The Nice decisions will of course not be an end in itself. On the contrary, and this for three reasons which I will now try to highlight. I will use three terms to illustrate them: Efficiency, Legitimacy and Governance. This last point – governance - will also help to assess to some extent what will be the implications for the Regions in a wider and hopefully also stronger Europe.

First Efficiency. Institutional reforms, especially the central issue of widening the scope of majority voting in the Council of Ministers, will pave the way for the enlargement of the European Union. Last Wednesday the European Commission submitted the so-called progress report on the enlargement process. It showed that except for Bulgaria and Romania the other ten applicant countries – from Poland to Cyprus and from Malta to Estonia – have good chances of joining the European Union rather sooner than later.

But a Community with possibly 25 member states by the year 2005 has to prove to be efficient when it comes to tackling the major challenges. Let's just for example mention the fight against international organised crime. And what about coping with the consequences of Globalisation and the so-called New Economy? And how can Europe enhance its role in international crisis management in areas like the Balkans or the Middle East?

But there are many other issues calling for a common approach. How can we fight climate change or tax evasion? How can one find a solution to the problem of the increasing number of refugees and avoid that migration flows, because of the diversity of situations within the Community, are so difficult to control. All this illustrates that the European Union needs more efficient decision taking procedures. And here the central issue is getting rid as much as possible of the veto of national governments and to apply the democratic principle that a majority should decide.

Experience in the European Union, especially the introduction of majority voting for the completion of the internal market for goods, service, capital and citizens, shows that removal of the veto did not necessarily mean more voting in the Council of Ministers. But the mere possibility of coming to a vote has put more pressure to negotiate and to force the member states to compromise. And as you might know, these decisions by governments cannot be taken by a simple majority. A decision requires at least 64 votes out of 90 cast for a proposal. That it was in Euro-Speak is the famous QMV: the qualified majority voting system. It means that there is a blocking minority when a small number of states – usually at least three to five - refuse to join in.

With enlargement more or less around the corner it would be unfair to say that the applicant countries are less integration friendly than the average of today's member states. But no one can deny that decision-making will become more difficult, if the veto stays in place in too many policy fields. Therefore I think that Michel Barnier, the European Commission responsible for institutional reforms was right, when last Monday he predicted, that one not too distant day one it would be regretted if at Nice progress on moving to majority voting was being hampered.

The second reason why the Nice Treaty will be crucial is that, beside the issue of increased efficiency it will also, at least partly, deal with the problem of legitimacy of European policy. This relates to the question of how decisions are taken at European level. In the Council of Ministers each member state has a certain number of votes which roughly reflects the number of inhabitants. For example Ireland has three votes, the Netherlands five, Spain eight and the largest member states France, Italy, the United Kingdom and Germany have each ten votes. When I say roughly it is illustrated by the fact that while Germany has about twenty time as many inhabitants as Ireland, it can only count on about three times as many votes.

If the current weighting system and method for calculating votes in the Council is maintained within an enlarged European Union, Germany as the largest Member State would have around the same number of inhabitants as the sum of the 17 smallest members – adding to each around 80 Million inhabitants. Yet while the 17 "smallest" states would have 57 votes, Germany with the same number of inhabitants, would still have to do with the same ten votes. For legitimacy reasons it therefore would only seem fair to adapt or as it is called in the Euro jargon to reweigh the votes of individual members states.

Beside efficiency and legitimacy there is a third reason why Nice should be a landmark for the European integration process. It will most probably be the starting point for a thorough debate on the long-term perspectives of the integration process. The European Charter of Fundamental rights which will be formally proclaimed at Nice might at some stage be incorporated into the treaty. It could later, at least this is a prevailing view in many continental countries, form some sort of a core element of a future European constitution.

There is a crucial question for the future scope of the Union: the question of who does what in Europe and at what level: at the level of the Community, the Member States, the Regions. And finally what should remain outside an institutional framework, what should remain, in other words the preserve of private initiatives.

The underlying principle is called subsidiarity. It has been enshrined in European law when the Maastricht Treaty was signed in 1992. Subsidiarity implies that the European Union should act only when this is appropriate. As mentioned before, fighting international crime or trying to bring about peace in the Middle East are just two topical examples where Europe needs to act together. On the other hand it can be questioned whether Europe should address the issue of nature reserves or the educational system within the member states. Here it would be rather up to member states or even regions, as in Germany the Länder like Bavaria or Saxony, to tackle the issue.

Of course a clear partition of competencies is not always feasible – just take the issue of transport or economic policy. Here you will find shared responsibility. And sometimes it might seem more appropriate to act rather at federal than regional or national level. Therefore the widely used term of subsidiarity which finds its origins in the protestant and later also catholic theology does not seem quite appropriate. The reason is that because it is based on a bottom-top approach implying that decision should be taken at the lowest possible level.

That is why the term of governance or indeed good governance seems to be appropriate. Not only does it leave more leeway when defining who should do what and at which level. It might also be helpful when it will come to shaping the political and institutional structure of tomorrow's Europe. One key element will be the White Paper on Governance which the European Commission plans to submit in the first half of next year and will be an important contribution to the discussion process.

German Chancellor Gerhard Schröder has already suggested the year 2004 as a target year for what he calls "die große Regierungskonferenz" – the big intergovernmental conference. It might then also be the right moment to decide on ambitious projects such as the creation of an avant-garde or pioneer group as has been suggested in the Berlin speeches by German Foreign Minister Joschka Fischer last May and by French President Jacques Chirac at the end of June. It also applies to other models for a core Europe, for example the call by Jacques Delors, the former European Commission President, for an „Federation of nation-states"

Whatever the long-term views of current leaders are – they all seem to be aware that the Nice Summit will just be one stage on the European integration process. There are differences of view to what extent the federalist view with shared European government and responsibility will prevail. There is still scope for a more federalist view. But while nobody seems to be arguing for an European Superstate, even the British Prime Minister Tony Blair last month in his European policy speech in Warsaw, in essence, has repeated what Delors said last January: No to an European Superstate, Yes to an European Superpower.

Whatever the practical meaning of this term, it just confirms, that things are moving in Europe. The year 2000, not least recent developments in the Balkan region and more particularly the move towards democracy in Serbia, have made politicians and public opinion aware of the volume of change underway on our continent. The European Union with its current 15 member states will grow bigger and eventually even comprise more than the ten current official applicant countries from central and eastern Europe plus Cyprus and Malta and at some stage perhaps also Turkey and, more likely, former Yugoslav republics as Croatia, Bosnia, Macedonia and – why not – a democratic Serbia.

It is against that historical background that the Nice summit meeting is really condemned to succeed. But what is success? If you assume it is what the leaders of 15 member states deem as sufficient institutional reform for proceeding with enlargement, then you can quietly assume that, yes Nice will be success. If success is just measured on the progress achieved on the two central issues of increasing efficiency in decision making and strengthening legitimacy, you might well end up with a different assessment.

What can be said today is that finally the crucial stage of preparation for Nice has been reached and possible compromises begin to emerge. Of course since the rule applies that nothing will be agreed until everything is agreed. One can assume that solutions will be only reached in a classic last-ditch effort.

Tentatively, that is what, I think, will be the broad result of the Nice summit: On the central and predominant issue of the extension of the possibility of majority voting there will be progress. However on issues like taxation and migration and asylum and foreign and in security policy issues it will fall short of expectations. The idea floating around is that it should be claimed that progress has been reached on all policy areas. For example on migration, asylum and visa policy, where there is huge reluctance even in core countries as Germany and France, some sort of political declaration might show the way forward.

Linked to the issue of unanimity is the possibility for a number of member states to co-operate more closely in certain policy areas. We are talking here of the so-called concept of enhanced co-operation or the flexibility clause. Here a positive result is emerging with a minimum number of eight countries needed to move ahead and the possibility for a national veto most probably disappearing altogether. As far as enhanced co-operation in foreign, security and defence policy is concerned the threshold will be probably lower than eight countries. What is also important in view of the prospect for further integration is the fact that no member should be indefinitely excluded from closer co-operation. And this also implies that no new institutional framework should be set up. This can serve as break to a tendency to strengthen intergovernmental co-operation at the expense of the European Commission which is supposed to guarantee the common European interest and of the European Parliament.

The reweighting of votes in the Council of Ministers is closely linked to the question of the composition of the Commission and how it should operate in future. On these highly emotional issues a compromise is beginning to emerge. On reweighting one can assume some changes in order to increase the influence of larger states while making sure that these countries cannot on there own put the smaller ones into a minority position. A possible outcome is the introduction of some form of safety net. It would imply that beside reaching the necessary amount of votes a decision would also require the support of a minimum number of member states.

On the numbers of Commissioners – 20 at present – things are more difficult to predict. My hunch is that for the time being all member states will retain one commissioner and the five largest members states will lose on of their two commissioners. Yet there might be an upper limit set so that in the course of enlargement not every member state will necessarily be present in the Commission. By choosing such an approach one could avoid that a new round of institutional wrangling on the Commission will start again at a later stage there is also still some scope for a solution which would consolidate the principle of one commissioner per member state. If this turned out to be solution it would have to go hand in hand with a reorganisation of the Commission. The position of the Commission president would have to be properly strengthened and, for example, give him the right to dismiss individual commissioners.

Finally, and this is an important task for Nice, the summit should and will probably give the mandate for preparing the ground for further political and institutional developments of Europe. I am thinking here of the "Große Regierungskonferenz". A broad agenda should and will be set. After all European Integration has in the past always progressed by setting dynamic elements. One classic pattern is the so-called revision clauses in the treaty. However in Nice it will be rather a solemn statement by the Heads of States and Governments that will open the road for further developments.

Where will this road lead Europe and its citizens? It is worthwhile to remember what has been achieved since 1945. European integration has brought peace, stability prosperity to a continent torn by war and economic crises. It also has been and still is contributing towards a long lasting settlement on this island. Through the fall of communism ten years ago, a new agenda to Europe has emerged and it is still unfolding through enlargement. Enlargement has been an essential issue linked to the deepening of Europe via economic and political issue.

The Nice summit should show that enlargement and further political integration are not in themselves opposites but rather forces that can complement and underpin each other. Enlargement is the overriding goal. But what would be the point if, it weakened European integration. Therefore it is important to move towards a more efficient Europe with more majority voting which will allow member states to pool more of their power. It is also crucial to increased legitimacy – This also means a stronger European Parliament and a more accountable European Commission. Finally the issue of good governance. Europe can only be credible to its citizens when it is clear who deals with what and also why. That is also why we need some form of an European constitution.

Nothing in all this should lead us to believe that we are swiftly moving towards the United States of Europe. The debate is not about some centralist European Superstate, but, as Tony Blair, the Belgian Prime Minister Guy Verhofstadt or Jacues Delors have rightly pointed out, about a Superpower. I think this should mean that a lot, even more than today, should be dealt with in a federal way by the Community. In other areas, like defence, it would be more appropriate to talk of shared sovereignty of nation-states. A proper concept of subsidiarity and of good governance should help to bring about greater prosperity and security to Europe's citizens whilst keeping wide areas of decision-making at national and regional level.

If the European Union chooses this way it could also help a process that can be perceived throughout the continent and increasingly on the British Isles. And that is to enhance the identity and role of the regions and its citizens.

ends

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