 G勵r y ffordd, dyfodd y mwylo'rkerio'. context. Why, I might as well confess at once what would soon become clear in any event, I am no economist. My trade is that of journalist which makes me one of what Hayek called second hand dealers in ideas. Before you leave and discuss however, Ie ddim yn dwylo'n gweithio gynhyrchu ffodill yn gwybod yn Ysgrifon, Pwyllgor a'r Cyfloedd Aethol, i ddim yn ei wneud o'r ddwci ddiweddol. Felly, rydyn ni'n ddweud i'r dweud i'r ddweudio'r ddweud. Ac rydyn ni'n gweithio'r ddweudio'r ddweudio, rydyn ni'n gweithio'r ddweud i'r ddweudiaethol. Felly, ydych chi'n gweithio'r lechioedd yng nghymhwyl, oedd ymddangos ein bod i'r ffordd yn rhan o'r ystyried i'r ffordd yn prospect. Byrdoedd y cwysinion ar dda i'w wneud i, dyna'r un oedd ymddangos ein bodi'r idea o'r eistaf, oedd ymddangos ymddangos ymddangos ymddangos ymddangos ymddangos, ac mae'n rhan o'r idea yma o'r eistaf o'r eistaf o'r eistaf o'r ysbytio ar gyfer y twelio am hwnnw. Rhaid i'n meddwl, rhaid i'w eich credu'r ysgrifennu eu projiectau European i'r ffordd, ond mae'r reall yn eich cyfnod ddau. Ond ydym yn rhaid i'r rhaid i'r ysgrifennu mewn oedd oedd o'r hyn ar gyfer projiectau. Mae civil yn cyfnodol yn ei ddweud o'r cyfnodol sydd o'r ffordd yma, ar ychydig o bwysig a'r gwrs a'r ddau i ddweud o'r cyfnodol a'r asparadau o'r cyfnodol ar gyfer neu'r ddweud. Rydw i'r mynd i, projektenioliolaeth yn eisen mewn atent ond yn ôl i'r cyflawn o'r cyflawn hefydol, unithio cyfle ach yn eu chyflonol, o'r projekte gan gweithgawr, ac unig o'r projekte yn ei hyd yn olayd mewn sefydlenu ar ôl. Rydw i'n eich distinctive honno beth, sy'n cyflawn cyflonol i chi i'r projekte gyda'r cyflonol, dwi'n bwysig i'r cynnigach yllyn niad ar yr unrhyw a'r ysgrifennu ei sylfaethol â'r cyffredigol, Roedd y ffordd o'r Cham�fyddiadolidd yn ddelfwyr ein modd mônolog iawn a gyfwyrdd yn ddelfwyrdd leogrofi pan oedd Llywodraeth yn busudol a Llywodraeth. Ond, yn ei ddarparu ein bedod o'r Llywodraeth i gynnig er peu o'r byd i'r sifol iawn yn ddelfwyrdd cymaint o gwblion i'r pwyrdd cymaint, roedd mae'r ffwyrdd cymaint yn ei ddelfwyrdd cymaint. Mae'r llyfr yn ymdyn nhw'n s smoothly ddyn nhw argymaint mewn cymdeithasol a chyfydliadau yn eistedd yn ei gceithio a'u cyfnod o'n'r cyfnod o'r llyfr. Felly mae'r cyfnod yno'r rhonghaethach yno ddylau cyllid rhan a o'r cyfnod o'r cerdd mynd o'r cyflydyddau cyfnod yn lleanfaethau, ac mae'r cyfnod yn mewn cyfnod o'r cyfnod yn lei'r cyst-dysgu'r cyfnod o'n wneud ymdyn nhw'n cyfnod o'r cyfnod o'r cyffrwyr yn amgylchedd. I dim yn ymrhyng o bobl fawr o bwysydd. Mae'r prynhwys gweithio'r pryd yn treulio'r fawr, alw i ffrith, ac mae'r ei ffôr wrth gwrs yn gwrs i'r mwylo'r ceisio. Rwy'n wench, fel ar gyfer, mae'n cyffredig i'r cyd-dyddiol ddyn nhw'n hwn. Fi wnaeth ei bod ymrhyw o polytych hyn yn hyn y pryd yn ddweud â'r bwysydd. Felly, os gallwn i'r ffordd a'i siwg, ysgol y bydd yn yr unig o polytych that is trehorably by rulers with projects who effectively made it a crime to have personal aims and ambitions. So political projects or project politics are inherently suspect and should be kept to a minimum. A phrase like the European project suggests that this is not being done. What then is the European project and what is the end or enterprise to which it is directing? Simplie put and it is simply put in the the documents of the European Union, it is ever closer union between European people and European peoples. From a purely theoretical standpoint this could mean many possible things. It could mean, I suggest five, a one, a new European state, possibly a highly centralised unitary state, possibly a federation, either one governed by central institutions. 2. Lluwser, gyda eu Llyfradol iawn, yn cael ei fod yn amlwg â Llyfradol yn yr hyn, arall, oherwydd mae'n cymdeithasol o'r ddechrau unimol o'r rhain oedd y bwysigol. 3. Beithio cyfrifio? Sef ymwysig cyfrifio hwnnw o'r ddalech yng Nghymru. 4. Oedden nhw'n llunio cyfrifio yng nghymru o'r Llyfradol iawn, Perhaps even more decentralised than it was in 1960 say, with regions and canton's exercising greater political sovereignty, but adhering to common agreed legal rules and standards expressed in treaties and conventions. Or five and finally, some new kind of political entity. One that is neither nation state nor free trade area, nor federation nor confederation, nor supranational body, but a post-modern compromise between all these different types and levels of organisation in which regions, nation states and federal institutions exercise overlapping sovereignty over citizens with multiple identities and allegiances, what is sometimes called the new medievalism. In practice, however, the debate is not about the final destination but about the direction in which the European train is going. Is it going towards greater centralisation or backwards to decentralisation? Advocates of the European project stress the point that we must always go in the direction of ever closer union. They may differ about what they see as the final destination. Most are federalists. Some are adherents of this post-modern euro entity sketched above, but they all wish to keep moving forwards as they put it towards ever closer union. Under the treaties indeed, the European courts have a constitutional responsibility to reach verdicts that push European governments and peoples in this direction. The opposite camp, generally described as Eurosceptic, is skeptical in a broader sense. It does not believe that politics necessarily moves in a particular direction, let alone towards some inevitable objective. It does not like the idea of rulers conscripting their peoples for forced marches into the future. It resists demands that we have a historical duty to move towards ever closer union or indeed that we have a historical duty of any kind. It therefore tends to favour decentralised concepts of European unity such as a free trade area that leaves powers with nation states or even seeks the return of powers currently wielded by the Brussels bureaucracy. This dispute between supporters of the European project in its purest form, I think from now on I will call them Europhiliacs. And between Europhiliacs and Eurosceptics about whether history has a direction and if so whether it leads to a unified European polity of some kind is a vitally important debate. It has serious, and I would say are dangerous, implications for two institutions, democracy and the market economy that only recently seemed securely entrenched in our lives. I realise that my host takes a somewhat different view of democracy, but I think as democracy is going to be discussed here we're talking also about straightforward national sovereign independence. And we risk ignoring these dangers if we regard the European project of ever closer union as above the usual criticism of democratic debate. Now in the last ten years we've had a series of increasingly severe crises about the European Union. Two in particular, the crisis over the European Constitution and its successor, the European Constitutional Treaty and more recently the crisis over the Euro. The surprise rejection of the original constitution by Dutch and French voters in 2005 in referendums created this crisis, the first crisis. Legally speaking the rejections by these two referendums should have solved the crisis rather than creating it because under the European Union rules the treaties rejection by a single state should have meant its demise. Instead a European Summit of Governments decided to extend the deadline for ratification of the treaty indefinitely. This was obviously a device for saving the constitution. It gave the European authorities and member governments time to rewrite the constitution slightly, re-christen it as a treaty rather than a constitution and submit it again for ratification. Not this time to the voters in a referendum that had proved to be a mistake but to the more predictable voters in the European Parliament. This decision determination to press ahead with further centralisation was in my view entirely predictable. It arises directly from the notion that ever closer union is the only legitimate direction of politics. From that it follows that the only legitimate outcome of the debate on the Constitutional Treaty was ratification. So the question had to go on being asked until all member states gave the right answer which after much huffing and puffing, pushing and squeezing, nodding and lying they eventually did last year. Even before the Constitutional Treaty had been finally forced through the easier ratification process however its provisions were being introduced in practice. The European Defence Procurement Agency created by the Constitution was already up and running doing business spending tax revenue even though it had no legal existence. The EU foreign minister or in the European jargon high representative had no legal existence but at the time more than 3000 of her core diplomatic were being recruited and trained. Overriding the wishes of voters is business as usual for the European Commission. European governments already within the EU and Eurofiliacs in general. This determination had already served the EU well on two previous occasions when Danish voters rejected the Maastricht Treaty in 1992 and when Irish voters decided against the Treaty of Nice in 2001. These inconveniences were quite simply brushed aside. Further referendum were held the following year and when both these resulted in yes votes the crisis was declared over and the matter was closed. No third referendum was suggested as a possibility although by the way the Irish would certainly vote against such a referendum today. All these instances suggest that project politics is essentially laws if laws and rules obstruct its central mission. It was also of course ultimately undemocratic. Now to be fair advocates of ever closer union have long conceded that the European Union has what they call a democratic deficit. Unfortunately they treat their admission of this as a solution to the problem. Yes they say we're not complacent. We recognize the EU has a democratic deficit and they more or less leave it at that. Occasionally the boldest spirits propose some solution but inevitably these solutions run up against the directional nature of the project. Let me just examine three proposed solutions in recent years. First there has long been criticism of the fact that the European Commission enjoys a monopoly of legislative initiative in the EU. As even the Eurofiliac magazine The Economist complains this grants the right of advanced veto over European legislation to a body that is composed entirely of appointed officials. It is to that degree a scandalous denial of democratic principles. But there can be no change in this because the commission is seen as the engine of the European project driving it in the right direction. Occasionally attempts to cloak this bureaucratic power in democratic disguise are offered but they always turn out to be almost comically inadequate. Let me quote from a recent European Council. Germany has suggested that if a third of national parliament's objective or proposal then the commission will have to submit a reasoned opinion as to why it is bringing forward the law but will not be obliged to withdraw it. It is interesting that it requires apparently a vote of a third of the parliaments of the European Union to provoke the commission into providing a reasoned opinion for legislation it proposes to the whole of Europe. So much for that. A second attempt to restore some democratic reality. There is now a wide raging EU charter of fundamental rights. It was part of the constitutional treaty now passed into what passes for law. This will give the European judiciary some powers to repeal or amend laws in 27 countries from Estonia to Portugal in accordance with its own interpretation of loosely phrased principles and aspirations in the charter of fundamental rights. Because European law has primacy over national law, the ultimate decision maker on contentious political matters will be a court in Brussels or Strasbourg. Some of the matters removed from the control of national parliaments will now be determined by remote judges in foreign cities with no necessary knowledge of local traditions or legal practice in different countries. It suggests to you that this mocks any idea of the democratic accountability of the law. I have realised that Americans will hear some hints of what the Supreme Court has done in recent years but nonetheless this is new particularly in Britain. The third and seemingly most logical solution to the democratic deficit is to give more powers to the European Parliament on the ground that it is a democratic body because it is elected. But this solution runs up against the social and political reality that the European Parliament, like the EU itself, is a highly imperfect body from a democratic standpoint. Democracy obviously is more than merely holding elections, counting votes and putting the winner into office. It is those things but it's more than those things. And it needs things to exist before even that limited version of democracy can actually happen effectively. Before electoral procedures can create a genuine democracy there has to be a common political consciousness. One that generates a nationwide public opinion to which all parties can pitch their appeals in a debate open to all in language that the voters can understand. In short, before you can have a democratic community you have to have a political community to which democratic institutions and elected representatives can be genuinely accountable. Now it isn't hard, in my view, to make a short list of the minimum underpinnings, the minimalist better policies, so to speak, that democratic democracy requires. I will mention a few but I'm sure you can think of one or two others. First, there has to be a common language and culture which shapes a common political consciousness making vigorous democratic debate possible. Second, there has to be a sense of political community and common destiny so that the losing side in an election does not fear being dispossessed or even murdered when it's opponents come to power. Third, there have to be not merely common interests uniting the nation but overriding common interests such that people are prepared to make serious sacrifices, even the sacrifice of their lives for them. Almost all European nations now enjoy these underpinnings singly, but the European Union as a whole enjoys only the second. I think it's fair to say that the citizens of the EU Member States no longer fear that they would be dispossessed after an election. They may, of course, prove to be wrong on that score but that's what they seem to think of the moment. Otherwise, let's look at Europe as a policy. Europe speaks several languages. It has a fragmented political culture. There are no Europe-wide political parties advancing common programmes. The Strasbourg and Brussels groupings are mere collections of uncomfortable bedfellows. Even the same words, subsidiarity, for instance, have different meanings in different countries and different political debates. As Noel Malcolm, the historian of Bosnia and Kosovo, has observed in his fine pamphlet on sovereignty, one can just about imagine the idea of joint Fino-Portuguese interests, but the notion of overriding joint Fino-Portuguese interests is simply a foolish fantasy. If none of the EU's central institutions, either commission or court or parliament, can provide democratic governance on a reliable basis, then the only structure of European government that can deliver it is one that concentrates ultimate sovereignty in its Member Governments and Parliaments. Today's Europe is composed of democratic nation states within a non-democratic union. Indeed, the late Ralph Darendorf, who ran the LSE, who was at one time in his life, a distinguished career of a European commissioner, pointed out that if the European Union applied to join the European Union, it would have to be rejected, because it didn't live up to the democratic requirements that are called for. Now, your affiliates are reluctant to examine this, let alone concede it. Sorry, what follows from this, therefore, is that some form of intergovernmentalism in Europe is the only possible democratic form of Europeanism. Now your affiliates are reluctant to examine this, let alone concede it, because they recognise that an intergovernmental Europe might one place a break on Everclosie Union, two, allow different countries to develop independently along variable geometry lines, and so, C, frustrate the evolution of a uniting, that is to say, uniform European state. What follows from their rejection and their insistence on the goal of Everclosie Union is a permanent acceptance of the EU as a structure of bureaucratic rule. Some of the bureaucrats making decisions in all these institutions may be called judges, some may be called government ministers, some may be called parliamentarians, some may be called commissioners, but bureaucrats is what they will be functionally, because they will all be committed to forwarding the European project rather than freely discussing and debating among different political choices and different political futures. They, and what I call the candidate members of this bureaucracy in NGOs and national parliaments, are the only group of Europeans who have the common European political consciousness and culture that wouldn't be necessary universally for Europe to be a real polity. And this is ominous for those who remember their history. It is these bureaucrats who see themselves as the vanguard of European integration. How do they conduct their business? Horse trading unrelated to the political debates of any one country determines the decisions in the wilderness of committees. Often these meet in secret and do not record their decisions. Determining blame or responsibility for major decisions is therefore rendered impossible. And when the decisions that come down proved to be unpopular in a particular country, the national government has to explain that nothing can be done, as government has recently been explaining this because these decisions are, a wonderful phrase, politically binding. In other words, they may not be legally binding, although they are often that too, but the government just doesn't dare to move to take a different position. Now, bureaucracies can sometimes produce good policies. I think the Indian civil service and the Brexit. But this benefit tends to be temporary, since a bureaucracy's natural drive to accumulate more power tends to produce over-regulation, and it's stontifying effects over time. In the case of the European Union, the long-term drift to over-regulation can be put down to the underlying economic nature of the EU, and that is the European Union is essentially a cartel of governments. Let me justify this statement. There has always been a tension within the European Union between the principles of internal free trade enshrined in the Treaty of Rome and the regulatory drift of its bureaucracy. Those who favored free trade in competition were able to cite, for example, the principle of mutual recognition of national standards as the proper basis of intra-European trade. But the regulatory impulse received a strong boost when the Maastricht Treaty, bringing in the single European market, introduced the idea that genuinely free trade in Europe required, quote, a level playing field across the entire Union. As a statement of economic theory, I'll risk staying before a group of economists, that's nonsense. Traders generally conducted between unequals in one sense or another because it consists of people exchanging what they have for what they want. The traders themselves are the best people to judge whether or not a deal is fair. But this principle, the level playing field, gave the European bureaucracy an excuse to extend its power by replacing mutual recognition of national regulations with their own bureaucratic harmonisation. That transformed the treaty, supposingly extending free trade into a vehicle for extending regulation, and over time it is transforming the EU from a market in governments into a cartel of them. A cartel is a device for raising prices by restricting competition. The price of government for consumers and businesses consists of taxes and regulations. If governments want to attract investment, hold on to hiring workers and encourage business start-ups, they should keep regulation light and taxes low. Other governments will then have to keep regulation light and taxes low in order to compete with them for the same scarce resources. The resulting market in government services will tend both to restrain the size and the intrusiveness of government and allow the best mix of tax and regulation to emerge from competition between them. In principle, both intergovernmentalism and federalism allow this jurisdictional competition. Juristictional competition is the opposite of bureaucratic harmonisation. So in principle and a long time ago, the EU could have developed along the lines of a market in governments if the governments have been so minded. In practice, however, the EU has become a cartel in which Brussels harmonises different national regulations and increasingly aspires to do the same with taxes in order to produce uniform standards across the union to level the playing field. Such harmonisation is almost invariably upwards to tighter and more expensive rules since the industries harmed by competition are more politically active than the consumers who benefit from it and it produces other damaging effects. As any economist I think would tell me, as you would tell me, this increasingly misallocates resources over time. Why is it that if Tony Blair, as he always claimed, and other EU leaders wanted a more efficient economy with more rational priorities, that is to say less spending on agricultural support and more on scientific research, such policies always seem to elude them? Why is it that when such policies tend to get adopted, as in the Lisbon agenda, they have such limited and disappointing results? And how come that the European Union has government-resisted reform of the agricultural support system and continues to spend 40% of its budget on 4% of economic activity? How does this happen when everyone can see its foolishness? The answer is that the EU, as a bureaucratic cartel of governments, increasingly transforms economic priorities into political ones and political priorities are not always driven by economic considerations. They reflect the interests of powerful groups, red seekers such as French farmers and Spanish fishermen, with close links to the bureaucracy rather than reflecting economic theory. Such groups will not surrender valuable privileges simply because they don't maximise return on spending and represent optimal economic outcomes for the EU as a whole. States representing the interests of these groups will insist on being paid for conceiving some of their privileges by obtaining some other benefit. When Bolasconi had to yield something, he managed to grab control of the EU food agency back from the Finns on the grounds that in Helsinki they'd never heard of prosciutto. In a non-market political system and distribution, which a cartel of governments obviously is, log rolling becomes the standard method of directing investments. This systematically misallocates resources. Indeed, more. It requires heroic measures to keep the losses to moderate proportions, let alone abolish them in the course of setting more rational priorities. Hence the persistence of agricultural spending supports should not astonish us. Is there an alternative approach? Well, you know, we journalists, we feel a certain inferiority when dealing with academics, particularly social scientists and economists. I'll let us call it Diagram Envy. So I have produced here to explain my arguments from this point an impressive social science diagram, which I may ask my colleague to, to explore what a sensible alternative policy look like. Now, ah yes, thanks. This will demonstrate that when we distill the various disputes over a European policy, we will be left with three large debates. Each of those debates is, so to speak, a spectrum of opinion going from left to right. Spectrum A, on political economy, goes from the social model, which is the French model particularly, on the left to the market model on the right. Spectrum B, on international relation, goes from an anti-American counterweight model of the EU on the left to the Atlanticist model on the right. I will deal a little with that, but less so today than I might because other things are more interesting to you, I think. And Spectrum C, on governmental structure, goes from supranationalism on the left to intergovernmental on the right. Now I think it's fair to say that there are family resemblances linking the positions people take on these different models. I've labelled the policies on one side as belonging broadly to adaptive evolutionism, and the other side to consider such a third one as the power prestigious system and then the other side to constructed rationalism, which correlates with civil politics and project politics respectively. Those who favour the social, social and political economy will tend to support both the counterweight model of Europe in foreign policy and the supranational model of the European integration, diddow those savvering the market model will lean towards the same end of the other two spectrums. Such interrelationships are tendencies other than firm relationships. Some especially logical souls could find themselves at the same extreme end of all three spectrums. Almost all French presidents, whatever their ideological self descriptions, embraced the social model, the count-a-way model, and the supernatural model. The British Tories would tend to be the opposite end of all three spectrums to the French president- I wouldn't find myself though. But others will pick and choose. I think it is reasonable to say that the head of the EU Commission today, Manuel Veroso, is a supranationalist, but at the same time, Nid oes i'r model ym mhwyfyrdd yn y model a'u ddwylo cyrraedd a'r ddweud am ymwrch yn Ysbyw Llywodraethau, oedd oes i'r ymwrch yn y pryd i'r rhan o'r policyr ym Llywodraethau. Mae'n ym Mhwyfyrdd ym Mhwyfyrdd yn ym Mhwyfyrdd, ond rhai rhai rhai a rhai yn ym Mhwyfyrdd yn Ysbyw Llywodraethau, bydd oes i'r ymwyfyrdd yn Comicon o'r mhwyfyrdd yn y modelau'r cyrraedd, have inter-governmentalism and Atlantisism, but their preferences on all three may be subtly modified over time, as they succumb to the temptation of larger subsidies from Brussels. So, at first glance it seems more pragmatic and reasonable to mix and match different positions from the three spectrums, what is sometimes called modelling through. But there are reasons for these attitudes to be linked aside from the imperatives of political dogma. Consider first the relationship between the spectrums on political economy and government structure in the light of current controversies. Suppose, for instance, that David Cameron wants the EU to develop a more flexible labour market that would reduce labour costs in order to reduce unemployment. He would then have to face the fact that many French voters rejected the European constitution some years ago precisely because they believed that the constitution would weaken their treasured social model along these Anglo-Saxon lines. I think they were wrong, but that's what they thought. And no French politician can win an election by advocating what the French quaintly call ultra-liberal modernisation. Here is where the governmental structure comes in. In an intergovernmental Europe, or what is sometimes called a free trade area, differences of opinion need not matter much on this. Both French and British governments could pursue distinctive economic policies in an environment of jurisdictional competition. And there would be an endless battle of statistics showing and seeking to prove whose tax and regulation model had delivered the goods. But in a supranational Europe, such a living that live arrangement is impossible. The requirement for common policies and harmonisation of different regulations will compel both countries to adopt the same set of rules over time. No doubt these rules would almost certainly be a compromise of sort between markets and social intervention. Neither country would be satisfied. The compromise would lack the virtues of either approach and we would never settle the superiority of either system through competition. If there really is to be market competition in Europe, then the EU would have to lean heavily towards the intergovernmental side of the spectrum. Now, I won't deal in detail with the crisis over the euro here. It's flaws were well discussed yesterday by Philip Bakers and Matthias McHedge, with whom I largely agree. And we can deal with it anyway in the question time later. I will merely make three quick points, all of them related to the fact that the euro is a political project posing as an economic one and the latest instance of euro of project politics. One, the euro zone is far from an ideal currency area. It is too large, the countries in it are economically to diverse and they are usually operating at different stages of the business cycle. Therefore, even if all of the governments were to behave well, I think we can agree a highly unlikely contingency, the European interest rates set by the central bank would encourage inflation in some countries and recession in others and that's what we've seen happening. Second, the incentive structure of a common currency in these circumstances is a perverse one as was well argued yesterday. It encourages spending countries to overborrow and as few if any automatic stabilizers. The political stabilizer adopted by the EU, the stability pact, required general government support and was therefore not enforced. Hence the Greek essential crises. Three, your affiliates not only predicted this crisis, they wanted it. They thought such a crisis would produce a central economic government of the euro zone which they thought was absolutely essential to a common currency area about which that's what they may be right. But the crisis they have helped to bring about is far greater than one anything they bargained for. Any outcome of the current euro crisis will have heavy costs. A Greek exit from the euro would mean backdrop German banks. Continued Greek memberships means continued German taxpayer subsidies and the euro affiliates have anyway not thought ahead to the next crisis if they do succeed in obtaining a central economic euro government. How will they enforce their economic policies not on the Greek government or on the Portuguese government but on the Greek people and the Portuguese people? That is quite a different order of problem. Now, I will end my remarks on the euro by simply quoting a little story that I happen to be present at. There was a debate a few years ago at the time when the euro was coming in in Boulder, Colorado. Among the people present were Helmut Schmidt, Giscard de Stang and Antonio Martino, who many of you will know is not only a former defence and foreign minister in the Italian government but is a distinguished monetary economist and a pupil of freedom. Martino listened with interest. There was a debate back and forth. Then Helmut Schmidt delivered what he thought would be the closer debate. He said, look, I come to these things every year and every year the same thing happens. You economists tell us that this project cannot possibly work and we tell you in the European Union it's definitely going to get through. Martino said, have you considered that we may both be right? That has happened. They pushed it through and it hasn't worked. Exactly how these things will end up. We will have to wait and see. I'll cut ahead and won't deal with the foreign policy aspects. We could discuss that later if you wish. But I do think that the development of common supernational EU does obstruct good transatlantical relationships rather than favourable. But let me come back to the... If Europe is to be an efficient corporate economy, let alone a vibrant market model, then we will have to reform the entire institutional and legal structure and rewrite existing European treaties. We would have to replace regulatory harmonisation with the principle of mutual recognition of national standards. We would have to transform the peasant cartel of governments into a market of governments in which European nations compete with each other by offering different mixes of tax and regulation to attract investment and talent. And since the existing policies admirably suit the interests of your bureaucratic ruling class, we would have to bring in political reforms to make the EU and its institutions more democratic, more liberal and more flexible. I would say at present there is zero chance of such policies being adopted. In fact, until very recently, we were moving in the opposite direction. At the 2007 European Council, an attentive diplomat noticed that several key words had disappeared from the previously circulated draft of a mandate for a new European treaty. It no longer promised free and non-distorted competition. Nicola Sarkozy, the French president then newly elected, had quietly approached Angela Merkel and persuaded her to drop the offending phrase. It was a symbolic victory of Maastricht over Rome and of French patriotism over Anglo-Saxon liberalism. It will inevitably in future influence the judiciary's interpretation of the Constitutional Reform Treaty in the direction of greater regulation and less competition, and it may therefore have major consequences over time. Let me be clear however. My objection to this exercise is not that Sarkozy will now drive a feat of Peugeot in other national champions through the loophole he made. As a matter of fact, he's not done particularly well partly because his own political power in France is waning. And anyway, I would be perfectly happy for him to drive these Peugeots and national champions through a French political system. He would do that in an open, decentralized and flexible Europe based on jurisdictional competition. But then he would be competing with other economies following more liberal models and we would discover which model worked best. What is legitimately worrying about that little triumph is that it rewrote a constitutional treaty and will therefore influence future policy. I think there was something else at play here as well and that is the underlying ideology of the EU. The underlying ideology is uniformity whether liberal uniformity or status uniformity is a secondary question as long as all states go in the same direction. So, if politicians, governments and nations find themselves up against others who are going in the... sorry, if liberals find themselves up against governments that are going in the status direction, we could well find that having accepted a European Union on the basis on all the various kind of Pacific bases that people do, we could find we have been prescanded to a Colbertian policy of economic nationalism of European scale. I don't think liberals have been among the strongest supporters of the European idea over a long period of time. I don't think liberals are bargained for that kind of Europe when they were encouraging a European unity. But the point about project politics is that when you are enrolled in project politics you don't really know where you're going to end up and you should therefore be very wary of adopting a policy in which you're told you can't ever change your mind. And that's where we are today. Thank you.