Scottish Parliament
European Committee
Official Report

Meeting 4, 1999

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Scottish Parliament

European Committee

Tuesday 14 September 1999


[THE CONVENER opened the meeting at 14:03]

Col 109 The Convener (Hugh Henry): Good afternoon, ladies and gentlemen. I have apologies from Tavish Scott.

Treaty of Amsterdam

The Convener: The first item on our agenda is a discussion on the treaty of Amsterdam and its implications for Scotland. I welcome Dermot Scott from the European Parliament and Elizabeth Holt from the European Commission to the committee. Before I ask them to take us through the presentation on the treaty of Amsterdam—that is after Mr Wilson has stopped giving us a tune on his mobile phone.

Allan Wilson (Cunninghame North) (Lab): Sorry.

The Convener: I should say that they are here in an informal capacity. They are not here to answer questions about the new Commission or anything else that might be going on.

Dermot Scott (European Parliament): Convener, ladies and gentlemen, thank you for your invitation. Liz Holt and I are delighted to respond to your invitation for an informal briefing on the Amsterdam treaty. I tried to think of something amusing to say about the Amsterdam treaty but have not yet found it. The treaty is a bit like the book of Deuteronomy: we all know that it is there; very few people have read it from end to end; some bits of it are probably controversial nowadays; and few people are expert on it.

Committee members have already received a lengthy document on the Amsterdam treaty prepared by Sue Morris of SPICe. We will not be revisiting the treaty at such length, but will instead give a useful overview of its contents. Several committee members—such as yourself, convener—have experience and are knowledgeable in this area. Liz Holt and I will split the presentation between us: I will set the scene and Liz will outline the treaty's content.

In the mid-1980s, Europe was gripped by economic stagnation; the US and Japan were creating jobs while Europe was losing them. Since the oil crises of 1973 and 1979, Europe had been retreating into protectionism. Although tariff 

Col 110 barriers had been removed, non-tariff barriers were being erected.

There were strategic uncertainties at the highest level of the European Union due to various geopolitical factors, such as the rapid changeover of American presidents and their points of view on international politics; the invasion of Afghanistan; the crisis in Iran; the twin-track NATO deployment in Europe and the reaction of various European countries to that; and the star wars initiative.

Such uncertainties led to the completion of the single market and the removal of non-tariff barriers that were now separating the European market into national markets. It was hoped that such measures would allow Europe to compete effectively with the large US and Japanese markets. However, 300 trade barriers that were covered by 300 directives had first to be removed. It was necessary to introduce voting to get the directives through the Council of Ministers, because the organisation had been stuck for years on the need for unanimity. A system called qualified majority voting is used to achieve agreement in the council on issues on which there is no unanimity and means that such issues can be agreed if there is a majority of about 71 per cent.

However, qualified majority voting also means that the national Parliament's influence over each member state's minister in the Council of Ministers is reduced. The national Parliament has no real sanction, because, although the minister might have argued the Government's point of view in the council deliberations, he may have been outvoted. More voting means more democratic control at a European level through the European Parliament, which is what happened in the Single European Act of 1985. Because of strategic uncertainties, there was a small advance in the area of European political co-operation. Such co-operation had been going on informally since 1970, but it was now formalised within the treaty framework under the heading of common foreign and security policy.

That situation lasted from 1985 to 1992, when the Maastricht treaty on European union was agreed. The treaty followed up the single act's largely successful idea of creating a single market by 1992 by suggesting the creation of a single currency. The proposal was well prepared by a committee of top-level central bankers which was chaired by Mr Delors and which reported in 1988 or 1989. Although the parameters for a single currency were laid down in the Maastricht treaty, the idea had been well researched in the Werner report in the early 1970s, through the snake mechanism and other attempts to co-ordinate the European monetary system and in the Delors report.

Col 111 However, while they were considering setting up an intergovernmental conference to bring about the single market, a political event upset the apple cart—the collapse of the Soviet Union. In May 1990, it was decided that there would not be one intergovernmental conference to reform the treaties to allow for the single currency, there would be two, with the other dealing with political co-operation and how to react to the collapse of the Soviet Union. The result was the introduction of economic and monetary union in the Maastricht treaty and advances in the common foreign and security policy. Those are the two pillars of the Maastricht treaty. I will come to the third one soon. The first pillar is the old treaties that go back to the 1950s and the second pillar is the structure that deals with common foreign and security policy.

Within the first pillar, we get more qualified majority voting, because the Single European Act was seen to have been a success and the powers that were given to the European Parliament were also seen to have been successful. They had not caused, as some people had expected, a great delay in the legislative process. Therefore, in 1992 the Parliament was rewarded with co-decision, the equal right with the council to take decisions on a limited number of areas—15 areas were agreed in the Maastricht treaty. That changed the balance between the council and Parliament. The council knows that the Parliament may vote something down, so it behaves differently in the bargaining process. A lot of interesting work has been produced on that matter.

The third pillar established by the Maastricht treaty is co-operation—which had again been going on informally—on matters such as visas, police and judicial co-operation and immigration. Co-operation in those matters is pillar 3. The difference is that in pillar 1 the community method is used: only the Commission can make a proposal and the council and the Parliament have defined powers in making the legislation. In pillars 2 and 3, it is more or less purely inter-governmental. The Commission may be associated with the work of common foreign and security policy and justice and home affairs, and the European Parliament may be consulted, but it does not have the role that it does in pillar 1. That is an important distinction to remember.

The important point about Maastricht is that they came to agreement at 3 o'clock in the morning on 16 December 1992, when they were dead tired and they signed on the bottom line. They could not agree on some issues. They could not agree on extending qualified majority voting further on the extent to which the European Parliament should be given co-decision rights or on how far to go on reforming common foreign and security policy. They knew that events were dynamic in central and eastern Europe, so they would need to come 

Col 112 back and review this in a few years time. They knew that the Western European Union treaty was expiring in 1998. There was disagreement on whether new areas, such as tourism, should be brought into the treaty. Therefore, they said, "We will sign now and come back in 1996 to consider those matters again."

Elizabeth Holt (European Commission): Now we get to the Amsterdam treaty, five years on from Maastricht, when the member states revised the Treaty on European Union. They tried to progress on the existing treaty by revising it. The trick of understanding the Amsterdam treaty is not to try to understand everything about it, because it is a huge, sprawling complex—almost organic—symbol of how Europe is developing. Certain key areas represent the important parts of the treaty. Dermot and I will go through the four main areas today.


What is the scope of the Amsterdam treaty? Central to the treaty is the idea that the European Union should have the interests of the people of Europe at heart. The difficulties experienced by certain member states, particularly Denmark, but also France, the United Kingdom and others, in ratifying the Maastricht treaty—the delays and the evident reluctance to move too fast—quickly concentrated the minds of Europe's political leaders on a single conclusion: that the European Union must be made more accountable and relevant to ordinary people than it had been hitherto.

The Amsterdam treaty is, therefore, very much about the people of Europe and their most immediate concerns: their jobs, their way of life and their rights as individual citizens. We will show how the Amsterdam treaty puts the fight against unemployment at the top of the European agenda, how it seeks to extend the rights of individuals in the member states, and how it reinforces—clarifies absolutely—the principle that European Union decisions should always be made at the lowest appropriate level, so that things are done that make the actions of the European Union more open, more accessible and better understood.

The second major issue dealt with by the Amsterdam treaty is the building of a safer and more just EU, in which, as is right in a union, there are no internal frontiers. Dermot will handle that issue. He will talk about how the Amsterdam treaty is intended to make the European Union a place in which its citizens can move around more freely than ever before, but at the same time a place that is secure and where the power of law and order is assured, despite the openness and freedom.

The treaty brings significant parts of the so-

Col 113 called third pillar, which Dermot has already mentioned—justice and home affairs—under the Community umbrella. The importance of that should not be underestimated. It is clear that for European Union citizens the things that count are security, effective Community action and networking and co-operation among Europe's police forces.

In the early years of the Common Market, the right to live and work in other European Union member states was limited to those in paid employment, but since 1993 any European who wants to can exercise that right: students, the self-employed, tourists, pensioners, and so on. In practice, however, it is true that we have not yet achieved full freedom of movement for people. That is partly because member states are reluctant to give up passport checks at their borders until they can be sure that there are common standards on immigration and asylum seekers and that effective controls on international criminals are in place at the external borders of the European Union. The EU island nations—Ireland and the UK—are particularly sensitive about that.

The third big issue in the treaty of Amsterdam is the idea of a stronger Europe in the world. We will briefly examine the way in which the Amsterdam treaty attempts to carve out a stronger, but appropriate, world role for the European Union by moving towards an effective and coherent external policy. As Dermot has already suggested, foreign policy is one of the most delicate areas for the European Union and one in which activity is essentially intergovernmental.

Kosovo, the Union's most public post-Maastricht foray into foreign policy, was widely considered to have been a failure. In spite of the good work done since, it was difficult to shake off the feeling that the European Union's foreign policy provision did not fit Europe's circumstances at the end of the 20th century. A careful balance has to be struck between the development of common EU action on security and defence and respect for national traditions of neutrality.

The fourth area that we want to talk about today is a wider European Union—the idea of enlarging the European Union to include new members. However, it must remain a Europe that works and can function. The sort of structures that were put in place were ideal for a group of six member states, but not, arguably, for 15, and certainly not for 20 or more. We want to talk about how the treaty has addressed the way in which the European Union is moving towards taking in new member states while embarking on the reform of its own institutions to keep them effective and democratic.

I have elected to talk about social policy as that is my main background in the Commission. For 18 

Col 114 years, I have been an official working in the Directorate-General V, Employment, Industrial Relations and Social Affairs, in Brussels. I have worked as a desk officer and as an individual official on a wide range of social policies, so it is appropriate that I talk about them. Arguably, employment and social affairs are the best thing about the treaty of Amsterdam. They are the area in which there was greatest progress in the negotiations, and that is perhaps the part of the treaty of which many people in Brussels are most proud. They feel that they did well in the treaty of Amsterdam.

Employment is obviously a central issue in anyone's thinking, and the treaty of Amsterdam introduced a new employment chapter that has put employment and job creation at the heart of the process of European integration. It is perhaps the single most positive outcome of the treaty and has been steadily built on since 1997, when the treaty was agreed between the member states. European leaders have recognised that stability and growth policies—the economic progress made by the European Union—had to be matched by a stronger commitment to employment at a European level.

The treaty made employment a matter of common European concern. In other words, solving European labour market problems would not be done by individual European Union member states, but by member states co-operating to address those problems—at the European and the national level—in a co-ordinated way. That important provision has been the mechanism that has, since 1997, seen the development of what is called the European employment strategy. It came into effect immediately, at the explicit wish of member state governments. In other words, the Commission did not have to wait until the ratification of the treaty in all the member states to begin working on the strategy. Member states agreed that we could begin to pull it together straight away.

The strategy has proved extremely effective; it is already producing results. It is based on common commitments and targets, not unlike those that have been so successful in European monetary union. We hope that, when applied to the job market, those common commitments and targets will lead to better employment performance, greater emphasis on employability, the building of a stronger spirit of entrepreneurship in European economies, much greater adaptability for both workers and firms in the labour market, and a considerable emphasis on equal opportunities between men and women.

An enormous amount has been achieved since 1997. The European employment strategy is now in its third year, and has been publicly endorsed 

Col 115 by the G7 summit in its scrutiny of the direction of the European economy. A few days ago, the Commission officially proposed its new guidelines for member state employment policy for 2000. For the first time under the new employment strategy, it has proposed to the Council of Ministers ways in which individual member states can improve their labour market performance. Peer review is an important part of the employment strategy.

The treaty of Amsterdam also gave the European Union something very important in terms of wider social policy: a single legal framework for agreeing social policy. In other words, Amsterdam integrated what is known as the social chapter into the body of the Treaty on European Union and ended the UK opt-out.

I was working in Brussels on social policy during the 1990s and it was not easy to deal with the European Union, with 14 member states implementing some European social policies and 15 member states implementing certain others. There was a fragmented approach to social policy, which did not make a lot of sense. Although member states all have their own approach, they also have an enormous amount in common in how they deal with social policy. The achievement of the treaty of Amsterdam is therefore important; European social policy making is now done by all the 15 member states, and that can only be a good thing.

One result of that change, and it is something that is considered especially important in the Commission, has been to bring the so-called social partners—the employers and trade unions—on board as major players in social policy making at European level.

The treaty contains a provision on people's fundamental rights and an article on anti-discrimination. Article 13 of the Amsterdam treaty gives the European Union the capacity to lead the fight in member states against any form of discrimination, defined in broad terms, whether on the basis of sex, racial or ethnic origin, religion or belief, disability, age, or sexual orientation.

The treaty emphasises gender equality and the achievement of real equality between women and men—something for which a great deal of work has been done at European level for many years, but where final success still eludes us. Article 2 of the treaty of Amsterdam now makes equality of opportunity between men and women one of the main objectives of the European Union.

Dermot Scott: The second area for discussion is freedom, justice and security—the third pillar of the Maastricht treaty. There are two contrary tendencies in this area. There is a desire to improve freedom of movement for the citizens of Europe—as a personal right and as a means of 

Col 116 assisting in the breakdown of barriers to trade, industry and economic development; there is also an unwillingness to let that happen if it will lead to more cross-border crime. Internationalising crime flies in the face of the logic of such treaties.

All member states except Britain and Denmark agreed to the freedom of movement across borders provided for by the Schengen agreement—Schengen is the name of the village in Luxembourg where the agreement took place. The agreement was made outside the Treaty on European Union. The Amsterdam treaty brings it in so that it is now incorporated in the treaty.

To allow for the fact that Britain has a different view, however, one must allow for flexibility. How does one do that? In the treaty of Amsterdam, the circle has been squared by setting out precise instructions about how certain countries may go ahead, under what conditions they may do so and whether other member states can stop them.

Because the detail has been laid out in the Amsterdam treaty, there is permission to invoke the Schengen agreement for some, but not all, countries. There are detailed provisions that allow Ireland, in particular, to rejoin if it wishes.

Denmark is in a curious half-in, half-out situation. It complies with the agreement, but under title 6 of the treaty of Maastricht rather than under title 3 of the treaty of Amsterdam. As usual, it is a very complex procedure.


Visa policy, residence permits and asylum procedures are now included in the text of the European Community treaty. They have been brought into the treaty structure and in five years' time a decision can be made to move to majority voting on them.

There are also rules for civil-judicial co-operation as part of that title. They are in the wrong place. That should mean that visa policy, residence permits and asylum procedures are now subject to Community rule, and possibly, in five years, to majority voting. Rules on civil-judicial co-operation are not yet subject to Community rules.

As is elaborated in the treaty, decisions made to improve the European police office for better information exchange are the counterpoint to the freedom of movement. In other words, if there is to be freedom of movement, the police in different countries must have freedom to enjoy effective exchange of information. Europol is not yet a federal bureau of investigation for the European Union. It is a mechanism whereby national police forces co-operate. It is an information exchange.

In criminal matters, police remain inter-governmental. The fights against terrorism, 

Col 117 organised crime, crimes against children, drugs, fraud and corruption also remain inter-governmental. Governments co-operate in those areas, although those areas are not communitised.

Elizabeth Holt: The treaty has been used to bring greater effectiveness and coherence to the European Union's external policy. The strategy that lies behind the treaty of Amsterdam is two-pronged. The treaty extends the scope of the EU's common commercial policy to promote its worldwide economic interests. The second part of the strategy is a reform of the EU approach to a common foreign and security policy.

From the outset, the EC has always defended the commercial interests of member states. However, international trade in the 1990s is very different from what it was in the 1960s, when it involved mainly agriculture and manufacturing. Invisibles now account for most of the wealth of the EU, which is why the Amsterdam treaty has extended the competence of the common commercial policy to the key areas of intellectual property and services.

That there should be such an extension of the common commercial policy is underlined by the fact that 92 per cent of the union's gross domestic product comes from trade between member states. External trade makes up only a relatively small proportion of Europe's wealth. Europe has become a single economic entity.

We still have a few things to cover, and I would like to look briefly at foreign policy. Progress has been necessarily limited. The need for caution and to take incremental steps is obvious. We are, in effect, moving towards a common foreign policy and strategy, but we are still far from it. The Amsterdam treaty amounts to a set of innovative principles, but not a great deal more.

The common foreign and security policy is grounded in the principle of territorial integrity of member states. Great care has been taken to ensure that it is in explicit conformity with the principles of the United Nations charter. However, it expects member states to increase the amount of co-operation and to develop, where possible, new forms of political solidarity.

The union is now empowered to carry out humanitarian aid and peacekeeping tasks, which are known as Petersburg tasks. One very positive move is that even the union's traditionally neutral member states—Austria, Finland, Sweden and Ireland—have agreed to contribute to humanitarian and peacekeeping missions. It is felt that their neutral status is not in any way threatened or questioned, which is obviously very important.

The treaty has also brought in some innovative 

Col 118 decision-making methods, allowing for the working out of common strategies, general guidelines, joint actions and common positions to be decided by the European Council. I think that you can feel the caution that underlines this whole area of policy, but those methods can be put into effect by a qualified majority of the Council, to ensure the flexibility that is essential to any foreign policy operation. Also worth noting is the constructive abstention clause, which allows one or more member state to abstain on certain decisions without preventing the other member states from acting. The most important decisions, however, are put to the Council for a unanimous vote.

The new approach has been given further prominence by the creation of a high representative for common, foreign and security policy. The French initials for that are PESC: Mr PESC is a lot easier than Mr CFSP. When people are talking in French, they often refer to the new high representative as Mr PESC, but that is a bit too close to Mr Pesky in my estimation. You will all be aware that the representative is Javier Solana, the former secretary general of NATO. That really puts a face and a name on developing European Union foreign policy.

A policy planning and early warning unit has also been established, to help the union's member states identify and anticipate crises. That is important if we consider the events of the past few years.

There are certain basic things that must be emphasised. No European defence or military policy has been adopted as part of the Amsterdam treaty. There is no provision for a European army and no provision for European military service. We are nowhere near any of that, because of the treaty. What the treaty does is take the European Union towards the progressive creation of a common defence policy that covers humanitarian and rescue tasks, peacekeeping and the use of combat forces in crisis management, while leaving NATO as the major player in European defence.

Dermot Scott: Finally, there are institutional questions. In brief, they are: improved access for the citizen, which underlies the whole strategy of the Amsterdam treaty in its efforts—after the bad experience of Maastricht, and for other reasons—to make things more citizen-friendly; fundamental rights, which are written into the treaty for the first time; access to documents, which is now a legal right, also written in for the first time; and other things such as the rights of consumers to health and safety.

The power of the European Parliament is slightly increased over that of the Commission in so far as it now has the right to vote in the president of the Commission—as happened with Mr Prodi—in addition to its right to vote for the investiture of the 

Col 119 whole Commission, which is scheduled for tomorrow.

The number of areas in which the European Parliament has co-decision rights has increased from 15 to 38, so we not only have agreement to the principle of the issue, which was important, but it has been greatly expanded. Such an increase would normally go hand in hand with an increase in the application of qualified majority voting in the Council but curiously, for reasons to do with the German Government, Mr Kohl was not able to countenance that at the last moment, so it did not go through.

There was a failure to face up to the institutional dynamics of the necessities of enlargement, which have in effect been postponed for another day. There was no agreement on reforming the voting strengths on the Council of Ministers to reflect the fact that, in the event of a considerable enlargement of the union, the large countries could be outvoted by a large number of small countries, which would have a much smaller population.

The decisions on the size of the Commission were sketched out but not decided and it was clear that a further intergovernmental conference was required. That has now been agreed and the conference will open next year. Those, in brief, are the institutional questions that are raised by the treaty of Amsterdam.

I have put up a slide on impact. Members will be pleased to know that it is the penultimate slide; the last one shows three or four subjects for the next intergovernmental conference. Liz has discussed the increased rights for the citizen and the great strides that are being made on the employment package. The European Parliament welcomed both those areas but was very disappointed by the progress on the common foreign and security policy, particularly in view of the situation that is evolving in Europe and elsewhere. It was also disappointed that the preparation for enlargement had been postponed and will have to be returned to next year.

I will move on to the last slide. An intergovernmental conference will open next year; it will probably be declared open at the Helsinki summit in December. The Finns are very keen on it. The conference will have to face institutional challenges. We wonder whether it will generalise qualified majority voting or extend it somewhat in view of the fact that we may have enlargement. It will consider whether there is any movement on the great questions of security and defence. Given the present crisis in Europe, the conference will also consider whether we need a refinement of the way in which the union deals with the third-pillar issues—population movement, immigration, refugees and visas—and whether more such 

Col 120 issues will move into the decision-making structure of the main treaty.

The Convener: Thank you very much for that comprehensive overview of a major and significant treaty. You covered many different aspects and, although it is difficult to cover everything in such a short time, you have given us a good grasp. Does anyone have questions and comments?

Ms Irene Oldfather (Cunninghame South) (Lab): I echo the convener's welcome for that comprehensive presentation.

There are major challenges ahead for Europe, first in relation to the common foreign and security policy, which will have to be addressed, and, secondly, on the structural and institutional questions that will arise as a result of enlargement. Considering enlargement as an opportunity as well as a threat will also be a challenge. As well as the changes in structural funding that will be required as a result of enlargement, there are 100 million consumers out there and there is much work that we could do to try to gear Scotland up to grasp that market as an opportunity.

We have had the opening up and liberalisation of markets, but social change has been a bit slower. We still have some way to go on that front. That is disappointing and I hope that there will be some movement on it during the next few years.

Allan Wilson: In the presentation, you talked about the dichotomy at the heart of the treaty: promoting greater freedom of movement while responding to a popular demand to combat crime internationally. You mentioned the Schengen agreement and the fact that a pan-European police force modelled on the Federal Bureau of Investigation had not been agreed on. It was not clear to me whether that could subsequently—perhaps five years down the line—be subject to a qualified majority vote, as will visa policy, residence permits and asylum procedures. Will the subject be revisited?


Dermot Scott: I am sure that it will be revisited next year in the light of the experience with Europol. However, it is early days for Europol, which is just getting going. The treaty of Amsterdam allows for a certain amount of executive work by Europol officers, but Europol is not a free-standing police service. It is mainly a co-operative venture. Policemen and women are assigned from national police forces to co-operate and share information in The Hague. I would be happy to look at the definitions in the treaty afterwards, but I do not want to do that now.

Ms Margo MacDonald (Lothians) (SNP): I am interested in the underlying philosophy of 

Col 121 enlargement and the possible stand-off between enlargement and deeper democratisation of the institutions of the EU. Liz and Dermot touched on big countries' rights. Coming from a small country, which I hope in the not too distant future will have the same legal and political rights as others around the European table, I am not altogether thrilled with anything that will protect the rights of the big countries. I am much more concerned about the smaller and peripheral countries.

My theory is that unless the national differences in an enlarged EU are recognised, the smaller and peripheral countries are unlikely to co-operate in the sort of social development that Irene wants. There is a great danger that the arrogance of the big states will cause the EU to implode. I would be interested to hear your comments on that.

Elizabeth Holt: There are differences of opinion among large and small member states about the sort of union that we should have. That is partly driven by an economic rationale, but also by several other things. The lack of agreement last time showed just how powerful small member states are in holding up the larger ones. There is much greater equality than there appears to be from the outside.

It is in everyone's interests for enlargement to succeed. I say that with the caveat that it is essential that enlargement is not used to dilute the democratic achievement of the European Union and the conditions that prevail in member states.

Any new country will be required to come up to the European Union's level, rather than the European Union making concessions. One of the reasons enlargement is taking such a long time is that it takes member states time to prepare. Behind the current process of negotiations is a huge and elaborate process of development—not just political, but economic and social. I have never found the small countries in the European Union shy about protecting their interests and I do not expect it to be any different next year.

Dermot Scott: I have worked in a small member state for the past 20 years and I have watched Ireland approach the negotiations for the Single European Act, the Maastricht treaty and the Amsterdam treaty. The bottom line for the Irish Government has always been to hold on to the Commissioner. If there is a marginal variation in the strengths of voting in the Council, Ireland may have reservations about it, but it is not the bottom line.

During the reflection group and the intergovernmental conference, the perceived threat was the body of opinion among member states that 20 Commissioners is too many, there is the risk of going to 25 or 30, so why not go back to a smaller number such as 10 or five? In other 

Col 122 words, there was a move to break the link between a member state and a Commissioner and to choose 10 people from throughout Europe on their merit. The small member states were suspicious of that and wanted to hold on to their Commissioners. That was the principal issue.

Ms MacDonald: What about the trade-off on qualified majority voting? That can often mean a big difference to a small state.

Dermot Scott: Ireland's view was that qualified majority voting was in general beneficial except in certain areas where it had objections. Everyone had objections to certain areas so we ended up not going with it at all. Everyone is in favour of extended qualified majority voting in all the areas that do not matter to them.

Ms MacDonald: I want it for the areas that matter.

Bruce Crawford (Mid Scotland and Fife) (SNP): I am interested in the fact that 92 per cent of the European Community's gross domestic product comes from within its own boundaries and the difficulties that that may lead to the in the longer term. It might isolate the European Community from the vagrancies of world market fluctuations and create more stability. Does helping the Russians and Brazilians to restructure their economies really assist the Community? Obviously conflicts can arise from the impact of various trade wars with the US—for example the banana wars that happened over cashmere and which were discussed through the World Trade Organisation—and those may begin to grow. I worry that not being able to expand and enlarge further will create greater difficulties for our influence, not just the EC's influence but Scotland's influence, in other parts of the world economy. Maybe that is a bit rambling but I think I know what I mean.

Elizabeth Holt: The fact that the European economy is as self-sufficient as it is is not anything other than a strength. We are considering 92 per cent of an extraordinarily rich block. It means that the European Union is not dependent on other parts of the world for the success of its society and economy. It is not a zero-sum gain. Only 8 per cent of the European economy is trade with the rest of the world, but that may change. What we have is really the creation of a single European economy. We do not yet have a single currency—we are moving towards that—but the European economy is undoubtedly a strength not a weakness.

Bruce Crawford: I agree that it is an internal strength; it might help us in terms of how we operate within the European Community. I wonder about the impact that it has on other world players outwith the European Community. In the longer 

Col 123 term, barriers might build up between Europe and the rest of the world and lead to trade barriers that can spin off into other types of conflicts.

Elizabeth Holt: People would not want to erect too many of those barriers. I do not link the tremendous self-sufficiency of the European economy with barriers to the rest of the world.

Dermot Scott: The next World Trade Organisation round will decrease barriers. There will be intense pressure on Europe to decrease even its agriculture barriers. The trend is entirely in the direction of decreasing barriers.

If Europe is a strong and integrated player it will be better able to help to regulate, and create balance in, the world economy. It has been the big countries such as the United States that have been able to rescue Mexico and Brazil; if the EU becomes a player of that sort, it may be able to help to regulate the world economy in such a way. That should not be confused with the idea of the EU being fortress Europe, as that idea is dead in the brains of most of the people who make the decisions.

Ben Wallace (North-East Scotland) (Con): Thank you very much for the presentation. You talked about the rights of EU citizens. What about the rights of citizens in areas that are not covered by EU treaty, such as defence? You talked about the equality of men and women in the EU, but I know of a number of cases in which women are in court on defence matters because their rights do not seem to be protected as defence is not under EU judicial control. Are there moves towards overlapping, even though defence does not come into that realm?

Dermot Scott: Defence matters have always been left out of EU treaties. If those people have a case in the courts, it will be based on the European convention on human rights and on the Council of Europe rather than on anything to do with the European Community legal system.

Ben Wallace: So, effectively, the rights of EU citizens apply only within the bounds of the EU treaties?

Dermot Scott: Yes, except that the Amsterdam treaty brings the European convention on human rights into the text of a treaty for the first time.

Ben Wallace: Why does the EU feel that it needs to develop a common defence policy?

Dermot Scott: The EU does not yet say that. The treaty says that it may progressively lead to the development of a common defence policy. There are various stages: we now have a common foreign and security policy, which may lead in time to a common defence policy, which may lead to a common defence. The treaty leaves doors open.

Col 124 The neutrals have opposed movement because they do not want to be drawn into a mutual defence guarantee, and the NATO enthusiasts have opposed movement because they do not want NATO watered down or rivalled by anything European. Those two tendencies have been sufficient to break the process. It will be interesting to see at next year's IGC whether both sides have moderated their convictions, as there is movement in the neutral countries.

The Convener: I will draw that part of the discussion to a close, as I am aware of the time.

You talked about decision making being brought closer to the average citizen and about decisions being made at the lowest possible level. In the papers that accompany your presentation you talk about a safer, more just European Union, about employment, and about the rights of the citizen. Given our relationship with Europe—as members of the European Committee of a Scottish Parliament that is still part of the UK—what are the most significant implications of the Amsterdam treaty for this Parliament and for the work of this committee over the next couple of years?

Elizabeth Holt: The most obvious implication is in the area of structural policy and funds and in the implementation of the new package. For all the fine words that can be said about employment and job creation and so on, jobs are created at local level. An important role for the committee will be to participate in the success of those programmes.


Dermot Scott: It occurs to me that the major significance of the Amsterdam treaty is not for the people of Scotland, but for the people of Europe. Europe is now more citizen-friendly. The European Union is increasingly concerned with issues such as unemployment; it is giving citizens more rights and is involved in difficult matters such as immigration, refugees and visas. The EU is concerned that it has failed to do things properly in Kosovo and would like to do things better. It is considering how to move forward in those areas.

It would be of great benefit if the committee and the Parliament could communicate all that to the people of Scotland. The Amsterdam treaty will be of assistance in achieving a European Union that is more up to date and more user-friendly than before. Although the treaty is not specific to Scotland, it can be used in the Scottish environment.

The Convener: Does anyone else want to comment on that?

Dr Sylvia Jackson (Stirling) (Lab): I want to follow on from Elizabeth Holt's comments. I refer to the section on creating jobs in the yellow leaflet, 

Col 125 "10 Points about the Treaty on European Union", which talks about building on best practice for job creation and about pilot projects. Is that initiative still in the pipeline, or has it started? Which monitoring procedures will be involved?

Elizabeth Holt: Essentially, the yellow leaflet talks about the new provisions on employment laid down by the treaty of Amsterdam. As I suggested, in only two years, an enormous amount has been done in that area. In terms of exchanging best practice, each year, member states have submitted national action plans that have been scrutinised by the Commission, which reports to the European Council. All the member states have been able to examine the labour market policies of the others and to say where they are right or wrong. There has been substantial development from a low-key beginning. Although it began as a pilot project, it is now part of a mainstream European activity in support of employment.

Dr Jackson: I wondered whether there had been research in order to identify good models. Which key issues arose from that?

Elizabeth Holt: I do not think that there is one model that everyone should follow.

Dr Jackson: No, I just want to know where we can find out more about that, to get an overall picture.

Elizabeth Holt: I can give you a lot more information on the development of employment policy, but we are talking about large documents. I should be happy to talk to you about European employment, bilaterally.

The Convener: We are running out of time. Cathy has not yet asked a question and I want to draw the matter to a close.

Cathy Jamieson (Carrick, Cumnock and Doon Valley) (Lab): I am interested in equal opportunities and improving social rights. Will you outline the positive action opportunities to redress some of the gender imbalances, particularly in employment?

Elizabeth Holt: Year on year, the member states agree certain priorities for their labour market policies. One of the four priorities on which they agree is equal opportunities for men and women. In the past, that influenced matters such as European social fund regulations, but it is now an absolute priority for labour market policy. When, at each December European Council, the direction and performance of the European employment strategy is assessed, specific attention is paid to the pay gap between men and women and to whether women are moving into the kind of jobs from which they were previously excluded. That has a great deal to do with the labour market, but is also connected with other 

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Scottish Parliament 1999
Prepared 14 September 1999