European Council Meeting: Statement by the Taoiseach.

The Taoiseach

With your permission, a Cheann Comhairle, I propose to make a statement on the European Council, which the Minister for Foreign Affairs and I attended in Strasbourg on 21 and 22 June.

The agenda for the Council was—

(1) Elections to the European Assembly,

(2) European Monetary System,

(3) Energy,

(4) Convergence and Economic and Social Situation,

(5) Relations with Japan.

There were also discussions on a number of items in the political co-operation framework. I have arranged for copies of the Conclusions of the Presidency to be laid before the House for reference by Deputies and intend to deal only with the major points of interest, as I saw them.

An important consideration for the participants was the necessity to co-ordinate the position of the Community for the Summit of the seven leading industrial powers and the Community to be held in Tokyo later this week. In fact, it was probably this theme and the necessity to co-ordinate positions in the face of the world energy situation which dominated the meeting.

The meeting was held in Strasbourg, on the proposal of the French Presidency, to mark the occasion of the meeting of the first directly-elected Assembly of the European Community which is to take place in that city next month. At the election more than 60 per cent of the electorate of approximately 180 million voted. This is a higher turn-out than in, for example, the last Presidential elections in the United States. The European Council took note of my intention to address the Assembly at their Inaugural Meeting on 18 July—as President in office of the European Council. They asked me to express their joint conviction that the newly-elected Assembly will serve the hopes and ambitions of Europe.

The Council were given an account of the working of the European Monetary System since the exchange rate mechanism came into operation last March. The conclusion was that the initial stocktaking could be regarded as positive. The major political significance of the system and of an area of monetary stability in Europe was stressed.

The European Council noted the report submitted to them by the Economic and Finance Ministers Council on the convergence of member states' economic performance. Deputies will recall that this report was asked for at the Paris Council, which discussed the subject in the context of the EMS debates.

In addition, the Commission were asked to study the working of the budgetary system. This study will be submitted to the Council which might adopt guidelines so that the Commission could put forward proposals for decisions to be taken by the next meeting of the European Council which is to take place in Dublin on 29-30 November.

In the Government's Programme for National Development, 1978-1981, we set ourselves the targets of reducing the numbers out of work by 25,000 and attaining a growth rate of 6½ per cent in 1979. Industrial disputes, the severity of the winter with its effect on food prices, the world energy problems now make it virtually certain that these targets cannot be attained.

This conclusion was supported by the papers and discussions of the Strasbourg Council. Indeed, never have I attended a council at which there was such unanimity and such conviction as to the prospects before us. The growth rate of the Community as a whole is expected to fall from 3.4 per cent in 1979 to 2.8 per cent in 1980. For us the Commission projection is that instead of the 6½ per cent I have mentioned, we will attain 3.8 per cent in 1979 and 3.5 per cent in 1980. We do not necessarily accept these projections but they are an indication of the direction and the magnitude of the change which has occurred in our economic circumstances. The essential point is that we will be unable to attain the targets I have mentioned; they or any other reasonable estimate of our prospects now show that we will be, emphatically, far below the figures on which current expectations of increases in living standards are based.

A strong word of warning was sounded at the meeting as to the dangers, indeed the impossibility, of trying to counteract the effect of what is happening by purely budgetary changes. There was strong emphasis on the need for intellectual honesty; for acceptance of the fact that, for example, there can be no compensation for the adverse effect of the rise in the price of oil. Real growth will be lower, increases in living standards will be less; and to believe that budgetary actions can counteract these changes or that increases in wages or other incomes unrelated to our changed circumstances will attain the same effect is to indulge in dangerous illusions.

In the medium term, the meeting was told that part of the problem is due to demographic change. In Europe between 1980 and 1990 the population of working age will increase by 9 per cent— about a million people a year—up to 1985. Thereafter it will decline, yielding a stabilisation of population of working age by about 1995. Europe will thus be faced with a large increase in the number of people seeking work at a time when economic growth is unlikely to be high, when technological change will be affecting jobs and when higher payments for energy will be draining resources away from the Community, on a considerable scale.

For Ireland, the forecasts are that the increase in the total population will be at a rate about five times that for Europe as a whole, while the percentage increase in the population of working age will be just under half as much again as the corresponding figures for the Community as a whole. The increase will continue for long after the figures have started to decline in continental Europe. I mention these statistics in some detail to show one of the reasons for the Government attaching such priority to the creation of employment. We will have a far greater increase proportionately in our working population than other countries and because of events like oil price increases we may well attain an increase in economic growth in the immediate future less than we have aimed for. Of whatever increase is attained, 1 per cent to 2 per cent must go abroad to pay the increased cost of our energy imports: and a further 1 per cent to 2 per cent must go to increase employment. The consequence of failure in any of these areas would be grave.

It will be virtually impossible to use resources to increase living standards this year. Attempts to do so will certainly ensure that there will be less employment and that inflation will be higher. The change in the pattern of world supply and demand for energy has changed the economic background fundamentally. Lest it be thought that our present difficulties are a temporary phenomenon which will pass away in a year or so I want to give some further projections which were before the Council in Strasbourg. During the period to 1990, unless there is a far-reaching change in American policy, world demand for oil would be increasing at a rate so high that it could be covered fully only if the OPEC countries were to double their present production. I need hardly point to the improbability of this or to the dangers even if it were possible. Oil is a finite resource; and we must start to plan now specifically on that basis. The world as a whole consumes about 53 million barrels of oil daily. The United States, with about 5 per cent of the world's population, accounts for about 45 per cent of this. The European Community consumes approximately 20 million barrels daily, of which the Irish share is about 100,000 barrels a day.

With the upset caused by recent events in Iran, demand for petroleum has outstripped supply by an estimated 5 per cent. This has caused a rapid escalation of prices, which have risen on the spot market by more than 80 per cent since the end of last year. The price of contract oil has risen far less steeply but is being pulled up by what is happening on the spot market.

The first problem faced by the European Council was what to do in the short term to meet this situation. Obviously, the first necessity is to try to moderate prices on the spot market. The Minister for Industry, Commerce and Energy at the Energy Council meeting in May was among the first to call for measures with this objective in mind. The European Council noted and welcomed the measures adopted by the Energy Council to improve market surveillance and asked the council to take whatever additional steps might be necessary. As to the recording of international transactions, it asked the Energy Council to take the steps for which they have laid down the principles, provided that the other industralised countries are prepared to take similar action. This will be a major issue at the Tokyo Summit.

Employment cannot be sustained unless there is economic growth. Economic growth in turn is dependent on energy supplies. In fact, in many countries, including our own, every 1 per cent by which the economy grows calls for an increase in energy consumption in excess of 1 per cent. An essential point made by the Council was that this link between economic growth and energy consumption must be broken.

I stressed the very high dependence of Ireland on imported energy. We buy from abroad more than 80 per cent of what we need and oil meets more than 75 per cent of our needs. Just seven years ago, in 1972, we spent £53 million or 2.8 per cent of G.N.P. in buying oil. In 1978 this had gone up to well over £300 million, or 5.3 per cent of G.N.P. I need hardly tell you that the bill for this year will be considerably higher. This is money which is going abroad and there is no way we can compensate ourselves for the loss.

Our vulnerability to shortages or interruptions in energy supplies is accentuated by the very high rates of economic growth we have been attaining and are aiming for. At the Strasbourg Council I stressed that a 5 per cent reduction in oil consumption for a country as heavily dependent as ours on oil supplies, which is growing so rapidly, could impose an altogether disproportionate burden. The Council accepted this point and agreed that in applying energy constraints generally, regard should be had to the situation of individual states.

There will be an effort to co-ordinate approaches with the producer countries to what is in fact a world crisis in energy. The Minister for Industry, Commerce and Energy, acting for the Presidency, will be involved in these discussions. These short-term measures to bring supply and demand into balance and to co-operate with the producer countries will meet only part of the case. They must be supported by measures whose effect will be felt in the medium and longer term. These measures include—(1) an effective conservation policy; and (2) the development of alternative sources of energy, including, in particular, coal and nuclear power. I have stressed the need for the most stringent safety precautions and for the development of methods of disposal of nuclear waste; but there is little point in deluding ourselves into believing that countries which are themselves looking to nuclear energy to supply one-fifth or one quarter of their total needs will look with sympathy on the case of a country like ours if we deliberately, or by omission, continue to leave ourselves vulnerable to the vagaries of supply in the market for commodities of limited and declining availability. Other alternative sources, such as solar or geothermal energy, are unlikely to produce energy on economic terms for another ten or 20 years. Under this heading I stressed the importance of exploration, particularly in the Irish context; but again it is important to remember that even another find on the scale of the North Sea would not change the medium term prospects.

The stark reality in all this is that before the end of the century millions of people could suffer severe hardship unless energy resources are fully developed and utilised; and that unless we here face this reality and adjust our expectations to what is possible of realisation we will be creating for ourselves and our children a most disagreeable future.

The Community, the United States and Japan are the three main pillars of trade and industry in the free world. A difficulty, indeed a source of friction, between them has been the growth of the deficit which the Community continues to incur in its trade with Japan. At $6.4 billion in 1978 it represents a major drain on Community resources. I would like to stress the approach favoured by the Strasbourg Council, because it has particular relevance to Ireland. There was general agreement that the solution did not lie in any attempt to convince the Japanese that they should reduce the efficiency or competitiveness of their research and industry—that indeed would be an easy way out for countries seeking the illusion of progress through higher payments for static output. The success of Japan has been founded on hard work, frugality, discipline and corporate loyalties. The general approach of the Strasbourg Council was to emphasise the need to strengthen co-operation with Japan in all fields, including trade, research and investment. There will be consultations between the Commission and Japan to this end.

Among the items discussed under the heading of European Political Co-operation were the Middle East, the Rhodesian situation and the problems of refugees from Vietnam, in particular the necessity of finding a solution which is both efficacious and humane.

This is the last European Council before Ireland takes over the Presidency on 1 July. I took the opportunity of thanking President Giscard d'Estaing for his hospitality and expressing appreciation of the way in which France had discharged the duties of the Presidency. I said that I hoped that Ireland would prove to be a worthy successor to France in this high office and expressed a welcome for the Council when it meets in Dublin next November.

The Minister for Foreign Affairs will be reporting shortly to the European Assembly on the programme for the Irish Presidency. I need only mention here that, apart from the follow-up to the Strasbourg Council on issues like energy and convergency and some questions relating to agriculture, important issues likely to arise during that time include the six-monthly review of the European Monetary System, the adoption of the 1980 Budget, the report of the Three Wise Men, maintaining the momentum of negotiations for the enlargement of the Community, making progress towards agreement on a Common Fisheries Policy, conclusion of the negotiations with the African, Caribbean and Pacific countries, perhaps this month, and signature of Lomé II. In all this it will be important to work for the avoidance of protectionism, improved access to existing markets, fair competition and safeguards for sensitive industries in trade negotiations. The Community will endeavour to prevent a new inflationary process from developing and to maintain the Community's economic growth at the highest possible level. It will obviously be our aim to do everything possible to improve the employment situation in the Community.

Criticisms are possible of the concept and working of European Councils. I do not necessarily subscribe to these, preferring to look on the positive side. Councils afford Heads of State or of Government an opportunity to come together and exchange views on the problems facing them individually and collectively. Even if Councils attained nothing more than this, they would be of considerable benefit. On this occasion, in particular, I found the degree of consensus, indeed of utter conviction, on the seriousness of the problems now facing Europe both impressive and intimidating, particularly in relation to energy. I will quote one paragraph from the Presidency conclusions which conveys this sense of urgency and conviction. It says that if a strategy for the rational use of oil and the development of new energy sources cannot be worked out, then "the world will rapidly move towards large scale economic and social crisis". That is a message we cannot ignore, either in our approach to general economic problems or to energy policies. The consequences of taking the soft option, of trying to avoid trouble, or to buy temporary popularity, are too grave. We will not survive if we ignore these warnings, which are more serious and more persistent than I can ever recall, or if we seek solutions based more on ignorance or the desire to please than on an appreciation of the realities. These are the facts now. I am no prophet of doom; I would prefer to be regarded as a realist—we must all recognise that our future will be governed by the realities so forcefully expressed in the conclusions of the European Council.

Dr. FitzGerald

It is not easy to reply in these circumstances. Frequently on these occasions, what happens the European Council does not affect the State directly and it is generally fairly well reported in the press. On this occasion what has happened could have the most profound effect on this country and, perhaps because the European Council occurred immediately before the weekend, the press reports were remarkably inadequate in our papers, with due respect to them, and also as far as I can make out, in the British papers—I cannot speak for other countries as, for various reasons, their papers are not available. The result is that I have not been clear until I saw the communique—and am now perhaps, in some ways, even less clear, having seen the Taoiseach's speech—on precisely what was decided and its possible impact on us. It may be that because this speech only reached us in the last three-quarters of an hour—it only reached the Library at 2.50—I have missed something and my remarks may in some respects be wide of the mark. I hope I have in the brief period available extracted the key points and that what I have to say will be relevant and accurate. If not, the Taoiseach will correct me.

First of all, it is my duty to wish the Taoiseach and his Government good luck with the Presidency. I am more conscious than most of the onerous burden involved and the need for very careful preparation and the possibility that, even with the most careful preparation, if you do not have good luck during it, things may not turn out as you would wish. In our case, we prepared carefully for the Presidency but we would not have had such success had we not had luck on our side as well. So when I say good luck to the Taoiseach, I mean it because he will need it to ensure that he achieves the kind of success that is beneficial to this country.

I am glad that the Taoiseach is going personally to the Parliament on its first meeting in three weeks' time, to mark the importance of the inauguration of the directly elected Parliament. I have some regret that he is going to represent this country with the message that Parliament should not have any additional powers vis-á-vis the Council of Ministers. As he knows, though not all his spokesmen during the European campaign seem to have been willing to admit this, we have never proposed that powers be transferred from this Dáil or Seanad at any stage to the European Parliament. We were concerned that it should have adequate control of the Council of Ministers and that, I think not merely on democratic and general grounds, but on grounds of the good of this country. The Taoiseach would be in a stronger position facing the Parliament if he were to go there as an advocate of the Parliament fulfilling its role as a legislature more fully than somebody who had joined with other fairly nationalistic and narrow minded people to oppose that.

There is one other issue on which he is on difficult ground in the Parliament, although perhaps at this rather formal inaugural session it may not be out of courtesy raised with him, that is, the Government's agreement with the European Council with the very narrow British view, which others then adopted, on the basis that the British and the Irish want to hang themselves, why stop them, that the salaries of the European Parliament should be determined and paid nationally at national levels. I know how strongly this view was held by the previous British Prime Minister and Foreign Secretary. While I do not feel that it would have been beneficial, for a variety of reasons, for German-level salaries to be paid to representatives from Ireland I certainly equally do not feel that the present Dáil salary level is the appropriate one for a member of the European Parliament, who will have to spend a large amount of his time in that Parliament with people paid very much higher rates. I believe the European Council acted improperly in purporting to exercise power in this area, which is properly one for the parliament within its own budgetary competence.

The Bill which is before us at present is one which should not be before us. I have some doubts about its constitutionality because we are interfering in an area which under the Treaty of Rome is a matter of competency of the European Parliament and under our Constitution the Treaty of Rome takes precedence in matters of this kind. I doubt very much whether we have any right in this House to be debating this legislation, quite apart from the wisdom of ensuring that our representatives will not be second-class or even ninth-class, citizens in the European Parliament. I hope those matters will not be raised on 18 July but I suspect the Parliament may want to come back to them at a later stage and that the legislation we are now passing may turn out to be irrelevant as well as possibly unconstitutional.

I now want to come to other points raised by the Taoiseach. He referred very briefly to the fact that the Council considered under the heading of political co-operation, matters relating to various parts of the world, the Vietnam refugees, about whom we are very concerned and which poses an almost insuperable problem because of the scale of the disaster involved and the immense cruelty of the Government in effectively sending into exile such large numbers of people. I hope the Community can help in this. I am glad we are helping in a small way. It is inevitable that it should be in a small way given our own situation. None of us can be happy in our consciences about this situation. I hope that anything we can do internationally to ease it we will do. Perhaps during our Presidency and in the framework of political co-operation it may fall to us to take initiatives in this matter. I trust that the Minister for Foreign Affairs will give priority to it.

The other matters of international foreign policy mentioned by the Taoiseach, merely by reference, relate to the Middle East and Rhodesia. I trust that at the meeting, when political co-operation was under discussion, he or the Minister for Foreign Affairs raised forcibly with our colleagues the situation which exists in the Lebanon where our forces have been under attack frequently by forces armed, assisted and encouraged by Israel and, have on occasion been shelled by shells which according to American experts, unlikely to be biased in their assessment, were fired directly from Israel. It is intolerable that, when we send our forces on a peace-keeping mission, any country should connive at attacks on them in this way. I do not think enough has been done to draw the attention of that country and world opinion generally to the impossible situation in which it puts our forces. I hope the Taoiseach raised that at the meeting.

On the question of Rhodesia—I am dealing with those matters first of all which are far from our shores before coming nearer home—I hope the Taoiseach and his Minister took the opportunity to maintain our position on this matter, that the internal settlement in its present form does not offer a solution and that he impressed on the British Prime Minister that view. There is a grave danger that the whole of Southern Africa will eventually be brought into a cold war situation with major intervention by the Soviet Union because of weak, inept handling of the situation. The British Government need our support and our encouragement to maintain the position of its precedessor and not to walk into the trap set of supporting a settlement which could lead to indefinite escalation of the war at great human cost and at great danger to the balance of power in the world as a whole.

I hope the Taoiseach and his Minister will continue to express what has been our view on this over the last three years since this issue came up and that the Minister will encourage the British Foreign Secretary to maintain his predecessor's position and to persuade his Prime Minister of the opportuneness of that policy.

I have, having referred briefly to those matters, to come to matters which more directly affect us. I will take them roughly in the order in which the Taoiseach dealt with them. The Taoiseach, having referred briefly to the question of the EMS and convergence, and the Commission being asked to study the working of the budgetary system, went on to deal with energy and the economic and social situation. I note that, for the first time in two years, so far as I can recall, in a Government statement there was an admission that the target they set themselves was not to provide so many thousand new jobs but to reduce the number out of work by 25,000 a year. For two years the Government have tried to wriggle out of that commitment in the manifesto by expressing it in terms of new jobs rather than a reduction of the numbers out of work. The Taoiseach has at least the honesty to come back to the original commitment, just at the moment when he is abandoning it.

The grounds he gives for failure to achieve this are ones which I do not think we can accept. He gives three reasons why it is virtually certain that the targets set of 6½ per cent growth rate and a reduction of the numbers out of work by 25,000 per annum cannot be attained. The first is the question of industrial disputes. Leaving aside the question of responsibility for those disputes, they are of their nature short term in character, although I accept that the failure to deal with the Post Office strike at the beginning and to achieve earlier on the settlement eventually achieved at the end, may have lasting effects not merely on tourism for the current year but on industrial investment here. Great damage has been done by the handling of that strike. Even allowing for that, I do not think the other industrial disputes are all that relevant to growth rates. Even the failure to remove rubbish from our streets, serious though it may be and objectionable, is not something which affects our growth rate. Leaving aside the Post Office strike, which is the one thing which could have some significant effect, the other matters raised by the Taoiseach, the severity of the winter with its effect on food prices and world energy problems, are not really relevant to the current year. The energy crisis is likely to affect our growth in the future but as an excuse for failing to achieve targets set several years ago in the current year it simply does not stand up.

There is nothing in the energy shortage which will have a perceptible effect on economic growth in the current year. I believe the Taoiseach knows that. The effect of the winter on food prices is marginal. It certainly has some effect on inflation. I would like the Taoiseach to compare the effect that had with the effect the Government have had by removing subsidies and increasing taxes. I do not believe that the severe winter did a quarter of the harm the Government did. I do not think the reference to the winter is particularly convincing. The fact is that our economy was on the downturn before the winter started, as the Central Bank reports have shown. It has nothing to do with the food prices and the winter and certainly not with the energy crisis whose effect lies in the future so far as economic growth is concerned, nor has it much to do with industrial disputes. The fact is that the Government's management of the economy is such as to lead to a revival of inflation, to encourage and sharpen that inflationary movement and to leave us in the worst possible posture to face the economic crisis arising from the energy difficulties.

When we were in office we faced an energy crisis, which was far more severe than this, because what was involved then was a quintupling of oil prices within two months and now we are talking about increases in oil prices which have been spoken of as of the order of between 20 and 30 per cent. One report—I trust it is not a very convincing one—talks about the possibility of 40 per cent. These are miniscule increases by comparison with the increases we suffered in a two-month period. Yet although this came at the beginning of our period in government and affected the whole economic situation throughout our period in government, whenever we raised this point and referred to the impact it had on our economic situation the then Opposition brushed it to one side. They said, "Excuses, excuses"; they told us it was the responsibility of the Government and said we should not be using what was happening outside as an excuse for not controlling the economy. The fact is we faced a major crisis at that time, beside which what is happening now is minor in terms of the impact on prices. The Taoiseach knows that. The figures are there for all to see. To start using it as an excuse for failures on the economic front before it has had any significant economic effect is a bit too obvious as an alibi for the failure that has been evident during the past year as the rate of our economic growth has declined.

The Taoiseach said that the Commission's projections for this country were for a growth rate of 3.8 per cent for this year and 3.5 per cent for 1980. It is not clear to me to what extent the Taoiseach accepts this. He said he does not necessarily accept the projections but they are an indication of the direction and the magnitude of the change that has occurred in our economic circumstances. I note that the Minister for Economic Planning and Development has not been prepared to admit anything more than the possibility of a 5 per cent growth rate instead of 6½ per cent and the Taoiseach has recently echoed that figure of 5 per cent.

It is time the Government faced the reality of the effects of their policies on giving us a short, sharp burst of growth creating inflationary pressures which have doubled the rate of inflation within 12 months and which have left us in a naked situation to face the real crisis that lies ahead. The Government should face the fact that the result of their policies has been to halve our growth rate or reduce it by 40 per cent in comparison with the level at which it was when we left office and to go on talking about 5 per cent when the Taoiseach knows perfectly well that 5 per cent is unattainable is unhelpful. The Government need to revise drastically their economic strategy at this stage. A constant dragging of feet and a refusal to face up to the situation—what we might call constant intellectual dishonesty, to echo the Taoiseach's speech—is of no help. The situation is grave because we are facing this crisis from such a weak position. It would be much better to face it fully. Only by doing that can the nation be convinced that it is necessary to take drastic measures to deal with it.

In his speech the Taoiseach promised to deal with the question of the allocation of increased resources in relation to the current year. He said that whatever increase is attained in our national output 1 per cent to 2 per cent must go abroad to pay the increased cost of energy imports and a further 1 per cent to 2 per cent must go to increase employment. If we put those two figures together we get the whole of the growth we are likely to have this year. By pretending that growth will be higher, by pretending that this year there is room for an increase in living standards, by attempting to fool the people, the Taoiseach is not helping the cause of achieving a reasonable increase in money incomes. It would be much better if he came clean and said clearly that the growth rate will not be 5 per cent, that it will be of the order of 3 per cent plus.

The Taoiseach has told us the percentage figures that must go towards meeting the cost of energy imports and increased employment. There is no room for an increase in living standards. That is not a popular thing to say. I am not saying it simply because I am in this House criticising the Taoiseach for some aspects of policy. I made that point elsewhere last night. On the whole an Opposition tend to leave it to the Government to bring bad news but the failure of the Government to face up to bad news imposes on us an obligation to tell the country the truth if the Government are not prepared to tell it.

There is a certain contradiction in the Taoiseach's speech in saying that between 1 per cent to 2 per cent must go to increase employment—implying that this is going to happen, that the Government will ensure it—and going on to say that employment cannot be sustained unless there is economic growth.

Employment can be sustained even if economic growth is reduced if the Government can offer leadership to the people to convince them that that should be a priority over increased living standards. However, the Government are not offering that leadership. They have not told the whole truth and it will probably be some months yet before they get round to admitting the reality of the situation we are facing. This is unfortunate. I regret the Government have not taken this opportunity to be frank about the matter. The opportunity is there and the seeking of alibis, as was done in the Taoiseach's speech, and the failure to face the reality of the situation is a serious defect. It is not a good augury for the long Summer Recess if that is the way the Government are going to approach this opportunity to get down to tackling the serious problem of achieving increased employment.

In the communiqué there was a brief reference to work-sharing. I should like to hear more about this. The brevity of the reference suggests more a "touching of the cap" to this concept than an actual commitment. As things stand at present and with the technological changes taking place to which the Taoiseach referred, the prospect of achieving increased employment in the years ahead with our present structures—our hours of work, our present system of overtime—is limited. We have to face realities which hitherto we have dodged. You do not face realities by saying that if the employment targets are not met you will invent another X thousand jobs in the public service to add to the deadweight burden of the cost of public administration which is significantly higher here than the average in industralised countries. This is despite the fact that among the industrialised countries we are at the bottom of the league in terms of output per capita; we are at about the same level as Greece.

I am not clear on what the Taoiseach said about energy. There is a disturbing ambiguity here which I hope he will take an opportunity to clarify. I recognise, as I have done before, that these debates are thoroughly unsatisfactory in that the Taoiseach has no right of reply. I still urge on him to accept the offer of a right of reply to make the statements of the three leaders meaningful.

With regard to the availability of oil supplies, there is considerable confusion. In the communiqué it is stated that the Council expressed their resolve, among other things, to maintain Community imports between 1980 and 1985 at an annual level not higher than that for 1978. There is a reference to taking account of the economic situation of each country. In his speech the Taoiseach mentioned this and implied that there was some commitment to take account of our special situation. I should like to hear more about that. If the Community as a whole are to maintain imports at the 1978 level, how can they make provision for different growth rates, different capacities to grow, because we have a greater capacity to grow than have other member countries, and different needs to grow because of different employment projections?

In his speech the Taoiseach referred to the demographic issue. I am very glad he has come to terms with this and is now raising this matter, as I have been doing for a long time. In this connection this country faces particular problems which are on a larger scale demographically than any country of the Nine and which are likely to last for at least 15 years longer than in other countries of the Nine. If these problems are there, what provision can be made to ensure that out of this constant flow of oil to the Community as a whole we get a share that will enable us to achieve the kind of growth which we need to provide employment and which other countries do not need because they do not have the same scale of employment problems, as the Taoiseach said in his speech? What discussions took place on that matter? What assurance has the Taoiseach that we will secure a differential allocation of imports of oil to allow for our growth? The mere reference to taking account of the economic situation in each country is insufficient unless it is quantified in some way or unless some mechanism is set up to quantify it. I ask the Taoiseach, perhaps in the Adjournment Debate, to clarify this matter which is of crucial importance. If we were to be held to an absolutely constant level of imports of oil at the same rate as other countries of the Nine, there is no way in which our much greater employment problems could be resolved no matter how we sought to share work or took other drastic measures of this kind. We are entitled to hear what the Taoiseach put to the European Council and what specifically they have agreed. Will there be proposals by the Commission as to the allocation of this constant volume of oil? What criteria will be applied to determining these allocations to member countries? These are matters of vital concern of which we need to hear more.

There is an aspect of the Taoiseach's speech and of his statement to the papers immediately after the European Council meeting which worries me. I refer to the nuclear issue. I do not believe any party can at this stage exclude the possibility of our acquiring, at some point, in order to maintain our economy and provide employment, a nuclear reactor. I hope and pray this will never be necessary, but I do not think we can exclude that possibility. I am concerned that we should not rush into this in any panic. We should be prepared to draw up plans, as the previous Government did, in case it becomes necessary. It is important that there should be a full and independent inquiry—and it should be seen to be independent—into the question of how nuclear energy might be provided here.

The Taoiseach unfortunately in his statement after the European Council meeting has prejudged this inquiry, as is evident from the newspaper reports. The Irish Times says:

The support of the Taoiseach for the nuclear option now virtually reduces the promised public inquiry on the siting of a first nuclear power station at Carnsore Point, Co. Wexford, to the virtual status of a committee which may be able to add some conditions about security and safeguards.

In his statement to the press he spoke about the possibility of looking at things like nuclear waste disposal, although he hastily added that was looked after anyway at present. It is not clear what role he sees for this inquiry. How it is to be independent after the type of statements made, I am not at all clear.

Why did the Taoiseach rush in to make such a dramatic statement on this subject, even talking about the possibility of a second nuclear reactor, after that meeting? He appears to have been overly impressed by the heads of the three major countries which pushed this issue. Having had some experience of dealing with these countries, I know they have a very strong commitment in the nuclear area because they have nuclear industries which export. I also know that they have been less than scrupulous in their export policies. Some of them have been willing to export nuclear reactors of a type which make possible the building of nuclear weapons, without adequate safeguards, and have persisted in this because of the benefit to their own economies. I know how tough they can be as salesmen and the kind of pressure they can put on. I heard the leaders of some of these countries expressing themselves in very strong terms and with the utmost contempt for anybody who is concerned with the possible dangers of nuclear energy, sweeping them to one side, because of the importance to their economy of selling nuclear reactors.

I was reading what the Taoiseach said to the newspapers. He spoke about advice given to us but I can find nothing in the communiqué about such advice. It was only in the Taoiseach's statement to the press that mention was made of advice.

The Taoiseach

Again I advise the Deputy to look at subparagraph 4 (3) of the conclusions.

Dr. FitzGerald

I have read the reference to that and remarked on the development of nuclear energy and the need to guarantee the safety of the population. The Taoiseach seems to be dismissing this rather lightly in rushing into the idea of a second nuclear reactor before there is an inquiry into having any nuclear reactor.

Has the Taoiseach read the transcript of the telephone calls made by the agent of the Nuclear Energy Agency in the power station at Harrisburg to his headquarters and the governor's office, which were printed in the American press but not here, unfortunately. It ran into more than five pages. Anyone who read that transcript could not but be horrified at the mixture of ignorance of what was happening, incompetence, fear to tell the truth, and a cover up of what was happening at the time. If that can happen in a country like the United States, we would want to think very carefully about what safeguards would be needed if we were to have a nuclear reactor.

I urge the Taoiseach to have those transcripts placed in the Library of this House so that Deputies can read what actually happened in a country where something went wrong, where the situation was handled by fallible human beings, not knowing what to do, frightened to tell the truth and, as a result, leaving lives at considerable danger for a certain period. It was good luck rather than good judgment which led to the result where no lives were immediately lost, although some people will die in due course as a result of what happened there.

Having said that, we come back to the fact that we may have to face this issue, but in my view we should face it in our own time, make our own judgment on it, not be advised or pressurised by anybody outside, and not use an occasion like this to panic our people into a decision which does not need to be taken yet. Has the Taoiseach consulted recently the European Commission and asked their views on this? I would ask the Taoiseach has he consulted recently with the European Commission as to their views on this. It is my understanding that the Commission, certainly some time ago, expressed the view that we should not rush into getting a nuclear reactor, that we are too small a country for it to be necessary and that we should take our time about it. I do not know if that is still their view but that view was expressed by them not so very long ago. They, perhaps, are in a more impartial position than some other people who might be expressing their views and whom I have heard expressing their views very strongly because of their own particular interests.

The Taoiseach

I have to interrupt the Deputy but may I say again that the position is exactly as it was left by the last Government, the ESB having been given instructions to make the necessary examinations and to be prepared in the event of a decision being taken?

In any event this whole nuclear question is something which we should examine much more carefully and calmly. We should not be influenced by pressures of this kind. We should take our time about a decision in a matter of such vital importance while planning well ahead in case it is necessary to take it. These are some of the points that I would like to make arising out of the Taoiseach's statement. When the Taoiseach says that there is little point in deluding ourselves into believing that countries which are themselves looking to nuclear energy to supply one fifth or one quarter of their total needs would look with sympathy on the case of a country like ours is we deliberately by omission continue to leave ourselves vulnerable to the vagaries of supply on the market for commodities of limited and declining availability, there is the hint of the threat from the big boys that we have to have regard to. If the Netherlands do not feel that they have to jump to the whip being cracked then I do not think we should either.

The Tánaiste

The Deputy knows wel the Netherlands' situation in regard to natural resources and so on.

Dr. FitzGerald

Yes. I know they have declining supplies of natural gas.

The Tánaiste

But their supplies are relatively very much more substantial than ours.

Dr. FitzGerald

The Netherlands have supplies of natural gas which, by the time we would have a nuclear reactor in operation were we to start now would be phasing out, so it is not a very relevant argument to use.

There is one other point I want to raise and that is on the question of the enlargement of the Community. We will have the task of furthering negotiations towards the enlargement of the Community and also the task of preparing the budget for 1980. I would urge on the Taoiseach that during our Presidency, while we should not of course pursue in any aggressive way particular national interests of our own during our Presidency, there is one matter which the Taoiseach and his Ministers can legitimately press and that is the argument entered into three or four years ago when the protocol was agreed in Brussels that with the enlargement of the Community the resources of the Community be enlarged pro rata. It is important that that agreement be implemented and that in any negotiations for the further enlargement of the Community it would be wise for the Taoiseach to make it a precondition for those negotiations that action be taken in respect of the increased resources required in relation to Greece so that we do not find ourselves in the position where we are trying to meet the needs of ten countries out of the resources for nine and then 11 and then 12—and I believe the agreement I achieved on that should safeguard us if we press to have it implemented. We have the opportunity in relation to further negotiations to insist on the implementation in practice of what is agreed in principle and I would urge the Taoiseach to do that as and when the opportunity arises during our Presidency.

Having said that, I repeat that I wish him and his Ministers every good luck during his period of Presidency and he will be assured of any support that the Opposition can give in the carrying out of this task and assured that our representatives in Parliament will do nothing to embarrass him during that period.

Mr. Cluskey

Before formally responding to the Taoiseach's speech I would like to comment on the procedures. I did not find the exchange at Question Time very beneficial. What was being sought was I believe in the interests of parliamentary democracy and the Taoiseach's ungracious response to the request that a copy of the communiqué, or the understanding as he chose to call it, would be made available to the Opposition parties some considerable time in advance of the statement being made is not in the interests of parliamentary democracy. It may, in the Taoiseach's view, be a question of gaining some slight party political advantage in so far as one cannot be adequately prepared to respond to a communiqué which one has not seen. It is a very heavy price that the country is being asked to pay for whatever party political advantage may be involved for the Taoiseach to justify this by saying that this is the way he was treated when he was in Opposition and then to further say that he regarded the treatment he got as discourteous.

The Taoiseach

I did not say that. The Deputy ought to quote me correctly.

Mr. Cluskey

It is very difficult to quote the Taoiseach accurately because he has so many ways of saying things that can mean different things to different people. If the Taoiseach's view was that this treatment was discourteous it is very small-minded of him to continue with a practice which he himself regarded as discourteous.

The Taoiseach

I did not say that.

In fact, the Taoiseach's response was somewhat petulant and totally out of character with the cultivated public image of the Taoiseach. I suggest it might be more beneficial for all concerned, not least the country as a whole, if the Taoiseach was less petulant on occasions when we are trying to be constructive in our approach. Deputy Dr. FitzGerald mentioned the Irish forces serving in the Lebanon and the fact that fire had been directed over positions they held. Naturally, this is a matter of concern to us all. I will have an opportunity of visiting Israel next week in connection with another matter and I have requested a briefing from the Department of Foreign Affairs about the Government's position and representations the Government may have made in relation to this matter. I did so in the hope that I may be able to assist those representations in any meetings I may have, formal or informal, with people of influence I may meet while in that country. I have also sought permission from the Department of Foreign Affairs, in conjunction with the Department of Defence, to visit the Irish troops engaged in peace-keeping operations in the Lebanon. I hope the Government will extend that facility to me.

With regard to the communiqué which the Taoiseach gave us an opportunity of viewing at 2.50 p.m. today and with regard to the Taoiseach's speech I shall confine myself to two issues, the main one being the question of energy and our position with regard to that topic. We must all be deeply concerned at the potentially disastrous effects for the world economy of the rapidly worsening energy crisis. The present crisis comes at a time when most economies had just recovered from the recession of the mid-1970s and, unless the matter is handled with extreme care and creativity by both producer and consumer countries alike, the economic consequences for all economies will be more serious than most of our young population have ever experienced.

Even before the latest increases in oil prices there were clear signs of impending economic difficulties in most countries. Inflation in the OECD countries this year will be higher than in 1978 by at least 1 per cent, leaving oil price increases out of account. Similarly, growth rates in the OECD countries were already showing a marked down-turn before the oil price effect is taken into account. In this connection, it is very worrying indeed for world prospects that the United States seems hardest hit with the consequent adverse effects on world trade which we are all aware of.

In the European Community, growth rate forecasts have also been revised sharply downwards. The European Commission is now predicting a growth rate of only 2.8 per cent for the Community as a whole in 1980. At the same time, the Commission states that Europe: "faces a decade of austerity". Indeed, present trends in Europe point to continuing high unemployment and falling living standards in the 1980s. In addition, unless major changes are made to existing energy policy, balance of payments crises and rapidly rising inflation will be the order of the day in the years ahead.

Against this stark background, it is legitimate that I should point once again to the extraordinary sluggishness with which the European Council has responded to the energy problem. It was a specific point on the agenda at the last Council meeting but, as I said at the time, the Council took no positive initiatives to deal with what was, even then, clearly going to amount to a problem of major proportions.

As a result six months have been wasted, during which common policies should have been pursued. I repeat now what I said then. The oil problem cannot be dealt with by individual countries acting alone for two basic reasons. First, the pursuit of different policies by different countries will lead to different standards of economic performance which will not be politically sustainable for long. Secondly, no individual country, no matter how economically strong it may be, can expect on its own to achieve a reasonable solution against multinational oil companies and the OPEC producer group.

These facts are well known and accepted. Yet we had to wait until last week's Summit in Strasbourg before expression was given to them in the form of an attempt to achieve a common approach by the Community as a whole. That is not good enough by any standards and is to be deeply regretted, not least by the smaller countries such as Ireland.

I note also that even the limited gains made at the Council in terms of securing a common European Community approach are conditional on securing agreement from the other major oil consumers at this week's Tokyo Summit. The signs are that the United States and Japan are unlikely to accept the exact formula worked out last week in Strasbourg. Should this turn out to be the case, I earnestly hope that we, as one of the smaller countries of the European Community, will not find ourselves faced with an alternative agreement worked out by the major economies outside the framework of the European Community. I have made the point before that I disapprove of the present system whereby the Community determines a common policy, only to have it altered or jettisoned at these Summits of the major powers where the Community as a whole is not represented on an equal footing.

I would make this point also. The depth and prolonged nature of the mid-1970s recession was due in no small measure to the inability of political leaders to act quickly and decisively, both in relation to domestic economic management and in relation to the oil producing countries. Should this experience be repeated on this occasion, coming at is would on top of already serious economic problems in all our countries, not only the economic consequences will be serious but so too will the threat to world peace.

The most substantial outcome of last week's Summit in Strasbourg was the agreement to freeze oil imports at the 1978 level during the years 1980-85. This would not be acceptable to us in this party if it means that each member country is expected individually to stick to its 1978 import level. Given that oil plays such a crucial role in economic development, the effect of a decision in that form would be to, at best, freeze the present income gap between Ireland and the economically more powerful member countries. Such an approach would fly in the face of existing policy, which is to narrow the gap in living standards between the poorer and richer areas of the Community. Rather, what is needed is a policy which discriminates clearly in favour of the poorer regions in so far as oil imports are concerned. It is to be hoped that the Taoiseach made that clear in no uncertain terms and will pursue such a policy actively during his period as President of the Council.

If the Minister to whom the Taoiseach saw fit to give responsibility in this area makes a statement on RTE we are entitled to assume that as a responsible Minister he is speaking on behalf of the Government and that he has the support of his Taoiseach—or perhaps we cannot wait for six months for the reshuffle? I would probably agree with that, but they cannot have it both ways. Either the Minister is stating Government policy on RTE or if he is not, the House and the country are entitled to know that. If he is, what is the Government's position and the Taoiseach's position? Which is it? Sitting there silent——

Dáil Éireann debate - Tuesday, 26 Jun 1979

European Council Meeting: Statement by the Taoiseach.

Dáil Éireann debate -
Tuesday, 26 Jun 1979