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I speak as British Prime Minister with a positive vision for the future of the European Union. A future in which Britain wants, and should want, to play a committed and active part... There are three major challenges confronting us today.
If we don’t address these challenges, the danger is that Europe will fail and the British people will drift towards the exit. I do not want that to happen. I want the European Union to be a success. And I want a relationship between Britain and the EU that keeps us in it. That is why I am here today: To acknowledge the nature of the challenges we face. To set out how I believe the European Union should respond to them. And to explain what I want to achieve for Britain and its place within the European Union...
21st century European Union
So let me set out my vision for a new European Union, fit for the 21st Century. It is built on five principles [abridged].
The first: competitiveness. At the core of the European Union must be, as it is now, the single market... I want us to be at the forefront of transformative trade deals with the US, Japan and India as part of the drive towards global free trade. And I want us to be pushing to exempt Europe’s smallest entrepreneurial companies from more EU Directives.
These should be the tasks that get European officials up in the morning – and keep them working late into the night. And so we urgently need to address the sclerotic, ineffective decision-making that is holding us back. That means creating a leaner, less bureaucratic Union, relentlessly focused on helping its member countries to compete...
The second principle should be flexibility. We need a structure that can accommodate the diversity of its members – North, South, East, West, large, small, old and new. Some of whom are contemplating much closer economic and political integration. And many others, including Britain, who would never embrace that goal. I accept, of course, that for the single market to function we need a common set of rules and a way of enforcing them. But we also need to be able to respond quickly to the latest developments and trends.
The EU must be able to act with the speed and flexibility of a network, not the cumbersome rigidity of a bloc. We must not be weighed down by an insistence on a one size fits all approach which implies that all countries want the same level of integration. The fact is that they don’t and we shouldn’t assert that they do. Some will claim that this offends a central tenet of the EU’s founding philosophy. I say it merely reflects the reality of the European Union today. 17 members are part of the eurozone. 10 are not...
Let’s stop all this talk of two-speed Europe, of fast lanes and slow lanes, of countries missing trains and buses, and consign the whole weary caravan of metaphors to a permanent siding. Instead, let’s start from this proposition: we are a family of democratic nations, all members of one European Union, whose essential foundation is the single market rather than the single currency. Those of us outside the euro recognise that those in it are likely to need to make some big institutional changes...
My third principle is that power must be able to flow back to Member States, not just away from them. This was promised by European Leaders at Laeken a decade ago. It was put in the Treaty. But the promise has never really been fulfilled. We need to implement this principle properly. So let us use this moment, as the Dutch Prime Minister has recently suggested, to examine thoroughly what the EU as a whole should do and should stop doing...
My fourth principle is democratic accountability: we need to have a bigger and more significant role for national parliaments. There is not, in my view, a single European demos. It is national parliaments, which are, and will remain, the true source of real democratic legitimacy and accountability in the EU.
It is to the Bundestag that Angela Merkel has to answer. It is through the Greek Parliament that Antonis Samaras has to pass his Government’s austerity measures. It is to the British Parliament that I must account on the EU budget negotiations, or on the safeguarding of our place in the single market. Those are the Parliaments which instil proper respect – even fear – into national leaders. We need to recognise that in the way the EU does business.
My fifth principle is fairness: whatever new arrangements are enacted for the eurozone, they must work fairly for those inside it and out. That will be of particular importance to Britain. As I have said, we will not join the single currency. But there is no overwhelming economic reason why the single currency and the single market should share the same boundary, any more than the single market and Schengen.
Our participation in the single market, and our ability to help set its rules is the principal reason for our membership of the EU. So it is a vital interest for us to protect the integrity and fairness of the single market for all its members. And that is why Britain has been so concerned to promote and defend the single market as the eurozone crisis rewrites the rules on fiscal coordination and banking union.
These five principles provide what, I believe, is the right approach for the European Union...
At some stage in the next few years the EU will need to agree on Treaty change to make the changes needed for the long term future of the euro and to entrench the diverse, competitive, democratically accountable Europe that we seek. I believe the best way to do this will be in a new Treaty so I add my voice to those who are already calling for this. My strong preference is to enact these changes for the entire EU, not just for Britain. But if there is no appetite for a new Treaty for us all then of course Britain should be ready to address the changes we need in a negotiation with our European partners.
The next Conservative Manifesto in 2015 will ask for a mandate from the British people for a Conservative Government to negotiate a new settlement with our European partners in the next Parliament. It will be a relationship with the Single Market at its heart. And when we have negotiated that new settlement, we will give the British people a referendum with a very simple in or out choice. To stay in the EU on these new terms; or come out altogether. It will be an in-out referendum.