I should like to return to the meeting. As I stated earlier, I intend to give some further bit of information. I felt precluded from speaking in any detail of what transpired at the meeting of the Council last week. Those meetings are presumed to be held in private and only Heads of State or Government and Ministers for Foreign Affairs are present. I believe they are expected to be held in an atmosphere of reasonable confidentiality. Since then much information has leaked out, or been made available deliberately, so I feel free now to give a further indication to the House of what transpired as far as I was concerned at that meeting.
The position is that in response to a number of detailed proposals I put forward, some of which were also raised by the Italian Prime Minister, Signor Andreotti, there were Commission suggestions put forward at the meeting that the term of the loan would be 15 years; that the loan subsidy would apply over the full period of 15 years and that the full capitalised value would be repayable to the borrower; that there would be a moratorium from three to five years on repayments of capital and that loans from the Ortoli Facility, which stand side by side with the European Investment Bank as a means of securing loans within the Community, would also attract subsidies. A number of these proposals were also accepted by the German Presidency when I visited Bonn and are reflected in the conclusions of the Council. The Leader of the Fine Gael Party may have noted the correspondence between these conclusions and the written reply to his parliamentary question yesterday, in that the cost of the interest subsidies referred to in the draft resolution represents one-fifth of the value of the loans, as it does on the basis used in deriving the figure of £45 million. These details were not specifically agreed at the European Council but it was clear from the reactions of the participants such as President Giscard d'Estaing and Chancellor Schmidt, as it is from the final conclusions, that there was general acceptance of them.
Deputy FitzGerald made much of what he saw as a major inconsistency between reference to the period of the moratorium as three years, three to five years or five years. As I have just explained, these details were not fully settled although the Presidency seemed to accept five years. However, the Deputy has probably been gratified to note from yesterday's written reply that, in terms of the present value of the interest rate subsidies over 15 years, the difference between moratoria of three and five years, on a loan of £100 million between three and five years, is the comparatively small sum of £0.7 million. For most of us this would not be a major issue but I can understand its significance for a Deputy who as Minister for Foreign Affairs went to the Paris Summit in 1974 with the Taoiseach and returned after settling for an additional six million units of accounts a year for three years at an average rate of £2½ million on the Regional Development Fund. The Deputy went over there with high hopes and returned gravely disappointed and he greatly disappointed the country also.
I readily concede to the Deputy that there is scope for discovering further major sums of these magnitudes in quibbles about the calculation of the £45 million. One could perhaps reduce it by reference to the availability of moratoria on commercial loans. On the other side, one could find arguments for using a lower rate of discount to bring sums of money over time to their value today. When all is said and done I think that objective observers will agree that when all the permutations are examined, the assessment I gave was a fair statement of the position.
As reported in last Saturday's Irish Press, the Deputy has noted a number of other respects in which my statement to the Dáil was allegedly incomplete or incorrect. For example, he said that I did not explain that the loans were not general loans but rather loans for general infrastructure programmes and projects to be submitted. There is, of course, as the House is aware, a difference between projects and programmes. Normally speaking the loans I have referred to, EIB loans or Ortoli Facility loans, are directed in the main to projects and programmes which are of a much wider connotation. This and other conditions are clearly spelt out in the documents I laid before the House. I might say in passing that Deputy FitzGerald was speaking then at a civil service dinner on Saturday night and while he complained that the information I gave was incomplete he did not go so far as to justify the heading contained in a newspaper the following day that I had got it wrong again. I am saying that in passing in fairness to Deputy FitzGerald; he was not responsible for that heading.
At no stage did I suggest that these were general loans. I have indicated that loans from EIB or Ortoli Facility loans are made for certain purposes and that, therefore, they could not be regarded as general loans to do whatever we liked with, as the Leader of the Labour Party apparently thought to be necessary and realistic. Indeed, it was clear to anyone who followed our case what the loans were for and, of course, this could have been established simply by perusal of the document laid before the House.
Again, Deputy FitzGerald is reported as drawing attention to the fact that the Council resolution refers to an understanding that, in relation to the funds to be provided any direct or indirect distortion of the competitive position of specific industries within member states will have to be avoided. He had earlier referred here on 30 November to the position of industries that might be vulnerable in certain circumstances. Does he suggest, having regard to the purposes for which the Community was established that it would have been sensible to seek to have the reference in question deleted from the draft conclusions? In any event the basic assumption on which he is apparently acting has no foundation. There are far too many variables involved for anyone to be able to conclude that any sector would of necessity be affected adversely by our entry into the new system. Much would, for example, depend on the way both management and workers in the industries themselves act.
I hope it is clear from what I have been saying that in Brussels we sought and obtained quite a number of modifications to the proposal for loans and that it remained open to us to take further steps to ensure that aid was provided under conditions that made it as effective as possible. We are still pursuing these questions.
I now want to refer again to Bremen and to deal with the suggestion that the Government's tactics were misconceived from the outset and throughout thereafter. This allegation was made by the Leader of the Labour Party here on 17 October, again on 30 November, and was repeated last Thursday. For example, on 30 November he said that at Bremen I gave an enthusiastic response to the whole idea of the EMS and that that was a serious mistake. On 17 October Deputy Barry of Fine Gael suggested here that the negotiating stance adopted by the Government was not very wise. He went on to try to put words in my mouth that I had never uttered and, when challenged as to the reference, could not back up his misquotation. This was also the case when Deputy Cluskey, on the same day, recklessly and irresponsibly claimed that the impression had been created within all member states of the Community that we were favouring entry into the system irrespective of what Britain did and, apparently, irrespective of what other conditions might be laid down regarding membership and irrespective of the size of the concessions that would be necessary for this country's future welfare. Last Wednesday, the Deputy admonished me because I had not aligned myself with that approach. But I want to ask the Leader of the Labour Party if he has any conception of the reaction that this kind of approach would have created amoung our other seven partners? We will make our decision not on alignments with this country or that country, as the Deputy fancies, but on arguments applicable to this country and based on what is good for this country and for the Community.
I want to say that everything that has happened has vindicated the positive but balanced approach adopted by the Government and confirmed that this was in the best interests not only of European integration—which means our long-term interest—but also in our interest in the medium—term. The fact is that our support in principle for the concept of the EMS and our indication that we would be joining if the circumstances were right, evoked—and I want to emphasise this—a correspondingly positive and sympathetic response among our partners. That is still in evidence: and that is still the basis on which we are continuing to consider the whole issue.
It was on my proposal that the European Council in Bremen agreed to commission concurrent studies of the action necessary to strengthen the economies of the less prosperous member countries in the context of EMS. All members agreed, it will be recalled, that such measures would be necessary for the success of the system. Work on the concurrent studies was entrusted to the Community's Economic Policy Committee. Our representatives there put forward our arguments in relation to transfers of resources. A Commission spokesman explicitly recognised that we had put forward a cogent case. However, it became clear at a relatively early stage that, on the crucial issues, their report would set out differing majority and minority views. It would have been too much to expect a completely objective report in such a highly political domain.
Deputy FitzGerald suggested here on 30 November that in the absence of studies such as he had helped to undertake in the run-up to EEC entry, in the first place, the Government had not been able to convey any convincing reason to our EEC partners for the proposed transfers but had been content to go with a begging bowl looking for transfers without being able to explain why we needed the money or what we proposed to do with it. My comment on this is that we apparently put forward so strong a case as to lead the German Presidency to envisage the provision of 2,000 million EUA a year in subsidised loans for five years and a significant grant transfers through what was called a new window in the regional fund or a new budget line over a similar period. On the figures that were in mind, the transfer in grant and grant equivalent to this country could have been as high as £600 million over five years. It would appear that the reasons we gave were more convincing than those used when we got the £7,500,000 that Deputy FitzGerald brought home from the regional fund some years ago.
These proposals were reflected, with technical changes and with the figures left blank, in the draft conclusions circulated by the Presidency before the Brussels meeting. That draft referred specifically to a third section of the regional fund, of which Ireland's share would have been 30 per cent. There was allocated also 50 per cent to Italy and 20 per cent to the UK. There was the alternative of opening up a special line in the budget. This would be a special grant fund in which Ireland would be able to participate.
This, then, was the response to the Government's positive attitude to the initiative taken by Chancellor Schmidt and President Giscard d'Estaing and to the case we put forward for transfers. I have reported already specifically on my meetings with these two leaders and with Mr. Callaghan. As I indicated last Thursday, our case was, in the main, accepted, with some reservations as to the size and form of the resource transfer involved and this acceptance was reiterated many times during the Brussels meeting. Indeed, in reporting to the Bundestag on the European Council on the day after the Council Meeting, Chancellor Schmidt went out of his way, as he has done publicly on at least two further occasions since then, to express his particular understanding of our difficulties and of the reserved position I adopted at the conclusion of the Brussels meeting.
In the same vein, I received a letter on Monday last, from Prime Minister Anker Joergensen of Denmark, in which he indicated that he personally attached the very greatest importance to the participation of both Italy and Ireland in the system from the outset. He went further and expressed his firm conviction that the possible extension of the number of countries participating in the EMS must not have the effect of reducing the aid given to Italy and Ireland. On the gap between the amount of aid discussed at the European Council and our wishes, Prime Minister Joergensen expressed the opinion that the very idea of the EMS implies a common responsibility to ensure that difficulties encountered by one member country should be solved in a way which does not weaken the main purpose of monetary co-operation, the creation of stability. This, in his view, implies that participation in the EMS carries with it the right of a member country which, contrary to expectation, faces the need for further assistance, to have the problem examined afresh. I should like to avail of this opportunity publicly to express my appreciation of this message from my Danish colleague. I may say that I have also received a similar communication from Prime Minister Van Agt of the Netherlands, in which support and goodwill are given a concrete expression which I should also like gratefully to acknowledge.
With so much goodwill, one might be forgiven for asking what went wrong. The answer is fundamentally an old one: the inability to reconcile conflicting interests and approaches, heavily influenced by limitations on the domestic political capacity to agree to compromises. It proved impossible to reach an agreement that would have been satisfactory for Ireland, not because of any defects in the presentation of our case but simply because, in the clash of wider interests and varying outlooks, the scope to accommodate our needs was not then available. As I have previously indicated, we had anticipated the difficulties that could arise. We had put forward a number of proposals for ways to overcome them. I came back on this several times during discussion on resource transfers when it appeared that there was no agreement for some time on conditions envisaged in the paragraph referred to earlier. During the course of the discussion I proposed that the Council consider the possibility of using the Regional Development Fund on the special budget line to which reference was also made, to supplement the transfer that could be made available to Ireland but for the reasons I have just outlined it was not possible to get agreement on my proposals. On another occasion and perhaps in another atmosphere, some of these proposals might have provided a basis for a solution that would have met our case but, in Brussels last week, this did not prove to be possible.
Here, I want to pay a warm tribute to the goodwill and to the patience shown by Chancellor Helmut Schmidt in the prolonged effort on 5 December to reach agreement that would enable this country to participate in the system from the outset. As he himself has indicated publicly, he was prepared to go further than what was eventually incorporated in the resolutions of the Council. All other members of the Council also showed the greatest understanding of the Irish position, but because, as I have said, of the relationship between what might have been done for us and what would have been required by some members in consequence, a reasonable conclusion was not possible in the atmosphere of the Brussels meeting.
The resolution which I have presented to this House contains the conclusions of that meeting and many of the details of the new monetary system. We are still considering the options open to us and certainly will join in the system if we can get the conditions right. When the Council concluded in Brussels on 5 December last this certainly did not apply—and the House knows my reaction.
The purpose of this debate is to afford Members an opportunity to say what their views are on the question of adherence to the new system, which is emerging after months of negotiation among the nine members states, a system of a delicacy and complexity for which there are few parallels in modern times.
If anything is clear from what I have said it is that this debate is not an occasion for scoring points. This is a national issue, affecting our future, our position in the Community and our relations with other States individually. The final decision has not yet been made because consideration of the questions at issue is still going on: all the details are not yet known. But the essentials are before this House. The framework of the system is in the documents I have presented: the reasons for the system and for the Government's view that it could be extremely beneficial, given the right-conditions, have been explained on many occasions in this House and elsewhere; and the attitude of other countries is known. The House now has a unique opportunity of expressing views and opinions on an issue of vital importance to the future of this country and of the European Community. I hope that that opportunity will not be wasted.
