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1992 May 15 Fr
Margaret Thatcher

Speech in the Hague ("Europe’s Political Architecture")

Document type:speeches
Document kind:Speech
Venue:The Hague
Source:Thatcher Archive
Journalist:-
Editorial comments:MT was speaking to the Global Panel.
Importance ranking:Key
Word count:6468
Themes:Agriculture, Arts and Entertainment, Conservative Party (history), Defence (general), Defence (general), Defence (general), Trade, Trade, Trade, Elections and electoral system, European Union (general), European Union Budget, Economic, monetary and political union, Economic, monetary and political union, Foreign policy (Central and Eastern Europe), Foreign policy (Central and Eastern Europe), Foreign policy (Central and Eastern Europe), Foreign policy (Middle East), Foreign policy (USA), Foreign policy (USA), Foreign policy (USA), Foreign policy (USSR and successor states), Foreign policy (Western Europe - non - EU), Foreign policy (development, aid, etc), Foreign policy (International organisations), Foreign policy (International organisations), Labour Party and Socialism, Race, immigration, and nationality

Europe's Political Architecture

Introduction

Mr Chairman,

We are fortunate to be meeting in the Hague, a beautiful city kept beautiful by a country which values its architectural heritage.

Goethe described architecture as ‘frozen music’.

And in a city like this it is not hard to imagine the grand symphonic melodies and subtle chamber music harmonies that might be released if we could defrost the Town Hall, the great urban squares, or some of the smaller side-streets.

Because it is a public art with which we all have to live, architecture tells us a lot about ourselves, about our idea of God, about our relationship with our fellow-men, about our vision of Man's destiny.

The great medieval cathedrals gave us an exalted spiritual view of Man's place in a universe governed by an all-loving and all-seeing Creator.

The Age of Reason pictured civilised man in a neat geometrically ordered landscape dotted with neo-classical structures at regular intervals — with no more than one small folly to each estate.

The revival of Religion and Moral Seriousness under Queen Victoria saw also a Gothic Revival that again pointed man's eyes heavenwards.

And in our own day, the vision of New European Man walking purposefully towards the Common Agricultural Policy was exquisitely realized in the Berlaymont building in Brussels.

What music would Goethe hear if he could look upon the Berlaymont, perhaps while acting as an advisor to the Commissioner responsible for developing a policy for European culture (which has languished so long without one)?

Surely the music would be something atonal and very long, perhaps performed by an orchestra including vacuum cleaners, scrubbing boards, and taxi-horns, with Songs of Harmonisation sung by a mixed choir from the Paris School of Deconstructionism.

And what a climax of discord and disharmony!

For the Berlaymont — its halls lined with cancer-causing asbestos — is to be pulled down.

We might say of such architecture that it is modern in conception, but uncomfortable to live in, and likely to fall down in a few years.

But is it even modern in conception?

It was once.

But look at the architecture of the last fifty years — look, in particular, at the architecture that went beyond the modern to the futuristic.

It was certainly a very dramatic architecture but the one thing it no longer expresses is the Future.

What it expresses is yesterday's vision of the future — one captured by the poet John Betjeman in 1945:

"I have a vision of the future, chum.

The workers' flats, in fields of soya beans,

Tower up like silver pencils, score on score."

But the Berlaymont school of architecture is a convenient symbol for the political architecture of the European Community.

For it too is infused with the spirit of "yesterday's future."

Mr Chairman, the European Community we have today was created in very different circumstances to deal with very different problems.

It was built upon very different assumptions about where the world was heading.

And it embodied political ideas and economic theories that in the light of recent history we have to question.

Today I want to do exactly that. In particular, I shall try to answer three questions.

First, how can we best deal with the imbalance in Europe created by the re-unification and revival of Germany?

Second, how can we reform European institutions so that they accommodate the diversity of post-Communist Europe and be truly democratic?

Third, how can we ensure that the new Europe contributes to — rather than undermines — the world's economic prosperity and political stability?

Our answers to these questions can no longer be bound by the conventional collectivist wisdom of the 1940's and 50's.

That is yesterday's future.

We must draw on the ideas of liberty, democracy, free markets and nation-hood that have swept the world in the last decade.

The Beginning of the Community

The European Community which we now have was set up for circumstances that were quite different from those of to-day.

It was Winston Churchill who, with characteristic magnanimity in 1946, with his Zurich speech, argued that Germany should be rehabilitated through what he called ‘European Union’ as ‘an association between France and Germany’ which would ‘assume direction’.

This could not be done overnight, and it took American leadership.

In 1947, after travelling through Europe in that terrible winter, when everything froze over, George C. Marshall , the then Secretary of State, promoted the idea of American help.

Marshall Aid was administered by institutions set up ad hoc [it had to be, if only because most European states did not have adequate machinery, the Greek delegate being found one day simply making up figures for his country's needs.

Plus ca change. Plus c'est la meme chose.]

The initial impetus was for European recovery.

It owed much to simple American good-heartedness.

It owed something to commercial calculation — the prosperity of Europe, in free-trade conditions, would also be the prosperity of America.

But the main thing was the threat from Stalin .

Eastern Europe had shown how demoralized peoples could not resist cunningly executed Communist take-overs, and Marshall Aid was intended to set western Europe back on its feet.

It was a prodigious success. Who, in 1945, would have guessed that defeated and ruined Germany would, by 1951, be exporting more than the British?

But we have found, again and again, that institutions devised for one set of problems become obstacles to solving the next set — even that they become problems in their own right. The Common Agricultural Policy is one such.

As originally devised, it had a modest aim that was not unreasonable.

Over-numerous peasant farmers had been unable to earn a decent living between the wars, and in those days subsidy and regulation were the conventional wisdom.

We in Great Britain had not suffered nearly as badly as our continental neighbours, because we had, even in 1900, almost no peasants: nonetheless we had, in the 1930's, a Milk Marketing Board which was supposed to control prices, and therefore had the precise function of not marketing milk — instead, pouring it down mine-shafts and regulating various cheeses out of existence.

Yet we all know that the CAP, is now an expensive headache, and one quite likely to derail the Uruguay Round.

Because of agricultural protection we stop food-imports from the poorer countries.

They themselves are nowadays vehement supporters of market-principles: it is from the Cairns Group of developing countries that you hear demands for free trade.

Yet in the industrialized part of the world, the tax-payer and the consumer stump up $270 billion in subsidies and higher costs; and the World Bank has calculated that, if the tariff and other barriers were cut by half, then the poorer countries would gain at once, in exports, $50 billion.

In case you might think that these sentiments are somehow anti-European, I should say that they come from an editorial in the economic section of the Frankfurter Allgemeine Zeitung of 4 May.

Here we have a prime example of yesterday's solutions, becoming to-morrow's problems.

You could extend this through the European institutions as a whole.

They were meant to solve post-war problems, and did so in many ways extremely well.

Western Europe did unite against the Soviet threat, and, with Anglo-American precepts, became free and very prosperous.

That prosperity, denied to the peoples of eastern Europe and Russia, in the end caused demoralization among their rulers, and revolt from below. We are now in a quite different set of circumstances, with the Cold War over.

Looking at European institutions today, I am reminded of a remark made about political parties in the French Third Republic.

Some of them had names which reflected radical republican origins from the 1870's, but years later they had become conservative.

These radical names, ran the remark, were like the light reaching Earth from stars that were long extinct.

Equally with the end of the Cold War we have to look again at the shape of Europe and its institutions.

The German Question

Mr Chairman, let me turn first to the new situation created by the re-unification of Germany.

And let me say that if I were a German today, I would be proud — proud but also worried.

I would be proud of the magnificent achievement of rebuilding my country, entrenching democracy and assuming the undoubtedly preponderant position in Europe. But I would also be worried about the European Community and its direction.

The German taxpayer pays dearly for its place in Europe.

Britain and Germany have a strong joint interest in ensuring that the other Community countries pay their fair share of the cost — and control the Community's spending more enthusiastically — without leaving us to carry so much of the burden.

Germany is well-equipped to encourage such fiscal prudence. Indeed I would trust the Bundesbank more than any other European Central Bank to keep down inflation — because the Germans have none too distant memories of the total chaos and political extremism which hyper-inflation brings.

The Germans are therefore right to be increasingly worried about the terms they agreed for economic and monetary union.

Were I a German, I would prefer the Bundesbank to provide our modern equivalent of the gold standard rather than any committee of European bankers.

But there is an understandable reluctance on the part of Bonn to defend its views and interests so straightforwardly.

For years the Germans have been led to believe by their neighbours that their respectability depends on their subordinating their national interest to the joint decisions in the Community.

It is better that that pretence be stopped.

A reuinited Germany can't and won't subordinate its national interests in economic or in foreign policy to those of the Community indefinitely.

And sometimes Germany will be right, when the rest are wrong, as it was over the recognition of Croatia and Slovenia.

Indeed, if the Federal Republic had led the way in recognising these countries earlier, Serbian aggression might have been deterred and much bloodshed prevented.

Whether rightly or wrongly exercised, however, Germany's new pre-eminence is a fact.

We will all be better off if we recognise that modern democratic Germany has come of age.

Nevertheless Germany's power is a problem — as much for the Germans as for the rest of Europe.

Germany is too large to be just another player in the European game, but not large enough to establish unquestioned supremacy over its neighbours.

And the history of Europe since 1870 has largely been concerned with finding the right structure to contain Germany.

It has been Germany's immediate neighbours, the French, who have seen this most clearly.

Both Briand in 1929 and Schuman after the Second World War proposed structures of economic union to achieve this.

Briand's proposal was made just at the moment when the rise of the Nazis made such a visionary scheme impossible and it failed. But Schuman's vision of a European Community was realised because of an almost unique constellation of favourable circumstances.

The Soviet threat made European co-operation imperative.

Germany was itself divided.

Other Western nations sought German participation in the defence of Western Europe.

West Germany needed the respectability that NATO and the Community could give.

And American presence in, and leadership of, Europe reduced the fears of Germany's neighbours.

With the collapse of the Soviet Union and reunion of Germany, the entire position has changed.

A new Europe of some 30 states has come into being, the problem of German power has again surfaced and statesmen have been scrambling to produce a solution to it.

At first France hoped that the post-War Franco-German partnership with France as the senior partner would continue. Chancellor Kohl 's separate and successful negotiations with Mr Gorbachev quickly showed this to be an illusion.

The next response of France and other European countries was to seek to tie down the German Gulliver within the joint decision-making of the European Community. Again, however, this quickly proved to be an illusion.

Germany's preponderance within the Community is such that no major decision can really be taken against German wishes.

In these circumstance, the Community augments German power rather than containing it.

Let me illustrate this point with two examples where I agree with the German position.

The first, as I have mentioned, was the German decision to recognise Croatia and Slovenia which compelled the rest of Europe to follow suit.

The second, is the refusal of the Bundesbank to pursue imprudent financial policies at the urging of some of the countries of the G7.

However much I may sympathise with these policies, the blunt fact is that Germany has followed its own interests rather than the advice of its neighbours who have then been compelled to adjust their own stance.

[In these circumstances Mr Chairman I understand Chancellor Kohl's willingness to surrender Germany's sovereignty in the interests of European unity!]

The Balance of Power

What follows from this is that German power will be best accommodated in a looser Europe in which individual nation-states retain their freedom of action.

If Germany or any other power then pursues a policy to which other countries object, it will automatically invite a coalition against itself.

And the resulting solution will reflect the relative weight of the adversaries.

A common foreign policy, however, is liable to express the interests of the largest single actor.

And a serious dispute between EC member states locked into a common foreign policy would precipitate a crisis affecting everything covered by the Community.

The general paradox here is that attempts at co-operation that are too ambitious are likely to create conflict.

We will have more harmonious relationships between the states of Europe if they continue to have room to make their own decisions and to follow their own interests — as happened in the Gulf War.

But it would be idle to deny that such a balance of power — for that is what I have been describing — has sometimes broken down and led to war. And Europe on its own, however organised, will still find the question of German power insoluble.

Europe has really enjoyed stability only since America became a European power.

The third response therefore is to keep an American presence in Europe.

American power is so substantial that it dwarfs the power of any other single European country.

It reassured the rest of Europe in the face of Soviet power until yesterday; and it provides similar comfort against the rise of Germany today — as the Germans themselves appreciate.

Why aren't we worried about the abuse of American power? It is difficult to be anxious about a power so little inclined to throw its weight around that our principal worry is that American troops will go home.

And there's the rub.

There is pressure isolationist opinion in the USA to withdraw from Europe.

It is both provoked and encouraged by similar thinking in the Community which is protectionist in economics and "little European" in strategy.

In trade, in the GATT negotiations, in NATO's restructuring, we need to pursue policies that will persuade America to remain a European power.

Europe Free and Democratic

If America is required to keep Europe secure, what is required to keep Europe free and democratic?

When the founders of the European Community drew up the Treaty of Rome, they incorporated features from two quite different economic traditions.

From Liberalism they took free trade, free markets and competition.

From Socialism (in guises as various as Social Catholicism and Corporatism) they took regulation and intervention.

And for thirty years — up to the signing of the Single European Act — these two traditions were in a state of perpetual but unacknowledged tension.

Now — with the Commission exploiting the Single European Act to accumulate powers of greater direction and regulation — Europe is reaching the point at which it must choose between these two approaches.

Is it to be a tightly-regulated, centralised bureaucratic federal state, imposing uniform standards throughout the Continent?

Or is it to be a loose-knit decentralised free-market Europe of sovereign states, based upon competition between different national systems of tax and regulation within a free trade area?

M. Delors at least seems to be quite clear.

Before the ink is even dry on the Maastricht Treaty, the President of the European Commission, who has always been admirably frank about his ambitions, is seeking more money and more powers for the Commission which would become the Executive of the Community, in other words a European Government.

And this initative comes on top of a Treaty that met the Commission's demand for a "single institutional structure" for the Community.

So there is no doubt what the President of the Commission is aiming at — it is a tightly centralised European federal state.

Nor is there any mystery about the urgency with which he presses the Federalist cause.

Even though he may wish to defer the "enlargement" of the Community with the accession of Eastern Europe, he realises it is impossible.

A half-Europe imposed by Soviet tyrany was one thing; a half-Europe imposed by Brussels would be a moral catastrophe depriving the Community of its European legitimacy.

The Commission knows it will have to admit new members in the next few decades.

But it hopes to construct a centralised European super-state in advance — and irrevocably — so that the new members will have to apply for entry on federalist terms.

This is not so much constructing a common European home — as a Common European Prison.

And it's just not on.

Imagine a European Community of 30 nations, ranging in their economic productivity from Germany to Ukraine, and in their political stability from Britain to Poland,

—all governed from Brussels;

—all enforcing the same conditions at work;

—all having the same worker rights as the German Unions;

—all subject to the same interest rates, monetary, fiscal and economic policies;

—all agreeing on a common Foreign and defence policy;

—and all accepting the authority of an Executive and a remote foreign Parliament over "80&% of economic and social legislation".

Mr Chairman, such a body is an even more utopian enterprise than the Tower of Babel.

For at least the builders of Babel all spoke the same language when they began.

They were, you might say, communautaire.

Mr Chairman, the thinking behind the Commission's proposals is essentially the thinking of "yesterday's tomorrow".

It was how the best minds of Europe saw the future in the ruins after the Second World War.

But they made a central intellectual mistake.

They assumed that the model for future government was that of a centralised bureaucracy that would collect information upwards, make decisions at the top, and then issue orders downwards.

And what seemed the wisdom of the ages in 1945 was in fact a primitive fallacy.

Hierarchical bureaucracy may be a suitable method of organising a small business that is exposed to fierce external competition — but it is a recipe for stagnation and inefficiency in almost every other context.

It can collect and use only a fraction of the information that the market picks up, and acts upon minute by minute — and so it gets it wrong.

The top cannot be sure that its orders are carried out by the bottom.

And the organisation as a whole has no feedback that would indicate whether it is performing well or badly.

Such flaws might be of minor importance in a monastery where, after all, the wishes of the monks are not the criteria of success.

In a Government, however, they produce the economic chaos and alienation we saw under communism.

Yet it is precisely this model of remote, centralised, bureaucratic organisation that the European Commission and its federalist supporters seek to impose on a Community which they acknowledge may soon contain many more countries of widely differing levels of political and economic development, and speaking more than fifteen languages.

"C'est magnifique, mais ce n'est pas la politique."

The larger Europe grows, the more diverse must be the forms of co-operation it requires. Instead of a centralised bureaucracy, the model should be a market — not only a market of individuals and companies, but also a market in which the players are governments.

Thus governments would compete with each other for foreign investments, top management and high earners through lower taxes and less regulation.

Such a market would impose a fiscal discipline on governments because they would not want to drive away expertise and business.

It would also help to establish which fiscal and regulatory policies produced the best overall economic results.

No wonder socialists don't like it.

To make such a market work, of course, national governments must retain most of their existing powers in social and economic affairs.

Since these governments are closer and accountable to their voters — it is doubly desirable that we should keep power at the national level.

The Role of the Commission

Mr Chairman, in 1996, when the arrangements agreed at Maastricht are due to be reviewed, and probably a good deal earlier, the Community should move in exactly the opposite direction to that proposed by the President of the Commission.

A Community of sovereign states committed to voluntary co-operation, a lightly regulated free market and international free trade does not need a Commission in its present form.

The government of the Community — to the extent that this term is appropriate — is the Council of Ministers, consisting of representatives of democratically elected national governments.

The work of the Commission should cease to be legislative in any sense.

It should be an administrative body, like any professional civil service, and it should not initiate policy, but rather carry it out.

In doing this it should be subject to the scrutiny of the European Parliament acting on the model of Commons Select Committees.

In that way, whatever collective policies or regulations are required would emerge from deliberation between democratic governments accountable to their national parliaments rather than being imposed by a bureaucracy with its own agenda.

Co-operation in Europe

But need this always be done in the same "single institutional structure"?

New problems arise all the time. Will these always require the same level and type of co-operation in the same institutions?

I doubt it.

We need a greater flexibility than the structures of the European Community have allowed until very recently.

A single institutional structure of its nature tends to place too much power in the central authorities.

It is a good thing that a Common Foreign Policy will continue to be carried on under a Separate Treaty and will neither be subject to the European Court nor permit the Commission to fire off initiatives at will.

If "Europe" moves into new areas, it must do so under separate treaties which clearly define the powers which have been surrendered.

And why need every new European initiative require the participation of all members of the Community?

It will sometimes be the case — especially after enlargement that only some Community members will want to move forward to another stage of integration.

Here I pay tribute to John Major 's achievement in persuading the other 11 Community Heads of Government that they could move ahead to a Social Chapter but not within the treaty and without Britain's participation.

It sets a vital precedent.

For an enlarged Community can only function if we build in flexibility of that kind.

We should aim at a multi-track Europe in which ad hoc groups of different states — such as the Schengen Group — forge varying levels of co-operation and integration on a case-by-case basis.

Such a structure would lack graph paper neatness.

But it would accommodate the diversity of post-Communist Europe.

The European Parliament

Supporters of federalism argue, no doubt sincerely, that we can accommodate this diversity by giving more powers to the European Parliament.

But democracy requires more than that.

To have a genuine European democracy — you would need a Europe-wide public opinion based on a single language; Europe-wide political parties with a common programme understood similarly in all member-states; a Europe-wide political debate in which political and economic concepts and words had the same agreed meaning everywhere.

We would be in the same position as the unwielding Habsburg Empire's Parliament.

The Habsburg Parliament

That parliament was a notorious failure.

There were dozens of political parties, and nearly a dozen peoples were represented — Germans, Italians, Czechs, Poles and so on.

For the government to get anything through — for instance, in 1889 a modest increase in the number of conscripts — took ages, as all the various interests had to be propitiated.

When one or other was not satisfied, its spokesmen resorted to obstruction — lengthy speeches in Russian, banging of desk-lids, throwing of ink-wells and on one occasion the blowing of a cavalry trumpet by the Professor of Jurisprudence at the German University of Prague.

Measures could not be passed, and budgets could only be produced by decree.

The longest-lasting prime minister, Count Taaffe , remarked that his highest ambition in politics was the achievement of supportable dissatisfaction on all sides — not a bad description of what the European Community risks becoming.

And because of the irresponsibility of parliaments, the Habsburg Monarchy could really only be ruled by bureaucrats.

It took twenty-five signatures for a tax-payment to be validated; one in four people in employment worked for the state in some form or another, even in 1914, and so many resources went to all of this that not much was left for defence: even, the military bands had to be cut back, Radetzky March and all.

Of course it was a tremendous period in cultural terms both in Vienna and in Budapest.

We in England have done mightily well by the emigration, often forced, to our shores of so many talented people from Central Europe.

But the fact is that they had to leave their native lands because political life became impossible.

This example could be multiplied again and again.

Belgium and Holland, which have so much in common, split apart in 1831.

Sweden and Norway, which have even more in common, split apart in 1905.

It does seem simply to be a straight-forward rule in modern times that countries which contain two languages, even if they are very similar, must in the end divide, unless the one language absorbs the other.

It would be agreeable to think that we could all go back to the world of the Middle Ages, when the educated classes spoke Latin, and the rulers communicated in grunts.

But we cannot.

Unless we are dealing with international co-operation and alliances, freely entered-into, we create artificial structures which become the problem that they were meant to address.

The League of Nations when the Second World War broke out, resolved to ignore the fact and to discuss, instead, the standardization of level-crossings.

A Federal Europe

Mr Chairman, I am sometimes tempted to think that the new Europe which the Commission and Euro-federalists are creating is equally ill-equipped to satisfy the needs of its members and the wishes of their peoples.

It is, indeed, a Europe which combines all the most striking failures of our age.

—The day of the artificially constructed megastate has gone. So the Euro-federalists are now desperately scurrying to build one.

—The Swedish style welfare state has failed — even in Sweden. So the Euro-statists press ahead with their Social Chapter.

—Large scale immigration has in France and Germany already encouraged the growth of extremist parties. So the the European Commission is pressing us to remove frontier controls.

If the European Community proceeds in the direction which the majority of Member State Governments and the Commission seem to want they will create a structure which brings insecurity, unemployment, national resentment and ethnic conflict.

Insecurity — because Europe's protectionism will strain and possibly sever that link with the United States on which the security of the continent ultimately depends.

Unemployment — because the pursuit of policies of regulation will increase costs, and price European workers out of jobs.

National resentment — because a single currency and a single centralised economic policy, which will come with it, will leave the electorate of a country angry and powerless to change its conditions .

Ethnic conflict — because not only will the wealthy European countries be faced with waves of immigration from the South and from the East.

Also within Europe itself, the effect of a single currency and regulation of wages and social costs will have one of two consequences.

Either there will have to be a massive transfer of money from one country to another, which will not in practice be affordable.

Or there there will be massive migration from the less successful to the more successful countries.

Yet if the future we are being offered contains so very many risks and so few real benefits, why it may be asked is it proving all but irresistible ?

The answer is simple.

It is that in almost every European country there has been a refusal to debate the issues which really matter.

And little can matter more than whether the ancient, historic nations of Europe are to have their political institutions and their very identities transformed by stealth into something neither wished nor understood by their electorates.

Yet so much is it the touchstone of respectability to accept this ever closer union, now interpreted as a federal destiny, that to question is to invite affected disbelief or even ridicule.

This silent understanding — this Euro-snobbism — between politicians, bureaucracies, academics, journalists and businessmen is destructive of honest debate.

So John Major deserves high praise for ensuring at Maastricht that we would not have either a Single Currency or the absurd provisions of the Social Chapter forced upon us: our industry, workforce, and national prosperity will benefit as a result.

Indeed, as long as we in Britain now firmly control our spending and reduce our deficit, we will be poised to surge ahead in Europe.

For our taxes are low: our inflation is down: our debt is manageable: our reduced regulations are favourable to business.

We take comfort from the fact that both our Prime Minister and our Foreign Secretary have spoken out sharply against the forces of bureaucracy and federalism.

The Choice

Our choice is clear: Either we exercise democratic control of Europe through co-operation between national governments and parliaments which have legitimacy, experience and closeness to the people.

Or, we transfer decisions to a remote multi-lingual parliament, accountable to no real European public opinion and thus increasingly subordinate to a powerful bureaucracy.

No amount of misleading language about pooling sovereignty can change that.

Europe and the Wider World

Mr Chairman, in world affairs for most of this century Europe has offered problems, not solutions. The founders of the European Community were consciously trying to change that.

Democracy and prosperity in Europe were to be an example to other peoples in other continents.

Sometimes this view took an over-ambitious turn with talk of Europe as a third force brokering between two superpowers of East and West.

This approach was always based upon a disastrous illusion — that Western Europe could at some future date dispense with the military defence offered by the United States.

Now that the forces of Communism have retreated and the threat which Soviet tanks and missiles levelled at the heart of Europe has gone, there is a risk that the old tendency towards de-coupling Europe from the United States may again emerge.

This is something against which Europeans themselves must guard — and of which the United States must be aware.

This risk could become reality in several ways.

Trade

First, there is the question of trade.

It is a terrible indictment of the complacency which characterises the modern post-Cold War world that we have allowed the present GATT round to be stalled for so long.

Free trade is the greatest force for prosperity and peaceful cooperation.

It does no good to the Western alliance when Europe and the United States come to regard each other as hostile interests. In practice, whatever the theory may be, economic disputes do sour political relations.

Agricultural subsidies and tarriffs lie at the heart of the dispute which will not go away unless we in Europe decide that the Common Agricultural Policy has to be fundamentally changed.

That will go far to determine what kind of Europe we are building.

For, as I have said before, I would like to see the European Community — embracing include the former Communist countries to its East — agree to develop an Atlantic free trade area with the United States.

That would be a means of pressing for more open multi-lateral trade throughout the world.

Europe must seek to move the world away from competing regional trade blocs — not promote them.

In such a trading arrangement, Britain would have a vital role bridging that Atlantic divide — just as Germany should provide Europe with a bridge to the East and to the countries of the former Soviet Union.

Eastern Europe

Secondly, we must modify and modernise our defence.

The dangers on Europe's Eastern border have receded.

But let us not forget that on the credibility of NATO's military strength all our wider objectives depend — reassurance for the post-communist countries, stability in Europe, trans-Atlantic political co-operation.

Communism may have been vanquished.

But all too often the Communists themselves have not.

The chameleon qualities of the comrades have never been more clearly demonstrated than in their emergence as democratic socialists and varieties of nationalist in the countries of Central and Eastern Europe.

From the powerful positions they retain in the bureaucracy, security apparatus and the armed forces, from their places in not-really-privatised enterprises, they are able to obstruct, undermine and plunder.

The systems of proportional representation which so many of these countries have adopted have allowed these tactics to succeed all the more, leading to weak governments and a bewildering multiplicity of parties.

All this risks bringing democracy into discredit.

If Eastern European countries which retain some links with a pre-communist past, and have some sort of middle class on which to draw, falter on the path to reform, how will the leaders of the countries of the former Soviet Union dare to proceed further upon it?

We can help by allowing them free access to our markets.

I am delighted that Association agreements have been signed between the European Community and several of these countries.

I would like speedy action to include the others in similar arrangement.

But, ten years is too long to wait before the restrictions on trade are removed.

And I would like to see these countries offered full membership of the European Community rapidly [after that].

Above all we must offer these countries greater security.

Russian troops are still stationed on Polish territory.

Moreover, it is understandable that the central and eastern European countries are alarmed at what conflict in the old USSR and the old Yugoslavia may portend.

Although I recognise that the North Atlantic Cooperation Council has been formed with a view to this, I still feel that the European ex-Communist countries are entitled to that greater degree of reassurance which a separate closer relationship with NATO would bring.

Security

But, Mr Chairman, most of the threats to Europe's and the West's interests no longer come from this Continent.

I believe — and I have been urging this on NATO members since 1990 — that the American and Europeans ought to be able to deploy our forces under NATO outside the area for which the present North Atlantic Treaty allows.

It is impossible to know where the danger may next come.

But two considerations should make us alive to real risks to our security.

First, the break up of the Soviet Union has led to large numbers of advanced weapons becoming available to would-be purchasers at knock-down prices: it would be foolish to imagine that these will not, some of them, fall into the worst possible hands.

Second, Europe cannot ignore its dependence for oil on the Middle East.

Saddam Hussein is still in power.

Fundamentalism is as strong as ever.

Old scores are still unsettled. We must beware.

And we must widen our ability to defend our interests and be prepared to act when necessary.

The Community's Wider Role

Finally, the European Community must come to recognise its place in what is called the new world order.

The ending of the Cold War has meant that the international institutions created in the post-War years — the UN, the IMF, the World Bank, the GATT — can work much more effectively. This means that the role for the Community is inevitably circumscribed.

Within Europe, a wider role for NATO and the CSCE should also be reflected in more modest ambitions for the Community's diplomacy.

In Yugoslavia, the Community has shown itself incapable of dealing effectively with security questions.

Outside Europe, GATT with its mandate to reduce trade barriers should be the body that establishes the rules of the game in trade.

The Community must learn to live within those rules.

All in all, the Community must be prepared to fit in with the new internationalism, not supplant it.

Conclusion

Mr Chairman, I end as I began with architecture.

The Hague is a splendid capital, and how much we should admire the Dutch for keeping it together so well, as they have done with so many other of their towns.

The Mauritshuis is a testimony to the genius which they showed.

It was here, and in Amsterdam that so much of the modern world was invented in the long Dutch fight for freedom.

Dutch architecture, here and in Amsterdam, has its own unmistakable elegance and durability — it was copied all around the north-European world, from Wick in northern Scotland to Tallinn in Estonia.

Some architecture does last. Other architecture does not.

Let us make sure that we build a Europe as splendid and lasting as the Mauritshuis rather than one as shabby and ephemeral as the Berlaymont.