People are increasingly frustrated that decisions taken further and further away from them mean their living standards are slashed through enforced austerity or their taxes are used to bail out governments on the other side of the continent.

People feel that the EU is heading in a direction that they never signed up to. They resent the interference in our national life by what they see as unnecessary rules and regulation. And they wonder what the point of it all is. Put simply, many ask 'why can't we just have what we voted to join - a common market?'

Taken as a whole, Europe's share of world output is projected to fall by almost a third in the next two decades. This is the competitiveness challenge - and much of our weakness in meeting it is self-inflicted. Complex rules restricting our labour markets are not some naturally occurring phenomenon.

The biggest danger to the European Union comes not from those who advocate change, but from those who denounce new thinking as heresy. In its long history Europe has experience of heretics who turned out to have a point.

The EU must be able to act with the speed and flexibility of a network, not the cumbersome rigidity of a bloc. We must not be weighed down by an insistence on a one size fits all approach which implies that all countries want the same level of integration. The fact is that they don't and we shouldn't assert that they do.

There is a growing frustration that the EU is seen as something that is done to people rather than acting on their behalf. And this is being intensified by the very solutions required to resolve the economic problems.

We believe in a flexible union of free member states who share treaties and institutions and pursue together the ideal of co-operation, to represent and promote the values of European civilisation in the world, advance our shared interests by using our collective power to open markets, and to build a strong economic base across the whole of Europe.

We cannot go on as we are with 2.6 million people on incapacity benefit, 500,000 of them are under 35. Are we really saying there are half a million people in this country under 35 who are simply too ill to work? I don't think that's right.

We have the character of an island nation: independent, forthright, passionate in defence of our sovereignty. We can no more change this British sensibility than we can drain the English Channel. And because of this sensibility, we come to the European Union with a frame of mind that is more practical than emotional.

We will say to people that if you can work, and if you want to work, we will do everything we can to help you. We will give you the training, we will give you the support, we will give you the advice to get you going and get you back at work.

You will feel the full force of the law and if you are old enough to commit these crimes you are old enough to face the punishments. And to these people I would say this: you are not only wrecking the lives of others, you are potentially wrecking your own life too.

2012 has been an extraordinary year for our country. We cheered our Queen to the rafters with the Jubilee, showed the world what we're made of by staging the most spectacular Olympic and Paralympic Games ever and - let's not forget - punched way above our weight in the medals table.

After the Berlin Wall came down I visited that city and I will never forget it. The abandoned checkpoints. The sense of excitement about the future. The knowledge that a great continent was coming together. Healing those wounds of our history is the central story of the European Union.

Britain is not in the single currency, and we're not going to be. But we all need the eurozone to have the right governance and structures to secure a successful currency for the long term.

Cap the well, yes. Clear up the mess, yes. Make compensation - yes, absolutely. But would it be right to have legislation that independently targets BP rather than other companies? I don't think that - would be right.

Christmas gives us the opportunity to pause and reflect on the important things around us - a time when we can look back on the year that has passed and prepare for the year ahead.

For me, and I suspect for lots of other people too, bad things actually sometimes make you think more about faith and the fact that you're not facing these things on your own.

From Caesar's legions to the Napoleonic wars. From the Reformation, the Enlightenment and the industrial revolution to the defeat of nazism. We have helped to write European history, and Europe has helped write ours.

I believe something very deeply. That Britain's national interest is best served in a flexible, adaptable and open European Union and that such a European Union is best with Britain in it.

I think it true that, you know, sometimes things start to change even before a government changes and, actually, I think you can begin to see even the Labour machine beginning to understand that it has become over-reliant on targets and processes, that local governments have been over-bossed and bullied.