Mr President, we British Conservatives note Mr Berlusconi's words on the need to re-launch the European economy. President-in-Office, you mention competitiveness, economic growth and deregulation. They are all welcome words but they are also well-worn words from past Council statements. The question is whether on this occasion these words will turn into action. Sadly, it seems again that Europe is more interested in rhetoric than the real reform that is needed to kick-start the Lisbon process. The need for real and far-reaching structural economic reform is pressing. What evidence is there of concrete actions from Member States to implement such reform? The president has spoken of his commitment to implementation of the financial services action plan, but the reality is that progress on the investment services directive has been frustrated just recently by Member States under this presidency. Low growth and unemployment remain critical issues for Europe: matters that can only be addressed fully by the application of a determined political will to act over the structural weakness of the European economy. But Europe is yet again more comfortable in pressing ahead with constitutional and institutional reform rather than taking practical action which makes a real difference to the day-to-day lives of our constituents. There surely was a message for all of us in the Swedish referendum vote. Has it been heeded? The message from Sweden instead appears to have led some Member States to a renewed determination that voters should not be allowed the chance to express their views on the great European issues. Of course in Spain, in Portugal, in the Netherlands, Denmark and Ireland, the electorate will have their say on the constitution in a referendum and I was pleased to note that the Prime Minister of France, Mr Raffarin, has said that it is necessary for a referendum to be held there. That is why we were all a bit confused last week by the attitude of the British Government on the issue of a UK referendum. Indeed, the government seems to be in complete disarray on the subject: senior civil servants briefing in the UK denying a referendum was untenable; a junior foreign office minister keeping the door open before it was firmly shut by Mr Blair. Eighty per cent of British people want a say in a referendum on this Constitution. Yesterday, my party in the UK launched a petition to our parliament demanding it. The fundamental changes in the relationship between the Union and the citizens of Europe proposed in the draft Treaty will not have legitimacy without the consent of the people. There is just one other issue that I think has been causing real concern in the UK in recent days: the future of European defence and the Transatlantic Alliance. Our American allies have expressed genuine concerns about the draft Treaty's proposals on defence. The US Ambassador to NATO has said recently that they constitute the most significant threat to NATO's future. The British Prime Minister says the opposite, that he would do nothing to undermine NATO, but this is of course the Prime Minister who assured Britain that the Constitution was nothing more than a 'tidying up exercise'. France and Belgium continue to want a separate military structure to be created with a new headquarters in Brussels. We see this as a challenge to NATO's supremacy in European defence. I want to make it clear, to put our position on the record clearly and unambiguously. We believe in NATO as the bedrock of European defence and any initiative that seeks to create a parallel structure within the EU framework undermines that long-standing and proven alliance.

Political group: PPE-DE