Mandelson: Federal Europe Is Inevitable

Former senior Labour Minister Lord Mandelson believes a more federal European Union is inevitable, and he is urging David Cameron not to hold a referendum on Europe as a "panicky" response to a rise in support for Ukip.

In a speech in Oxford, Lord Mandelson will say: "To survive, the eurozone needs to operate more as a single political entity."

"I think this is the inevitable course for the eurozone to take and that it will probably work economically.

"My question, though, is this: whether it is sustainable politically, especially in a period of profound austerity, and whether the European public will understand why it is right to sign up to such an advance in federalism and will be willing to do so."

For Britain, Lord Mandelson believes there is now a stark choice; between being part of a European 'core', inside the eurozone, or an 'outer ring' of states left on the outside and with limited influence.

"In the years to come, Britain will be faced with a recurring choice of roads to follow," he will say.

"The one of joining with the core and the other of permanent second tier status. Life in a sort of European annex.

"It is certainly not inconceivable - indeed I think it is likely - that Britain will find itself a decade from now the only state in the EU, certainly the only large state, outside the eurozone.

"Effectively the EU will have been rebooted, with the UK on the outside. We must not delude ourselves about this,"

Lord Mandelson will say he believes "for Britain, the facts of globalised life are European" and that the UK will only assert its interests by being "part of a political and economic European Union".

Even more controversially, he believes a referendum is inevitable, but must not be held just because the anti-EU views of Ukip, and many within the Conservative party, are gaining ground.

"I believe a fresh referendum on this will be necessary because the political parties cannot reconcile their own differences and come to a final conclusion on their own, and nor should they," he said.

"While the Conservative Party is the home of visceral hostility towards Europe, to an extent, negative feelings about Europe are now more present in all the parties.

"This referendum should not be held as a panicky electoral response to the rise of Ukip, as I fear might be David Cameron's inclination."

Responding to that, Ukip leader Nigel Farage told Sky News: "The reason for holding a referendum is not to pacify dissent within our political parties but to give a voice to the British people.

"Once again, Lord Mandelson is looking at everything through the prism of what is good for politicians rather than what is good for the country."

But Lord Mandelson believes it is time for pro-Europeans to take the initiative.

"We need a serious debate on this and it seems to me that the burden is now on the pro-Europeans to make the case," he said.

"I do not believe that pro-European Labour and Liberal Democrats can leave it to the Conservative ultra-sceptics to make all the running over Europe.

"The Tory allergy to public debate on Europe for a decade has to some degree let Labour and the Lib Dems off the hook."