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Blair's Barcelona statement in full

The full text of the prime minister's statement to the Commons on the EU's Barcelona summit.

"With permission Mr Speaker, I should like to make a statement about the European Council which took place in Barcelona on 15 and 16 March.

Two years ago at Lisbon the European Union set out to become the world's most competitive and dynamic economy by 2010. Since that date the European Union has created five million new jobs. There are now nearly three million more women in work. Tax rates on low wage earners have been falling. We have agreed a new framework for competitive telecoms markets.

Telecoms liberalisation has cut the price of calls across the EU by almost a half. As a result of the EU Action Plan internet access has doubled across the EU. We have cut red tape for small firms so that a private limited company can now be set up in under two weeks in ten EU Member States. We have recently agreed proposals to deliver a single EU securities market, and cheaper capital for small firms.

The recent difficulties faced by the world economy mean we cannot rely on cyclical growth to deliver the employment Europe's citizens need. We must push ahead with the structural reforms to Europe's economies.

At Stockholm a year ago, progress stalled. Barcelona had to recover momentum. There is no doubt that after Barcelona we are moving again, though there is still much ground to be made up by 2010. Such progress, as there is, is a tribute to the Commission and the leadership of the Spanish Presidency and I pay tribute to the excellent chairmanship of prime minister Aznar.

Here is what was achieved.

We set a timetable under majority voting to complete the single market in financial services, itself capable of boosting EU GDP by half a percentage point. No fewer than 25 different liberalising measures have already been agreed. Seven more key measures will be agreed by the end of the year.

Most of all, we made a breakthrough in opening up the European energy market. All member states have now agreed fully to open up the non-domestic market by 2004 with free and fair competition. This represents over 60 per cent of the total market in gas and electricity. In addition, it is clear that the overriding majority of EU countries are now ready to open up their domestic markets as well. We agreed a decision on the relevant directives will be taken by majority vote, at the latest by end of 2002. This means that a single market in energy is now attainable.

We agreed to deliver broadband technology across the European Union by 2005. That means internet access at 10 times the present speed.

We agreed to boost our commitment to research and development towards a target of 3 per cent of GDP by 2010. The new Research Framework programme will spend Euro 17.5 billion to this end. New industries like the growing biotech market will benefit significantly.

We have agreed to implement by the end of 2002 proposals to reduce regulation on business, and a new system for consultation with business before new regulation is introduced.

These steps go hand in hand with a social policy which seeks to encourage more and better jobs for all. The record of British government is strong. We have guaranteed fair rights at work. We have a national minimum wage.

Our disability, gender and race equality legislation is among the most advanced in Europe. We have introduced a new system of tax credits to make work pay.

Our New Deal has got over 300,000 young people into work.

Since we came to power unemployment in Britain has fallen to its lowest level for 25 years. We have one of the highest employment rates in Europe overall, including for women and for older workers.

Europe agreed the enlargement agenda must focus on measures targeted at jobs, enterprise and moving people off benefit into work rather than heavy-handed regulation - the British approach and increasingly the European one. As the Barcelona conclusions say: "employment is the best guarantee against social exclusion" .

The enlargement countries came to Barcelona and for the first time participated in policy debates. We also discussed how to make our decision-making more streamlined and efficient once we become a European Union of 25, 27 and more. I welcome the proposals of the Secretary General of the Council, Javier Solana, which will now be taken forward by the Spanish presidency. In many respects these echo the ideas which chancellor Schroeder of Germany and I put forward in a recent paper on Council reform.

The Council also addressed a range of pressing international issues.

The EU committed to increase its average development aid to 0.39 per cent of GDP by 2006. This achievement owes a lot to the lead given by my right honourable friends the chancellor and development secretary. It is worth an extra $7 billion a year. If delivered it means another 80 million children in Africa and elsewhere in schooling, up for the first time.

On the Middle East, we underlined the extreme gravity of the present situation and called on both sides to take action to stop the bloodshed. We welcomed the resolution adopted by the UN Security Council last week and the initiative taken by Crown Prince Abdullah of Saudi Arabia offering full normalisation of relations with Israel in return for full withdrawal from occupied territories. There must be an immediate ceasefire all round to give the peace process a chance to work again.

On Zimbabwe, the European Council accepted our judgement that these elections were neither free nor fair. It agreed to take forward specific measures through Foreign Ministers.

On the Balkans, the Council warmly welcomed the Agreement brokered by the EU's High Representative Javier Solana between the authorities in Serbia and Montenegro for a new relationship within a single state. This Agreement underlines just how far the countries of South East Europe have come in the last four years. A democratic government is in place in Belgrade. Milosevic is on trial in The Hague, and Kosovo has held successful elections for its provisional government. Moderates are in power in Croatia and Bosnia. The noose is tightening around Karadzic. In Macedonia, active diplomacy last year stopped what could have become another Balkan war.

All this progress made came about in large part through Britain acting in alliance with others. Prior to the summit, we took initiatives with no fewer than seven different countries (Netherlands, Germany, Sweden, Denmark, Italy, Belgium and Poland). Five years ago, such alliances would have been unthinkable. Under the last Conservative Government, Britain was marginalised, without influence appropriate to our weight and size, in the isolation room. Now, from the economy to defence to institutional reform, Britain is in there, shaping Europe's future, making Europe work in a way that is better for Britain and Europe. That policy of constructive engagement is right. Britain I s proper role is as a leader and partner in Europe. We will continue to get the best for Britain in Europe.

Under this government the days of weakness and isolation will not return."

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