The London European Conference: Major confirms French rejection would kill off Maastricht: This is an edited version of the Prime Minister's speech at yesterday's conference, which marked the UK's presidency of the EC

TWO WEEKS from now we will know the result of the French referendum on Maastricht. It is a pivotal event and it is in the forefront of our minds today.

The Danish referendum has already narrowly said 'no' to the treaty. The combination of that and of a French 'non' would be decisive. Without the consent of all 12 member states the Maastricht treaty cannot proceed. It would be dead.

Even if, as I hope, the French vote 'yes', the Danish difficulties must still be overcome. And then, across Europe, national parliaments must approve the treaty. In the United Kingdom it may have a bruising passage since - uniquely in the Community - we in Britain will scrutinise the Bill line by line, clause by clause and vote on it in the same way. I believe myself that this is a more effective scrutiny than referenda where many votes may be cast on matters wholly unrelated to the treaty. The Maastricht treaty is a product of compromises by 12 nations. However, we should not let this particular strand of European development blind us to the other issues before us.

We have also to complete the single market by the end of the year; strengthen political co-operation, for example, over Yugoslavia; complete difficult negotiations over future financing; seek a successful GATT outcome; show that justice/home affairs co-operation is alive and well; strengthen links with eastern and central Europe; and prepare for enlargement - EFTA first, then eastern Europe. There is much work to be done for the Europe we wish to build.

What lies at the heart of the Community is one very simple idea. It is the notion that by binding together the nations of Europe in a common economic framework it would be possible to build an inextricable network of shared interests that would render war between former enemies impossible.

Few in any country will admit to wanting to dismantle the Community. Even its fiercest critics fight shy of that. But there are concerns about how it develops that European governments must address. Many European citizens fear for national self-identity. Will it be lost? Will their domestic interests be subordinated? Will they forever face frustrating restrictions?

You could sense that debate in Denmark. It is alive in France. It is an everyday currency in the German Lander. It flourishes in the UK: there are instincts rooted here deep in the blood: they are not to be swept away by rhetoric about growth or slogans about unity. The Community must show that these fears are phantoms. To do so it must recognise and build on national identity and national pride, not appear to ride roughshod over them. For the reality is that no nation's identity will ever be lost. Whatever happens in the Community the French will be no less French, the Germans no less German, the Danes no less Danish and the British no less British.

The problem is a political one. The politicians must carry their nations with them.

At the core of the Treaty of Rome lies the notion of democratic consent. Its opening words are these: 'Determined to lay the foundations of an ever closer union among the peoples of Europe.' Not ever closer union among governments or bureaucracies but among people. Not federation but conciliation and consent.

The Community operates in two ways. Within the treaty framework it builds up, measure-by-measure, the framework of its shared law. Each time it does that the member states exchange a small piece of national sovereignty for the greater benefits that come from collective action.

Some see that as an irretrievable loss. Others see it as an exchange.

In addition to that daily process of decision taking, the member states from time to time pause to reflect. They step outside the framework of normal decision making to decide whether to add to those treaties, whether to cement some new piece of Community initiative to the overall structure.

When that happens there must be safeguards. The first is the unanimous consent of all the member governments. The second is ratification by all the member states. So the treaty under which we are operating explicitly says that the institutions of the Community cannot ride roughshod over member governments: the governments must all agree before they propose important changes. And then the individual nations, through their democratic procedures, must have the final say. And that is why if Denmark and France, or any other member states, says 'no', then all must think again. There can be no question of leaving one member behind. Britain would not be party to such an agreement.

This conflict between sovereignty and national interest is not new. It has been evident in the UK since the Community was founded. But it has not until recently been echoed to the same extent in any other member state. It explains why, before I went to Maastricht, I had to have the support, in a vote, of the House of Commons. It explains why, as soon as I returned, I had to get another vote to endorse what I had agreed. What was controversial in Britain seemed commonplace elsewhere. The idea of economic and monetary union was hotly debated here. It was scarcely debated elsewhere.

I had made my views clear some considerable time before Maastricht. I said in the House of Commons in 1989 that the Commission's prescription for economic and monetary union skated over vital issues of political accountability. I said then - and still believe - that changes in economic and monetary arrangements must reflect real changes in economic behaviour in the marketplace and must work with the grain of the market and not against it. This is of course what the ERM does, and will continue successfully to do, whatever happens to the Maastricht treaty. Economic and monetary union was not the only controversial issue at Maastricht. For many countries in the Community the idea of a common defence lies at the heart of political union. There is a tension between those member states who believe that we must make progress towards a common defence between the countries of the European Community and those, like Britain, who believe that we have a common defence of Europe and that that common defence is called Nato. Maastricht does not resolve the argument for all time. It does, however, preserve the benefits of what we already have. It maintains the primacy of Nato while building up the European role within Nato.

At Maastricht there were other significant developments. The Maastricht treaty enshrines two very important ideas. The first is that the Community should only do those things which cannot be better done at the level of member states. That implies scrapping some existing, overbearing legislation, as well as avoiding new, unnecessary regulation. This process, which makes subsidiarity a living concept is vitally important to member states throughout the Community.

The second is that we can act together in unison without necessarily acting within the framework of Community law. This is a revolutionary change. In foreign policy and in matters of interior affairs and justice we shall work together as 12 within a treaty framework, but that framework will be distinct from the Treaty of Rome, outside Community law, outside the sole initiative of the European Commission, outside the jurisdiction of the European Court of Justice.

The lesson of Maastricht is that we do need to work together, but we do not on every issue need Community law to make us work together. We do so of our own free will and in a variety of different ways.

The Maastricht treaty enshrines that principle. It is, I believe, a turning point. In other words the very centralising tendency that many are so worried about was addressed and corrected at Maastricht. Maastricht is not the complete answer, but it is the first important step in a new direction. So what would be the position if the Maastricht treaty was not ratified by all the member states and could not be implemented? Would all those gains be lost?

The fact is that you could not set aside the results of a hard-fought negotiation and expect to keep all the gains. I believe that what we won at Maastricht is worth preserving. The easiest way to preserve it is through ratification of the Maastricht treaty. If the Maastricht treaty is not ratified, the arguments within the Community will not go away. They will have to be gone through again.

If Maastricht did not enter into force the alternative would not be the status quo ante. The real issues which affect the Community: our economic development, enlargement, our response to international events and crisis, all require a response. To be effective that needs to be a response agreed among all of the member states. Maastricht gives us the means of doing just that.

(Photograph omitted)