Julian Lewis - secretary, Conservative Backbench Defense Committee; member, Select Committee on Welsh Affairs; former deputy director, Conservative Party Research Department; former director, Conservative Central Office Media Monitoring Unit; former director, Policy Research Associates; former conservative candidate, Swansea West; former leader, anti-CND Campaigns; author, Changing Direction: British Military Planning for Post-War Strategic Defense 1942-1947. Hampshire, UK.

 I'm bearing in mind the lesson that was put forward by Mark Montini in his brief presentation this morning. He said, "You've got 15 seconds to persuade people that you're going to say anything interesting; otherwise, you've lost them for good."

Now what should be interesting to an audience of American conservatives about wrangles in Europe, about a single European currency and a federal state?

The answer is quite simple. I'll express it in an image, and the image is the two little button badges I have on my lapel today.

One of them is the pound sign, which is worn by those of us in the United Kingdom who are determined to retain our own currency, which is under threat, as I will be telling you shortly.

The other button badge is the badge of the intertwined union jack and American flag. I'm wearing those two button badges together because if I remove the one about the pound, it won't be long before I have to remove the one about the special transatlantic relationship between Britain and the United States.

So if you think this topic isn't a topic to worry you, you're wrong. I intend to worry you something rotten, but I also intend to give you a fundamentally optimistic message to take away. That's why I hope you will bear with me in what I have to say.

Back in 1982, Morton Blackwell, Paul Weyrich and Woody Jenkins, like latter day three musketeers, came across the Atlantic to help us out in the United Kingdom when we were facing a key threat at a turning point in the Cold War.

Most of you will remember what I'm talking about. It was the Euro missiles crisis. NATO had decided that it was essential to deploy cruise and Pershing II intermediate range nuclear forces to counterbalance the SS-20s of the then Soviet Union.

As a result of their trip across the Atlantic, the forces of the liberal left in Britain were outraged. Their mouthpiece newspaper is called The Guardian. Some of you may have heard of it. Well if it is a guardian, it's a guardian in everything except a military sense. After Morton and his team came over, the newspaper devoted half a page to what they called "The Curse of the President's Men" and how it had transformed politics in the UK. Because people like Morton and Paul and Woody had the vision to realize that what happens to Britain intimately affects the future security, the future prosperity, and the future defense of the United States of America, they made that effort. And I hope to explain why some of us are so concerned about developments within what is now called the European Union.

Now in case some of you are wondering, the European Union originally was called the European Economic Community. So it was about economics. Then after a thing called the Single European Act, it became known as the European Community and eventually as the European Union, after the Treaty of Mastricht . So what started off as something ostensibly about economics ended up as something primarily about politics. And these are politics of the gravest nature and of the most perilous consequences if they go wrong.

You know, ladies and gentlemen, if anyone had told me back then in 1982 that I would be standing here today talking, of all things, about what we then knew as the Common Market and what's now known as the European Union, I'd have laughed. I'd have said, "How can something like this have anything much to do with the really grave crises, the crisis of the Communist threat, the crisis of military imbalance in Europe, the crisis that could have led to the outbreak of World War III rather than the collapse of Communism?"

Yet, I do believe that the chain of events which has drawn me into this fight, ought to be of the utmost concern to you and to all who believe in the transatlantic relationship.

I came to this fight very late. I can in fact tell you exactly when I came to this fight. It was on the 22nd of March 1995 when I read an article in The London Times, which was headed "Santa Seeks Right to Shape Foreign Policy for Europe."

Santa was not Santa Claus, the very opposite of it. Santa was Jacque Santa, a man who was the president of the European Commission until eventually he came to his downfall as a result of political corruption in his commission.

Santa came from Luxembourg. Now, I don't know about the military historians amongst you, ladies and gentlemen, but I must say I was not aware of Luxembourg being at the heart of strategic thinking over the last 150 years. But "Santa Seeks Right," it said, "to Shape Foreign Policy for Europe." This is what the article said. It said that Brussels, that is to say the European Commission, should have the right to shape Europe's foreign and security policy, a power currently jealously guarded by the governments of the European Union's 15 member states. And the article said that Santa asked for a strengthening of the European Commission as the guardian of the European treaties, that the Commission should be given the right of initiative in foreign and security policy.

Now this is a very different kettle of fish from the North Atlantic Treaty Organization to which we owe our victory in that Cold War I mentioned at the start of my remarks.

With the North Atlantic Treaty Organization, you had a model for international cooperation -- a system where individual sovereign states could agree to cooperate together in a manner and on a matter of crucial importance to their safety and security. That organization defined as protecting each member the regarding of an attack on one as being an attack against all. If at any time that organization adopted policies that became unacceptable to any of its members, those members could leave or withdraw or refuse to participate in those policies because those members remained individual nation states in command of their own sovereignty and in control of their own destinies. The difference that would be in the arrangements being proposed by Jacque Santa, and which are still very much and increasingly on the agenda, is that we would not have just cooperation and coordination in defense and foreign policy as in the past. We would have control by an unelected European bureaucracy that is trying to build a superstate in Europe.

It's always enjoyable when you're making an address not to have to refer to notes, but I'm going to do so for the next couple of minutes because the words I want to lay before you are not my words but the words of leading Continental politicians, so that you know that this is not some alarmist, backbench, conservative MP making unsubstantiated allegations about a conspiracy to take over the sovereignty of the United Kingdom and the other countries of Western Europe. It is in fact the openly declared aim of leading politicians in Continental Europe and in the Brussels power structure itself.

Let me quote for example the new German finance minister. His name is Hans Eichel. He was widely hailed as being a moderate when he replaced Oscar La Fontaine as German finance minister a few months ago.

I did a little search on the Internet for Hans Eichel, and this is a quotation I quickly found from an address that he'd made. He said "I cannot imagine that Europe can successfully compete with the United States, with Japan, and later with China, India, and many others without a consistently uniform economic area and without the prospect of a uniformly acting political union. The euro, (that is the single currency about which I wish to speak in a moment) is not European unification but it is one important step towards this end."

That was the German finance minister, ladies and gentlemen. This is the German foreign minister, a man called Joshka Fisher from the Green Party. "My goal," he says, "is to turn the European Union into an entity under international law." Next comes the German Chancellor, Gerhard Schroder. "National sovereignty," he warns us but he warns us as something that for him is not a warning but a desirable objective, "National sovereignty will soon be a product of the imagination."

Am I beginning to scare you a bit now? Schroder goes on to say that the introduction of the common European currency, that's the euro, was ultimately by no means only an economic decision. Well, I certainly agree with that. It was an original political act to hand over sovereignty over one of the most important areas of national authority to a European authority.

For this reason alone, monetary union requires of us Europeans decisive advances in the field of political integration.

Indeed the chief economist at the European Central Bank, which will control the single currency and does already control the single currency for those 11 member states of the European Union which have all ready been mad enough to sign up to it, is a man called Dr. Otmar Issing. He has rightly said that there is no example in history of a lasting monetary union that was not linked to one state.

Finally, Wim Duisenberg -- who is the president of the European Central Bank, and as I say, these are the people who manage and control this new creature, the single currency -- admits that this is in fact the whole point of the creation of that currency. He says, "EMU," that is Economic and Monetary Union, "is and was always meant to be a stepping stone on the way to a united Europe."

Now some people may say, "Well, what's so bad about a united Europe? Wouldn't it be a good thing if the Europeans all spoke with a single voice?"

My answer to that is that if this ever happens, the single voice with which it speaks will not be a democratic voice. If you ask these people why they are so hell-bent on a United States of Europe, the answer is to be found in their fear of their own history.

I remember a visit that I paid to Brussels when I was a prospective conservative candidate. I'd been adopted to fight my seat. I've been an MP only since 1997. And this visit was paid a few months before the election. We went to Brussels to see what was going on and to have briefings there.

I will never forget the briefing that we had from a German Member of the European Parliament (MEP). And it's not what you think I'm going to say. It's not that this man was bombastic. It's not that he was in any way unpleasant. On the contrary, he was a very lovable man, a very sincere man and a very compassionate man. He said to us, "What you've got to understand is that the single currency and Europe is not mainly about economics. It is mainly about peace."

I responded to him and said, "I have to disagree with you entirely in your analysis here because what sort of peace are you trying to preserve? Are you trying to say that Europe, in the form of the EEC, the EC, or the EU in its successive guises, has had something to do with the defeat of the Soviet threat? Because if that's what you're trying to say, it's clearly rubbish. The Soviet threat was contained and defeated by the North Atlantic Treaty Organization and primarily by our transatlantic link with the United States of America."

Indeed I said to him, and I say again to you, and I'm proud to admit, I'm grateful to admit it, that the lesson of Twentieth Century history, the lesson of the First World War, the lesson of the Second World War, and the lesson above all of the Cold War is that without U.S. participation there is no security for peace in Europe. Indeed, one reason why I feel a heavy responsibility talking to you today is to try to urge you that that participation is as essential in the future as it has been in the past.

So going back to our conversation, I said, "But if you're saying to me that – ‘Why Europe is really about peace. It's not about external threats but about the threat of war between the individual European countries themselves,’ if that's what you mean--." He confirmed that was, of course, what he meant. I said, "Still I disagree with your analysis." Because if you consider the wars that have taken place, and if I were to ask you to give me an example of a war that had taken place between a democracy and a dictatorship, you could easily do so. And if I asked you to give me an example of a war that had taken place between a dictatorship and another dictatorship or between a dictatorship and a democracy, you could easily do so.

"But if I asked you to give me an example of a war that had taken place between a democracy and another democracy, you probably couldn't give me any examples at all, or if you could come up with one or two, they would be so highly debatable as to be at the bottom end of the scale for consideration."

So this German MEP thought for a while. He didn't come up with the example that you sometimes get, of Indian and Pakistan. He came up with another case. He said, "Yes," he said, "I can think of an example of a democracy that's been to war against another democracy." And he cited a war which involved Prussia on one side and Bavaria on the other side in 1866. And you know, ladies and gentlemen, I thought, if he has to go back to 1866 to find an example of a war between two democracies, my case must be pretty substantial.

Now what is all this leading up to? I think most of you are aware already. What it's leading up to is this. What has kept the peace in Europe is the fact that, after the totalitarian fascists and Nazis were defeated, the victorious Anglo-American alliance imposed on Western Europe a system of democratic parliamentary nation states. And because democratic parliamentary nation states seldom, if ever, go to war against one another, we have had since the end of the Second World War the peaceful period, the longest uninterrupted period of peace between Western European states in modern history. And all this is under threat by the attempt to construct a United States of Europe in which those countries will be drawn together in a subtle and cunning and underhanded method of integration which has to be adopted. If the people of those countries were ever openly asked, "Do you wish to give up your sovereignty and your independence and join a single European state?" they would overwhelmingly say no.

Now here again I have to admit fallibility. You don't often get politicians admitting fallibility, even less often do you get academics admitting fallibility. My introducer was kind enough to refer to my academic past. Well, when I look back into my academic past, I recall that we had lessons in international relations theory when I was an Oxford undergraduate. The topic that comes to mind was called integration theory. Integration theory, or functional integration, was the notion that you can get states to agree to combine together without openly telling them what they're doing, by building a sort of spider's web of functions which are common to them and that gradually draw them in to joint action and eventually to merger. And I said then, "Oh, no, no, no. This is pie in the sky. This is to ignore the fact that nation states have a very clear-headed idea of what is in their national interests. They may get drawn some way down this road but they will then spot what's happening, turn around and retreat from it."

I have to admit I was completely wrong. This process has proved much more cunning and much more effective than I dreamt at the time.

 I mentioned earlier that I was a new conservative MP. There weren't many new conservative MPs at the last election in Britain, as you probably know. In fact, there were only 164 conservative MPs elected on the 1st of May 1997, and out of those 164, I added up how many of us were first time new MPs. On the day after the election, I found that that total was just 33 for the whole country.

Now I like to think that one of the reasons that I was one of that very small minority is that, when I went to my electors, I made Europe the key issue of my election campaign. And I put forward a little argument, which I had developed myself. You may hear it from other people. If so, they are cheap imitations. This is the real Coca-Cola.

The argument that I developed myself, I thought, "Well, this isn't a very sophisticated argument and maybe it won't stand the test of time." But surprisingly it has done so, even in the House of Commons, where you'd think that if there were too many weaknesses in it, they would be exposed. It goes something like this. You cannot have a single currency without creating a single economy. You cannot have a single economy without creating a single government because, of course, the people who run that economy will de facto take over key functions of government. And you cannot have a single government without creating a single state. Therefore, if you do not wish to become part of a single state in Europe, you must reject the idea of a single European currency.

Well, I promised you my message is optimistic. I'm glad to say that that is the view of an increasing number of the British people because it has been promised by all three main political parties in Britain that the single currency, should it be recommended to be adopted by them in government, whoever they are, will be put to a referendum of the people.

I have been commissioning opinion polls which ask a simple question. And that question is, "Do you think that Britain should replace the pound with the single European currency?" I've asked this question three times so far at six-monthly intervals. A year ago, 32 percent of the British people said yes and 56 percent said no. Six months ago, 30 percent said yes and 60 percent said no. And last month, when I did it in time for our Conservative Party Conference, which has just ended, it was down to 27 percent saying yes and 64 percent saying no. Those figures are strikingly familiar, and they take me back quite neatly to where I started in this presentation, to the argument about the Euro missiles and about British unilateral nuclear disarmament, which was such a key issue when Morton and I first started our cooperation back in 1982. Because back in those days, I used to ask a similar poll and that was, "Do you think that Britain should continue to possess nuclear weapons as long as other countries have them."

And time after time, time after time, we would get the same answer. One quarter would say no, get rid of them, and two-thirds would say yes, keep them. And that became the biggest albatross around the neck of the Labor opposition in the 1980s. That issue did more than anything else to sink them at the 1983 and 1987 elections until they were finally forced to abandon unilateralism and the Campaign for Nuclear Disarmament.

After the downfall of Prime Minister John Major, a leader for whom I must say I had little respect, we had a new leader who was an unknown quantity. At the time of the last election, you had a tremendous denial of democracy. Why is that? I'll tell you. Because the Conservative government, as it then was under John Major, went into that election. What did it say on this, the single most important issue about the survival of democracy in Britain and Europe?

It said, "Wait and see. We'll tell you whether or not we will support a single currency after the election is over."

The Labor Party said, "Wait and see. We too will tell you what we think about this when the election is over."

And the small Liberal Democratic Party said, "We are all in favor of it. We love it. We want to sign up to it."

Just to give you the measure of the sort of things they were saying, I can give you quotations from Paddy Ashdown, who was then the Liberal leader, who said, "I do not believe that the nation state is anything other than a relatively recent historical invention. I do not believe that it will always remain. I believe that throughout this decade," and he was talking about the 1990s and into the next century, "the importance of the notion of the nation state will decline." And the Liberal Party's own guide to Europe said, "The United Kingdom cannot help shape the future of the European community while it's led by a government that does not share the goal of a united Europe."

So the large majority of the British people had no choice among the principal parties. The majorities are against the single currency precisely because they know that it is a ramp on the ratchet elitists want to use for our absorption in an undemocratic single European state. The only choice they had was to vote for fringe parties, one of which was called the Referendum Party, run by the late Sir James Goldsmith.

Therefore a large number of dissatisfied conservative voters either stayed at home or voted for those fringe, anti-federal parties. What would have been a moderate conservative defeat in that election was turned into the disastrous rout that you know about.

This may surprise you, ladies and gentlemen, Tony Blair won that election with only 43 percent of the vote. That would normally have been enough to give him a comfortable, moderate, working majority in the House of Commons under our system of first-past-the-post elections. But instead, he got an overwhelming majority, and not because of any increase in the Liberal vote.

Remember, the Liberals were the one party that came out openly and said they wanted this dangerous rubbish. Their vote actually went down. It went down by 1 percent and it went down in the actual total in number of votes as well, even though their seat total went up. What happened was that the Conservative voters were so disgusted that they stayed at home or they voted for fringe parties so that the Conservative vote collapsed. That's why we had this overwhelming defeat.

Now what about Tony Blair himself? And I'm bringing my remarks to a conclusion to leave us with time for questions.

Tony Blair has to face questions every week in the House of Commons and occasionally one strikes lucky and one manages to get a question in on it. I managed to do this on the 15th of December 1997 by which time Gordon Brown, the Chancellor of the Exchequer, had declared that the Labor government was in favor of entry into economic and monetary union, that is the single currency or the euro. They were favor of it in principle, providing certain economic criteria were met. He said there is no constitutional bar to entry. In other words, there's no democratic reason why we shouldn't go in. It only depends on economic tests.

Needless to say, ladies and gentlemen, those economic tests are so vague that the government can decide they've been met whenever they like. And they will decide when they've been met when and only when opinion polls show them they've got a chance of winning the referendum.

So I said to the Prime Minister the following. I said, "The Prime Minister has again said that there is no constitutional bar to our entry into economic and monetary union. Does that mean that no loss, however great of political sovereignty, would deter him and his government from entering economic and monetary union provided that what they regard as the economic conditions alone were right."

The Prime Minister replied, "No." But then he went on to admit that that was precisely what it meant because he says, "It simply means that we should judge whether we enter monetary union according to our national interest," so far so good, "and that is defined by the economic tests which we have set."

So the national interest depends only on the economics.

Now before the 1997 election, Blair had gone to the people, saying that the single currency is not just a question of economics, he said, and I quote, "It's about the sovereignty of Britain and constitutional issues too." So he said one thing before the election, and now he's saying something completely different afterwards. But we shouldn't be surprised because when he got elected to Parliament the first time in 1983, his election manifesto said, "We will negotiate a withdrawal from the European Economic Community, which has drained our natural resources and destroyed jobs." So this is a man who came into Parliament saying he wanted out of the European community. He went into the 1997 election on which he became Prime Minister staying that he was fully aware of the important democratic sovereignty and constitutional issues. Now he says it just depends on economic tests which are so vague and wooly as to be meaningless.

Now I conclude, ladies and gentlemen, with this. It is a frightening prospect that we could see a breakdown of the democratic structures that have kept the peace in Europe for so long so effectively and so well.

On the other hand, those other 11 countries have gone ahead with this and Britain hasn't. That's very important because as long as we can stay out for long enough, when the implosion comes, if it collapses, as did something called the Exchange Rate Mechanism, which was a weaker version of this in 1992 that led to the total undermining of the credibility of John Major’s government from which he never recovered. If there is a collapse like that, at least we will be on the outside and the Anglo-American link will be safe and secure.

If there isn't a collapse like that, the alternative is that EMU, Economic and Monetary Union, will do what it's intended to do, which is to start to create this single state. And at that stage, the prospect of Britain going in will be even more remote than it is now.

So on the whole, I am cheerful. I am cheerful that as long as we can stay out, the key to European peace, prosperity and security will survive.

I end by thinking back in terms of 20th century European history as follows: At the beginning of the century, there was a choice which Russian leaders faced between Bolshevism and democracy. And Russian leaders chose Bolshevism and communism and millions of people were killed. And then in the 1920s and +30s, there was a choice by Italian and German political leaders between fascism or Naziism and democracy, and they chose fascism and Naziism, and again millions of people were killed.

Now in the 1990s and at the beginning of the new millennium, we face a third choice. That choice is between federalism and democracy, and let us hope for the peace of the world and for the security of all of us that the right choice is made this time. Thank you very much.

QUESTION: Do you think the United States should take some initiative to try to influence Great Britain's decision about involving itself -- with the European Common Market and specifically the euro?

DR. LEWIS: I don't think it would be advisable for the United States to seem to interfere in British domestic politics, especially as the outlook is quite encouraging in that we are winning the battle. You might be on guard in the United States against any reversion to isolationism. This is what worries people like me who believe that America's role (for which you can never be thanked enough) is as vital in the future as it was in the past. So I don't want to see the message coming out of important conservative centers over here, "Oh, well, the Europeans can take care of themselves. They're all getting together. It's a cheap way we can get out." That's really what I want to get out of bringing my message to you today.

I want you all to feel that this is a worthwhile cause, just like your support of Europe in the Second World War with the Marshall Plan and throughout the Cold War was a worthwhile cause.

 By your supporting Britain throughout the Cold War, we avoided a hot war. If something like that had been done after the First World War, who knows. We might have avoided the Second.

QUESTION: Nice to see you, Julian. I wanted to ask you a question about monetary policy. One of the reasons for a European common currency is that it makes trade between countries a lot easier, the way trade between each of our individual American states is made easy because we have one dollar rather than 50 individual currencies.

Couldn't the United States help this situation if we were to try to revert to a Breton Woods type of a system, where we would go back to an international monetary standard or we could call it a price rule in our monetary policy where we would effectively guarantee the value of the dollar? We don't guarantee that value right now. The dollar still is the international reserve currency. A standard would encourage a monetary stability throughout the rest of the world and the perceived need in Europe for this kind of union when it comes to the strictly monetary questions?

DR. LEWIS: I'm not an expert on international financial structures, but what I can say is this. There is a very strong economic case for Britain not joining the euro anyway, as far as Britain is concerned.

I can't presume to advise you what American financial policy should be, but the fact is that the majority of our trade is not with Europe anyway. Therefore, although even if we were sucked into this behemoth, this monster, although there would be rigid stability between the states that formerly were separate states and now are components of the single European economy that would thereby be created, that wouldn't ease this question of stability. Since the euro has been created, its value has fluctuated wildly against the other currencies of the world.

So from our point of view, there has been a very gratifying development. A very successful pressure group has been set up called Business for Sterling. This has shown that the overwhelming majority of small businesses in Britain are against us going into this thing because they remember what happened when we tried it before with the Exchange Rate Mechanism. On that occasion, unemployment doubled to 3 million in two years, 1¾ million homes went into negative equity, which means you couldn't even pay off what you owed on your home even if you tried to sell it. And 100,000 businesses went bankrupt.

As regards big business in the UK, that is split down the middle, although the big business organizations, dominated by multi-nationals, are trying to pretend otherwise.

I'm afraid it's too late as regards those countries that have already gone into the euro. Fate will determine what happens to them. As regards Britain, I think we're beginning to win the business case and the economic case, as well as the political case.

QUESTION: Can you comment on the significance for your party of Lady Thatcher's appearance and speech at your recent party convention?

DR. LEWIS: Yes. Very good question. And the answer is that it's an encouraging development. It's an encouraging development because when William Hague became our leader, nobody knew whether he was going to turn out to be another John Major, whether he was going to turn out to be the man who got in because he was the man other than the man who was clearly a fanatical federalist. John Major got in in order to stop Michael Hesseltine, who was a euro fanatic and who in fact had stabbed Margaret Thatcher in the back.

The question was about William Hague. He got in in order to stop Kenneth Clark, who is quite a principled Euro-federalist, but someone whom people like me and other conservative-minded conservatives could not vote for because of his views on Europe.

The good news is that William Hague has gradually but shrewdly moved the party much closer to my orientation and the orientation of the British people.

I conclude by saying that he held a ballot on whether we should oppose British entry into the EMU at the next election. This was a ballot of all the individual members of the Conservative Party. His recommendation that we would stand at the next election on a ticket of opposition to British entry in the euro in the next parliament after that was endorsed by 84 percent of the members of the British Conservative Party.

That's why I think Margaret Thatcher felt she could now come out and be a little bit more outspoken without being accused of undermining what William Hague was doing.

I know our time is up, so I will just conclude by saying it's worth looking at the reaction in Europe to what Mrs. Thatcher said.

I have a press cutting here which quotes various European leaders denouncing her as balmy, bonkers and "yesterday's woman."

Well, those people may trade in those sort of insults, but I can tell this audience, as I would tell any audience back home, that Mrs. Thatcher's contribution to peace, security and freedom will be celebrated in history long after these mad, dangerous, and crazy federalists are forgotten.