With the permission of the Ceann Comhairle, I should like to make a statement to the House about the meeting in Luxembourg last Thursday and Friday of the European Council of the heads of state or Government of the member states of the European Communities, accompanied by their Foreign Ministers.
The main items discussed by the Council were the economic, monetary and social situation in the Community, direct elections to the European Parliament, the report by Mr. Tindemans on European Union, and a number of other items particularly matters concerned with the foreign relations of the Community.
Much of the discussion on the economic, monetary and social situation was concerned with the stability of currencies. As Deputies will be aware, there have been sharp fluctuations recently in the value of the £ sterling, the French franc, the Deutschmark and the Italian lira. These fluctuations may seem remote from our ordinary everyday concerns but let me emphasise that a continuation of the instability of recent years could have the most serious consequences for international trade. Since imports and exports are equivalent to more than 90 per cent of our gross national product any sizeable interference with such trade could affect our economy.
There was a general recognition at the Council—and this was a new and from our point of view, very welcome feature—that it is unrealistic to see exchange rate fluctuations as a substitute for measures to reduce disparities between the levels of development of the economies of the member states. We did not get as far as discussing in any detail such questions as the policies or the amounts of the transfer of resources from the richer to the poorer countries necessary to reduce these disparities. However, it emerged quite clearly that there was little enthusiasm among the most developed member states for large Community assistance to their weaker partners in the present economic climate.
The dual themes of Community solidarity and economic discipline or responsibility also came through in proposals discussed at the meeting. These involve the concept of sanctions where member states fail to carry out Community guidelines for their economic activity and policy. I should emphasise that under these proposals, the Community guidelines would be agreed by member states in advance. An interesting feature which this country would certainly welcome is that the guidelines would be set in an agreed medium-term framework. Our attitude to the proposition about sanctions is necessarily one of reserve as it seems likely that any such sanctions could affect the richer and poorer member states in a quite disproportionate way. However, the proposal is indicative of the realities with which we are faced and underlines the need which I and my colleagues have been stressing to get our inflation under control. The problems in the economic field and the Commission's proposals were remitted to the Finance Minister for the serious study they require.
There are over five million persons wholly unemployed in the Community and 1½ millions on short-time working. I made the point that there are two types of unemployment—cyclical and structural. The first can be cured by demand management policies and I supported the Commission's call for those states who have decided on expansionary action to implement their measures as speedily as possible.
Structural unemployment is, to us in Ireland, a familiar problem. However, accelerating technological change and the growing shift of some industries to lower cost countries, as well as high labour costs, are now creating serious problems of structural unemployment throughout the Community which cannot be dealt with by ordinary counter-cyclical policies. I urged that we should all tackle this Community-wide task together. The meeting asked the Commission to put in hands a study of remedial measures immediately.
We went to Luxembourg, faced with various proposals on the allocation of seats in a directly elected European Parliament, including a French proposal that would have sharply reduced Ireland's proportion of the Parliament's membership. At Luxembourg, President Giscard d'Estaing put forward an alternative proposal that, in effect, accepted our position. This, of course, was that unanimously adopted by the Joint Committee on the Secondary Legislation of the European Communities—that our proportionate representation, so recently settled in the Treaty of Accession, should be maintained. The French President's proposal was that the present size and composition of the Parliament be maintained. While we would wish for good reasons to have a larger number of members than the present ten, the proposal met our main concern and was accepted by me. In the event, it did not prove possible to reach agreement on the issue. The positions of Italy, Britain and Denmark raised difficulties which it was not possible to resolve at the meeting.
This will, I know, be a source of keen disappointment to the House. It must be accounted the one clear failure of the Luxembourg meeting which the European Council had itself set as the deadline for finalising the text of the convention on direct elections. The delay raises doubts about the feasibility of holding these elections in May or June, 1978, as agreed in Rome. However, it would be premature to write this off as a possibility. If the outstanding problems could be settled speedily—say, by the July meeting of the European Council—the target might still be feasible.
The third main item discussed was the report on European Union prepared by Mr. Leo Tindemans, the Prime Minister of Belgium, to whom we are all indebted for the way in which he discharged a daunting task. There was, of course, no question of expecting final decisions on so fundamental a matter from the Luxembourg meeting. Indeed, I was the first to speak on this matter and I proposed that the report be examined in detail and decisions taken at the next or second-next European Council. This was agreed. Much of the work will be done by the Foreign Ministers as members of the Council.
In Luxembourg, I spoke in some detail on the principal proposals in the report, relating to a common Community approach to foreign relations and the development of the institutions of the Community, emphasising that the broad thrust must be to develop the supra-national character of these institutions. Debate on the report's proposals on economic and monetary union had, I may explain, become tied up with the wider discussion of economic and monetary matters. I do not propose to go into detail on the report as I hope that the House will have an early opportunity of debating it in conjunction with the motions on the Fifth and Sixth Reports on the Activities of the European Communities which are on the Order Paper.
I also raised the question of the revision of the Community's fisheries policy. I stressed the importance of conservation for the future of the industry throughout the Community. I suggested that a combination of substantial exclusive zones reserved to coastal fisheries and a quota system not related solely to historical experience, but which would take full account of development and of the needs of coastal regions, would provide a firm basis for a new policy. I hope that the interventions on this matter will give an impetus to its consideration in the Council.
The European Council also agreed declarations on Rhodesia and on the entry into force—on 1st April—of the Convention of Lomé, the terms of which were approved by the House fairly recently. We also adopted a resolution conferring the title of Honorary Citizen of Europe on M. Jean Monnet, in recognition of his services to the cause of European integration. I am arranging for the early presentation of these texts.
In conclusion, I should like to return briefly to the role and significance of these meetings. They are primarily occasions for exchanges of views, enabling those who head the Governments of the Community's member States to reflect together on the problems of the Community and on foreign policy matters of common concern to the Nine. On some major issues it is certainly appropriate to look to the European Council for general orientations, in discharge of the role that is, in my view, most appropriate to it as a Community body, that of giving an impetus and lending the authority of Heads of State of Government to the progressive development of the Community.
It is wrong, however, to look to the Council meetings for detailed plans or concrete measures. Indeed, any development of a role of this kind would be, I believe, inimical to this country's interests. Inherent in the operations of the European Council is the danger that the Community's decision-making process could tend in the direction of inter-governmental co-operation, to the detriment of the procedures and institutions established by the Treaties which it is in this country's interest—and, I believe, that of the Community—to maintain and develop.
However, simply to meet and exchange views is not enough, especially in the current situation where the economic position remains grave, progress towards European integration is stalled and even existing Community achievements are under threat. In these circumstances there is a need for positive guidance from the European Council. While I did not have great expectations, the outcome of the Luxembourg meeting was perhaps a disappointment. Nevertheless, it has put in hands further work in the economic and monetary spheres and on European Union, which could be of great importance if properly developed. The task of building Europe is a continuous process. In assessing progress it is perhaps best to look not at the outcome of a single meeting but at the results over the full span of Community activity over a period of time. By the end of this year it should be possible to make a fair assessment and to set the outcome of our meeting last week in perspective.
