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How to run a market

• Mark Mardell
• 11 Oct 07, 07:08 PM

Barroso has made challenging Britain to properly engage in Europe.

He says: "I find it frankly strange that the debate on this side of the Channel so often seems to suggest that the UK is fundamentally at odds with the Continent.

"I don't believe this reflects the reality here in the UK. With your long-held international outlook, I don't believe that your arms can be open to the world while your hearts and minds are closed to Europe."

He argues nothing could be further from the truth than the idea that European integration leads inexorably to a superstate. All the EU is doing is building up the confidence and capacity for countries to work together when there is a common interest, he says.

He adds: "This paints a very different picture from the caricature of the European Union as a distant elite trampling on diversity with endless diktats on harmonisation."

He also defends the role of the European Commission in a way that I often hear in Brussels but I rarely see debated in the British media . So I will quote him at some length:

"Some of my friends, including here in Britain, say that they can live with the idea of Europe, but think Europe is obsessed with institutions. The key to Europe, they say, is the market. Well, there can be no markets without institutions. Markets need rules. It's as simple as that. And to run a market, across 27 countries, you of course need effective institutions. Those who want to reduce the EU to a market don't even understand markets. You can't run a market stall without rules.

"Let's be frank - it would be impossible to run a single market in Europe without a strong commission, without a strong Court of Justice. And you can forget free and fair competition as well. That is why, let's be clear, we need a legal framework which allows Europe to function properly. And that's what the institutional debate was all about. We needed to ensure that a system created for six member states is capable of functioning more effectively for a Europe of 27 member states and more."

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The two Mr Bs

• Mark Mardell
• 11 Oct 07, 01:11 AM

Merkel made it a priority. So did Sarkozy. Within days of being elected the leaders of Europe鈥檚 two most important countries made sure they went to Brussels to talk to the President of the Commission, Jose Manuel Barroso.

In Paris or Berlin that鈥檚 not a problem. It doesn鈥檛 look like paying homage to "Brussels" but like powerful politicians taking their rightful roles as helmsmen of a continent. But Prime Minister Gordon Brown hasn鈥檛 been to the EU鈥檚 capital yet, and he鈥檚 not planning to come here until the summit in December.

Some think this is a snub, and Mr Brown isn't particularly bothered. So instead President Barroso is going to Downing Street to see him. They both want next week鈥檚 summit in Lisbon to see an end to an intense bout of navel-gazing, and presumably both know it won鈥檛.

In practice, it means they want to get the signed off with the minimum of fuss. Well, not actually signed off. The signing won鈥檛 come until that December summit. I understand the leaders may be asked to initial a document in Lisbon, so they have their monikers attached to a piece of paper without having formally 鈥渟igned up鈥� to the treaty.

Anglo-Saxon agenda

This nicety aside, Brown and Barroso are keen that there is as little messing about as possible. Despite the critical report by the British parliament鈥檚 Scrutiny Committee, demanding more 鈥渟afeguards鈥� for Britain, Brown is pretty happy that he鈥檚 got what he wanted. His argument will be that even if the treaty isn鈥檛 very different from the constitution for most countries, it is for Britain, because the opt-outs make it different.

If it will be a relief to Mr Barroso that the prime minister is not going to be a problem, the two will want to make sure others don鈥檛 raise objections either. The first cloud on the horizon is the possibility of the Poles kicking up a new fuss. The other problem could be a plan to redistribute seats in the European Parliament - with the Italians, French and the British losing out. Mr Brown isn鈥檛 worried about a handful of MEPs losing their jobs, but he doesn鈥檛 want the row about the treaty to drag on because of it.

The two Mr Bs are united in one thing at least - they both frequently make statements on the need to push Europe further down a free-market, high-competition road. At this meeting, they may both be asking each other to put their money where their mouth is. It may not be the stuff of headlines, but how much the French can force a retreat from the Anglo-Saxon economic agenda may be the real story behind next week鈥檚 Lisbon summit.

Gordon Brown will want to make sure that the commission鈥檚 contribution to the summit, sticks to its commitment that "protectionism cannot be the solution". There are some concerns that when it says "the political case for openness can only be sustained if others reciprocate in a positive manner" it is in fact opening the door to all sorts of policies which are lightly disguised trade barriers.

Barroso wants Brown鈥檚 clout to help push the commission鈥檚 energy package - which would mean dismantling giant energy companies in France and Germany, and is already meeting fierce resistance in those countries. While this is very much up Brown鈥檚 street, British diplomats are unsure whether we鈥檝e currently got the clout to make much difference. When Brown took his promotion there was a fair bit of comment around, pointing out that he didn鈥檛 play the EU game particularly well, due to a tendency to lecture other European leaders on how they should be running their economies. It seems the commission may be asking Mr Brown to get his soap box out and start lecturing.

They鈥檇 like him to do it at home as well. The commission is constantly frustrated that British politicians rarely challenge the common British perception (very much reflected in ) that European Union proposals are almost always things that need to be weakened and watered-down, in case they do the UK irreparable damage. They point out, with some justification, that the policies that will get the most attention over the next few months - energy and competition - could have "Made in Britain" stamped on their bottom. Whether or not it will be diplomatic to say it face-to-face, Barroso would like Brown not only to shape EU policy behind the scenes but also to talk about it in public.

Engaging Muslims

But Brown鈥檚 biggest worry is a cold wind from France that threatens to freeze the EU in its current pattern.

The British government has always traditionally championed an expanding European Union and Brown is no different. Keeping the door open for Turkey is a key aim of British foreign policy, and Brown is seriously worried that this is now under threat.

I鈥檓 told he argues that there are three phases in the European Union project to create stability on the continent. The first was establishing democracy and prosperity after the war. The second was reuniting Europe after the iron curtain came down. But the third phase has only just started. That is to engage Muslims within Europe, both within existing borders, but also by making welcoming noises to Turkey, Albania and depending what happens there, Kosovo.

The French President Nicholas Sarkozy wants to put the kybosh on this. He鈥檚 demanding that the European Union sets up a group of "wise men": a dozen senior statesmen to examine what Europe should look like in 10 to 20 years' time. That translates not too roughly as 鈥淪top Turkey!鈥� and

Mr Sarkozy is threatening to block further detailed technical talks with Turkey if he doesn鈥檛 get his way. Mr Brown wants to put the wise men on the back burner, if that isn鈥檛 too unappealing a mixed metaphor. In fact I think it鈥檚 rather an appealing one.

Brown had another interesting visitor to Downing Street, the Danish prime minister. As it was "photos only" we didn鈥檛 hear from them after the meeting. But it would have been odd if they didn鈥檛 share at least a wry smile about referendums. The Danish PM is under new pressure, after an interview in with the leader of the Helle Thorning-Schmidt.

As I reported a few weeks ago, Neil Kinnock鈥檚 daughter-in-law has been under some pressure to throw her weight behind calls for a refrendum in Denmark. While she hasn鈥檛 quite done that, she has challenged the government鈥檚 contention that it鈥檚 a matter for the lawyers. She says, 鈥淭his is also a political assessment,鈥� and, 鈥淲e were at no point in doubt that the former draft constitution should be subjected to a referendum. We would like to look at the new treaty and do a similar evaluation.鈥�

Both men will be aware that if they budge they could create "negative feedback" in the European system and keep eyes focused on euro navels for a while longer.

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