“I hope still to contribute to the task of building Liberal strength across the continent of Europe and beyond. I believe there is much to play for. The European People’s Party is an inherently unstable coalition, the European Socialists a party in terminal decline. The opportunity for a stronger centre is immense.”

With these words I concluded my book ‘Building a Liberal Europe - the ALDE Project’ published late last year. The book tells the story of the Liberal contribution to the building of the EU from the first direct elections to the European Parliament in 1979 to the elections of June 2009. But the story of liberalism did not end there.

Since then the Lisbon Treaty has entered into force, giving the EU institutions new competences; substantial moves have been made towards common economic government for the countries sharing a common currency, in conjunction with moves to control the greed of the financial community; the EU has been challenged to turn its fine words into action in the fight against climate change; and the foundations have been laid for a common foreign and security policy. Liberal thought has contributed to these. But where do we go from here? How can we contribute to the EU's 'work in progress'?

I contend that with the Lisbon Treaty now in place, Liberals should accept that the constitutional basis for the European Union is almost complete. Some further treaty change will be necessary (indeed, minor changes have already been made since Lisbon and more will be needed to deal with current Eurozone weakness). In particular, we need to update and clarify aspects of the decision-making process. Among these, election of Members of the European Parliament from supranational lists must remain our goal, for EP elections are currently little more than 27 different sets of national elections for a supranational parliament.

And indeed, I believe that if given an EU-wide platform to present our Liberal political 'goods', our open, tolerant approach really will win support. Just as outward-looking businesses have thrived and grown in the single market, political parties whose messages translate across borders and do not fall prey to isolationism or small island mentality will also prosper in a single political market for votes.

But the Lisbon settlement must represent the settled will of the people, the nations and the member states of the EU to pursue policies for integration within a framework which anchors the rights of national parliaments and national administrations. The idea of ‘ever closer union’ need not and must not mean the arrogation by central, Brussels-based government of ever greater powers. Indeed the need for subsidiarity to and beyond member state level deserves further consideration by the EU’s judicial instances.

The EU is currently facing three major challenges or threats that must be solved - and luckily the Lisbon treaty gives us the tools to do so - but which are also real opportunities for Liberals to show their mettle.

The first is the unsustainable basis of world finance and the greed of financiers, one of the greatest threats to liberal democracy and which nearly brought about the collapse of capitalism in 2007-08. Liberals must recognise that this is a threat that comes from within. When Otto Graf Lambsdorff joined Jacques Delors and others in warning - in May 2007 - of the perils of a situation in which the value of commercial paper in circulation was almost three times that of the value of the underlying assets (compared to less than twice at the time of the Wall Street Crash of 1929), he signalled a Liberal concern which can be traced back to Adam Smith: that left to their own devices, markets do not always work.

The greed of financiers, taking in fees some 20% of all monies invested in stock and equity markets, is a legitimate target for Liberals. Indeed, failure to legislate will undermine the moral basis for liberal democracy. Sovereign debt poses a problem which must be solved, not least because of the inter-generational theft involved in leaving the problem to the next generation. And the money and stock markets must be calmed by effective government action co-ordinated at EU level.

The second such threat is our dangerous dependence on imports of oil and gas, whether from the east or the south, which not only puts us at the mercy of producer countries but also deepens our destructive and unnecessary acceleration of the processes of climate change. Today’s EU, larger and stronger than ever before, is in large measure the legacy of Hans-Dietrich Genscher’s Big Idea in foreign and security policy: an Ostpolitik which liberated from communist domination many of the countries of central and eastern Europe. A similar Big Idea is at hand for the climate threat, and we must make it ours. That big idea, which has been quantified by the European Climate Foundation in its epic ‘Roadmap 2050’ study, is for the EU to cut carbon emissions by 80% by 2050 through the rapid development of renewable energy (primarily electricity) production accompanied by carbon capture and storage technologies. This should be grasped as a Liberal idea, not one to be left to the Greens, since it is as much about security policy as about energy policy.

The third such opportunity is a political one, stemming from the popular uprisings in the Arab world which are, like their eastern European equivalents twenty years ago, an expression of the values of Liberal society. In 1989 it was Liberal action which turned a sceptical EU into a welcoming partner for those yearning for freedom on our eastern borders. In the 18 years which followed, Liberals led the way in stabilising the newly-liberated countries by their gradual integration into the EU. The challenge posed to us by developments in north Africa is no less great, though the means of stabilising these countries in the long term may be different since they involve tackling the dangerous conflict between the Abrahamic religions.

Are Liberals up to meeting these tasks? I think we are. At EU level, eight of the 27 EU Commissioners come from the Liberal family, giving us an important input into policy-making. While we have fewer MEPs and fewer government ministers in member states than in recent years, our base of support is arguably broader than before.

In the UK, Germany, Italy and France - which together represent 50% of the EU’s population - we are well represented in the European Parliament; in the UK and Germany we are coalition partners in national government. In the three member states populated by another fifth of the EU’s people - Spain, Poland and Romania - the picture is mixed. In Spain our presence is regional, mainly in Catalonia and the Basque Country; in Poland we are thin on the ground and not represented in Parliament; only in Romania are we numerically well represented in the European Parliament and strong on the ground - the major opposition party - at home. Of the twenty member states which account for the final 30% of European citizens our presence ranges from leading the government (Netherlands, Finland, Estonia) to a complete absence from the political scene (Portugal, Malta, Austria).

Greater coordination of the work of our parties and our government ministers is vital. It will help with the development of a truly pan-European political party, which could then be expected to assist most in those countries in which our political family is weakest or absent.

Liberals were, after all, the first to establish a trans-national party for the elections to the European Parliament in 1979. Liberals must again lead the way.

Lord Russell-Johnston remarked that Liberalism is often most rejected when it is most needed. He ascribed this to the weakness of organised Liberalism. The need for Liberalism today, as Europe’s dominant right wing slides dangerously towards nationalism and theocracy and its left continues to flounder, is clear. It is our task to make sure we organise effectively so that our solutions are embraced by our people.

Sir Graham Watson is a Member of the European Parliament and a vice president of the European Liberal Democrat and Reform Party. From 2002 to 2009 he led the Liberal Group in the European Parliament, more than doubling its membership. His latest book, ‘Building a Liberal Europe’ is available from John Harper Publishing in London.

See also:

YABLOKO Sister Parties

YABLOKO and the International Liberal Family

September, 2011