11 September have forced Europe to face up to its own responsibilities in a new way. Until not very long ago, it was possible to conceive of Europe playing a part on the international stage as a "civil power", an actor promoting specific principles and values without any autonomous capacity for political action. Today we cannot allow ourselves the luxury of that kind of Europe. Today, we need integration to guarantee our security and democracy as well. Security in all its various forms: the fight against international crime and cooperation between police forces, but also social inclusion, the fight against discrimination, the integration of immigrants in an open and pluralist society and a policy of international solidarity. Democracy in a new form. But how? By strengthening the role of the European Parliament, completing the transformation of the European system into a bicameral legislative system. By strengthening the links between the European system and national Parliaments. By strengthening the principle of subsidiarity, with the Union increasingly drawing inspiration from grassroots democracy. By strengthening the constitutional identity of the Community system. By making Europe everyone's business, encouraging political debate within Europe and pointing out the European dimension of all the major questions currently being debated at national level, from economic and social policy to research and new technologies, from sustainable growth to peacekeeping. Today we are discussing models in Italy, in Europe and in the United States. I believe the European experience is special and that we cannot simply import this or that federal model into the Union. When the United States enlarged, it took in territories as Ohio, or Dakota. The European Union, when it enlarges, will take in Prague, Budapest and Warsaw. 5

6 However, there is, in my view, one thing linking the two experiences, namely the desire for greater popular legitimacy. The Virginia Declaration of Rights of 1776 stated that "...the government is, or ought to be, instituted for the common benefit, protection and security of people, nation, or community. I believe that the reform of the method of governing the Union should be based on the same principle. That is not the only challenge ahead of us. The tragic attacks on New York and Washington once again highlighted the "European question". At the time I stressed Europe's solidarity with the American people. However, we must also equip ourselves with the instruments and policies necessary to fulfil our ambitions and perform the new global tasks facing Europe in a changed world. Only if we can effectively meet these challenges, will we regain credibility in the eyes of the citizens of Europe who have lost faith in the European institutions and become disenchanted with the great European project. This is one of the most serious problems facing us today. Clearly, this raises the question of whether we should continue to coordinate certain policies foreign policy, for example, or security policy, immigration and asylum policy purely at intergovernmental level or whether they should become matters for the Community. Two criteria determine the answer to that question: democracy and effectiveness. As regards democracy, I do not believe that it is feasible today to continue down the road towards integrating our internal policies (justice and law enforcement) and external policies (foreign policy and defence) without adequate democratic controls at European level as well. As to effectiveness, the experience of the past and the key role of Europe in relation to integrated policies - be it trade policy, monetary policy, agricultural policy or the single market - demonstrates that a leaner and fitter Community system is more effective. The strictly intergovernmental method takes too long and proposes timid solutions that are hostage to the veto of individual States. It lacks the necessary coherence and continuity of action. It is therefore logical that the policies people are most concerned about, such as immigration and asylum, are being brought under the Community umbrella. An enlarged and genuinely democratic Union will be an incredibly powerful force for good, which can promote and spread throughout the world the democratic values and principles we hold so dear. Not by dispensing them from above, but simply by setting a good example, by showing that we are a society that works well, efficiently and with solidarity. Our fellow citizens would be proud to be part of that Union. They would feel their citizenship. And that is the only way they will be able to say they are truly Europeans. 6