Peter Mandelson: 'We have to address the needs of the losers in Europe'

Europe today faces a deep crisis of direction and legitimacy. There have been many such crises before, and doubtless there will be more in the future. For, make no mistake, Europe does have a future. The real problem is that there is no consensus about what Europe is for, and where it is going. The European project is today under sharp attack from a populism of the Right that blames foreigners for every woe, and a populism of the Left that feeds on fear of globalisation, Anglo Saxon "liberalism", job losses and "delocalisation".

Europe today faces a deep crisis of direction and legitimacy. There have been many such crises before, and doubtless there will be more in the future. For, make no mistake, Europe does have a future. The real problem is that there is no consensus about what Europe is for, and where it is going. The European project is today under sharp attack from a populism of the Right that blames foreigners for every woe, and a populism of the Left that feeds on fear of globalisation, Anglo Saxon "liberalism", job losses and "delocalisation".

In the past, we've tended to stress the inevitability of globalisation; we've said there's no alternative, as if politics cannot offer people security any more. But globalisation is not a tide that we should simply let flow over us. We have to make the case that we can marry globalisation with social justice; that we can open markets in Europe and pursue economic reforms in a way that narrows, not widens, the gap between "winners" and "losers".

There have always, in history, been losers from the dynamics of economic change, from the handloom weavers in the first stages of the English Industrial Revolution. What we have to show now, in our policies, is as much concern for the losers as for the winners.

The basic political problem with open market and economic reform is that the benefits are spread out, while the costs are concentrated. Poor families across Europe benefit from cheap Chinese T-shirts, but it is the textile workers standing to lose their jobs who, understandably, are most vocal. If economic reform is to be acceptable politically, the losers have to be cushioned and equipped to adjust to change.

And addressing the needs of the "losers" in Europe is essential if Europe is to proceed with enlargement. I believe in enlargement as a means of extending democracy, human rights and our values to a wider Europe. But there will be no consent for enlargement to the Balkans, Turkey, and beyond, unless we address the problems of the "losers" back home. All politics is local, ultimately even the geopolitics of enlargement.