Welsh leader: ‘Our interests in Europe are distinctive from England’s’

Carwyn Jones Small.jpg

UK Prime Minister David Cameron should tone down his eurosceptic rhetoric and avoid a repeat of the diplomatic failure of last December’s European summit, Wales’ First Minister Carwyn Jones has told EURACTIV in an exclusive interview. In his view, the interests of Wales are distinctive from England's and should be better taken into account.

Carwyn Jones is the first minister of Wales. He has served as a Labour member of the Welsh Assembly since 1999. A barrister and fluent Welsh, he was nominated as first minister and unanimously elected by the National Assembly in December 2009. He spoke with EURACTIV's Frédéric Simon and Jeremy Fleming-Jones.

For a shorter article based on the interview, click here.

What is your personal assessment of the December summit and the UK veto?

First of all I think the December summit represented a way forward. What's absolutely crucial is that we see stability now in the eurozone. I don't take the view that there's a 'euro crisis'. There's a European crisis that affects us all; those countries that are within the euro and outside.

So I welcome the fact that progress was made in that regard. With the UK situation, the concern that I expressed last month was that the UK had been left isolated, without allies at that point.

Certainly as first minister of Wales – where we have been recipients of a large amount of structural funds and of course given our reliance on unfettered access to the European market – I had a concern that the impression was being given that the UK was an uncommitted member of the European Union. I think the prime minister has taken steps since then to try to correct that view.

You called on him after the summit to have a ministerial meeting with yourself and the first minister of Scotland. Did that take place?

It hasn't taken place yet but it will be taking place in the next few weeks. I think it's important when decisions like this are taken, especially in the context that they're taken, that the views of the first ministers are sought.

It's a matter for the prime minister for what he then does but it is important given the importance of Europe to the economy of Wales that we are able to express a view.

So you are saying you were not consulted before this veto was applied. Is this a criticism that you are directing against the UK Prime Minister David Cameron?

I think it would have been easier had he sought the views of the first ministers. We wouldn't have agreed I suspect on a number of issues but at least our views would have been sought and I would certainly hope in the future that that is done.

How can you make sure that this is done in the future? Is it going to be through the House of Commons or other ways?

No, it's on a government-to-government basis. The best way of doing it is for there to be a conversation between the prime minister and the three first ministers within the UK and then the views of the respective governments can be discovered.

There are mechanisms in the UK for us to meet. I was [Welsh] rural affairs minister some years ago and we met on a monthly basis, all four ministers, to determine what the UK line would be at the upcoming council of ministers.

So there are precedents for this and I think it does help in terms of deciding on a UK line having taken into account the views of the different parts of the UK.

You mentioned the Welsh interests in structural funds, presumably there is a CAP interest as well. Do you think those interests are distinct from the interests of England and have they been endangered in any way by the line taken by Cameron?

Well our interests are distinctive for three reasons. First of all in terms of farming we rely very heavily on wheat production and also on dairy production. So from our point of view and the structure of our farming, it's absolutely crucial that we have a strong voice in the European Union. We rely on subsidies that the CAP provides and also of course the market that southern Europe particularly provides for Welsh lamb, as one example.

It's also important to us because we have so many companies in Wales that are here, large employers, because they have access to the European market and because the UK is a member of the EU.

Any situation in which that commitment to membership might be weakened, and that was the impression that was given before Christmas, is not helpful in terms of attracting investment into Wales as a place to gain access to the European market.

You say that that was the impression that Britain's membership was somehow endangered. Some of this is obviously noise that comes from aeurosceptic media and general eurosceptic opinion. Is there a difference between opinions in Wales towards Europe and those in England?

Wales is less eurosceptic than England although there is a well of euroscepticism, mainly driven by the fact that so many of our people here read the eurosceptic press from London.

Clearly there is an element of euroscepticism here but people can see the difference that European money has made to the Welsh economy and they do tend to take a different view. For example, parties that support UK withdrawal from the European Union get far less support than is the case in many parts of England.

If the UK were to withdraw or disengage from the EU, which has started in some ways, would that incite you to ask for greater independence from the UK as a Welsh nation?

Independence is not in our interests financially, socially and economically. But it's also very much in our interest that we be full members of the EU with a voice at the table. It's not enough to be in the room, we have to be at the table as well.

As I've said many times to people in Wales over the years: The European Union is a major market for our produce and the rules that govern the European Union are drawn up by it. Better to be part of it and be part of drawing up those rules than be outside and have to observe those rules anyway.

When that's explained to people they tend to get a better idea of how important it is that there is a strong UK voice in Europe.

If you had been at the negotiating table at the December summit, I understand that you would have signed up to the fiscal compact?

No, I think the prime minister took the right decision but that the 'mood music' that followed was not right. The fact that the UK was left on its own is in many ways a failure of diplomacy in that regard, although I have great respect for the UK's representatives in Brussels.

I think a lot of work has been done since then to repair that position. I think what also didn't help is the fact that the prime minister returned to the UK and spent time apparently celebrating what's been described as a 'veto' with the more extremeeurosceptic MPs in his own party.

Now that's unhelpful because it gave the impression to investors and those companies that are already in Wales that somehow the UK is on its way out of the EU and that's extremely unhelpful for us in Wales, as we promote ourselves as a place to invest in because we are part of the EU.

You have investment from Japan and China. Do you think that sort of 'mood music' puts them off?

I think it can do. I think that's the danger. Europe is a far bigger market than the UK. There's no doubt in my mind that a lot of the Japanese investment that came in the '70s was based on the fact that there was access to the European market.

We have very big companies employing people in Wales, Airbus and Ford for example. Now there has to be a question mark as to whether Wales will be as attractive a place to do business if most of Europe was effectively in a position where the UK was not able to export to it in the unfettered way which we can at the moment.

The discussions on the fiscal compact are still ongoing. Would you make the case now for the UK in any way to sign up to the fiscal compact but with strict red lines or opt-outs? Is that an outcome which you would be pushing for?

Before that's considered there's a need to ensure that work is done for the UK to win friends again. There are other countries in the EU that are eurosceptic, Denmark being one of them for example. For the UK to be on its own at the moment is not a good position to be in.

Before considering what to do next I think it is absolutely crucial that work is done to ensure that the UK is seen as a full and committed of the European Union and not the impression that was given before Christmas that the UK was being awkward for the sake of it. I don't think that's a wise way forward.

This isolation was basically due to the fact that the UK was the only country to veto the fiscal compact. Would you say now that the UK should sign up, perhaps provided there are clearer red lines for the UK ornon-eurozone countries in general?

I think continuing with negotiations is important. The UK is at its strongest when it's able to talk to other countries and put its view forward. It's a weakening of the UK's position when the UK says "no, absolutely not" and does not continue negotiations. How can the UK have any influence if that's the position?

You said the last summit was a failure of diplomacy for the UK, there is obviously a big summit coming up at the end of this month when all these issues will be discussed again. Are you taking measures to ensure that you are better briefed on the diplomacy going into that summit?

We've received reports on what happened in December from sources in Brussels. It's quite clear to me that the usual work that would be done in advance of a meeting such as this wasn't done.

It appears it wasn't done because the UK government didn't want it to be done. Because there are some very capable people working for the UK government in Brussels, I've seen them in action, and normally they would able to prepare the ground for the UK leading into Council sessions such as this.

I think this work is being done now. I think there is a realisation that the mood music that came after the meeting in December was wrong and I think the UK government is now using the expertise that it has within the structure of the EU to ensure that the UK is presented as a country that wants to have an influence on the future of Europe.

Going back to the difference of outlook between the Welsh and English: One of the sources of euroscepticism in England focuses on a fear of euro-federalism. Do you think the Welsh have as much to fear from euro-federalists as the English or do you think the Welsh would fit more easily in a federal European idea?

I think we would sit more easily in a Europe which had a different structure, which is more federal. But that said it's absolutely crucial that as the Union moves forward that firstly it's transparent and secondly its own citizens feel they have an influence on what the Commission, for example, does. And that isn't the case at the moment in many ways.

One of the criticisms that is often made is that people aren't against the idea of Europe but they feel they aren't able to influence the decisions that take place in Brussels. I think that is a big challenge for politicians in the future: To make sure that the EU citizens feel more connected with the EU's structure.

Do you think that regional assemblies such as the Welsh Assembly can assist in that process?

I think we can and we see our relationship as being of paramount importance. We have an office in Brussels just across from the Justus Lipsius building. We have our own representation in the Commission who liaises with it on a daily basis.

It's important for us. For example agricultural policy in the UK is governed entirely by the different administrations within the UK [sic]. So having a direct voice which liaises with the Commission is absolutely crucial to us.

There has been quite a bit of ratcheting up of the rhetoric with Argentina on the Falklands issue between Cameron and Kirchner in the past few days. Argentina is one of the few countries which has a distinct Welsh community. I wondered if you had any dialogue with the Patagonian Welsh in relation to the issue and whether they have voiced any concerns with you.

No they haven't. It's right to say that there is a Welsh-speaking community in Patagonia. We have strong links with them. We pay for Welsh teachers to teach in Patagonia. But they are Argentines and Argentine citizens and I have no doubt they would take a different view in many cases to the UK government in regard to the future of the Falklands.

Does it concern you that the language in the dispute seems to be getting more heated?

Yes. It's widely believed of course that democracies don't come into conflict. I hope that is the case but I do have to say that it is my view that the future of the Falkland Islands is a matter for the people who live on the Falkland Islands. If they wish to remain British then that is their right.

Coming back to the euro summit and the euro debt crisis, you said at the very beginning of this interview that the summit of December made a number of steps in the right direction such as strengthening governance in the eurozone. In many ways that represents some loss of sovereignty from nations towards Brussels in terms of how they can manage their deficits, etc. Do you see this as a positive development? Do you think Wales or the UK in any way would one day take part in such a construction?

It's difficult to see the UK taking part of it in the near future. You mentioned loss of sovereignty, in many ways there are a number of member states in the EU that have lost their sovereignty to the financial markets.

That's the reality of the situation. It's not the case for example that governments of Italy, Greece and Spain have complete freedom of manoeuvre. As we know, we've seen what kind of yields the financial markets are looking at when it comes to those government bonds.

It's better for the situation to be managed on a political basis rather than, to my mind, for each country to be left at the whims of the financial markets and having to struggle on their own.

But coming up with this common set of rules which are pretty much a rigid straightjacket for them, do you think that is something positive for the economy or democracy? Or are the two separated?

In the short-term I think it is unavoidable. It was absolutely crucial to have a structure put in place to stabilise the eurozone and to help those countries that have been affected the most.

The concern has to be that in time the compact isn't so strict and so narrow so as to stifle a positive improvement in the economy of Europe over the next few years. What we don't want to see is a compact that is too inflexible so that austerity is locked into the economy of the eurozone for the next five or 10 years.

So, yes, I think it is the right move now. I think it was unavoidable. I think it is right for the eurozone and indeed the whole of Europe. But there will clearly need to be a re-examination of the situation as the economy of Europe improves.

On the austerity issue, Wales is clearly suffering as are other regions. Would you encourage more Keynesian impetus to encourage growth? What kind of things do you think should be done in Europe and in Wales to push for growth?

The banks need to lend and they need to lend on terms that are not too narrow. The banks will argue that they are lending but quite often the security that is demanded is beyond what individuals and companies can afford.

Now given the fact that so many banks across Europe are in effect owned by their governments, the banks could be used as a way of levering more money into the economy.

The other problem as well is that the evidence in the UK suggests that SMEs are sitting on a substantial amount of capital that they could use to invest but they just don't have the confidence to do so.

I think in order to encourage SMEs to have the confidence to invest there needs to be stimulus from government whether it's done through the banks which are effectively publicly-owned or whether it's done through bringing forward construction projects to create construction jobs.

But until people see those green shoots of recovery we will be tied-in I suspect to flat-lining economies for a substantial amount of time.

One last question, returning to the UK veto and its consequences. Would you see it as legitimate from the view of a group of countries such as the European Union to hand out less of its regional funding to countries that take steps effectively to disengage at least partly from this organisation? Would you consider this as a legitimate reaction?

No I wouldn't. The UK remains a full member of the European Union and all member states should be able to access European funding, particularly structural funds.

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