The Hon. Alexander Downer, Minister of Foreign Affairs, Australia
delivered the 1999 Schuman Lecture, discussing
Australia and the European Ideal

Introduction

Thank you Vice-Chancellor. Chancellor Professor Peter Baume, members of the diplomatic community, distinghished guests, ladies and gentlemen.

I was very pleased to be able to accept the invitation to deliver the 1999 Schuman Lecture, both because of my long and enduring interest in Europe and its history, and also my firm conviction in the continued importance of ties between Australia and that continent.

It is a conviction I've been able to act on since becoming Foreign Minister, and one of the achievements of which I am most proud has been the revitalisation of bilateral relations between Australia and the countries of Europe.

I want today to reflect on the development of the European ideal, on its achievements and the challenges it faces as it enters the new millennium.

I will also touch on Australia's relations with the European Union, but my main focus will be on the Union and its future - a matter that will affect not just Europe, but the world, Australia included.

The Search for Unity and Peace in Europe

The search for a mechanism that would bring peace and stability to Europe has preoccupied statesmen for almost two centuries.

The spur for action at the beginning of the Nineteenth Century was simple - fear of rampant expansionism by one European power at the expense of all, as exemplified by France under Napoleon.

So it was that the notion of a "concert of Europe" was devised at the Congress of Vienna in 1814 and 1815, and for almost a century and a half diplomats were obsessed with the idea of keeping a balance of power on the continent.

Now, as a concept, the balance of power does have something going for it.

After all, it did maintain peace in the region for a long period of time.

And the same idea underlay the manoeuvrings of the Cold War more recently.

But it also contains the seeds of its own downfall, for it presumes the ability of one nation, or a group of nations, to keep pace with developments in the strategic power of others.

That ability was doubtful at the best of times, given the rapid pace of industrial and technological developments that were taking place in Europe during the past 200 years.

What was state-of-the-art for military technology in one decade was hopelessly outdated in the next, encouraging the development of an almost non-stop arms race.

And while the Western and Soviet blocs during the Cold War might have been able to maintain something like parity from 1945 until the late 1980s, that was competition on a bipolar basis.

One can see how destabilising such forces must have been when half a dozen countries were vying for leadership in Europe.

The idea of a "concert of Europe" maintained by balance of power principles lay in ashes at the end of the Second World War.

The evidence was, after a series of conflicts culminating in two global wars, that the idea had run its course.

The search began for a better means of ensuring peace and stability in Europe.

New concepts began to form.

These emphasized the abandonment of stability based on force - "mutually assured destruction", or MAD, as it became known in the nuclear age - in favour of the nurturing of pan-European sentiment and institutions.

The antagonistic aspects of the nation-state were to be toned down, and the manifold common interests of the peoples of Europe would be emphasized.

Or, as Henry Kissinger puts it, Europeans sought agreement on common values.

"The balance of power," he said, " inhibits the capacity to overthrow the international order; agreement on shared values inhibits the desire to overthrow the international order."

The Achievements of European Integration

The genesis of the formal integration of Western Europe with the formation of the European Coal and Steel Community will be familiar to many of you.

On 9 May 1950, the French Foreign Minister, Robert Schuman (the very one after whom this lecture is named), announced that France and Germany planned to pool together their coal and steel markets in the spirit of ensuring that war would never again be possible between them, and invited all other democratic countries of Europe to join the plan.

Belgium, the Netherlands, Luxembourg, and Italy answered the call and on 18 April 1951, signed the Treaty establishing the European Coal and Steel Community which came into force in July 1952.

In March 1957, the same six countries, through the Treaty of Rome establishing the European Economic Community, extended the idea to embrace a common market to cover all goods and services.

A period of consolidation and enlargement followed with the UK, Denmark and Ireland joining in 1973 and Greece, Portugal and Spain joining in the 1980's.

The next major development was the Single European Act of 1986 which aimed to complete the single European market by the end of 1992, through eliminating all barriers to the movement of people, capital, and goods and services.

This was followed by the Maastricht Treaty on European Union, which envisaged the creation of an Economic and Monetary Union with a single European currency as well as the development of a Common Foreign and Security Policy, or CFSP, with an independent European Defence component.

There followed the next enlargement to take in Sweden, Finland and Austria bringing the number of EU members to 15.

The single currency, the euro, arrived on schedule on 1 January this year for 11 of the 15, but the development of an effective CFSP and European Defence component is having a somewhat more difficult birth.

It is easy now, almost 50 years after the event, to see all these developments as being inevitable somehow - it all has a logical, linear progression, resulting in the kind of Europe that we take for granted today.

But I want you to think about that announcement by Robert Schuman in 1950, and try to imagine how courageous it must have been for a French politician to put forward such a concept, just five years after the end of a war that had devastated his country and the rest of Europe.

That kind of vision is the true triumph of the European ideal, an achievement we must never take for granted.

European integration since 1950 has led to the creation of an area of remarkably peaceful inter-state relations, considerable political stability, and growing economic prosperity.

On the world stage, it has led to the consolidation of a trading bloc of considerable economic power which has contributed to world prosperity and, broadly speaking, freer trade.

Contrast that with the situation in Europe over the preceding 50 years, which had seen massively disruptive internal wars, political turmoil, and economic depressions.

Challenges for the EU

But as it seeks to continue to grow economically and fulfil its political ambition, the EU faces some very significant challenges:

• It must absorb applicants for membership which are at a different level of political, social, and economic development from those of its current members, without lowering the standards of its existing members, or imposing excessive sacrifices or too fast a pace of change upon the applicants, or transferring the costs of enlargement on to the outside world
• It must reform its institutional framework to facilitate decision-making, improve accountability and make policy making more transparent, to the benefit of its members and its world partners
• And it must make a complete success of European Monetary Union (EMU) and the single currency, while facing economic difficulties both internally (such as high unemployment and sluggish economic growth) and externally (including financial crises in Asia and Latin America)

I want now to examine briefly each of these challenges.

A Difficult Enlargement

Enlargement to the East will pose problems of unprecedented difficulty to the Union and, indeed, to the applicant countries themselves.

For a start, under its next expansion the EU will absorb 6 new members, double the number who joined in 1973 and 1995.

This will put considerable strain on existing institutions and the rules under which they operate.

To give you one example: membership of the European Commission, a collegiate body, would under existing rules climb to 27.

The majority rule under which the Council of Ministers operate, unanimity and qualified majority would all become problematic, excessively complex, and lead to unpredictable outcomes.

With an eye to such difficulties, actual enlargement has been made conditional on the adoption of certain institutional reforms, specifically the composition of the Commission and voting in the Council of Ministers.

These matters, however, have not yet been agreed upon.

The second challenge caused by expansion - the discrepancy in levels of development between prospective and current members - is just as difficult.

While in the past a way was found to integrate into the Union less developed economies (for example, Ireland in 1973, Greece in 1981, and Portugal and, to a lesser extent, Spain in 1986), eastern enlargement would extend the privileges and duties of membership to a group of economies that are even less developed than were those of the earlier groups.

This would create considerable strain for some EU policies, such as the CAP and the regional policies, unless the principles under which they operate are radically altered.

And on the other hand, membership will place considerable strains on the economic capacity of the applicant states which, under the principle of the acquis communautaire, must accept the body of the Union's legislation, regulation, and policy, as it has developed over the years.

You may recall the famous remark made by Charles de Gaulle about France: "How can you govern a country which has 246 varieties of cheese?"

It remains to be seen whether the new cheeses being offered to applicant countries by the EU, and vice versa, will suit all tastes.

Institutional Reforms

I've mentioned how possible expansion has put pressure on the EU for institutional reform.

Pressure for institutional reform is also generated by social and political developments that are unleashed by the very logic that impels Europeans towards greater integration.

European citizens these days have a direct interest in EU policies because those policies are beginning to have a direct impact on their lives.

For example, in just over two years' time they will carry a European currency, the euro, in their pockets and also, probably not much later, a European passport.

Statutory definition has been given to European rights, which can be claimed and exercised at an individual level and within the context of one's ordinary life, beyond the borders of the home state.

We are also seeing the beginning of a serious examination of the role of the European Commission.

It is losing its monopoly on policy initiative and decision making under the challenge of other institutions such as the European Parliament and the European Central Bank.

This latter institution might become accountable to the European Parliament, thus mutually reinforcing their respective powers at the expense of the Commission's.

Its daily tasks have become more mundane, making it increasingly similar to an ordinary bureaucracy rather than an �lite, or at least a bureaucratic �lite.

And finally, the Commission's image has been tarnished by the critical report of a committee of independent experts appointed to investigate allegations of fraud, mismanagement and nepotism which led to the collective resignation of all members of the Commission in March this year.

Speaking as a member of a parliament, this new accountability of Commission members to the European Parliament is a very welcome development and provides an opportunity for real reform.

The members of the European Parliament, after all, are directly elected so one hopes they will accurately reflect the wishes of the people of Europe as they enter what I hope will be a new era of European cooperation.

From the upheaval of March, what is now emerging in Europe is a widespread agreement that the policy processes being set into motion demand far greater levels of transparency and accountability, failing which basic democratic values could be undermined.

The Union is, in effect, faced with a choice - make itself more accessible, or face irresistible levels of public dissatisfaction with its performance.

The choice is not really one at all - the European Union must continue down that path of accessibility and accountablity or else know that resisting that course will only lose it public esteem and support.

At such a crucial time, getting its affairs in order is the only way for the Union to proceed.

European Monetary Union

EMU, with its common currency and the Stability and Growth Pact, is merely a macro economic framework: its impact on the European economy (in terms of increased productivity and faster economic growth) is dependent upon the implementation, at the micro economic level, of structural reforms which remain fully the responsibility of Member States.

The success of EMU also depends on the economic cycles of the Euro zone member states becoming more synchronised, since monetary policy is now necessarily determined on a "one size fits all" strategy.

So economic and fiscal policies of the 11 member states must be harmonised and intergrated over time if the Union is to present a united approach to the rest of the world.

Security

A test for the European Union will be its decisions over the development of a Common Foreign and Security Policy.

This is a sensitive question for the European states because of the possible connotations of a European superstate being formed at the expense of the soverignty of individual states.

The EU was criticised for its response to the conflict in Bosnia and I note that the new EU President, Romano Prodi, this week raised the prospect of forming a European armed force to respond to crises such as that in Kosovo.

This is a decision for Europe but the decision made will clearly affect the tone of Europe's relationship with the rest of the world, particularly the United States and also potentially NATO.

Such a decision will also flow onto Europe's approach to issues such as human rights and the spread of democracy.

How Europe deals with this issue with all its sensitivities is a key component of its development over the coming years.

Suffice it to say that a divided Europe in its approach to the outside world has less impact than a Europe united.

Australia and the EU

It should be acknowledged that the process of European integration and growing EU prosperity have generally had positive consequences for Australia.

Our economic relationship is strong.

The EU is Australia's largest source of investment and last year our exports to the EU grew by 42 per cent - a strong result in anybody's language.

But there are still some negatives in what is an expanding and diversifying relationship.

One big negative is that the EU is still pretty much closed to our traditional agricultural exports, and the recent much heralded CAP reforms hold out little prospect that the situation will change in the foreseeable future.

The reforms offer nothing in terms of improved market access and basically only shift a large measure of financial assistance from price support to direct production linked income support to farmers, so our expectation would be that EU subsidised production will not decline and may actually increase.

I note, as an aside, that this is one of the problems outsiders have with a unified Europe - an increase in size does not equate to a decrease in the influence of special interest groups within the Union.

We can only hope that, over time, the majority of ordinary consumers in the EU can come to realise that the price they pay for unreasonable levels of agricultural production provides only a short-term, and very inefficient, level of protection to European farmers.

Fortunately, we have been able to diversify our agricultural exports.

The EU is now a major destination for Australian wine, and game meats (including kangaroo and Australian wild boar) are now also contributing to our export effort.

But such disagreements have not detracted from the wider relationship, for our relationship has much more to it than just agriculture.

And so it should.

We share common values, common insights, common outlooks and common principles.

We have common civil societies, structures and institutions.

The frameworks of modern Australian society can trace their origins directly to Europe.

We are culturally linked. In this age, Australians and Europeans share the same movies, the same books, the same pastimes.

Let us not forget that modern Australian society was forever changed for the better by the waves of post-war European migration after the Second World War.

It is was that migration that made Australia more outward-looking, vibrant and confident.

From that migration, Australia and Europe have developed stronger people-to-people ties with tens of thousands of people travelling in both directions each year, always strengthening those bonds.

Since coming to government, we have been determined to develop a closer and more diversified relationship with the European Union and individual European states.

And we have.

In 1997 we signed the Joint Declaration with the EU to broaden our relationship and we are acting on implementing it.

Good progress is being made on bilateral cooperation in areas such as consumer policy, environmental cooperation, education and training and development cooperation.

We have a new senior officials dialogue with the Troika on Asia-Pacific issues.

We have also signed a Partnership 2000 initiative with Germany, established an Australia-Italy Economic and Cultural Council and conducted an extensive cultural program with the United Kingdom in 1997 under the badge of "NewImages" to show Britain that the old stereotypes of Australia as simply a beach, a farm and a quarry were outmoded and needed to be rethought.

As a Government, we have worked closely with individual European countries on a range of issues - with Spain on the Skase issue, with France in the South Pacific and with the Netherlands in multilateral fora.

We have been honored to host many European leaders in recent times - Irish President MacAleese, Italian President Scalfaro and former German Chancellor Kohl - all signs of closer Australian-European ties and European interest in Australia and things Australian.

The Howard Government came to office believing that our foreign policy focus should be one of Asia first but not Asia only.

Relations with Europe were downgraded by the Keating Government after Mr Keating's discovery of Asia.

Increasingly, we have sought to play a role of meshing our geographic proximity with Asia and our cultural ties with Europe.

Until recently, I think this link has been under-utilised in our relationship with Europe.

Part of our aim in that relationship has been to seek a closer dialogue with Europe on a range of issues to increase European interest and engagement in regional affairs.

This includes talking with a wide range of European ministers and officials on issues such as East Timor, Indonesia and the regional financial crisis - all issues of great concern to Europe.

It is only right that Europe be involved in these issues.

All of those three issues I just mentioned will, in one way or another, impact on Europe despite the geographic distance between our immediate region and mainland Europe.

This closer connection is both welcome and necessary.

In this context, I congratulate the Australian National University on its initiative to establish a National Europe Centre in Canberra.

Such a Centre would be a manifestation of the growing close Australian-European relationship, building on the spirit of the Joint Declaration on bilateral relations of 1997.

The Centre would be a fitting project worthy of EU support as we approach our Centenary of Federation in 2001.

In our own history, immigrants to our shores have included people from every country and region of Europe - many, of course, who still have family back in their countries of origin.

And one must never forget the sacrifice made by the more than 100,000 Australians who lost their lives fighting in two world wars in Europe.

Conclusion

It is ties like this - ties of history and spirit - that make our relationship with Europe a very special one.

Of course there are very practical commercial and political considerations behind Australia's approach to the new Europe, but there is also that important aspect of attitude.

We, one of the youngest nations of the earth, look to the old nations of Europe - the homes of our forebears - and share some of the hopes and dreams that Europeans hold for their unified continent.

We wish you well in that noblest of endeavours.