Today the Foreign Secretary launched the review of the balance of EU competences. As he said, now is the right time to take a critical and constructive look at exactly where competence lies, how the EU's competences, are used and what that means for our national interest.
A desire to see significant reform and change is perfectly compatible with our belief that membership of the EU is in our national interest. We will continue to play a key role in a strong and stable EU.
Being part of the EU is central to how we in the UK create jobs, expand trade and protect our interests around the world. It allows us to be in a single market of some 500 million people, with a combined GDP of £11trillion (Euros), in which we can trade, travel and work freely.
The UK has always had good track record in providing leadership and a constructive agenda for change. The UK has been one of the leading proponents of the Single Market and we have vigorously championed enlargement. We led the debate on reducing the burden of EU regulation and we have consistently pressed other member states for a sharper focus on extending the single market to the services, digital and energy sectors.
However, recent events have shown, more than ever, that the EU can seem remote from ordinary people. Across Europe, the positive image of the EU has dropped from 52% in 2007 to 31% in 2011.
It is also clear that, without significant change, the EU will not meet the challenge of competing in an increasingly dynamic world economy. For example, setting up a company costs several times more in the EU than it does in the US or India.
As the Eurozone takes steps towards closer fiscal and economic integration, and as the EU continues to develop, we need to be absolutely clear when it is most appropriate to take decisions at the national or local level, closer to the people affected, and in other cases when it is best to take action at the EU or global level.
And we need to be comfortable about the EU moving towards greater "variable geometry" with member states in a number of different configurations cooperating in different policy areas. This will make the EU more effective, with the flexibility of a network, not the rigidity of a single bloc.
This is why the review will look at the case for rebalancing responsibilities. It will be a thorough and detailed analysis possible on what the exercise of the EU's powers does and what it means for the United Kingdom. We will ensure that our national debate is grounded in knowledge of the facts and will be a vital aid for policy making in Government.
This extensive review has never been attempted before. It is good for the EU that its members debate honestly and openly how it functions and responds to the challenges it faces. We know there are a lot of people out there with knowledge and expertise on how the EU affects the UK. We will want to hear from them. Keep an eye on the FCO website for updates on what areas of competence the review is working on.