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Martin Callanan is Leader of the Conservative MEPs. CALLANAN MARTIN

This really isn’t a good time to be a federalist in the European Union.

Ask a typical Euro-enthusiast what the main achievements of the EU are, they will tell you: the single market, the Euro, and the border-free Schengen zone.  The first of these – the single market – is undergoing a rebirth at the moment, with strong political will from national leaders (led by David Cameron) and the European Commission. However, the other two are in turmoil.

This column is primarily intended to give you an update on events in the European Parliament. However, what strikes me nowadays is the complete lack of serious debate or even corridor chat about the immediate Euro crisis. There seems to be an inevitability of further bailouts, forcing countries that have already received significant loans to bailout others.  Finance Ministers meeting in Brussels this week are discussing the details of the Portuguese bailout, and it looks like the UK is going to make a further contribution through the EFSM – something that I have argued against here.

Schengen also lies in tatters. Elections are coming up in Denmark and France where parties with tough immigration platforms are strong. The influx of migrants from North Africa, has destroyed national leaders’ confidence in each other.  In Brussels,  the most overused word that  is ‘solidarity’ and federalists have accused France of lacking it. For a federalist, to tell somebody that they aren’t engaging in a spirit of solidarity is possibly the second biggest insult they could muster; second only to the accusation of populism.

So what future is there for Schengen? The reality is that the commission is calling for reform of the acquis but it seems unable to articulate what kind of reform. If it gives too much ground to the national governments then it will inevitably be blocked by the European Parliament which has co-decision over such matters. But if it wholeheartedly defends the current porous borders arrangement then it sets itself on collision course with national governments and risks public outcries that could see far more ‘populist’ governments elected in major EU member states.

All this shows how right we were to stay out of the Schengen zone. But we still must remain vigilant, particularly to ensure we don’t see the return of large numbers of migrants congregating in Calais intent on reaching the UK using increasingly desperate means.

Despite the EU’s woes, federalists are not as downtrodden as you would think. This month we saw the initial proposal from the European Commission for the EU’s 2012 budget. The commission has asked for a whopping 4.9% increase on top of the 2.9% they got last year. This is totally unacceptable and we will work with our ECR partners and the UK government to bring it down.

The arguments used by the commission are that the EU must still pay its bills and it has commitments to fulfil. It also argues that more money can be spent at EU level for growth-related initiatives such as R&D. I don’t argue that it has bills to pay and I do think it should spend more on very specific areas where it can add value. However, all this can easily be done within the existing budget by finding savings elsewhere. Open Europe has a good list of some of the areas where the commission could start. I appeared on a BBC panel debate with the EU budget commissioner’s spokesman. The video is available here. I particularly like the part where he says that without EU spending, France and Germany wouldn’t be able to link up their roads, and Tesco would not have opened stores in central Europe!

In the parliament last week we voted on the ‘discharge’ of the 2009 EU budget. This ends the process of ‘signing off’ the accounts following the Court of Auditors’ annual report. As the court had once again failed to give an unqualified statement of assurance, Conservative MEPs and our ECR allies voted against granting discharge. This year, for the first time, we also saw three member states – led by the UK – abstaining on the discharge vote in council.

We also voted on plans that were put forward by David Cameron last year to waive some of the EU's tariffs on textile goods coming from Pakistan, in an effort to help them rebuild their industry following the devastating floods last autumn. Considering that this was a tool aimed at helping people following a natural disaster, I was astonished that the socialist group in the parliament tabled an amendment to reject them. Their true colours once again shone through: they don't care about helping people, they care about their socialist dogma. Disgraceful.

We also voted on a non-legislative resolution on giving the EU a permanent seat at the UN Security Council. Unsurprisingly, the vote went through with a large majority but of course, we voted against. Liberal Democrats voted for it.

The parliament also had a debate with Baroness Ashton to take stock on the six month anniversary since the creation of the External Action Service. Ashton has come under a great deal of criticism recently. Federalists are exasperated that they aren't getting the EU foreign minister and distinct EU foreign policy that they wanted. We are frustrated because we see so much money being piled into the External Action Service and to Ashton's operation (including a 10 million Euro tender for PR services), yet we don't see what value her operation is adding. However, despite the whisperings, the European Parliament chamber is rarely a scene of great excitement and the debate with Baroness Ashton passed with little criticism.

The ECR – on the initiative of Roger Helmer – was also able to secure a statement from the commission on EU employment agencies. Roger wanted to ask the commission why the EU has four agencies – all with budgets of between 15 and 20 million Euros – which duplicate a great deal of each other's efforts. In the debate following the commissioner's somewhat anodyne statement there was strong support from the Liberal and EPP groups for a rationalisation of these agencies so that money can be saved. As Roger said, we need better spending, not more spending.

Finally, I want to draw your attention to some work we have been carrying out to halt European Commission plans to create a system of EU contract law. Essentially, the commission want to give consumers the right to opt for EU law for their contracts, rather than their domestic law. Liberal Democrat MEP Diana Wallis has already put forward some plans that were adopted by our legal affairs committee for a so-called 'optional instrument', which would allow people or businesses to either choose EU law or respective national law when agreeing a contract, including when purchasing items online. My colleagues Saj Karim, Malcolm Harbour and Ashley Fox hosted a hearing on the subject with commission vice-president Viviane Reding. She argued that the lack of consistency over contract law is hampering the single market. I don't agree. Talking to businesses in the North East, the number one obstacle to cross-border trading is language differences. I fear that this whole new layer of law would just add significant burdens onto small businesses and it could actually reduce protections for consumers as the stronger party in a contract will choose whichever legal regime is favorable to them. The plans still have a long way to go but we will continue to oppose them. ENDS

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