1. THE CONTEXT

The European Union (EU) is on the cusp of the most momentous changes in its history. On the one hand it has embarked on a process of enlargement which is without precedent in scale and character, a process of widening which could see the Union increase from 15 to 28 members. On the other hand the advent of economic and monetary union (EMU) signals a process of deepening which is equally challenging, albeit in different ways. Time alone will tell what will happen when these processes have to co-exist within the EU. It may be that these twin processes will trigger new sub-groupings within an enlarged EU, as envisaged by proponents of 'flexibility' and 'enhanced cooperation', and as happens already in the EU today with EMU and Schengen for example. Euro-enthusiasts are keen to push ahead along these lines so as to maintain the momentum of integration. The more cautious Europeans fear that sub-groupings could lead to a two-speed Europe and that too much integration could endanger the integrity of the nation-state. For the most part the debate about political power and institutional architecture in an enlarged Union has been confined to a dialogue between member states and the EU, a two-dimensional debate which is legally proper but politically inadequate. One of the major shortcomings of this debate to date is that it has signally failed to recognise that the EU is fast becoming a multi-level polity in which sub-national levels of governance are beginning to assume more significance in the lives of their citizens as they attain more responsibility for the design and delivery of a growing array of service functions. Addressing itself to the theme of 'A Europe of the Regions?' the 617th Wilton Park conference examined the role which regions and other sub-national institutions might play in an enlarged EU. One of its central conclusions was that the principle of subsidiarity - the principle which stipulates that decisions should be taken at the level of authority that can act the most effectively - needed more clarity and status.  (1)As the EU geared up for its inter-governmental conference at Nice (when the Union was scheduled to agree major institutional reforms, including qualified majority voting, re-weighting of votes in the Council of Ministers and streamlining the Commission), one could be forgiven for thinking that the 'means' had perversely become the 'ends' in the minds of the principal negotiators. In other words it often seems that enlargement and EMU (the means) threaten to crowd out the ends of the EU. The latter must surely include things like sustainable development, social and spatial cohesion and democracy in the Union. Each of these three goals is vital to the future viability of the EU:

• Sustainable development poses the challenge of how to develop models of innovation and economic development which are less wasteful of human and environmental resources, as recommended in the Delors White Paper (EC:1993).
  
  
• Social and spatial cohesion highlights the need for social justice and territorial equity, forms of solidarity which can very easily be undermined by a parochial pursuit of devolution and regionalism (Morgan: 2001)
  
  
• European democracy needs to be enhanced as a matter of urgency, otherwise the democratic deficit will continue to drive a wedge between the politicians and the people, and many of the latter feel alienated from the European 'project' because they have little or no opportunity to debate issues like EMU and enlargement (Siedentop: 2000).

One of the themes of the Wilton Park conference, and therefore of this report, is that devolution and subsidiarity could help to bring the EU closer to its citizens, thereby rendering it more relevant and meaningful to their everyday lives rather than it being seen as remote and bureaucratic, as is the case today. The negative Danish referendum vote on the single currency could be a warning sign for the political elites: it was not so much a vote against Europe as such, more a vote against a remote and bureaucratic Union which seemed to threaten Denmark's distinctive welfare state.In an introductory overview, John Palmer (2) of the European Policy Centre set the scene by asking whether the European Union is tending towards "ever closer union" or "ever greater diversity". His answer is "both" - with centrifugal and centripetal forces at work. There is great uncertainty about how far member states will be prepared to go in pooling sovereignty. The impact of the cohesion report cannot be predicted. The mid-term review process in three or four years time will be another opportunity for taking stock. Between 2007-2012 the interplay between the process of enlarging the union and re-assessing structural and regional policies will undoubtedly expose conflicting interests. Devolved administration in many of the member states is likely to find a reflection in a more complex interplay of institutions at European level.

(1) The conference was organized in cooperation with The European Policy Centre in Brussels (which can be accessed at: http://www.theepc.be ) and the Economic and Social Research Council, which recently launched a major research programme on Devolution and Constitutional Change, programme coordinator Professor Charlie Jeffery, Birmingham University c.a.jeffery@bham.ac.uk ). Wilton Park's website is located at: http://www.wiltonpark.org.uk (2) Since the Wilton Park Conference took place, the Nice intergovernmental conference has been held. Official texts including the provisional text of the new Treaty are available at: http://europa.eu.int/igc2000  
In addition, the Second report on economic and social cohesion has been issued - Unity, Solidarity, Diversity for Europe, its People and its Territory, 31.1.2001 - available at: http://www.inforegio.cec.eu.int/wbdoc/docoffic/official/report2/contentpdf_en.htm
See also J. Palmer, "The European Union After Nice - One Step Forward, Two Steps Back?, EPC Communications 11.12.2000 - available on the EPC website - http://www.theepc.be .