We are very pleased to have Peter Ludlow here. For many years he has been one of the most highly regarded and insightful observers of the EU scene. Exactly one year ago he shared with us his analysis of the Seville summit. I look forward to hearing his assessment of last week’s Thessaloniki meeting of the European Council and its implications for the future direction of the EU .

But before turning the floor over to Mr. Ludlow I would like to make a few comments from Norwegian perspective. The point of departure has to be that the defining item of the Thessaloniki agenda obviously was the summit’s consideration of the Draft Constitutional Treaty. I will revert to that shortly.

However, as we see it the second basic theme of the meeting was a broad-ranging effort to get to grips with the new challenges facing the Euro-Atlantic community.

This can be seen in the shared perception that the Union needs a strategic concept and a strategic doctrine;

• in the emphasis on the need to further develop relations with the countries on the periphery of the enlarged Union;
• in the agreement to revamp cooperation with the Western Balkans;
• in the decision to upgrade the Union’s efforts in the countries of origin for most of the illegal immigration into the Union;
• and in the the heavy emphasis placed in various contexts on the fight against terrorism and the spread of weapons of mass destruction.

The endorsement of the strategic concept prepared by Javier Solana and the tasking of the High Representative to come up with a broad and comprehensive EU security strategy, to be adopted by the European Council in December, is a particularly important development.

It will in our view contribute positively to rebuilding trans-Atlantic relations and to the further development of a strategic relationship between EU and NATO in the area of crisis management.

And it will significantly strengthen the ability of the EU and the broader international community to respond effectively to the inter-connected challenges of international terrorism, proliferation of weapons of mass destruction, and international organized crime.

We fully support the EU’s approach in this regard. Scourges such as these must be met with a determined multilateral response and have a solid foundation in international law. We appreciate the strong emphasis the summit placed on the importance of close trans-Atlantic cooperation. That is the only viable foundation for dealing effectively with the new security challenges. And long-term US involvement in European security remains an objective of overriding importance.

Second, Thessaloniki confirmed that the historic process of EU enlargement is continuing. We appreciate, furthermore, the emphasis that the Union is placing on preventing new lines of division in Europe. Norway, as a part of the single market and a Schengen partner, has a stake in this, too.

Hence, we welcome the Wider Europe and New Neighbours initiatives. Countries such as Moldova and the Ukraine must not be left out of the process of building stability and prosperity in our part of the world. That would be contrary to our own enlightened self-interest.

By the same token we applaud the renewed emphasis that the Union is placing on the situation in the Western Balkans, a region which in recent months because of other pressing concerns has received less attention from decision-makers in Europe and North America than it should.

There has been undeniable progress in that troubled part of Europe. Yet the tragic assassination of Prime Minister Zoran Djindjic showed just how precarious those gains could be.

The Euro-Atlantic community has made heavy investments in the region, now we must follow through.

The Thessaloniki summit with the countries of the Western Balkans shows that EU leaders, to their credit, understand this. The reaffirmation that the future of the Balkans is in the EU and the accompanying upgrading of the political and economic relations with the countries of the region were important steps in the right direction.

We are confident that the incoming Italian, just as the current Greek presidency, will continue to push the Balkans agenda. It will only be successful, of course, if the countries of the region themselves follow up with the necessary economic and political reforms.

In this regard, the prospect of eventual EU membership will remain the most powerful incentive. One of the countries of the region, Croatia, has already applied for membership and could conceivably be in a position to join the Union some time between 2007 and 2010.

We in Norway, for our part, are already contributing actively to the stabilisation of the Western Balkans and are committed to continue doing so.

Which brings me back to where I started: The Convention’s Draft Constitutional Treaty. Although Norway is not and has not applied to become a member of the Union, and thus did not qualify for participation in the proceedings of the Convention, there is every reason for Norwegians to follow the process of EU treaty reform with keen interest.

As a country intimately linked to the EU across a range of areas of cooperation, the outcome of the process will of course affect us both directly and indirectly.

Naturally, it is too early to tell just what the implications will be for us. A detailed analysis will have to await the outcome of the upcoming Intergovernmental Conference. And we have noted that while the Convention draft was adopted by consensus, several of the member states have indicated misgivings about particular aspects of it.

As I see it at this stage, the process of EU treaty reform could affect us essentially in two ways: First by impacting on the EEA and other bases for our cooperation with the EU across a range of areas; and second by impacting on the debate about a possible third application for membership in the Union.

On the first of these, the point of departure has to be that the revamped, enlarged Union will of course stand by the international agreements it has entered into, including the EEA Agrement. And our first impression is that our main interlocutor among the EU institutions, the Commission, does not seem likely to become significantly weakened.

But with the new constitutional treaty the EEA Agreement will increasingly be out of step with and different from the treaty basis of the EU. In this regard it has to be remembered that even though we have just successfully concluded negotiations paving the way for simultaneous enlargement of the EU and the EEA, the EEA agreement has remained substantially unchanged since 1992.

In theory, this problem could of course be fixed by amending the EEA Agreement. We have already agreed with the Commission that a limited, technical updating of the agreement should be conducted after the ten new members have acceeded on 1 May next year.

But in view of the many pressing challenges facing the enlarged EU in coming years, it seems unlikely there would be much interest in anything more than this sort of limited exercise on the part of the EU. A more comprehensive upgrading is not in the cards. In any case, the EEA Agreement , in spite of its shortcomings, is as good an agreement as we are likely to get under the present circumstances.

The only realistic improvement over it would be membership. Recent public opinion polls indicate that Norwegian voters increasingly share this view. But the membership issue as we all know will not move forward until the 2005 parliamentary election.

Still, the debate will continue and probably become more heated as we approach the elections. And the Draft Constitutional Treaty will of course be an issue in that context. Clearly, both sides of the argument will try to use it for their own purposes.

The debate seems likely to focus on at least two basic issues: First, whether or not the EU is likely to become more or less supra-national or federal in character; and second whether or not the influence of the small member states is likely to be reduced.

On both these points I look forward to hearing our guest speaker’s views. My own preliminary assessment, for what it is worth, is that the Draft Constitutional Treaty does not seem to augur dramatic new developments in either one of these areas.

Some new trappings and powers are conferred upon Brussels, notably that it will have a legal personality and a bill of rights; that there will be new powers over criminal law and immigration; that there will be an EU foreign minister and a president of the European; that the role of the European Parliament will be enhanced; and that there will be a significant expansion of the EU’s power to make legislation by majority vote.

On the other hand the Constitutional Treaty will have to be ratified by all the present and acceeding member states; all future constitutional changes will be contingent upon the unanimous agreement of all the member states; the foreign minister will have no power to make policy over the heads of national governments, who retain the vetoes and control of their armed forces; the role of the President of the European Council will be carefully circumscribed; and the EU will remain unable to raise taxes.

In short, the Union will remain for the foreseeable future a hybrid creature, with some but not nearly all the characteristics of a state; and at the same time with a distinct intergovernmental character.

It would also seem to me that the balance between large and small EU states has essentially been preserved. Take the example of decision-making and voting weights. The increased emphasis on population size will favour the bigs.

On the other hand, the principle of one state, one vote will presumably replace weighted voting. That will favour the small countries, who will constitute almost four fifths members following enlargement.

In other words, even in the unlikely event that the six bigs were to join forces on a significant issue – which does not happen often – they would need the support of seven small countries in order to meet the requirement that a simple majority of the member states have to be in favour of any given motion.

I’ll leave it at that and without any further ado turn the floor over to the man you really came to hear, Peter Ludlow.