With your permission, I would like to take a little of the time of the House to give a brief outline to Members of what transpired over the last two days at the meeting of Heads of Government of the Nine countries of the European Economic Communities. The Foreign Ministers of these countries and the President of the Commission, with his colleague the Commissioner for Economic and Financial Affairs, also attended the meeting.
This was the first meeting of Heads of Government under the new arrangements agreed in Paris last December. A characteristic of these arrangements is that there should be no formal communiqué after the meetings. Nevertheless, a number of issues before the meeting were of such importance and such complexity that it was found necessary to incorporate the decisions in formal declarations or statements. I have made copies of these statements available to the Leader of the Opposition. They have also been laid before both Houses and are available in the Library. I should say at present only stencilled copies are available but they will be printed at a later stage and put in the Library as usual.
A matter of great importance discussed at the meeting was the criteria by which the situation of a country could be examined to see if its membership of the Community was leading to unacceptable conditions, and how this situation might be corrected. This is a major issue of concern to the United Kingdom at present. There is, as Deputies will be aware, a document on the subject, produced by the Commission of the Community entitled "The Unacceptable Situation and the Correcting Mechanism". The meeting concluded that the correcting mechanism as outlined in that paper should be applied, with the following modifications:
1. The criteria concerning the balance of payments deficit and the two-thirds ceiling are dropped.
2. The following provisions will be incorporated into the agreed mechanism:
(a) The amount of the correcting mechanism shall be up to a ceiling of 250 million units of account. However, as soon as the amount of the Community budget exceeds 8,000 million budget exceeds 8,000 million units of account, the ceiling shall be fixed at an amount representing 3 per cent of total budget expenditure.
(b) When a moving average drawn up over three years indicates that the balance of payments on current account of the country in question is in surplus, the correction shall only affect any difference between the amount of its VAT payments and the figure which would result from its relative share in the Community GNP.
Because of the number of variables involved—like the rate of growth of the country concerned and of the Community as a whole, the state of its balance of payments and the composition of its trade over a period of years —it is quite impossible to indicate with any useful degree of accuracy how this new arrangement will affect Ireland. I can say, however, that whether we are beneficiaries or contributors under the arrangements, the amounts involved will be insignificant in comparison even with the monetary benefits alone, of our membership of the Community.
The question of British membership of the Communities is also affected by the decision arrived at by the Heads of Government on the review of the importation of quantities of New Zealand dairy products to the Community, in accordance with Protocol 18 of the Accession Treaty.
The protocol permits the importation, free of levy, of certain specified quantities of these products in the years up to and including 1977. Under the terms of the protocol, the arrangements are to be reviewed before the end of 1975. The meeting decided on certain guidelines to be given to the institutions of the Community in carrying out this review. The Commission's proposals on the subject are to be ready as soon as practicable and are to include special import arrangements as provided for in Article 5 of the protocol, after 1977. The proposals will provide for price reviews having regard to certain defined criteria. I cannot, of course, anticipate the outcome of the review by the institutions of the Community under the arrangements we agreed yesterday, but I do not think that it will give rise to any great difficulties so far as this country is concerned. The matter is dealt with in more detail in the declarations which I have had made available in the Library.
The subject of Energy and the price of Energy occupied the attention of the meeting for a considerable time. There was, in particular, a great deal of concern expressed at the inadequacy of the Community preparations and policy in this area—which is vital to its security and stability. The meeting agreed that under the authority of the Council (Foreign Affairs) a special high level ad hoc Committee composed of representatives of the member states and of the Commission should be established so as to co-ordinate the approach to this problem in the interests both of consumers and producers, and of economic stability in the entire world. The first meeting of this committee is arranged for 19th March. The Heads of Government have incorporated their views on this also in a declaration of which copies will be available in the Library.
We also discussed the world economic situation with particular reference to the problems of unemployment and inflation following the steep increase in oil and other raw material prices, and to the influence which the major economies of the world exert on each other and on the economies of other countries. There was general agreement that this issue and the views of the Heads of Government on it, should be referred to the meeting of Council of Ministers of the Community (Finance) to be held on 18th March.
On raw materials, there was an extremely useful discussion. Security and continuity of supply is a matter of vital and growing importance to the countries of western Europe. It was decided that the matter, which was coming before the Heads of Government for the first time, should be referred to the Council of Foreign Ministers on the basis of the proposals put before the Council by the Commission.
We also had a useful discussion on the Conference and Security and Co-operation in Europe which is currently taking place in Geneva. We have agreed on a statement on this subject which is also available in the Library.
On Cyprus, the Heads of Government and Foreign Ministers, recalling the statement issued by the Foreign Ministers following their meeting in Dublin on 13th February expressed the hope that in the context of the discussions currently being held at the United Nations in New York, there will be an early resumption of negotiations on the question of Cyprus. The Nine will, of course, continue to keep in close touch with developments as regards the situation there.
I was glad to have had the opportunity to preside over this Heads of Government meeting which, in addition to dealing successfully with other items, brought to a conclusion the prolonged discussion of the issues raised by the question of British membership.
