European Council Meeting: Statement by Taoiseach.

The Taoiseach

In the House on Wednesday last, in reply to a query from the Leader of Fine Gael, I suggested that the statement made usually after a European Council meeting might be made in conjunction with the introduction of the debate on the Adjournment. Following contacts with Deputy FitzGerald I decided to depart from precedent and to make a separate statement. Unfortunately, I was not able to make this statement on Thursday last as I was away all day on official business. Consequently, this is the first opportunity since to make the statement.

Before I give the House an account, in detail, of the European Council which the Minister for Foreign Affairs and I attended on 5th and 6th December, in Brussels, I should like to say a few words about the Community.

To many people it is a remote institution involved in obscure discussion in distant places. Nothing could be further from the truth. The Community treaties are as much part of the law of our land now as our own Constitution. Community legislation enters into every aspect of our daily lives—into the price we pay for our bread and butter, schemes of taxation, how we regulate transport, relations between employer and employee, the right of firms and individuals to establish in a particular area, and almost all aspects of commercial or political activity. There is hardly any part of our official or working lives now which is untouched by Community legislation or influence.

The present Government have supported the idea of Europe embodied in the treaties. In this, they are carrying out the will of the people of Ireland. We have indeed good reason for our attitude. As a Community, Europe can take its place internationally. As the greatest trading block and the second greatest economic power in the world, the Community must be listened to when it speaks on trade or politics. And Ireland has a place and a voice in these counsels. As with every other country in the Community, membership gives it a weight and an influence which alone it could never have. The strength deriving from this unity benefits some countries far more than others. The fact that these benefits are not reflected in the annual computation of budget credits and deficits should not lead anyone to suppose that they are not relevant.

I am not by any means arguing that, for us the budget flows are unimportant. Although the budget is less than 1 per cent of the gross national product of the countries of the Community the net inflow to this country is considerable. This year we will probably have a net favourable balance in cash flows running into hundreds of £ millions.

In addition to this, there are benefits which accrue to every country from the existence of a market of a unity, size and sophistication sufficient to encourage investment and specialisation, on which all economic progress depends. These benefits are largely unquantified but often they go in large measure to countries which are net contributors to the Community budget.

I mention all this now because I want to underline the idea that Europe is not simply a matter of arithmetic. Neither is it remote or unreal. In our legal and economic systems it is as obligatory as the air we breathe—and perhaps as much taken for granted.

In Brussels, I stressed the commitment of the Irish Government to Europe, idealistically, politically and economically. I wanted our belief in the aims of the Treaties and the ideal of European integration to be clearly and widely understood by our colleagues in the Community.

The last time I attended a formal meeting of heads of state or of Government was in Paris, in October, 1972. Then, as now, the major issues facing the Community were economic and monetary union and the problems of enlargement.

In regard to the Economic and Monetary Union, I went to Brussels with no great expectation of results. This may, perhaps, account for my surprise at the degree of commitment indicated in the Council discussions to the idea of European union. The debate was full and positive. In supporting the concept, I stressed that the move towards union must involve a greater convergence of the economies of the different countries, and, in particular, positive moves to reduce regional imbalances.

In the early seventies, Ireland's per capita gross domestic product was almost 54 per cent of the Community average. In 1975, the figure had fallen to 48 per cent. In 1970, the average income in Hamburg was five times that in the west of Ireland. By 1975, the Hamburg figure had grown to six times that of the west of Ireland.

If we were outside the Community this comparison would, I have no doubt, have been very much more to Ireland's disadvantage. But we are not outside the Community; and the figures as they are, without hypothesis and without conjecture support the case for greater attention to one of the fundamental aims of the Community. I mean the aim expressed so vigorously at the Paris Summit in 1972 of ending disparities between regions.

This objective requires a new approach not only to budgetary flows but also to the interpretation of industrial and competition policies. We cannot contemplate a situation where regional funds and policies are allowed to languish while these other regulatory policies of the Community are applied with vigour and enthusiasm. I am not arguing against the unity of the market. I am stressing simply that the rigorous application of policies favouring unduly the central areas of the Community which though they have their troubles, are incomparably better endowed than the peripheral regions. This contradicts one of the fundamental purposes of the Community. It strikes against any hope of reducing regional imbalances and, therefore, any hope of attaining economic and monetary union.

The Council reached a high degree of consensus on this issue. They approved as immediate objectives—

(1) increased co-ordination of economic policies;

(2) the strengthening of monetary solidarity;

(3) the development of the Communities financial means and:

(4) the search for Community solutions to structural problems.

They approved of the principle of the establishment, on an experimental basis, of a new instrument for Community lending and borrowing with the loans being managed by the European Investment Bank. Generally these loans are to be used in the fields of energy, industrial reconversion and infrastructure. The problem of monetary compensatory amounts is to be re-examined to see if they can be phased out, on the basis of proposals from the Commission. A move in this direction is to our advantage and is essential to the unity of the market.

I come now to Article 131. This is a highly technical area and I do not propose to take up the time of the House with the details. Briefly, the six original member states will be paying to the Community budget according to their own-resources system, as from January next. In the transitional period between now and 1980, when the United Kingdom, Denmark and Ireland will also be paying on the own-resources system, Article 131 limits the size of our budgetary contributions.

In 1977, we will be contributing approximately £24 million. Next year, we expected to pay £43 million on the interpretation put by the Commission on Article 131. However, another interpretation would require a contribution of the order of £60-65 million, an increase of approximately 170 per cent on this year's figure. Obviously an increase of this magnitude would have been completely intolerable.

After some discussion in the European Council when I emphasised again the opposition in an earlier Council expressed by the Minister for Finance, to the onerous interpretation, we reached a compromise solution on the basis of a proposal I made.

Under this compromise, each country will pay to the budget a contribution in accordance with the interpretation of Article 131 which is most favourable to it. This compromise would involve a deficit in the Community budget of approximately 3½ per cent of the total. This 3½ per cent is, in turn, to be apportioned among the member states according to one or other of four methods—each State, again, taking whichever method is most favourable to it.

The net effect of this compromise will be that Ireland's contribution to the Community budget will be approximately £44 million in 1977. Because the budget will now be calculated in the new European unit of account and because we are net beneficiaries, we will gain in payments from certain Community funds.

We are glad that a solution to this difficult problem has enabled the Community to take the further step in the direction of European integration through the use for budget purposes of the more logical European unit of account.

At the European Council in Paris in December, 1974 it was agreed that there would be a regional fund of approximately £540 million. Our share of this fund, over the past three years, came to about £35 million.

I have already given the House figures indicating growth in the disparity between the richer and poorer parts of Europe. This is due, in part, to the inadequacy of the regional fund. There was, in the European Council, agreement as to the need for a real and substantial increase in the amount of the fund.

In fact, the Council agreed to a fund of about £12 million to be distributed over the three years—1978, 1979 and 1980 in gradually increasing amounts. So far as we can estimate now our share will come to approximately £24 million in 1978, compared with just under £14 million in the current financial year. In 1979, we will get about £25 million and in 1980 a figure probably in excess of £26 million. These contributions will enable industrial and infrastructural projects to go ahead which might otherwise have had to be deferred. They will increase the country's capacity for investment—on which employment and progress depend.

There was also general agreement at the council to an increase of 2 per cent in the French share of the Fund which stood at 15 per cent. This increase is for the benefit of the French overseas departments. The 2 per cent is to be deducted from the quotas of the other member States. This will affect our percentage quota but only marginally.

Certain other matters, including the question of whether there should be a non-quota part of the fund, remain to be settled by the Council of Ministers.

The European Council took note of statements by the member countries on the progress of legislation to enable direct elections to the European Parliament to take place in May/June, 1978. They noted, in particular that all countries except the United Kingdom, were in a position to hold elections at that time.

The question of emoluments is to be settled, if possible, in discussions between the Parliament and the Council of Ministers.

Community policy on Africa and the Middle East was discussed. We also referred to measures to counter terrorism. As the House knows, this has been the subject of declarations of the European Council in Brussels in July, 1976, and in the Hague, in November, 1976. Work is going ahead on police co-operation and officials of the different Governments are examining the possibility of improvements in practical and legislative procedures. We are fully committed to international co-operation to eradicate this most henious of crimes. The European Council asked that certain proposals put forward by the President of the French Republic should receive active consideration. Naturally, any solution must take account of the varying national laws and institutions of the member states. This is, however, not a subject which can usefully be publicly debated in detail at this stage.

I do not think that even the greatest friend of the Community could argue that the Community is close to the life of citizens, either politically or culturally. The purpose of the European Foundation proposed in the report by Mr. Tindemans, Prime Minister of Belgium, is to try to remedy this deficiency. A proposal for the establishment of the foundation was agreed in principle in Brussels.

On the question of enlargement, the problems of the Mediterranean were emphasised. I have stressed our welcome for the applicant countries who are part of Europe and share the principles of European democracy. The real and substantial difficulties in the way of accession should not be minimised but they are obstacles to be overcome—not insurmountable barriers.

I said, however, that while we were prepared to assist fully in the solution of these problems. We should not, as one of the less developed regions of the Community, be asked to contribute disproportionately. I also said that we owed it to the applicant countries that the Community to which they are seeking accession should be strong and growing, in its purpose, its procedures, its institutions and in its ability to solve the major problems facing it, including the problems of unemployment, regional imbalance and European integration.

The discussion on the economic and monetary situation was an extremely interesting and useful part of the general discussion in the Council. I intend to cover the subject, in so far as it effects us, when I speak on the Adjournment tomorrow. It has great relevance to our situation.

I had the opportunity of discussing, in an informal way, developments in Northern Ireland, with the British Prime Minister, Mr. Callaghan. We took the opportunity of reviewing progress in the political, security and economic areas. These talks were useful and informative.

I have had the conclusions issued by the Presidency laid before the House, in accordance with the normal practice.

Since this is the First European Council I have attended, it may be useful to put certain views on record. Certainly, I was pleasantly surprised by the speed and precision with which we were able to reach conclusions on matters of great complexity. Essentially, technicalities are more for experts and should not come before Heads of Government. But come they do—and the fact that their implications, often of considerable financial or political significance, can be thrashed out and resolved is, I think, a tribute to the Community and the way it works.

The involvement in European Councils of Heads of Government whose concerns are more often with home affairs brings them into closer contact with the Community. This merging of matters of home and foreign policy is what the Community is about. It helps not only the countries of the Community but the Community itself.

Finally, personal contacts between Heads of Government cannot but be useful. It is all very well to speak of communication by other methods, but this communication can never have either the relevance or the immediacy of person to person contact. A great deal can be attained at this level, and in this way, which would be impossible by other means. I realise the dangers—that Councils may enervate the Commission which must be a motive force in the Community; that they may act as inter-Governmental fora, outside the mechanisms of the Treaties: That the expectation that each and every Council should reach momentous decisions must inevitably be disappointed—reflecting on the credibility of the Community itself; and, finally, that the Councils by acting as courts of appeal from the Council of Ministers can impair the effectiveness of those Councils.

But we must pay a price for everything. These criticisms are part of the price for a procedure which enables the Heads of Government in Europe to meet regularly and in friendship to discuss matters of concern to their countries and their Community.

I think we get good value.

Dr. FitzGerald

: I welcome the Taoiseach's statement and I am grateful to him for having reconsidered his original intention of making this statement in connection with the Adjournment Debate. He has held over to some degree comments on the broad world economic situation arising from the deliberations in the European Council. This is appropriate because these will fit into the context of the Adjournment Debate, but the matters he has raised here, if they had been left over, would have been submerged in that debate and that would have been regrettable.

I am glad that a solution was found to the question of our contribution to the Community. The solution is satisfactory from our point of view and I am glad the Taoiseach put it forward. I wonder, however, whether he could be more explicit on the question of the net effect on us of the solution. He speaks of hundreds of millions of receipts which we had obtained from the Community and until this formula came up for discussion the figure which has been given for the current year was of the order of £200 million. He did say that it will be significant, but the House should be told what the net figures are. We will be paying many millions more; but is it not the case that we will be getting even more than we receive now, thereby more than counter-balancing additional contributions? We are entitled to some estimate of what the net effect will be.

I am glad to hear of the approval given to the new instrument for Community lending and borrowing to be managed by the European Investment Bank, but I would like to draw the Taoiseach's attention, if this has not already come up, to the importance of ensuring that this instrument is not used primarily for the benefit of the better-off countries in the hinterland of Europe. I do not like the sound of these additional moneys being made available for energy, industrial reconversion and infrastructure. When this proposal was first put forward at the European Council some time ago by the President of the Commission, he seemed to visualise that this would be primarily, as we recommended, directed to the interests of the weaker countries, and the Taoiseach pressed that this would be the case. I would like to be clear that the Taoiseach on this occasion pressed this issue. Have we a guarantee that this instrument will be used primarily to benefit the weaker countries. I wonder whether the Taoiseach raised this issue and whether we can have any clarification or any assurance that the original intention that this figure would be used for the benefit of the weaker countries will be carried out.

I am glad that the question of the phasing out of the MCAs was discussed. Would the Taoiseach give any indication of how rapidly this would happen? We know of the difficulties the MCAs create for us because of smuggling arising from this. Because of this problem it is important that they should be phased out as rapidly as possible. No indications have been given of what kind of time the Commission is thinking of and this information would be welcomed by us.

In the case of the regional fund the increase is good, but the scale remains absurd. Regarding the proportion allocated to Ireland, the Taoiseach has said that our share was reduced only marginally; but it should have been sharply increased. The share which was negotiated for us, 6½ per cent, was negotiated in conditions of great difficulty because the Commissioner in question putting forward the proposal left me with the impression that he was influenced by considerations of its impact on the UK, and Scotland particularly. It was because Britain sought an excessive share of the fund that the French felt it necessary to seek an almost similar share; so Germany reduced the fund to half the sum originally proposed by the Commission.

I ask the Taoiseach, did we seek to get an increase in our share on this occasion, and if so what did we seek? Did the allocation fixed take account of the circumstances in which the original fund was established? Will the Taoiseach indicate what action was taken on our behalf, when the French were demanding that their share should be increased? In all the circumstances the assumption was that, if we had lost out the first time because of the circumstances in which the fund was established we would seek to put that right the next time. From what the Taoiseach has said and from press reports it appears that no attempt was made to put right an inadequate Irish share which arose from the way in which the fund was determined on the last occasion.

Referring to the inadequacy of the scale of transfers to counteract the impact of freeing of trade and make possible the establishment of economic and monetary union, in retrospect it was a mistake for the Community to have agreed to the freeing of trade first without at the same time establishing measures to transfer resources within the Community in order to achieve an equitable balance. Membership of the Community is a major benefit to us, but nothing like what it should be if the Treaty meant what it said. It has always seemed to me that the Germans and the Dutch in particular are getting huge benefits from the freeing of trade but are paying only a fraction of this back, because the benefit has never been identified. These benefits should mean adjustments in the scale of transfers which would compensate the other countries which have not benefited in like manner, and achieve balance within the Community, a balance which does not now exist. In this connection I ask the Taoiseach to take account of the MacDougall Report, in whose preparation his own Minister for Economic Planning and Development was involved. I ask the Taoiseach to take this report seriously and to seek to have it brought before the Council of Ministers and before the European Council for serious discussion. The larger states have got away with murder in this respect.

We have no quantitative analysis of what would be needed to make a genuine Community at present and what scale of transfers are necessary to create economic and monetary union and we have no figures to show the benefits which some members, amongst them the Germans and the Dutch, secured through free trade and for which they are paying back only a tiny fraction in the form of their contributions to a Community whose total budget is only .7 per cent of that of the gross domestic product of the Community as a whole.

The Taoiseach spoke also about enlargement, but I was worried more by what he did not say than by what he did. The question at issue is not really the one he mentioned: that our contribution should not be disproportionately increased by the membership of other countries. This does not directly arise. If other countries join they can contribute to the common funds of the Community. There is a commitment which we secured in July of last year in a particular formula, a commitment to the expansion and enlargement of the resources of the Community pro rata with the needs of an enlarged Community, an enlargement of resources which would come at least in large measure from the new states themselves. There could be some net drains on the resources of the remaining countries because these new members are poorer states and we must be willing to contribute our share towards that. What is vital from our point of view is that the total resources are increased so that inroads are not made in the share of the social fund, the regional fund, the agricultural fund coming to this country as a result of the enlargement of the Community. In particular we must ensure that in so far as the common agricultural policy is extended to Mediterranean products this is done by providing additional resources, however reluctant countries like Germany may be to do so, and that it is not achieved by diverting resources that at present go into the common agricultural policies for the benefit of the temperate products which we produce in this country.

These are the major economic issues of enlargement. We secured this assurance in principle that the resources would be increased. I trust the Government will be watching carefully all the plans and discussions in relation to enlargement and will ensure that when the time comes for the first budget related to enlargement, the promise made by the Community will be honoured to the letter in terms of an enlargement of resources so that the existing resources do not have to be spread amongst 12 members instead of nine.

Another issue which arises in connection with enlargement is a question raised at the Leeds Castle meeting— the question of ensuring the maintenance of democracy in member states. At that meeting it was decided to refer to the COREPER the question of how this could be secured. It is not sufficient to lay down as it is laid down in practice, although not in the actual wording of the Treaty of Rome, that countries seeking to join the Community must be democratic. In raising this matter at the Leeds Castle meeting the British Foreign Secretary was performing a service to us all. It is important that we be assured that countries in the Community remain democratic. If any country—and I am not pointing any fingers because any of our countries could in ten or 20 years' time be vulnerable in terms of the preservation of democracy—ceased to be democratic, the Community as at present constituted would be faced with a real dilemma. If it sought to deprive that country of the benefits of membership, there is no juridicial basis for that, and that country could, by withholding its consent to any decision in the Community, destroy the existing Community and hold up all its activities, thereby blackmailing the Community into tolerating an undemocratic Government. That is why consideration needs to be given now to the question of an amendment to the Treaty under which, for example, a majority of the member states could refer to the European Court the question whether democracy has ceased to exist in a member state. A decision of the European Court based on such a reference by a majority of member states could be binding in terms of the exclusion of that country from membership of the Community. The existence of such a safeguard would help to protect democracy in all member states, the existing member states as well as the new ones. Something of the kind is required, given the threats to which our democratic system is subject and given the growing tensions that exist in various member states at present, some of which could eventually lead away from the preservation of the democratic system.

There is one other aspect of enlargement to which I would like to refer because it raises a broader issue in regard to our position in relation to the Community. The Taoiseach referred to the commitment on our part to the Community which he endorsed on behalf of his Government as we did on behalf of ours. Let me say that our strength in the Community hitherto, as a country which is a net beneficiary and which in financial terms is a significant drain on the resources of the Community, has been that we have genuinely worked and fought for progress towards a united Europe and have won the respect of other member states because of that.

In connection with that we made a second precondition in connection with the enlargement negotiations. In addition to the precondition about the enlargement of financial resources pro rata with membership we also made a precondition that the conclusion of the negotiations should not take place until and unless the decision-making mechanism of the Community had been significantly improved. It has already reached a stage where the whole decision-making process has almost ground to a halt. If there were to be three new members all abusing the veto even in cases where there is no vital national interest, the existence of the Community could be threatened. That is a precondition laid down by the Irish Government at the conclusion of the enlargement negotiations and I am disturbed that the Taoiseach made no reference to this. I hope this does not mean that he is wavering in any way from the determination of our Government to ensure that before there is a further enlargement, which could enervate and possibly destroy the capacity of the Community to take decisions under existing procedures— to ensure that these procedures are improved. What worries me is that when I raised this matter in the House from the Government benches and pointed to the urgent need from our point of view of ensuring that the unanimity practice is not abused in cases where there is no vital national interest, sounds came from the other side of the House casting doubt upon the wisdom of this approach and suggesting that it was in our interest that the veto be retained in all cases. I can accept at this stage in the development of the Community that there does not yet exist a degree of solidarity amongst member states and the peoples of member states to enable any of us to trust our futures completely, even where vital national interests are at stake, to the goodwill of our fellow members. Therefore for the moment at least the unanimity practice has to remain and other countries feel this way also. There is no point in our trying to change their minds even if we thought it was wise from our point of view. It must remain where there are vital national interests at stake.

But the present Community has often ground to a halt for the most trivial reasons, sometimes in relation to matters of procedure and sometimes in relation to matters which involve no more than £100,000. We made it a precondition of the completion of the enlargement process that this would be changed. I am sorry the Taoiseach has not referred to this matter and I trust he will retain our position in this respect. The sympathy and respect which our country has won and holds in the Community derives from the fact that we have continued to work and press for progress in the direction of a more effective Community, in which decisions are taken effectively, and that we have upheld the European view when it was opposed by other countries pursuing nationalist interests.

Even countries which themselves are not enthusiastic for progress towards European union have accorded to us a certain sympathy and respect because we have held to our view of the importance of progress towards European union. Even if they disagree with us, they regard us in a curious way as being the better Europeans for holding to this position. The contrast between this country and the UK in this respect is very marked. A large part of the unpopularity of the UK in the Community and the difficulty the UK has in securing support for its particular interests from time to time in contrast to the willingness of the Community in many cases to consider our interests, derive from the way in which we have been positive in these matters. Any weakening of that could not but be to our disadvantage.

The Taoiseach referred briefly to the question of direct elections. In that connection I seem to have read a comment of his recently in relation to the salaries of European parliamentarians suggesting a doubt as to whether it was wise that the salaries should be fixed at a level necessary to attract a German to the European Parliament when such salaries could be so much greater than the highest salaries paid in public life in this country. If this is the Taoiseach's view it is one which I share. While I used to think it was desirable that in this first transitional directly elected European Parliament there should be uniformity in this matter, I have come to the conclusion that the need for uniformity is something which could be postponed until we have a parliament elected by a uniform system. It may well be better for us to consider a system under which the salaries are fixed nationally for this transitional European Parliament. This is a matter on which we need further discussion.

The Taoiseach referred to the initiative of the President of France and then went on to say that there should be no detailed public debate of this matter at present. I respectfully dissent on this point. The history of this matter is of considerable importance to this country. It was on 13th July, 1976, at the European Council meeting, that this matter came up in the form of a draft declaration on the desirability of a convention amongst the Nine relating to the taking of hostages, although subsequently it was contemplated that this could be widened to include other acts of terrorism. When that matter was raised at the end of the meeting, I immediately proposed several amendments to the final paragraph, in consultation with the then Taoiseach, and suggested a change in wording to read "That member states undertake to prosecute or to extradite those engaged in the taking of hostages" and the Ministers for Justice were invited to draw up a legally binding convention among the Nine member states to this effect.

If my recollection is correct, at a subsequent meeting this matter was discussed again and was widened from the taking of hostages to other acts of terrorism. On that occasion we reiterated that it was, in our view, essential that any such new convention must include the words "to prosecute or to extradite", in contrast to the procedure in the Council of Europe where an extradition treaty was negotiated over our objections and despite the fact that many other countries had been hypocritical in negotiating this treaty as they have shown an unwillingness to extradite people for so-called political offences as we have seen in relation to the Italian-German case, the Dutch-German case and the French-German case, to name but three. I am leaving aside the French-Spanish case, Spain being outside the EEC.

We insisted on this change of wording. There was a brief discussion. The President of France raised some queries on it but agreed to it and it was endorsed at a subsequent meeting. I am concerned that this new proposal by the President of France is one in respect of which it is clear that it offers the alternative of prosecution or extradition. If his proposal did not involve this, then I trust that the Taoiseach would have reminded him of the fact that when the earlier issue was raised we insisted upon and secured the agreement of all the heads of Government to this alternative being provided. I trust, also, that in any further discussions which will take place on this matter, we will maintain that position. We are in a very strong position because of the agreement of two successive European Councils on this point, despite the attitudes of the same governments in the Council of Europe.

We should not yield any ground on this because the alternative of prosecution at home to extradition is, from our point of view, constitutionally necessary and in my view is in any event desirable and preferable to extradition.

An Leas-Cheann Comhairle

: I am sorry to interrupt the Deputy but I have yet to call on Deputy Cluskey and, in accordance with a decision of the House, there are three items to finish before 5 p.m.

Dr. FitzGerald

: I have spoken slightly longer than the Taoiseach and I will therefore abbreviate my remarks. The only other point I want to raise on the Community as such is to ask the Taoiseach whether the arrangements for the new industrial countries summit, which has been mentioned in the newspapers, were raised at the meeting? Have we taken up the position that the Community must be properly represented, without the humiliations imposed on the President of the Commission at the London Summit and, if we have not done so, can we be assured that the Irish Government will insist on this matter being properly dealt with in accordance with the spirit and letter of the decisions of the European Council?

The other point I want to refer to briefly is Northern Ireland. The Taoiseach referred to his discussions with the British Prime Minister. He said they were informative; that is more than one can say for his account of these discussions to this House. I would like to ask him if he raised either with the heads of Government or the British Prime Minister the question of the representation of Northern Ireland in the European Parliament? The Taoiseach will recall that at the meeting on 12th July, 1976, under pressure from our Government it was agreed that the number of seats to be accorded to larger member states should be increased from 78 to 81 in each case, a total increase of 12 in the European Parliament, so that Northern Ireland could be given an additional seat, the British Government insisting that they could not give an additional seat to Northern Ireland unless they had two further seats to give to other parts of the United Kingdom.

That discussion involved all the members of the European Council. The reason for the extra seats being agreed by all heads of Government was to give an extra seat so that the minority in Northern Ireland might be represented. There are now amendments in the British Parliament which seek either to remove provision for an electoral system that would provide for such representation, or, alternatively, which would seek to reduce the number of seats to two to prevent that representation.

I hope the Taoiseach raised this matter with the British Prime Minister. He could appropriately have raised it with the heads of Government as the proposal in the British Parliament is a departure from an inter-Governmental decision which is of the highest importance to this country. I trust he will raise this matter with the British Government and the British Opposition who are seeking, perhaps unknowingly, to undermine an international agreement of great importance.

Did the Taoiseach raise with the British Prime Minister the question of that Government's willingness to put forward proposals to the parties in Northern Ireland which will be directed to meet their aspirations rather than the aspirations of the British Government and, in particular, to meet the aspirations of a number of these parties for a measure of, although an incomplete form of, legislative devolution, as against administrative evolution which carries all the difficulties of the thorny problem of power-sharing? I hope he took the opportunity to raise this matter with the British Prime Minister because this matter is of considerable and urgent importance if even an interim solution is to be found to the problem of Northern Ireland.

I would like to make a final comment on the Taoiseach's reaction to the European Council. I thought he was too enthusiastic. Having attended all these bodies I regard them with grave doubt and considerable cynicism. The views expressed and the good resolutions made about working together to improve the economic situation have, without fail, been abandoned by the countries concerned. The discussion on the subjects have been hypocritical and have led to nothing. It would be unfortunate if the Taoiseach were taken in by some of the things said on these occasions which we know from bitter experience turn out to mean very little when the time comes to implement them.

Mr. Cluskey

: I regret to say that I do not find very much cause for satisfaction in the result of the European Council meeting in Brussels last week. Once again, as has already been implied, this exercise has been revealed as a show-piece where public relations capacity would seem constantly to outstrip its practical relevance to the lives of the people of the European Communities.

In the limited time at my disposal I would like to deal with four major items which were the subjects of the deliberations by the heads of Government last week—direct elections to the European Parliament, the regional fund, the national contributions to the Community budget, and the re-launching of the concept of Economic and Monetary Union. The continued reference that the direct elections of the members of the European Parliament will take place in May or June next year in my view does no credit to any of the participants in last week's Council meeting. We all know that the elections cannot take place at that time and it is now most unlikely that they will be held even before the spring of 1979 because of the present legislative difficulties in Britain and the likelihood of national elections there next autumn.

To continue with this reaffirmation of a hopeless wish for elections in the first half of 1978 is wrong and damaging for two reasons. First, it makes the task of adequate preparation for the elections by the political parties and, indeed, by other interested groups most difficult. The consequent effect on the likely turn-out at the polls could be disastrous. Secondly, and probably of much more significance, it gives rise to a very serious issue of credibility. If the date of the first direct elections is dealt with almost annually at the level of the European Council, and with almost transparent double-talk, the prospect of the whole exercise being diminished as an irrelevance by the electorate is very real.

There must be an early determination of a fixed and very definite date for the holding of direct elections. This should be done no later than the occasion of the next meeting of the European Council which, I understand, is scheduled for Copenhagen early next year. The Labour Party take the forthcoming direct elections very seriously. We see in them the first real opportunity for the democratic involvement of all the people of the Communities in the development of the central institutions of the Community. We believe it is imperative that nothing should lessen the impact and the political significance of this important milestone in European progress.

The decision of the Council in relation to the European Regional Development Fund can be described only as a further example of how far the Communities have departed from the spirit of the early seventies, when this country then an applicant for membership, was beguiled by the promise of a regional policy designed to tackle real problems in a concrete and effective manner. The regional fund is now the only vestige of that promised regional policy. Next year it seems it will contribute to this, the poorest and the least developed region of the Nine, a sum equivalent to 3½ per cent of our own capital budget. This almost ludicrous fact gives rise to two very important considerations for us.

First, we must continue to press for acceptance by the Communities of the need for a genuine and comprehensive regional policy within which the fund, hopefully reformed to favour the regions of real need, or enhanced in terms of resources would operate. Such a policy should become the cornerstone of Community economic, agricultural and industrial policy, in general, so that no decision of substance could be made for the Community as a whole which had not been given positive clearance in terms of its regional effects. Equally, the somewhat theoretical exercise whereby Commissioner Giollitti is expected to bring about some form of co-ordination between the various funds—regional, social and agricultural—must be strengthened.

It is also of the utmost importance that the Commission proposal for "non quota" resources to permit a more flexible application of the regional fund should be approved without delay, and that the so-called community loans should be launched and applied with concrete effects to investments of regional significance. When we consider the stage we have reached after so many years of debate on regional affairs in Europe, the scale of the Community's failure is manifest.

The second point I should like to make about the regional fund is of a more direct national relevance. The application of the meagre funds to be made available under the terms of the European Council decision is a matter which requires very close attention in this House. It is of the utmost importance that the most effective use is made of this money, that it is used to support projects which will result in a real improvement in the regional balance within the Community, rather than to bolster up the sort of minor projects which should be carried through in the routine evolution of our national programme.

We in the Labour Party, while deploring the inadequacy of the regional fund allocations for the next three years, are firmly of the opinion that £75 million should be used only in the financing of major projects of long-term significance, in areas such as port development or the improvement of transportation and communications within the country. In this way, we might have something to show for the activity of the fund in Ireland.

The failure of the Communities in the area of regional policy gives an added urgency and importance to the question of national regional policy. Our inability over the years—and under successive Governments—to produce and implement a viable and effective regional policy is a reflection of our almost total incapacity in the whole area of economic and social planning. At the political and administrative levels, there has been no real commitment to planning in the true sense, and the pale substitute of programming has proved totally irrelevant to our needs. We need a plan for the economic and social advance of our less developed regions. It appears to us that this plan must be devised, financed and implemented by us, without any reliance on the Communities. We believe it is only when we are seen to be genuinely committed ourselves to regional development, and to solidarity between our own people here in Ireland, that we can have any credibility within the councils of the Communities. Regional policy should have nothing whatsoever of the begging-bowl about it. Our commitment to regional advance in Ireland should be matched by a Community will to secure a proper balance of regional development as between all member states.

I should like to turn now to the question of Ireland's contribution to the funds of the Community budget. We must accept the responsibilities of membership of the Communities and that includes our financial responsibilities. The application of Article 131 under the terms of the complex agreement arrived at by the European Council will mean an increase of some £20 million in our annual contribution. That fact should be borne in mind when the effects of the decision on the regional fund are being assessed. The outcome of the arithmetic involved scarcely entitled the Taoiseach to the headlines about successes in Brussels which his PR men obtained for him. I feel that the analysis contained in Monday's article by the EEC Correspondent of The Irish Times is rather closer to the mark than some of the earlier nonsense about startling diplomatic successes.

Dr. FitzGerald

: Hear, hear.

Mr. Cluskey

: It is a fact that the greatest financial advantage to this country of membership of the Communities arises through the mechanism of the CAP and through the farm-price system. All other financial inflows are insignificant by comparison. Our contribution to the budget should be seen in this context—here I agree with the Taoiseach—but it must also be seen in the light of the fact that this great national advantage occurs to a group in our society who, by and large, make no direct tax contribution whatsoever to the welfare and development of the State. Here is that great anomaly and it is one which is within our capacity as a nation to tackle.

A great deal of attention was given by M. Tindemans and by Mr. Jenkins after the Council to the question of the so-called re-launching of the idea of Economic and Monetary Union. This appears to represent some kind of political victory for the President of the Commission who has been speaking on this theme over the past few months. He has spelled out his ideas on this matter with some clarity and he has called for a wide and vigorous debate throughout the Community.

We had better get that debate launched here this afternoon. What-ever may be said about the importance of co-ordinating economic policies and reinforcing monetary solidarity, the fundamental issue here is quite simply the total unacceptability of any substantive move in the direction of EMU without a preliminary stage of massive economic development activity designed to equalise the level of economic achievement in the various regions of the Communities. EMU without real regional, social and structural policies is quite unthinkable and it would be extremely dangerous for any Irish Government to allow their partners in the Council—either at European Council or Finance Council level —to believe that this country could go along with such a development.

No doubt the agreement reached in connection with the European loans is seen to be a move in the direction of giving EMU a regional aspect. We in the Labour Party believe that the effectiveness of this new approach will have to be monitored carefully over a considerable period in order to ascertain whether or not it can contribute significantly to the improvement of the regional balance.

I note that the European Council, in addition to its decision on Community loans, dealt also with a number of other policy instruments intended to progress the re-launching of EMU. These include work on the convergence of market and competition policies, the pursuit of financial solidarity by the use of short and medium term credit policies, and action in areas of structural difficulty such as the steel, textiles and shipbuilding industries. It is essential that the regional impact of such moves should be most carefully assessed in order to ensure that existing imbalances will not be aggravated. There is good reason for caution—if not for suspicion —in facing up to a range of policy proposals of this nature which are quite capable of exacerbating regional difficulties rather than alleviating them.

What has emerged, under these four headings, from the European Council deliberations does not add up to a success or to a significant advance, There has been some movement and a number of quite desirable ideas have been given an airing. But there is still far too little evidence either of a genuine Community spirit or of a political will to advance at a pace commensurate with the great challenges of the present economic situation.

It is also most disturbing to note that the European Council could not advance beyond the use of weak platitude in its approach to the issue of unemployment. With six million people out of work in the Communities —and 16 million idle in the OECD countries—the prospects remain discouraging. Present growth projections for the Communities as a whole hold out absolutely no hope of a reduction in unemployment—indeed they suggest a continuing upward movement. The urgent preoccupations of the European trade union movement which were expressed at the tripartite conference last June have not been responded to in any adequate fashion. For very many citizens of the Nine the year ahead will be one of deep frustration and increasing bitterness. I believe that we cannot for much longer avoid the very fundamental analysis of the nature and causes of our deep-seated unemployment problem. Only when that analysis is made can there be any hope of finding a lasting solution.

Finally, the European Council does not appear to have considered the economic situation of the Third World nations worthy of consideration. Given the current nature of the problems of the poorer countries and the continuing delays and frustrations which attend all international approaches to a solution of them, this fact is to be regretted.

All in all, the outcome of the European Council upon which the Taoiseach has reported must be considered as providing further proof of the inherent weaknesses and problems of the Communities. We must hope that what positive decisions were made will be fully implemented and that those of us who believe that the only justification of the Communities' existence lies in the active pursuit of progressive policies for the good of all the citizens of all the regions of the Nine will not be discouraged from working together towards that end. My summing up of the event would be that for the participants it was a failure but, undoubtedly as far as the PRO job on behalf of the Government is concerned, it was a success.

The Taoiseach

: I am aware that it is the practice not to reply to statements in any detail. I do not propose to reply except to say to the Leader of the Fine Gael Party that I could probably answer most of his questions —many of them, at any event—in the affirmative. One could have got the impression that there was some lack of commitment by my party, and my Government, to the Treaties of Rome. A story was told about a lady ambassador from an English speaking country, a committed Catholic, who, having presented her credentials to the Pope, had a conversation with His Holiness. Half-way through the conversation the Pope was heard saying to her : "Madam Ambassador, I already am a Catholic." Deputy FitzGerald need have no apprehension about our commitment to the Treaties of Rome. In connection with most of the things he mentioned, he was correct in raising them.

Dr. FitzGerald

: I appreciate that the Taoiseach cannot reply at this time but he might take the opportunity to deal with specific points on the Adjournment Debate. I propose that, with the agreement of the House, the remaining business be taken 30 minutes later in order to enable time for discussion and to take into account the fact that the statements have taken one hour and ten minutes.

Dáil Éireann debate -
Tuesday, 13 Dec 1977