Ronald Reagan Lecture To The Margaret Thatcher Centre

The Margeret Thatcher Centre on Tuesday the 12th of April 2016


By the time they handed over leadership of the United States and the United Kingdom, after eight years and 11 years respectively, Ronald Reagan and Margaret Thatcher were witnessing a tsunami of change in the world. The fall of the Berlin Wall would end the seemingly intractable bipolarity of the Cold War and, via a period of what has been described as America’s ‘unipolar moment’, see the emergence of a new global economic order with all the political and security implications that we are still seeing develop today.

The revolution in communications technology has taken us from a world where there were only 163 websites in existence at the end of 1993 to over 700 million at the end of 2015.

The increased interdependence that the globalised era has brought means that contagion in one part of the world will quickly affect the rest. As I wrote in my own book, Rising Tides, “if Francis Fukuyama had called his book The End of Geography rather than The End of History he probably would have been closer to the mark”.

How would Ronald Reagan and Margaret Thatcher have handled the process of governance, both domestic and international, in this new environment? While this is obviously a matter of conjecture, we can make some fairly good assumptions based upon both the behaviour and belief of these leaders.

They were both committed to a strong and united free world – united in its concept of democracy, rule of law and free markets underpinning the concepts of liberty and freedom, and strong in its ability to withstand economic, political and, if necessary, military challenge from its enemies.

This evening, I would like to deal with just two of the international challenges facing us and to ask how the beliefs and values enunciated by President Reagan and Prime Minister Thatcher would have guided them, and might guide us, in the tasks in hand.

The first challenge lies with the behaviour of the Putin regime in Russia, and the second with the political developments in continental Europe and, in particular, the European Union.

One of the lessons of history that both leaders would have clearly understood is that appeasement is doomed to failure, that it has never worked in the past and will not work in the future. What would they have made of the policy pursued by the West in recent times towards the Russian threat?

The most generous way in which I can describe Western policy towards Putin’s Kremlin is a triumph of wishful thinking over critical analysis.

Western leaders were so keen to see Russia transform into a market orientated and pluralistic society that they were blind to the significance of events. There was a cyber attack on Estonia, a key NATO ally in the Baltic, and we did nothing. Russia invaded Georgia, where it still has troops on sovereign Georgian soil, and we looked the other way. By the time we were forced into taking sanctions against Moscow over its threats to Ukrainian sovereignty, we were too late and Crimea had been illegally annexed by force.

Wishful thinking is a generally poor basis for any activity in life but as a basis for foreign and security policy is potentially catastrophic. Why do I think that Ronald Reagan and Margaret Thatcher would have seen the issue differently?

Because, I believe they would have seen it from first principles and would have recognised much earlier that the beliefs of the Putin regime, and the behaviour that comes from those beliefs, would make it impossible to normalise relations.

Firstly, they would have immediately recognised in the mindset of the current Russian leadership the old Soviet concept of “a near abroad”. In other words, the Kremlin’s belief that Russia should have a veto over the security and foreign policies of its immediate geographic neighbours. This is utterly incompatible with our concept of sovereign nations with their own self-determination.

Secondly, the belief that ethnic Russians, wherever they happen to live should be protected not by the laws or constitutions of the countries in which they reside but by an external power, Russia, drives a coach and horses through our concept of international law and norms of behaviour. They would also have recognised from the Cold War experience the methods by which Moscow goes about furthering its agenda and influencing events.

If the pattern of behaviour from the Putin Kremlin would have been depressingly familiar from their Cold War dealings with the Soviet Union, then the atrophy of the European side of NATO, the transatlantic defence alliance to which both leaders were absolutely committed, would be shocking indeed.

After the fall of the Berlin Wall and the collapse of the Soviet Union, and despite Russian opposition, Poland, Hungary and the Czech Republic joined NATO in 1999.

2004 saw Estonia, Latvia, Lithuania, Slovenia, Slovakia, Bulgaria and Romania become members and most recently, in 2009, Albania and Croatia.

While this was a great and historic achievement for the European continent, this was not a European achievement alone.

Without the economic might, the military strength and political commitment of the United States, in particular, the result might have been very different.

Those who today wish to see a distancing of the European Union from the United States would do well to reflect on the successes of our recent history together and what the alternative might have been.

Yet, from the high point of Western strength in the immediate aftermath of the Cold War, a misplaced sense of comfort has resulted in too many NATO members dropping their guard and redirecting the promised defence spending into other, more politically expedient, areas.

This has left many European countries both defensively weaker and welfare-addicted. As has been repeatedly pointed out, EU countries now account for 7% of the global population, 25% of global GDP but 50% of global social spending.

The ironic result of all these decisions, taken together, is that many of those countries who would seek to create space between themselves and American foreign policy have instead made themselves more dependent than ever before on the United States. How long US taxpayers and policymakers will tolerate the free riding Europeans is an increasingly live topic in American politics, and one that European leaders need to take seriously.

So where, if at all, does the EU fit into this picture? Let's begin by looking at the recent evolution of EU defence.

Since the agreement in 1998 at the French port of St. Malo integrationists have slowly been constructing institutions to build an EU common defence policy.

A "European Security and Defence Identity" became the "European Security & Defence Policy". With the Lisbon Treaty we have what is now called "Common Security and Defence Policy" - an arcane change in the nomenclature, you might think, but in the detail lay the foundations of EU integrationists leaning away from NATO.

I have spent years being told that I am being obsessively and wrongly Eurosceptic to believe that the ultimate aim of the federalist is to have an EU Defence Force under an EU flag.

Yet at the Munich Security Conference in 2010, the German Foreign Minister at the time, Guido Westerwelle, stated that "the long term goal is the establishment of a European army under full parliamentary control."

You cannot get any clearer than that.

The Lisbon Treaty brought this whole process a step closer, bringing new concerns about democratic legitimacy regarding the EU and defence issues.

Under the Lisbon Treaty the EU Foreign Minister is not only a vice president in the supranational EU Commission but has the right of initiative to propose military operations, and is the Head of the European Defence Agency. This blurs the line between what is supranational and what is intergovernmental inside EU defence planning and it is something that should concern us all.

Likewise is the commitment of the same units to EU functions while maintaining them as necessary parts of domestic utility and national defence.

Who gets priority?

Double or even triple hatting the same forces do not produce any increased capability and may ultimately create competition for the same resources.

Any EU military capability must supplement and not supplant national defence and NATO. NATO members who are already falling well below expectations in their military budgets must not be allowed to divert scarce resources away from NATO towards EU capabilities.

And we must not allow European NATO members to believe that there is a ‘soft’ security option of peacekeeping with the EU rather than war fighting with NATO.

If you want to be a peacekeeper you have to have peace in the first place. That peace, history tells us, requires the willingness to fight and sometimes die for it.

Whatever political or financial problems that NATO might face from time to time should not be allowed to become an excuse for turning our back on an alliance that has underpinned the security of Western Europe and the United Kingdom for the last 60 years.

NATO is no luxury. It is a necessity and, crucially, is the relationship that keeps the United States in Europe. American involvement in Europe's security is something that Europe cannot afford to lose.

So, how is continental Europe doing in its commitment to the collective security provided by the NATO alliance? Analysis of the NATO budget from the last year shows how EU countries are failing to pull their weight. Only four European countries, Estonia, Greece, Poland and the United Kingdom met the 2% GDP defence spending target.

This meant that the United States has been left to carry the greatest burden of European security, but the extent of the imbalance is quite staggering.

Last year the United States alone accounted for 72.2% of total NATO spending; $666 billion out of a NATO total of $900.5 billion. This means that although the EU accounts for well over half the total population of NATO, it contributes less than a quarter of the NATO budget.

This is little more than a free ride on the back of American taxpayers, something which they are unlikely to put up with indefinitely.

The figures actually become worse on closer inspection. Britain, at $60 billion and France at $44 billion make up more than 50% of total EU defence spending. If the UK were to leave the EU, then the EU would account for only 17.5% of the total NATO alliance defence budget.

The conclusion is unequivocal; Britain’s national security is best served by the NATO umbrella as it has been for over 60 years. The EU is not necessary for Britain’s national security. Not only is the EU’s contribution to the alliance well below what it ought to be, but the pretensions of Brussels on defence matters has led to duplication and diversion of scarce resources. With Britain outside the European Union, the outcome I am campaigning to achieve in the forthcoming referendum, the remaining members would have to confront the paltry nature of their contribution to collective security.

Yet, the arguments go much further than just money. In recent years, the European Union, despite being unwilling to put its money where its mouth is, has increasingly usurped the political role of NATO to the extent that the political cohesion of the alliance has been much weakened.

If Britain, the world’s fifth biggest military power, were to remain inside NATO but the outside the EU, it would provide an opportunity to reinvigorate NATO’s political agenda which has sadly atrophied.

Before we consider the impact that Brexit would have on the EU, let us just pause to consider the position of the US. There is no shortage of American political opinion when it comes to Britain’s continued membership of the European Union, including the current White House. Yet, the concept of a supranational organisation to which national lawmaking, border control and finance would be subjugated is alien to how the United States sees itself, just as it ought to be alien to how we see ourselves.

American politicians and commentators are of course perfectly entitled to their opinions, but when the US has an open border with Mexico and a court that can overrule the Supreme Court and when Congress no longer has the final say in federal law then perhaps we will listen.

Of course, it is clearly in both the interests of the United Kingdom and United States to see a politically, socially and economically stable European continent, but let us remember that Europe and the European Union are not synonymous.

Europe is a continent composed of individual nations each with their own history, culture and identity. The European Union, by contrast, is a short-term political construct based on supranationalism which does not include all of the European continent’s nation states.

It is 41 years since the British public were last given a say on their membership of the European project. The 1975 referendum is my first clear political memory, not least because my parents were on opposite sides. One of the reasons that my father gave for his decision to vote for the common market in that referendum was that he did not want to see another military conflict in Europe.

He believed that greater economic interdependence would diminish the nationalist tendencies which had set the continent alight twice in the 20th century.

Britain, the sick man of Europe, looked to prosperous Germany as an inspiring economic model in an international environment dominated by the fear of the Soviets in the Cold War. How our world has changed, with the bipolar power structure of that era replaced by a more open and more competitive global economic environment and a transformed security picture, albeit with new and equally challenging security issues.

I’m not one of those who believes that everything the European Union has done has been worthless or wrong. In particular, I believe that, geopolitically, the ability to help bring Spain, Greece and Portugal from being military dictatorships to being part of the democratic family of nations in a short time was a great achievement.

Equally important was the EU’s role as a beacon to those who suffered under the long years of Soviet oppression in parts of the European continent and to show them that there was an alternative future of democracy, freedom and prosperity.

These are not small achievements, and they have helped shape our continent for the better, but this should not blind us to the fact that the European Union, as a political institution, has failed to adapt to the new realities of the globalised era and the changing world that lay on the other side of the fall of the Berlin Wall. Rather than abandon their goal of ever closer union and develop a more agile and responsive organisation, able to deal with the challenges and embrace the opportunities of this new environment, the old guard have redoubled their efforts to centralise and harmonise in a world where diversity is king.

I believe that Britain will be much better off outside the EU and its sclerotic tendencies, able to make our own laws, control our own borders and be in charge of our own money – but it won’t result in any improvement for the rest of the EU, whose problems will continue to worsen unless there are profound changes.

The two great iconic elements of “the European project” are in tatters.

The Schengen agreement, designed to give new and historic freedoms of movement across borders, has collapsed under the weight of the migrant crisis with walls and barbed wire fences being erected across continental borders and military movements being prepared should the crisis worsen.

The catastrophe of the Euro, a political project dressed up as an economic one, that allowed the wrong countries to join for all the wrong reasons, has seen the European economy stall with millions of young Europeans denied any prospect of hope or prosperity.

A generation has been sacrificed for the vanity project of the single currency. Only Germany, which now has a massively undervalued currency for the state of its economy, continues to flourish. German unemployment of 4.3% stands in stark contrast to the EU average of 8.9% and the even worse Eurozone rate of 10.3%.

The risk of future bank failures and bailout crises remains high in a European economic zone divided North and South by the Alps and Pyrenees. The political consequences are all too awfully predictable. There is no meaningful reform and there will be none because the old men of Brussels will not allow it. David Cameron did not ask for more in his renegotiation because all concerned knew that they would not tolerate it.

Political parties on the extreme right and left continue to flourish, yet the Eurocrats simply turn a blind eye. If they break it is because they will not bend. When we see young men in Athens wearing Nazi armbands in protest at the visit of Chancellor Merkel the alarm bells should be ringing, for their perception is not one of the largesse of German taxpayers but that Germany is willing to see any level of austerity in any other country in order to make the single currency work.

Whether this is true or not is largely immaterial; the perception is there and the damage has been done in a part of the world where memories are still scarred by the 1940s.

Britain may well be fortunate enough to break away from the forces of governance that underpin this bleak picture, but we will still be affected by the failure that is the European Union.

Economic prospects will be depressed, political risks will be exacerbated and security problems will represent potential contagion. We might be free from its clutches but we will not be free from its effects. The one great hope is that a British exit from the EU might provide them with the necessary shock therapy to recognise that they must change or face the potential breakup of the entire political architecture. The fundamental reform that Britain has wanted, but which has been completely rejected, will still be required to prevent Europe and its citizens from facing continued decline and increasing irrelevance in global economic and political affairs.

Given the rising tensions across continental Europe, its leaders must learn to manage reform and create a process of change or they will risk potentially catastrophic consequences.

The politically stunted leadership in Brussels risks reigniting the very nationalist tendencies that people like my father hoped they could avoid by joining the common market.

Britain can give a lead and show the benefits of looking outwards and forwards rather than backwards and inwards - the chosen direction for the EU navel-gazers.

We should welcome the opportunity to shape a better future not just for the people of Britain but for all peoples of our continent. That better future would also benefit our allies, including United States, and help create a more stable and secure international environment.

Those are aims that both Margaret Thatcher and Ronald Reagan would have well understood.