With your permission, a Cheann Comhairle, I would like to make a statement about the meeting of the European Council in The Hague on Monday and Tuesday last, 29th and 30th November.
This was the sixth of these meetings attended by myself and the Minister for Foreign Affairs since the series was inaugurated in Dublin in March of last year. The meetings take place without any formal agenda and conclude without any formal communiqué. However, it has become usual to issue statements or declarations on some of the subjects discussed and I am arranging to have those issued on this occasion laid before the House.
At the outset, we agreed to discuss the following subjects, though not necessarily in this order:
The economic and monetary situation;
Relations with Japan;
The North/South dialogue on relations between the developed and the developing world;
The Tindemans Report on European Union;
International terrorism; and
Monetary Compensatory Amounts.
I will deal with these items shortly but first I should like to make a few general comments on the more important issues. The Hague Council was useful for two reasons. First, it enabled us to get a good view from the heads of Government of the countries of the Community, which, with the United States, are responsible for about half of total world trade, of the prospects of economic progress in 1977. I can summarise these views quite simply. They are sombre, with a prospect of a further rise in oil prices, continuing instability in currencies and the probability that inflation in many countries will not be reduced to the extent that had originally seemed likely. References to unemployment, due now more to deep rooted structural changes taking place in the economies of Europe than to cyclical causes amenable to remedy by ordinary demand management policies, were notable. What I thought was especially relevant to our circumstances was the reference to a more widespread understanding by both sides of industry as to just how serious current problems are and to the degree of agreement in many countries on the measures necessary to solve them.
The implications for us—depending more than most countries of the Nine on external trade for the maintenance of employment and standards of living—are obvious. They are of immediate importance to those engaged in the current negotiations on incomes in 1977. When some of the most powerful countries in the world are deeply worried about the prospects, we cannot go blindly along as if the problems of unemployment, inflation and possible stagnation in trade did not exist.
The Council was also useful in that it enabled me to raise at the highest level the effect which the present system of monetary compensatory amounts is having on our economy. This point has been made time and again by the Ministers for Finance, Agriculture and Fisheries, and Foreign Affairs at different Council meetings and some amelioration has been obtained. But the present disorder in exchange rates has raised the issue to a different level. It is no longer a question affecting any one group or sector but a distortion warping the entire economy. The system itself is of great complexity. Correction of the present difficulties will involve large sums of money and affect many countries of the Community. It may even affect some fundamental financial mechanisms. We did not expect the issue to be resolved at the European Council. These Councils, as Deputies know, do not take formal decisions but give orientations or instructions which facilitate decisions by the relevant institutions of the Community. The Hague Council heard our views with understanding. They agreed that the question of monetary compensatory amounts should be discussed by the Ministers for Finance and Agriculture and Fisheries at an early meeting. These were the two major issues as far as we were concerned. I will go on to deal with the other items.
The trading successes of Japan have been attributable in some measure to restrictive measures of various kinds affecting imports. From a Community point of view, the Japanese have been too successful to the extent that the Community's deficit on trade with the country this year is expected to be £2,350 million—having risen perhaps fifteen fold since about 1970. The Community had called on the Japanese Government to take measures to redress this imbalance and their response was received shortly before The Hague meeting. The subject was discussed by the Council which issued a statement. Inter alia, this noted with satisfaction that the Japanese Government were willing to co-operate with the European Community on the basis of a mutual understanding in solving the problems which have arisen. It also indicated that particular attention was required to the need for a rapid expansion of Japanese imports from the Community. I would hope that the measures to be taken will lead to a further rapid growth in our own exports to Japan which have already shown a remarkable increase this year.
Under the heading, North/South dialogue there was a wide-ranging discussion of a whole range of matters relating to international economic co-operation, including trade negotiations in the GATT, discussions on commodities in UNCTAD and, in particular, the state of play in the Conference on International Economic Co-operation in Paris. One of the major difficulties here is the size of the indebtedness of many developing countries and the question of how they are to be helped in meeting their liabilities. I intervened in the debate to emphasise the necessity for a positive and constructive approach to the problems of developing countries. In return for this approach we would expect moderation in the more excessive demands of developing countries.
In regard to the Tindemans Report I again expressed my appreciation of Mr. Tindemans's work which provided a major signpost on the way to European integration. In commenting on his report, I said that, in some areas, we would have been happier if there had been a greater will to make progress: for example, if it had been possible to accept more clear-cut commitments to arrive at common decisions in the areas of external policy as Mr. Tindemans had proposed.
I also expressed some disappointment that the Foreign Ministers' discussions on the report had not led to a real and substantive exchange of views on economic and monetary union, and on the important issues arising in relation to social and regional policy, and to the scale of Community action needed to counteract the centripetal effects of economic and monetary union and to narrow the economic and social disparities between member states. Obviously a real improvement in the decision-making process of the Community is a prerequisite for any further enlargement of the Community. Finally I indicated our agreement with the statement which has been issued on the report.
While this statement does not go as far as we would wish in a number of respects, I think the important thing now is to make practical progress in realising European Union within the framework which has been agreed. Progress towards this goal and the further steps which could be taken will now be considered regularly each year by the European Council on the basis of reports which the Foreign Ministers and the Commission have been invited to submit to us.
The House will recall that at the July meeting of the European Council we made a declaration inviting Ministers of Justice to draw up a convention—to be open to ratification by non-member states of the EEC—under which the member states would undertake to extradite or to bring to trial terrorists who take hostages. As part of the follow-up to this declaration some questions were referred to the European Council for clarification at this meeting so that the drafting of a convention could go ahead. These questions related to such issues as whether or not the proposed convention should be opened to other countries at the present stage and whether it should cover other offences as well as the taking of hostages.
After a short discussion it was agreed that the Foreign Ministers should be asked to consider and clarify these points. This decision was taken on the explicit understanding that the terms of the European Council declaration of 14th July last are to remain unchanged and, in particular, that the provision that the convention must allow states to opt for trial as an alternative to extradition is not called into question.
There were the main issues discussed at The Hague Council. It is easy to criticise the outcome of some of these meetings on the grounds that they do not produce a definite conclusion or result. This is probably to misunderstand the nature of the meetings. European Councils enable heads of Government to get together in a more or less structured way for an exchange of views on the more important questions affecting Europe and their countries.
The meetings are arranged in such a way that they will often take place when there is no crisis or dramatic issue affecting the Community. Obviously, therefore, to expect concrete conclusions on all occasions is a mistake. This approach does not take into account the benefits in mutual understanding which can develop simply because the Council exists and the meetings take place. Heads of Government meeting formally or informally like this cannot but get a better grasp of the problems of their counterparts; and relations cannot fail to develop which are to the advantage of the European Community and to the countries which it comprises. I may add that while this is generally true there may well be features of the Council, in particular, in its organisation which could be improved. This is an aspect which is naturally receiving continuing attention.
