Single market, competition & trade

The European Union's political leaders have great ambitions for the years ahead: a successful economic and monetary union, a coherent and effective foreign policy, and the accession of up to 12 new member-states.

The prospect of a two-tier Europe, with Britain outside the core, causes alarm in Downing Street. Joschka Fischer's vision of a European federation - with a group of more ambitious states forming its vanguard - is the latest such proposition, albeit one for the long-term. But does Tony Blair have much to fear?

Slowly, and somewhat reluctantly, the EU is beginning to embrace economic reform. For years America's equity-orientated, shareholder-value-driven economic model appeared anathema to much of the continent.

Europe's citizens, generally speaking, do not want their taxes set by Brussels. Taxation and representation still go hand in hand. So it is safe to assume that so long as people continue to look to their national governments to represent their interests (and turn out to vote for their national politicians in greater numbers than for MEPs), they will reject the notion of taxation policies being decided at European Union level.

Europe needs a new economic story. Its ability to compete in the knowledge-driven economy depends on how well it can translate science, technology and know-how into jobs, growth and economic success.

Europe needs a new economic story because it faces a new economic challenge. The challenge is to transform European science and technology, knowledge and creativity, into jobs, growth and economic success.

Commission President Romano Prodi has promised a fundamental review of the EU's priorities. He should encourage the Commission to think more about service industries.

It is easy to forget that the Eurosceptical mood of many EU countries is a recent phenomenon. In the late 1980s, when the EU's prime task was the creation of a single market, its popularity grew in every member-state.

Crime is becoming increasingly international, and it is a big business. A recent United Nations report estimates that the global turnover of criminal organisations amounts to some £1,000 billion a year, considerably larger than the gross domestic product of Britain.