New actors have entered the terrorist arena, with the drugs trade, organised mafias and fanatical religious sects now augmented by the rise of rogue, failed and failing states. An increasing capacity to strike across national boundaries, and a calculated exploitation of improved communications and globalisation in a 'borderless world', mean that terrorism has become a transnational activity alert to media opportunities. A new willingness of terrorists to use suicide bombing as a method of mass murder has developed, with advanced weapons and techniques becoming available - including weapons of mass destruction and cyber-crime.

In the WG's view, the EU and member states need to be much more active in fighting terrorism at its roots. No funding or support should be given to any groups that support terror or incite to racial hatred. Schools that are intended to serve only one cultural or ethnic section of society should not be encouraged. Effective laws against incitement should be put in place, alongside more secure EU external borders, a common visa requirement, and the creation of a rapid anti-terrorist reaction force. The EU should develop an intelligence and security agency capable of combating the terror threat, whilst enhancing Europol's ability to share data and intelligence.

During the 2005 Summer University in Lisbon, the working group noted that internal and external security concerns are intimately connected. The EU should help Muslim states move towards democracy and contribute to wider proposals for resolving conflicts in the Middle East. Within the EU, some Muslim communities increasingly see themselves as separate from the wider community. This trend must be reversed and integration promoted. Likewise, the West needs a more coherent strategy to assist economic development in areas such as North Africa. Poverty can fuel jihadism, even if many terrorist leaders are drawn from elites.

In April 2006, the working group met in London. It highlighted the need to strike a balance between the US 'war on terror' and the European 'criminal justice' models. NATO needed to put counter-terrorism at its core and to develop a stronger homeland security dimension alongside a wider, global remit. At a further meeting in Brussels in June 2006, the WG focussed on efforts to reinforce the EU 'criminal justice' pillar and identified the need for greater cooperation between judicial systems. Different national and international branches of the intelligence services need to be less competitive and more collaborative, whilst upholding the rule of law at all times. The ultimate purpose should be the creation of a culture of security in Europe.

The Policy Roundtable in Lyon concluded that, whilst terrorism and internal security might be a theme which Europe's citizens often prefer to ignore or forget, it exists in our midst and is a painful reality, as recent events had reminded us once again. Its view was that we must not let a fear of Islamist fundamentalism corrode our values to prevent us from saying what we believe is right, whether we are talking about the reflections on Islam of the Holy Father, or Danish cartoons. The right to express views freely, in accordance with the law, is a core democratic right.

The centre-right political family should be at the forefront of those alerting the public to the dangers they face, and providing practical answers to the problems. Why? Because we have always believed in the delivery of security through sensible and effective measures, under the rule of law. We do not want the EU to be a 'security state', but a space in which democracy is secure. Its political role in the war against terror can and will be enhanced by producing policies at a European level which in line with a philosophy of a 'Europe of results'.

The first challenge is to provide a diagnosis and definition of the problem. Our democratic status gives us the right to confront terrorism and to define it for what it is. The current terror threat is different from previous ones, because the aims of today’s terrorists are global and not simply about issues of regional or national self-determination. They themselves say they want the destruction of the west and its democratic values. Some claim terrorism has limited ambitions or is caused by western foreign policy in the wider Middle East. The Policy Roundtable took that view that this is not supported by the evidence and that our foreign policy is a response to terrorism and its attacks on us, not the reverse. The terrorists' tactics may be hard predict, but their goals are clear. As to the terminology to use, the Policy Roundtable believed they are correctly called 'radical Islamists'. Their plans are totalitarian – if you do not submit to them, they will try to destroy you. But they are not fascist, and they are certainly not true followers of Islam, which believes in peace.

The second challenge is to state our values. The centre-right believes in dialogue and the need to work together realistically with the often silent majority of Muslims who want nothing to do with terror in order to explain the possibilities of liberal democracy. However, the Policy Roundtable in Lyon considered our cultural history and Christian heritage as 'non-negotiable'. Radical Islamists may attempt to single out specific aspects of western foreign policy as their target, but there are no changes in foreign policy acceptable to us which would ever satisfy them. If we change policies, it must be because the policies are wrong, not because of terrorist actions or threats. Appeasement is not a cure for extremism, but an encouragement to it.

The Policy Roundtable proposed that the EU ensure that information be exchanged more quickly and efficiently. An institutional system must be established to promote this. There needs to be a European internal security policy with a political plan to deliver it. Institutionally, a special 'terrorism summit', attended by all the interior and justice ministers of the member states, would be held regularly. There should meetings at least once a year between such ministers, the Commissioner for justice and home affairs, and the directors of Europol, Eurojust, Sitcen (which coordinates intelligence and security matters on a European level) and Frontex (the external border agency). There should also be a stronger link to NATO, not least because the distinction between external and internal security threats no longer applies as it once did. The European Parliament should assert the right to engage in more comprehensive parliamentary oversight over the emerging EU security and intelligence agencies.

The Policy Roundtable encouraged the EU and member states to invest in new technologies to deliver security. Electronic and other profiling could address the unacceptable barriers to speedy travel, which are a growing problem. Technology together with effective intelligence-led policing and cooperation can also provide effective Border controls: they are vital for there is a connection between illegal immigration, organised crime and terrorism.

The Policy Roundtable believed there must be cooperation with those Muslims – the silent majority – who accept western values. They need encouragement and, if they can in any realistic way help us prevent extremist and terrorist ideas from taking hold on young minds. Research should be funded so that policy measures can be targeted against the actual sources of Islamist terrorism. We should promote strong professional relationships between the intelligence and security agencies of EU states and between them and their sources.