Inside Britain's draft proclamation: 'Uniting the people of Europe, while preserving their cultural diversity'

The document's preamble sets out what the EU's aims should be:

1. The process of European integration has brought together within the European Communities and the European Union ever more of the States of a Continent once divided by war, ideology and political oppression. Peaceful co-operation has replaced age-old rivalries.

2. Those achievements must be consolidated and taken forward, to ensure for all the peoples of the European Union:

• Continuing peace;
• Respect for the basic principles of democratic governance, human rights and fundamental freedoms, and the rule of law;
• Social progress and sustainable prosperity;
• High levels of internal and external security; and
• In the international sphere, the ability more effectively to pursue common interests, while advancing the general well-being of humankind.

3. To those ends, the Member States are resolved to set the relations between their peoples on a new foundation laid down by the Constitutional Treaty of the European Union.

4. As constituted under the Treaty, the European Union has these defining features:

• The Member States have chosen, in some measure, to exercise their sovereignties in common, through the institutions of the Union;
• In so combining their sovereignties, for defined purposes and within defined limits, the Member States retain their national identities;
• The Union has only those powers which have been conferred on it by the Member States. All powers which the Member States enjoy by virtue of their sovereignty, and which they have not conferred on the Union, remain theirs exclusively; and,
• Decisions are to be taken as openly as possible and as closely as possible to the citizen. The powers conferred on the Union are to be exercised in ways that encroach as little as possible on the powers of the Member States.

5. The European Union is thus a constitutional order of a new kind, uniting the peoples of the Member States, while preserving the diversity of political institutions and of cultural and linguistic traditions that enriches European civilisation."

THE PROPOSALS: WHAT THE DRAFT CONSTITUTION RECOMMENDS

The draft constitution says the EU should have legal power to act alone in:

Common commercial policy: At present, the European Commission acts on behalf of the 15 countries, in the front line of trade disputes, and negotiates for the EU in global trade talks.

Fisheries conservation: Although EU governments carve up annual quotas for fish catches, the European Commission has powers to close waters temporarily if stocks are collapsing. With fishing waters depleted and the industry in the doldrums, the powers may be increasingly controversial.

Monetary policy: This power is controlled for members of the euro by the European Central Bank in Frankfurt. Should Britain join, it would hand over control of monetary policy but gain a seat at the ECB.

The draft recommends that the EU should only support, encourage, co-ordinate or set guidelines in:

Economic Policy: At the moment, the EU leaders voluntarily agree Broad Economic Policy guidelines each year, but these are not binding. Those in the euro are subject to much stricter rules over their budgets. The EU cannot act on taxation without unanimous agreement, and that would remain the case under the British-backed plans.

Employment: The status quo, where guidelines are set and best practice exchanged but without any enforceable targets, would remain.

Education: As things stand the EU has very limited powers, although it does organise schemes promoting languages and encouraging study throughout the EU.

Health education/ consumer protection: At present, the European Commission promotes policies such as the reduction of smoking, but needs the approval of governments and the European Parliament to act.

Industry: Brussels has limited power to promote industry – unlike its big role as a regulator of fair competition.

Research and development: The European Commission has charge of a big research budget funding scientific research in the EU member states.

European transport links: Brussels currently promotes a policy designed to foster closer road and rail ties to promote economic integration.

Areas where the EU and nations should work together under different sets of rules:

Foreign policy: The most important foreign policy decisions remain the preserve of member states and there is little prospect of this changing. But the EU tries to agree a common policy on key issues and the European Commission also plays a key role as a donor from the Balkans to Africa.

Justice and home affairs: This used to be the preserve of national capitals, but the EU is gaining steadily more power. Even the UK now supports majority voting on asylum and immigration policy.

Agriculture: The paper recommends reforming the present system, which gives Brussels a huge influence through the subsidies, which it alone is allowed to pay to EU farmers. National governments retain powers to regulate many areas of farming, but the CAP remains the strongest of the common policies the EU can implement.

Environment: The European Commission has a growing influence here by initiating new laws and by shaming countries which breach guidelines, although it can only propose legislation with the support of national capitals and MEPs.

Single market: Brussels is a big player in ensuring that there is a level playing field in the EU's internal market. It needs the backing of governments to make new laws but enforces the single market by taking to court nations that break legislation by, for example, restricting free movement of goods.