From“economist.com”

A new law on property rights defines the ideological struggle at the heart of China's economic reform

FOUR years of double-digit growth, soaring government revenues, low inflation and a manageable budget deficit might be cause for celebration in other countries. But China's leaders are anxious. Inequalities are growing, corruption is rampant, grumbling widespread. Ideological battles between free-marketeers and left-wingers threaten to impede reform.

In his annual address at the opening of China's parliament, the National People's Congress (NPC) on March 5th, the prime minister, Wen Jiabao, studiously avoided mention of the most controversial item on the 12-day meeting's agenda. It is a new law on property rights which is mainly intended to reassure the country's fast growing middle class that their assets are secure. Three years ago China added a clause to its constitution saying that private property was “not to be encroached upon”. But efforts to translate this into law have aroused unusually fierce and open debate about the direction of China's economic reforms. Chinese leaders are now struggling to silence it.

As the party prepares to hold its five-yearly congress this autumn, the first to be presided over by Mr Hu and a crucial test of his authority, the leadership's record is coming under closer scrutiny. The NPC session is focusing attention on how much has really been done for the poor under Mr Wen's premiership. Mr Wen's five-year term of office ends next year. He is all but certain to be reappointed for another term (he and Mr Hu appear to get on well), but he will want to mark the occasion by pointing out what he has achieved.

Not nearly enough say those on the left. Direct criticism of leaders is still virtually taboo in China. But the drafting of the property law has provided an outlet for critics of government policy to air their grievances. Mr Hu and Mr Wen do not appear to face concerted opposition among party officials. But a vocal body of intellectuals and retired officials has denounced the property law as a betrayal of the country's socialist principles. It will, they say, protect the fortunes of corrupt officials and the ill-gotten gains of crooked businessmen. Further, it will hasten the demise of China's remaining state-owned industries and the creation of a plutocracy.

The leadership has been put on the defensive. Although it is often ready to lash out at critics on the right, it is usually more cautious in handling the left (China is still, after all, officially socialist). In this case, the left's criticisms have been particularly difficult to suppress because the leadership itself invited discussion by publishing a draft of the law in 2005—a very unusual move in a country that normally keeps its legislative processes shrouded in secrecy.

A law professor at Peking University, Gong Xiantian, took advantage of this to write an open letter calling the proposed bill unconstitutional. His criticism was widely reported in the Chinese media and fuelled an acrimonious debate on Chinese websites. Officials revised the law and planned to have it adopted at last year's NPC meeting. But the controversy continued to rage and they were obliged to pull it from the agenda.

Since then, three more drafts have been circulated among senior legislators, the latest in December. The leadership retreated into secretive mode. Copies were not made public until after the NPC session began. Mr Gong says officials have made it clear in recent weeks that they want the law passed at this year's NPC session. Newspapers have been ordered to play the issue down. Mr Gong says he has had no choice but to turn to the foreign media in order to get his views across. Han Deqiang, another Beijing academic and critic of the bill, says officials told him to remove an online petition he had organised opposing the legislation.

But an NPC spokesman said consensus about the law had emerged and it was wrong to call it unconstitutional. Its passage on March 16th, the closing day of the NPC, is now all but secure. Opinion polls of delegates—who owe their positions to party patronage—are never published. Dissenting votes have become increasingly common in recent years. But it would be unprecedented for delegates to reject a bill.

For all its pro-left rhetoric—Mr Wen's speech to the NPC was suffused with it—the leadership realises that it also has to keep on side a growing urban middle class whose tolerance of party rule is particularly vital to its grip on power. On this, Mr Hu and Mr Wen are of one mind with their predecessors, Jiang Zemin and Deng Xiaoping. It was Mr Deng who decided in the early 1990s that only rapid growth, fuelled by the unfettering of the private sector, could save China from the fate of the Soviet block. In the final years of his presidency, Mr Jiang invested enormous political capital in promoting the abolition of the party's ban on recruiting private entrepreneurs. In 2002, when he stepped down as party general-secretary in favour of Mr Hu, Mr Jiang secured—despite strong complaints from the left—a revision to the party's charter that, in effect, legitimised his welcoming of capitalists.

The more left-leaning approach of Mr Hu and Mr Wen has often been portrayed as evidence of a policy rift between them and Mr Jiang, who remained influential in Chinese politics until he stepped down from his last position as the party's military chief in 2004. But their efforts to please the property-owning middle class suggest they have a lot in common. The constitutional revision three years ago and recent attempts to silence opposition to the proposed property law have been central to these efforts.

Neglecting the middle class would be even more perilous for the current Chinese leadership than it was perceived to be by Mr Jiang and Mr Deng. Sweeping privatisation of housing since the late 1990s has radically changed the social and political fabric of urban China. Property rights have become a topic of critical interest to urban residents anxious to protect their new assets from the whims of the state.

Farmers, too, are finding property rights of rapidly growing interest (and their concerns matter more to the left). The large-scale appropriation of farmland in recent years for housing and factory construction has rendered millions of farmers landless. Many have been given little or no compensation. In the countryside and in the cities, property and land disputes have become a leading cause of social unrest. A senior official said in January that the number of “mass incidents” in China had fallen to about 23,000 last year from 26,000 in 2005. But such figures are ill-defined and subject to political distortion. Since 2004 leaders have vowed to build a “harmonious society”, making it risky for low-level governments to report data suggesting that unrest is growing.

The proposed law's provisions (to judge from the draft released on March 8th) range from general statements of principle to specific clarifications of certain grey areas. These include, for instance, the ownership of parking spaces around high-rise flats: the draft says that the spaces belong to the flats' owners, not the developers. China's fast-growing cohort of car-owners will be pleased with that.

Many of the law's provisions are contained in other regulations issued in recent years. But supporters of the bill say that combining these elements into one law enacted by the country's top legislature would give them additional weight. Yin Tian of Peking University says the law will be a mark of the government's respect for private property and could help to reinforce social stability by reducing disputes. The draft tries to streamline the registration of property sales and make it easier for interested parties to check details. The difficulty buyers have in getting such information results in frequent ownership wrangles after deals are completed.

Farmers, whose main concern relates to land-ownership rights, would also have something to gain. The good news is that the latest draft, unlike the 2005 version, gives farmers the right to renew their land-use leases after they expire. Unlike urban land, which is state-owned with usage rights granted for periods of between 40 and 70 years, rural land is “collectively” owned. Farmers are given 30-year leases (though often no supporting documents) to use plots of land. But the law will put no new limits on the government's powers to appropriate land. It also says that village committees represent the collective. These are supposedly democratically elected but party regulations still give unelected party chiefs the final say over village affairs. Most important, the ban on mortgaging farmland will remain.

Again according to the draft, a person would be considered the owner of real estate if his ownership was registered with the government, or of movable property if he was in possession of it. Ownership could be challenged, but critics worry that it would be difficult to do so for former state-owned assets or for land-use rights that had been sold off in shady deals. The timing of the earlier draft's publication in 2005 was bad for the bill's supporters. It followed an upsurge of debate about the frequent sale of state-owned enterprises at rock-bottom prices to their managers. In response, the government banned management buy-outs of large state enterprises. But there was also concern about its sales of strategic stakes in state-owned banks to foreign investors.

The left was irritated in 2005 and remains so. A recent petition to the NPC by influential left-wingers says privatisation is accelerating and causing a widening gap between rich and poor. It says the sale of state assets to corrupt officials, the super rich and foreign multinationals is illegal and unconstitutional. Among the more than 3,200 signatories are seven former government ministers or deputy ministers, five former provincial leaders, a sprinkling of retired senior military officers and about 50 professors at the party's Central School, an academy for top officials.

The government has tried to assuage the left by stressing the limits of reform. In December it announced that state-owned enterprises under the central government would remain in control of industrial sectors considered crucial to national security and economic welfare: military equipment, electric power, oil and petrochemicals, telecommunications, coal, aviation and shipping. But the number of centrally owned state enterprises would continue to decline from 161 at the end of last year to between 80 and 100 in 2010. Among these, the government hopes that 30-50 internationally competitive conglomerates will emerge. State-owned enterprises with no hope of turning a profit will “exit the market” by 2008. In other words, sell-offs to the non-state sector will continue.

At the NPC session, officials have continued to emphasise measures aimed at the poor. Mr Wen in his opening address said the government would “shift the focus” of state infrastructure development and the development of social programmes to the countryside, where income growth has been slower than in the cities (7.4% in real terms last year compared with 10.4% in urban areas). The aim is to develop what party leaders announced in late 2005 would be a “new socialist countryside” with subsidised health care and free schooling for all. From this year, said Mr Wen, schools would no longer charge tuition or other fees for children having their compulsory education (up to the end of junior high school). This will affect 150m families. A medical-insurance scheme, launched in 2003, is to cover 80% of rural areas by the end of this year, up from 50% at present. The aim is to have complete coverage by 2010.

But these measures, though welcome to many, hardly amount to spectacular shifts in the government's spending priorities nor are they a colossal burden. Central-government support for rural areas and agriculture is to increase by 15% to about 392 billion yuan ($51 billion) this year. This is almost the same rate as this year's predicted increase in central-government revenue (2.4 trillion yuan is the target). It is also about the same as last year's increase in the government's spending in the countryside.

The armed forces, however, get a bigger boost. The budget presented to the NPC calls for a nearly 18% increase in military spending this year to 347 billion yuan. Most analysts believe this is far less than China's true spending. The armed forces have enjoyed double-digit budget increases for most of the past 15 years. The leadership knows well whom it really needs to keep happy.

The central government has substantially increased its spending on health care, but from a very low base. This year it is forecast to rise by 87% to 31.3 billion yuan. Though it is encouraging that the central government is taking up a bigger share of health-care spending, this is still low: less than one-tenth of total government spending on the health sector last year. After four years in office Mr Wen has yet to announce any ideas for addressing one of the public's biggest concerns, namely the prohibitive cost of medical treatment for many urban and rural residents. Hospitals have been trying to generate revenues by pushing up medicine prices, over-prescribing drugs or recommending unnecessary procedures. Mr Wen was able to say only that the government had “begun formulating a plan”.

Even the health-insurance scheme in the countryside is not all it is cracked up to be. The programme requires contributions from peasants and provincial governments as well as the central government. The peasant has to pay only a dollar or two a year. But he still has to pay a considerable proportion of expenses for hospital treatment. Wealthier peasants may welcome the subsidy, but for poorer ones having to pay even a reduced share of hospital expenses still makes treatment unaffordable. The “new socialist countryside” campaign has its critics too. Mr Wen may not be to blame, but some village officials have used the campaign as an excuse to order the demolition of old houses and require villagers to borrow money to pay for new ones.

The central government is spending more on education: 54 billion yuan last year, an increase of more than 39%. This too will be welcome. Next to soaring housing costs (which Mr Wen pledged to keep at a “reasonable level” this year, without explaining his secret), education expenses are among the biggest complaints of urban residents. But the government remains way off the target set in the mid-1980s (when leftists enjoyed far more clout) of pushing education spending by central and local governments to 4% of GDP by the year 2000. Last year total spending increased by nearly 20% to 475 billion yuan, but this was less than 2.3% of GDP—“significantly lower” than the international average, according to a UN report in 2005.

Far from using its fast-rising revenues (let alone issuing more debt) to finance pro-poor programmes, the government has stressed its goal of further reducing the central budget deficit. Last year this amounted to 275 billion yuan, a fairly healthy-sounding 1.3% of GDP. The plan is to cut it by another 30 billion yuan this year. “We can never start spending money hand over fist just because revenue has been relatively good recently,” said a budget report submitted to the NPC.

A bit more equal than others

Mr Wen and Mr Hu may have swung to the left in their words, but they have kept the party's doors wide open to capitalists. In 2005 the party recruited 1,512 private-business owners, an increase of 170% over the previous year, according to a recent publication by the Chinese Academy of Social Sciences. The government's desire to keep all constituencies happy—but the middle class a bit more so than others—is reflected in the property- rights bill. Mr Gong says the drafters have added provisions on the protection of state property. But he dismisses these changes as superficial. “It would be a very shameful page in China's history” if the law is passed, he says. He is appealing for it to be delayed again. But Mr Hu and Mr Wen seem unenthused by their party's ideological baggage.

To such a party it must be an ideological embarrassment that China has such a large and flourishing private sector, accounting for some two-thirds of GDP. So one law due to receive the NPC's rubber stamp this month, giving individuals the same legal protection for their property as the state, has proved unusually contentious. It was to be passed a year ago, but was delayed after howls of protest from leftists, who see it as among the final of many sell-outs of the ideas of Marx, Lenin and Mao Zedong, to which the party pretends fealty.

In the cities, and of greater importance to the decision-makers pushing the law through, a growing middle class with its wealth tied up in houses wants to pass these assets on to their only children. These people are anxious about the security of their property and, like their fellows in the countryside, are becoming more assertive. In other countries the emergence of this group as an important political constituency has been followed by an unstoppable drift towards greater pluralism.

A journey of a thousand steps

In the short term, however, do not expect too much. The latest law is only one step in the slow trudge China is making out of the blind alley of Maoism. One big change in 2002 allowed businessmen to join the Communist Party, thus turning the revolutionary vanguard into a networking opportunity for bosses. In 2004 China changed the country's constitution to enshrine private-property rights. But the constitution is less a prescriptive document than a constantly changing description of what has just happened. So nothing changed.

This latest law, likewise, will not bring the full property-rights revolution China's development demands. Indeed, it will not meet the most crying need: to give peasants marketable ownership rights to the land they farm. If they could sell their land, tens of millions of underemployed farmers might find productive work. Those who stay on the farm could acquire bigger land holdings and use them more efficiently. Nor will the new law let peasants use their land as security on which they could borrow and invest to boost productivity. Nor, even now, will they be free from the threat of expropriation, another disincentive to investment. Much good land has already been grabbed, and the new law will merely protect the grabbers' gains.

This law cannot in itself resolve the murkiest question: who owns what? This is especially true in the countryside, where the mass collectivisation during Mao's Great Leap Forward of half a century ago left farmland “collectively” owned. Peasants have since been granted short (30-year) leases. But even outside agriculture it is often unclear whether a “private” enterprise is really owned by individuals or by a local government or party unit. Conversely, some “collective” or “state” enterprises operate in ways indistinguishable from the private interests of their bosses. Moreover, should an underdog try to use the new law to enforce his rights, the corrupt and pliant judiciary would usually ensure he was wasting his time. Since the Cultural Revolution, when the NPC passed just one law between 1967 and 1976, the legislature has been legislating quite prolifically. But the passage of laws is not the rule of law.

Which leads to a final obstacle: without an accountable executive branch, the necessary reform of the legal system is not going to happen. As the passage of the property law itself demonstrates, the party is showing itself somewhat more responsive to public opinion than it was in the past. But it still runs a government that does its best to silence most dissenting voices, strictly controls the press, and lavishes resources on the best cyber-censorship money can buy. Property rights are a start; but only contested politics and relatively open media can ensure that they are enforceable.

Petty-bourgeois fanaticism can be good for you

No revolution today then. Yet in the long term the leftist opponents of China's property law are surely right to be worried about what has been begun this month. They understand the law will entrench the rights of the carpet-baggers who have looted the state as it has privatised assets. They also understand that the law, for all its technicalities, does not chime with an avowedly communist government.

The leftists derive their theory not from Confucius, but from Marx. Were the latter writing today, he would surely see in China a revolution waiting to happen—or perhaps two. One is the bourgeois revolution led by the emerging property-owning middle class that the new law will help. The other is the potential for the simmering resentment in the countryside to boil over, perhaps in frustration at the law's shortcomings. Property rights are at the root of both—which is why the dozing NPC delegates may have started a process this month that will one day change their country completely.

We express our revulsion at this murderous carnage of the innocent.

We send our deep and abiding sympathy and prayers to the victims and their families.

We are united in our determination that our country will not be defeated by such terror but will defeat it and emerge from this horror with our values, our way of life, our tolerance and respect for others, undiminished.

I would also like us to record our heartfelt thanks and admiration for our emergency services.

Police, those working on our underground, buses and trains, paramedics, doctors and nurses, ambulance staff, firefighters and the disaster recover teams, all of them can be truly proud of the part they played in coming to the aid of London last Thursday and the part they continue to play. They are magnificent.

As for Londoners themselves, their stoicism, resilience, and sheer undaunted spirit were an inspiration and an example.

At the moment of terror striking, when the eyes of the world were upon them, they responded and continue to respond with a defiance and a strength that are universally admired.

I will now try to give the House as much information as I can. Some of it is already well-known.

There were four explosions. Three took place on underground trains - one between Aldgate East and Liverpool Street; one between Russell Square and Kings Cross; one in a train at Edgware Road station.

All of these took place within 50 seconds of each other at 8.50 a.m.

The other explosion was on the No.30 bus at Upper Woburn Place at 9.47 a.m.

The timing of the Tube explosions was designed to be at the peak of the rush hour and thus to cause maximum death and injury.

It seems probable that the attack was carried out by Islamist extremist terrorists, of the kind who over recent years have been responsible for so many innocent deaths in Madrid, Bali, Saudi Arabia, Russia, Kenya, Tanzania, Pakistan, Yemen, Turkey, Egypt and Morocco, of course in New York on September 11th, but in many other countries too.

I cannot obviously give details of the police investigation now underway. I can say it is among the most vigorous and intensive this country has seen.

We will pursue those responsible not just the perpetrators but the planners of this outrage, wherever they are and we will not rest until they are identified, and as far as is humanly possible, brought to justice.

I would also like to say this about our police and intelligence services. I know of no intelligence specific enough to have allowed them to prevent last Thursday's attacks.

By their very nature, people callous enough to kill completely innocent civilians in this way, are hard to stop.

But our services and police do a heroic job for our country day in day out and I can say that over the past years, as this particular type of new and awful terrorist threat has grown, they have done their utmost to keep this country and its people safe.

As I saw again from the meeting of COBRA this morning, their determination to get those responsible is total.

Besides the obvious imperative of tracking down those who carried out these acts of terrorism, our principal concern is the bereaved, the families of the victims.

It is the most extraordinarily distressing time for them and all of us feel profoundly for them. Let me explain what we are trying to do.

The majority, though I stress not all, of the victims' families now have a very clear idea that they have lost their loved ones.

For many, patterns of life and behaviour are well enough established that the numbers of potential victims can now be brought within reasonable range of the actual victims.

Some 74 families now have police Family Liaison Officers with them. In addition, we have established, with Westminster City Council, the police and others the Family Assistance Centre. This is presently at The Queen Mother Sports Centre.

Tomorrow it will move to a more suitable site at the Royal Horticultural Halls in Westminster.

I would like to thank the many organisations involved including the Salvation Army, the Women's Royal Voluntary Service, the Red Cross, Westminster City Council and all those counsellors who are helping to staff the centre.

In this way we are doing our level best to look after the families. My RHF - the culture secretary - has taken charge of this aspect as she has done before.

More difficult is then the process of formal identification.

The police are proceeding here with some caution. In previous terrorist attacks of a similar kind in other countries, mistakes have been made which are incredibly distressing.

The effect of a bomb is to make identification sometimes very, very hard and harrowing. There is now a process in place, involving a group chaired by the coroner which will, in each case, make a definitive pronouncement once the right procedures are gone through.

I wish it could be quicker but I think the only wise course is to follow precisely the advice of Coroner and police and that is what we will do.

At some time and in consultation with the families, we will be ready to join in arrangements for a Memorial Service for the victims.

Her Majesty The Queen has said she will attend. Two minutes silence will be held at noon on Thursday. This will be an opportunity for the nation to unite in remembrance.

There is then the issue of further anti-terrorist legislation. During the passage of the Prevention of Terrorism Act earlier this year we pledged to introduce a further counter-terrorism Bill later in this session.

That remains our intention. It will give us an opportunity, in close consultation with the police and the agencies, to see whether there are additional powers which they might need to prevent further attacks.

As to timing, the home secretary, pledged to publish the bill for pre-legislative scrutiny in the autumn with introduction in spring 2006, so that Parliament had time to digest the report on the operation of control orders produced by the independent reviewer, Lord Carlile. I do not currently see any reason to depart from that timetable.

However, that is subject to an important caveat. If, as the fuller picture about these incidents emerges and the investigation proceeds, it becomes clear that there are powers which the police and intelligence agencies need immediately to combat terrorism, it is plainly sensible to reserve the right to return to Parliament with an accelerated timetable.

Finally, I would like to record our deep appreciation of the huge outpouring of international support for London and for Britain over these past days.

The G8 leaders demonstrated complete solidarity and also commented with an awe that gave me a lot of pride in Britain, on the courage of our capital city and its people.

The UN Security Council passed a unanimous resolution of condemnation of the terrorists and support for Britain.

The International Olympic Committee kindly sent a resolution of support.

Messages have been received world-wide. There have been immediate offers of help from all the world's main intelligence agencies. An emergency meeting of the EU JHA Council will take place later this week.

Mr Speaker, the 7th of July will always be remembered as a day of terrible sadness for our country and for London.

Yet it is true that just four days later, London's buses, trains and as much of its underground as is possible, are back on normal schedules; its businesses, shops and schools are open; its millions of people are coming to work with a steely determination that is genuinely remarkable.

Yesterday we celebrated the heroism of WW II including the civilian heroes of London's blitz.

Today what a different city London is - a city of many cultures, faiths and races, hardly recognisable from the London of 1945.

So different and yet, in the face of this attack, there is something wonderfully familiar in the confident spirit which moves through the city, enabling it to take the blow but still not flinch from re-asserting its will to triumph over adversity.

Britain may be different today but the coming together is the same.

And I say to our Muslim community. People know full well that the overwhelming majority of Muslims stand four square with every other community in Britain.

We were proud of your contribution to Britain before last Thursday. We remain proud of it today. Fanaticism is not a state of religion but a state of mind. We will work with you to make the moderate and true voice of Islam heard as it should be.

Together, we will ensure that though terrorists can kill, they will never destroy the way of life we share and which we value, and which we will defend with the strength of belief and conviction so that it is to us and not to the terrorists, that victory will belong.

It is an honour to be here in the European Parliament today.

With your permission, I will come back after each European Council during the UK Presidency and report to you. In addition, I would be happy to consult the Parliament before each Council, so as to have the benefit of the views of the European Parliament before Council deliberations.

This is a timely address. Whatever else people disagree upon in Europe today, they at least agree on one point: Europe is in the midst of a profound debate about its future.

I want to talk to you plainly today about this debate, the reasons for it and how to resolve it. In every crisis there is an opportunity. There is one here for Europe now, if we have the courage to take it.

The debate over Europe should not be conducted by trading insults or in terms of personality. It should be an open and frank exchange of ideas. And right at the outset I want to describe clearly how I define the debate and the disagreement underlying it.

The issue is not between a "free market" Europe and a social Europe, between those who want to retreat to a common market and those who believe in Europe as a political project.

This is not just a misrepresentation. It is to intimidate those who want change in Europe by representing the desire for change as betrayal of the European ideal, to try to shut off serious debate about Europe's future by claiming that the very insistence on debate is to embrace the anti-Europe.

It is a mindset I have fought against all my political life. Ideals survive through change. They die through inertia in the face of challenge.

I am a passionate pro-European. I always have been. My first vote was in 1975 in the British referendum on membership and I voted yes. In 1983, when I was the last candidate in the UK to be selected shortly before that election and when my party had a policy of withdrawing from Europe, I told the selection conference that I disagreed with the policy. Some thought I had lost the selection. Some perhaps wish I had. I then helped change our policy in the 1980's and was proud of that change.

Since being Prime Minister I signed the Social Chapter, helped, along with France, to create the modern European Defence Policy, have played my part in the Amsterdam, the Nice, then the Rome Treaties.

This is a union of values, of solidarity between nations and people, of not just a common market in which we trade but a common political space in which we live as citizens.

It always will be.

I believe in Europe as a political project. I believe in Europe with a strong and caring social dimension. I would never accept a Europe that was simply an economic market.

To say that is the issue is to escape the real debate and hide in the comfort zone of the things we have always said to each other in times of difficulty.

There is not some division between the Europe necessary to succeed economically and social Europe. Political Europe and economic Europe do not live in separate rooms.

The purpose of social Europe and economic Europe should be to sustain each other.

The purpose of political Europe should be to promote the democratic and effective institutions to develop policy in these two spheres and across the board where we want and need to cooperate in our mutual interest.

But the purpose of political leadership is to get the policies right for today's world.

For 50 years Europe's leaders have done that. We talk of crisis. Let us first talk of achievement. When the war ended, Europe was in ruins. Today the EU stands as a monument to political achievement. Almost 50 years of peace, 50 years of prosperity, 50 years of progress. Think of it and be grateful.

The broad sweep of history is on the side of the EU. Countries round the world are coming together because in collective cooperation they increase individual strength. Until the second half of the 20th Century, for centuries European nations individually had dominated the world, colonised large parts of it, fought wars against each other for world supremacy.

Out of the carnage of the Second World War, political leaders had the vision to realise those days were gone. Today's world does not diminish that vision. It demonstrates its prescience. The USA is the world's only super power. But China and India in a few decades will be the world's largest economies, each of them with populations three times that of the whole of the EU. The idea of Europe, united and working together, is essential for our nations to be strong enough to keep our place in this world.

Now, almost 50 years on, we have to renew. There is no shame in that. All institutions must do it. And we can. But only if we remarry the European ideals we believe in with the modern world we live in.

If Europe defaulted to Euro scepticism, or if European nations faced with this immense challenge, decide to huddle together, hoping we can avoid globalisation, shrink away from confronting the changes around us, take refuge in the present policies of Europe as if by constantly repeating them, we would by the very act of repetition make them more relevant, then we risk failure. Failure on a grand, strategic, scale. This is not a time to accuse those who want Europe to change of betraying Europe. It is a time to recognise that only by change will Europe recover its strength, its relevance, its idealism and therefore its support amongst the people.

And as ever the people are ahead of the politicians. We always think as a political class that people, unconcerned with the daily obsession of politics, may not understand it, may not see its subtleties and its complexities. But, ultimately, people always see politics more clearly than us. Precisely because they are not daily obsessed with it.

The issue is not about the idea of the European Union. It is about modernisation. It is about policy. It is not a debate about how to abandon Europe but how to make it do what it was set up to do: improve the lives of people. And right now, they aren't convinced. Consider this.

For four years Europe conducted a debate over our new Constitution, two years of it in the Convention. It was a detailed and careful piece of work setting out the new rules to govern a Europe of 25 and in time 27, 28 and more member states. It was endorsed by all Governments. It was supported by all leaders. It was then comprehensively rejected in referendums in two founding Member States, in the case of the Netherlands by over 60 per cent. The reality is that in most Member States it would be hard today to secure a 'yes' for it in a referendum.

There are two possible explanations. One is that people studied the Constitution and disagreed with its precise articles. I doubt that was the basis of the majority 'no'. This was not an issue of bad drafting or specific textual disagreement.

The other explanation is that the Constitution became merely the vehicle for the people to register a wider and deeper discontent with the state of affairs in Europe. I believe this to be the correct analysis.

If so, it is not a crisis of political institutions, it is a crisis of political leadership. People in Europe are posing hard questions to us. They worry about globalisation, job security, about pensions and living standards. They see not just their economy but their society changing around them. Traditional communities are broken up, ethnic patterns change, family life is under strain as families struggle to balance work and home.

We are living through an era of profound upheaval and change. Look at our children and the technology they use and the jobs market they face. The world is unrecognisable from that we experienced as students 20, 30 years ago. When such change occurs, moderate people must give leadership. If they don't, the extremes gain traction on the political process. It happens within a nation. It is happening in Europe now.

Just reflect. The Laeken Declaration which launched the Constitution was designed "to bring Europe closer to the people". Did it? The Lisbon agenda was launched in the year 2000 with the ambition of making Europe "the most competitive place to do business in the world by 2010". We are half way through that period. Has it succeeded?

I have sat through Council Conclusions after Council Conclusions describing how we are "reconnecting Europe to the people". Are we?

It is time to give ourselves a reality check. To receive the wake-up call. The people are blowing the trumpets round the city walls. Are we listening? Have we the political will to go out and meet them so that they regard our leadership as part of the solution not the problem?

That is the context in which the Budget debate should be set. People say: we need the Budget to restore Europe's credibility. Of course we do. But it should be the right Budget. It shouldn't be abstracted from the debate about Europe's crisis. It should be part of the answer to it.

I want to say a word about last Friday's Summit. There have been suggestions that I was not willing to compromise on the UK rebate; that I only raised CAP reform at the last minute; that I expected to renegotiate the CAP on Friday night. In fact I am the only British leader that has ever said I would put the rebate on the table. I never said we should end the CAP now or renegotiate it overnight. Such a position would be absurd. Any change must take account of the legitimate needs of farming communities and happen over time. I have said simply two things: that we cannot agree a new financial perspective that does not at least set out a process that leads to a more rational Budget; and that this must allow such a Budget to shape the second half of that perspective up to 2013. Otherwise it will be 2014 before any fundamental change is agreed, let alone implemented. Again, in the meantime, of course Britain will pay its fair share of enlargement. I might point out that on any basis we would remain the second highest net contributor to the EU, having in this perspective paid billions more than similar sized countries.

So, that is the context. What would a different policy agenda for Europe look like?

First, it would modernise our social model. Again some have suggested I want to abandon Europe's social model. But tell me: what type of social model is it that has 20m unemployed in Europe, productivity rates falling behind those of the USA; that is allowing more science graduates to be produced by India than by Europe; and that, on any relative index of a modern economy - skills, R&D, patents, IT, is going down not up. India will expand its biotechnology sector fivefold in the next five years. China has trebled its spending on R&D in the last five.

Of the top 20 universities in the world today, only two are now in Europe.

The purpose of our social model should be to enhance our ability to compete, to help our people cope with globalisation, to let them embrace its opportunities and avoid its dangers. Of course we need a social Europe. But it must be a social Europe that works.

And we've been told how to do it. The Kok report in 2004 shows the way. Investment in knowledge, in skills, in active labour market policies, in science parks and innovation, in higher education, in urban regeneration, in help for small businesses. This is modern social policy, not regulation and job protection that may save some jobs for a time at the expense of many jobs in the future.

And since this is a day for demolishing caricatures, let me demolish one other: the idea that Britain is in the grip of some extreme Anglo-Saxon market philosophy that tramples on the poor and disadvantaged. The present British Government has introduced the new deal for the unemployed, the largest jobs programme in Europe that has seen long-term youth unemployment virtually abolished. It has increased investment in our public services more than any other European country in the past five years. We needed to, it is true, but we did it. We have introduced Britain's first minimum wage. We have regenerated our cities. We have lifted almost one million children out of poverty and two million pensioners out of acute hardship and are embarked on the most radical expansion of childcare, maternity and paternity rights in our country's history. It is just that we have done it on the basis of and not at the expense of a strong economy.

Secondly, let the Budget reflect these realities. Again the Sapir report shows the way. Published by the European Commission in 2003, it sets out in clear detail what a modern European Budget would look like. Put it into practice. But a modern Budget for Europe is not one that 10 years from now is still spending 40 per cent of its money on the CAP.

Thirdly, implement the Lisbon Agenda. On jobs, labour market participation, school leavers, lifelong learning, we are making progress that nowhere near matches the precise targets we set out at Lisbon. That Agenda told us what to do. Let us do it.

Fourth, and here I tread carefully, get a macroeconomic framework for Europe that is disciplined but also flexible. It is not for me to comment on the Eurozone. I just say this: if we agreed real progress on economic reform, if we demonstrated real seriousness on structural change, then people would perceive reform of macro policy as sensible and rational, not a product of fiscal laxity but of commonsense. And we need such reform urgently if Europe is to grow.

After the economic and social challenges, then let us confront another set of linked issues - crime, security and immigration.

Crime is now crossing borders more easily than ever before. Organised crime costs the UK at least £20bn annually.

Migration has doubled in the past 20 years. Much of the migration is healthy and welcome. But it must he managed. Illegal immigration is an issue for all our nations, and a human tragedy for many thousands of people. It is estimated that 70 per cent of illegal immigrants have their passage facilitated by organised crime groups. Then there is the repugnant practice of human trafficking whereby organised gangs move people from one region to another with the intention of exploiting them when they arrive. Between 600,000 and 800,000 people are trafficked globally each year. Every year over 100,000 women are victims of trafficking in the European Union.

Again, a relevant JHA agenda would focus on these issues: implementing the EU action plan on counter-terrorism which has huge potential to improve law enforcement as well as addressing the radicalisation and recruitment of terrorists; cross-border intelligence and policing on organised crime; developing proposals to hit the people and drug traffickers hard, in opening up their bank accounts, harassing their activities, arresting their leading members and bring them to justice; getting returns agreements for failed asylum seekers and illegal immigrants from neighbouring countries and others; developing biometric technology to make Europe's borders secure.

Then there is the whole area of CFSP. We should be agreeing practical measures to enhance European defence capability, be prepared to take on more missions of peacekeeping and enforcement, develop the capability, with NATO or where NATO does not want to be engaged outside it, to be able to intervene quickly and effectively in support of conflict resolution. Look at the numbers in European armies today and our expenditure. Do they really answer the strategic needs of today?

Such a defence policy is a necessary part of an effective foreign policy. But even without it, we should be seeing how we can make Europe's influence count. When the European Union agreed recently a doubling of aid to Africa, it was an immediate boost not just for that troubled continent, but for European cooperation. We are world leaders in development and proud of it. We should be leading the way on promoting a new multi-lateral trade agreement which will increase trade for all, especially the poorest nations. We are leading the debate on climate change and developing pan-European policies to tackle it. Thanks to Xavier Solana, Europe has started to make its presence felt in the MEPP. But my point is very simple. A strong Europe would be an active player in foreign policy, a good partner of course to the US but also capable of demonstrating its own capacity to shape and move the world forward.

Such a Europe - its economy in the process of being modernised, its security enhanced by clear action within our borders and beyond - would be a confident Europe. It would be a Europe confident enough to see enlargement not as a threat, as if membership were a zero sum game in which old members lose as new members gain, but an extraordinary, historic opportunity to build a greater and more powerful union. Because be under no illusion: if we stop enlargement or shut out its natural consequences, it wouldn't, in the end, save one job, keep one firm in business, prevent one delocalisation. For a time it might but not for long. And in the meantime Europe will become more narrow, more introspective and those who garner support will be those no in the traditions of European idealism but in those of outdated nationalism and xenophobia. But I tell you in all frankness: it is a contradiction to be in favour of liberalising Europe's membership but against opening up its economy.

If we set out that clear direction; if we then combined it with the Commission - as this one under Jose Manuel Barroso's leadership is fully capable of doing - that is prepared to send back some of the unnecessary regulation, peel back some of the bureaucracy and become a champion of a global, outward-looking, competitive Europe, then it will not be hard to capture the imagination and support of the people of Europe.

In our Presidency, we will try to take forward the Budget deal; to resolve some of the hard dossiers, like the Services Directive and Working Time Directive; to carry out the Union's obligations to those like Turkey and Croatia that wait in hope of a future as part of Europe; and to conduct this debate about the future of Europe in an open, inclusive way, giving our own views strongly but fully respectful of the views of others.

Only one thing I ask: don't let us kid ourselves that this debate is unnecessary; that if only we assume 'business as usual', people will sooner or later relent and acquiesce in Europe s it is, not as they want it to be. In my time as Prime Minister, I have found that the hard part is not taking the decision, it is spotting when it has to be taken. It is understanding the difference between the challenges that have to be managed and those that have to be confronted and overcome. This is such a moment of decision for Europe.

The people of Europe are speaking to us. They are posing the questions. They are wanting our leadership. It is time we gave it to them.

 "How long would it take to move Mount Fuji?" As interview questions go, it beats:"How would your friends discribe you?" But this is just one of the mind-bending riddles asked of candidates hoping to land a job at Microsoft, Bill Gates' Seattle-based computer behemoth, which receives more than 12,000 applications a month. These weird tests are designed to flummox even the cleverest candidate. But now, Pulitzer Prize-nominated science writer WILLIAM POUNDSTONE has compiled a list of some of the most off-beat Microsoft questions - and the best answers - in a fascinating new book. So how would you fare?

Q: Why are manhole covers around?

A: A simple one to start off with. Flippant interviewees might answer: "Because the manholes themselves are round. " But the "best" answer is to state that "round covers" cannot fall in. A square cover can be angled so that it falls through the diagonal of its square hole. A round one cannot fall through its round hole at any angle. Also, it is easier to dig a round hole than any other shape. Maybe the first answer is not so flippant after all.

Q: Does the sun always rise the East?

A: The correct answer is "No." At the North Pole, there is no such thing as East. Every direction is south so the sun rises (and sets) in the South. Conversely, at the south Pole it rises and sets in the North. (Show-offs could also point out that on the planets Venus and Uranus, the Sun sets in the East and rises in the West - because they rotate in the opposite direction to Earth.)

Q: How would you design Bill Gates' bathroom?

A: There are two key points to make here. First, what Mr Gates wants, Mr Gates gets. Second, he cannot know exactlly what he wants, otherwise why hire you? You are supposed to say that you will discuss what he wants, adding in a few ideas of your own. You are supposed to appreciate the fact that this is a man who likes his gadgets: he famously owns a bathtub that can be filled, to the desired temperature, by a radio control device in his car. You will be expected to konw that. And while money is not a huge issue, you do not get to be a billionaire by throwing the stuff away. so no gold staps.

Q: You have eight billiard balls. One is "defective", meaning that it weighs more than the others. How do you find it, using a balance, in just two weightings?

A: A test of logical reasoning. For the first weighing, pick any three balls and balance them against any other three balls. If the weights are equal, your heavy ball is not in this six. THen simply weight the other two against each other and the result is there - the defective ball will be heavier. But if one of the pans - with three balls - is heavier, you now know that the heavy ball must be in that group. For the second weighting, pick any two of these balls and compare them. if one is heavier, it is your defective ball. if they are equal, it is the third ball. Simple!

Q: How do you weigh a jumbo jet without any scales?

A: Quite simple, but it requires linear thinking. Put the plane onto a large ship. Mark the water level on its hull. Then remove the plane. The ship will then rise in the water. Now lace known weithts, such as one-ton blocks, on the deck until the line you drew is again at the water surface. Add up the total weight you've placed on the ship - that's how much the jet weights.

Q: How many piano tuners are there in the world?

A: This question does not expect you to know anything much about piano tuners. But it does expect you to know some basic facts and to be able to handle some big numbers quickly to generate a ballpark figure. Start by estimating how many peoplehave pianos. There are roughly 6.5 billion people in the world and an average household has three people, so there are roughly 2 billion homes in the world. But most of them are too poor to have their own piano. Even in wealthier countries, perhaps fewer than 5 per cent of homes have their own piano. Then use a series of guesstimates - how often pianos need to be tuned, how long it takes and so on. The "correct" answer is about 40,000, but it is the way you "show your reasoning" that counts here. Any answer between 10,000 and 100,000 should do.

Q: Why are beer cans concave at the bottom?

A: A soothly curved surface is far stronger than a flat one of identical diameter, so it stops the carbonated beer's pressure from forcing the can out of shape. The bottom could, of course, be convex, but then the cans would not stack properly.

Q: How many times a day do the hands of a clock overlap?

A: The correct answer is 22 - unless you count the midnight at the end of the day and midnight at the beginning of the day as two overlaps, in which case it is 23. Either answer is correct. Nearly everyone, however, answers 24.

Q: Mike and bill have £21 between them. Mike has £20 more than Bill. How much does each have? You cannnot have an answer which involves pence, only whole pounds?

A: Most people instantly say: "Mike has £21, and Bill has £1. But that makes a total of £22 so it must be wrong. Perhaps Mike has £20.50, and Bill has 50P. BUt those aren't whole pounds. In fact, you can't answer the question as posed. The only answer is £20.50 and 50P. The test is to see if you can stand your ground and challenge your superiors if you find an error - as you will have to do in any large organisation."

Q: A bucket of water is placed on the scales. It weighs 50lb. A fish, preweighed at 5lb, is then put in the water. How much does the bucket plus fish weigh now?

A: The correct answer is 55lb. But then the interviewer insists that this cannot be so, because: "The water in the bucket is holding up the fish - the buoyancy means the weight of the bucket is sill 50lb." The test here is how the candidate deals with someone who is clearly wrong or stupid. The correct response is to stand your ground politely. If you calmly persuade the interviewer that he is wrong, you will be hired. Microsoft did not get where it is by employing yes-man.

Q: How long would it take to move Mount Fuji?

A: The answer is rather ovbvious: "Hundreds of thousands of years, probably millions, at the least." But that won't be enough to impress the king geeks at Microsoft. This is a test of your knowledge about the world and your ability to juggle large, ballpark figures. You need to know that the Japanese mountain is a symmetrical cone, the base of which is five times it height (about 12,000ft). Working out - in you head - that the volume of the mountain is thus ten trillion cubic feet, and gussing that a truck could carry between 10 and 100 cubic feet of rock at a time, you can estimate that you will need between one billion and ten billion truckloads to do the job. You can then guess at how many trucks you could commandeer in one day, how may could be built specially for the job and so on. You would then need to explain what you would do with the rubble. The trick is not to get it "right", but so show how you would go about solving the problem.

Q: You have a three-pint bucket and a five-pint bucket. And an infinite supply of water. How do you measure out exactly four pints without using a measuring jug? There are no measuring marks on the buckets.

A: Fill the biggest bucket. Use it to fill the smaller bucket to the brim. You now have exactly two pints left in the five-pint bucket. Now empty out the three-pint bucket and pour in the two pints from the bigger bucket. Now fill the five-pint bucket again. Carefully pour it into the three-pint bucket. You will now have drained off exactly one pint from the big bucket, leaving four. Bingo!

Q: You have a large bucket of Jelly Babies in three colours. How many do you have to take, blindfolded, to be sure of getting a matching pair?

A: Fingers on the buzzers: this is a quickfire question to end on. The correct answer, asn any aspiring geek should know, is four. Hesitate here and you are probably out of the door!

    今天打工没事儿溜达，顺手拿起餐厅里摆的那些漂亮的卡片看看，原本想都是些生日卡，纪念日卡之类精致的祝福而已，呵呵，仔细瞅瞅，还是有些不同的言语，感觉有趣之余，也不禁慨叹一种被叫做文化的差异。由此想开去，这几百个日夜的英伦生活中，充斥着的那种截然不同与东方古国的英国式做派，矛盾与分歧，亦或共识和偶遇都无处不在。例如男女关系上的开放状态和指环附着以后的彼此忠诚；例如私人领地的恪守（无论生理或心理）和公共聚会的盛行（也无论是纯“性”或非纯“性”），再比如温文尔雅的手杖绅士和狂暴残厉的足球流氓，还有那种似乎与生俱来的倨傲内敛的民族性格和乐天知命自我解嘲的黑色幽默。假如用报纸举例，如同Times，Telegraph，Daily Mail这样的主流声音的身旁，绝对少不了Sun，Star Life，Nuts这样的火辣性感女郎；用词汇比较，那一个个无处不在的Thank You，Please，Excuse Me背后的思想里，Bastard，Wanker，F***等等幽灵战士又时刻准备着。当一种语言的学习越来越成为工具使用的必须时，那种语言背后所承载的文化和传统就更为突显。常常想，对于千年风尘磨砺的华夏龙种而言，若非有海外生活的经历，或是忘我于异域语言的文字旅程中而不自拔的痴魔，即便是口音能够称为“London”，文章有“BBC”的风骨，也无可奈何于西装革履下黄土地的淳厚和孔孟之道的中庸。呵呵，不知道说了些什么，自己是绝没有什么内涵能讨论诸如文化大同和时空差异的论调的，只是想保存下偶然看到的卡片上一些有趣的文字而已，故作深沉的倒是显得虚伪了。

8 Birthday Reasons Why a Beer is Better Than a Woman

1.A beer doesn't expect you to make conversation

2.A beer won't get jealous if you fancy another one

3.You don't need to tell a beer you love it before you have it

4.A beer prefers you to be down the pub

5.A beer won't keep asking you if its bum looks big in its glass

6.You don't have to wait hours for a beer to get ready

7. You don't have to hug a beer afterwards

8. A beer is easier to pull 

8 Birthday Reasons Why Chocolate is Better Than a Man

1.Chocolate is sweeter

2.You don't have to wait for a couple of hours before you can have another piece

3.Chocolate is always rich

4.It's okey if your friend wants to nibble on it

5.Chocolate is probably more intellegent than a man

6.Chocolate does't embarrass you in front of your friends

7.Chocolate is chunkier

8.Chocolate always leaves you feeling satisfied