Vol. 328 No. 4
asked the Minister for Foreign Affairs if he proposes to indicate Ireland's attitude towards the reform and restructuring of the European Community's finances including the restructuring of its budget at the next meeting of the Council of Ministers; and if he will make a statement on the matter.
6.
asked the Minister for Foreign Affairs the proposals the Government will make for an increase in the revenue of the European Economic Community having regard to the likelihood that the Community may soon reach the limit of its own resources income.
With the permission of the Ceann Comhairle, I propose to take Questions Nos. 5 and 6 together, as the subject matters are, in fact, intimately linked.
The Council agreement of 30 May 1980 provided for reductions to the British contribution to the Community Budget during the years 1980 and 1981. At the same time the Community pledged themselves to resolve the problem for 1982 by means of structural changes and, to this end, the Commission were mandated to carry out an examination of the development of Community policies, without calling into question the common financial responsibility for these policies, which are financed from the Community's own resources, nor the basic principles of the common agricultural policy. Taking account of the situations and interests of all member states, this examination will aim to prevent the recurrence of unacceptable situations for any of them. Detailed discussions of the issue will not begin until the results of the Commission's examination have been presented to the Council in June 1981. For this reason the item was not on the agenda of the recent Foreign Affairs Council and is unlikely to be discussed in any detail, until the Commission report has been presented to the Council.
However, it is nonetheless the case that the matter is the subject of ongoing study and discussion within the Community. I have recently held bilateral meetings to discuss this question with the Foreign Ministers of Denmark, Netherlands, Belgium, France and Germany, and similar meetings will take place in the near future with the Foreign Ministers of Italy and Greece.
At these meetings I have taken the opportunity of outlining the Government's views on the future development of the Community. In our view the forthcoming debate should not focus on exclusively budgetary issues. Instead, the Community and all its policies must be looked at as a whole and, as required by the agreement of 30 May, the situation and interest of all member states must be taken into account in order to prevent the recurrence of unacceptable situations for any of them. If the restructuring called for in the mandate of 30 May is to be in accord with the fundamental objectives of our Community, what is required now is for the Community to move forward by building on their achievements. To do this, it is imperative that the present artificial restraint on potential Community revenue be removed, through the raising of the legal limit on that revenue represented by the ceiling of 1 per cent VAT. That is the view which I, on behalf of the Government, have been conveying, and will continue to convey, to our Community partners.
May I ask the Minister if the discussions he had with his various counterparts in other member states of the Community have been extended to direct discussions with the Commissioner who was allocated responsibility for the reform of the Community's finances?
There is a constant exchange of views between myself as Minister for Foreign Affairs and the Commissioner responsible as the Deputy has indicated.
I am sure the Minister is still on talking terms with the former Deputy O'Kennedy. I am asking whether the Government had precise discussions on proposals for the restructuring of the Community's finances?
That is what I said.
No, the Minister said there was a constant exchange of views which I do not doubt.
Any exchange of views would obviously include the substance of the matter to which the Deputy is referring. If the Deputy wants reassurance I can tell him that we have discussed this matter with all the Commissioners.
I should like clarification because I want to be sure that I understood the Minister correctly. Is the Minister saying it is his view and that of his Government that the most appropriate solution to the budgetary difficulty would be to increase the ceiling of 1 per cent VAT to something above that? In particular, does the Minister accept that it would be most undesirable to return to a system in which the Community budget would be financed by individual national contributions which would have to obtain the political will of individual Governments and individual Parliaments in each year?
I agree fully with the thrust of Deputy Ryan's question and, indeed, that was the thrust of my reply. If the Community want to retain their Community philosophy and programme of action, the obvious manner in which it should be financed is through their own resource, the 1 per cent, as it is at the moment. This ceiling can be raised if there is the political will to raise it. There is no other way in which the Community can be self-financing.
May I ask the Minister——
A brief question, please.
Has Commissioner O'Kennedy prepared any form of draft proposal for informal discussions with the Minister or any other Foreign Affairs Minister?
That is Commissioner O'Kennedy's business within the Commission. Deputy Ryan has put it properly in that, while the Commission do this business and have to produce a mandate by the end of May, basically it will then become a matter for the European Council and the Council of Ministers to discuss what the Commission put forward. That is the way the system works.
Ceist 7.
