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Dáil Éireann debate -
Thursday, 21 Apr 1983

Vol. 341 No. 8

Report on Developments in the European Communities: Motion (Resumed) .

Debate resumed on the following motion:
That Dáil Éireann takes note of the Reports:
Developments in the European Communities — Seventeenth, Eighteenth, Nineteenth and Twentieth Reports.
—(Minister of State at the Department of Foreign Affairs).

: As Deputies will be aware, the Government are required, under section 5 of the European Communities Act, 1972, to report twice yearly to each House of the Oireachtas on developments in the European Communities. We will today, therefore, be discussing the 17th to 20th Reports which cover the period from July 1980 to June 1982.

Section 5 was inserted into the European Communities Act in order to provide the Oireachtas with an opportunity on a regular basis to debate and review developments in the European Communities. It is, I believe, important for this House to assess periodically the development of the European Communities, how Ireland can best contribute to this development and the effects which it, in turn, has on this country.

Unfortunately, in recent times there has been a growing tendency to measure Community benefits in terms of cash flows only. Such a yardstick does, of course, have the advantage of being easy to quantify. However, the use of such a crude criterion to measure the advantages and disadvantages of Community membership can lead only to a partial and distorted picture of such membership. In saying this, I am not in any way attempting to dismiss such criteria as irrelevant. Certainly the benefits which this country derives from such Community instruments as the Regional and Social Funds, Structural Aids for Agriculture, special Community borrowing facilities, interest subsidies, and so on, are real and tangible and, we would argue, need to be further strengthened in order to eliminate the disparities in wealth as between the various regions of the Community. In addition, of course, the Irish farming community have benefited from the price support system of the common agricultural policy. All these are, as I have said, real and tangible benefits resulting in 1982 in a net benefit to this country of approximately £450 million. But this provides only a partial picture of the Community and the implications of membership for Ireland.

Community membership has wide ranging implications which cannot be measured simply in terms of receipts from the EEC budget for all of its member states, including Ireland. For us, for instance, membership has meant to a certain degree a restructuring of our industrial sector, with a decline in some of our traditional industries dependent on the home market coupled with a development of new industries geared to the European market. There has also been a diversification of our foreign trade patterns with a reduction in our traditional dependence on the British market.

Membership of European Political Co-operation, which is a consequence of our membership, has afforded us the opportunity to participate actively in a very deep and extensive consideration of political developments in the world at large and in the formulation of common policies related to a large number of these developments. These are just some of the impacts which membership has had in Ireland. Overall too it might be said that our partnership within the Community has had a particularly significant impact in the social and cultural spheres, leading to the growth of a more wide-ranging "European" view, on the part of Irish people — particularly the young.

A community is never static but develops through the interaction of its members and the influence which external factors have on this process. So it is with the European Community which today stands at a crossroads in its development. The imminent exhaustion of the Communities' financial resources, the demands for a redirection of budgetary flows and all which this entails for the common agricultural policy, the need for the development of existing and new policies aimed particularly at the problem of unemployment, the impending enlargement to a Community of 12, the problems of existing decision-making procedures and the inter-relationship between Commission, Council and Parliament; all of these problems require urgent solutions which must be found — and found by a Community experiencing severe economic difficulties as a result of the current international recession. It is not enough in this situation to sit on the sidelines. How these problems are tackled will dictate whether the Community will move forward or backward over the coming decade. Ireland must play an active and positive role in seeking the necessary solutions.

I turn now to the reports currently before the House. One of my predecessors, Senator Dooge, has already introduced the 17th and 18th reports to this House. Deputies will understand, therefore, if I restrict myself to giving a synopsis of the period covered by the two latest reports, that is, from July 1981 to June 1982. I will, of course, be happy to respond to queries raised by Deputies on any of the four reports before the House today.

During the 12 months covered by the 19th and 20th reports the Community honoured, on 25 March 1982, the 25th anniversary of the treaties establishing the EEC and EURATOM. It was not a particularly auspicious time, however, either internally or in its external relations, for the Community to celebrate. The challenges presented by the world economic crisis, by the accelerating pace of widespread unemployment, especially youth unemployment, and by internal institutional difficulties within the Community, were posing serious problems for European consensus and solidarity. And yet it has been at times of crisis, and worse, that in the past European countries found the courage, the conviction and the political idealism to build on their individual and collective strength and experience and, in this way, to create an environment in which bold and responsive plans for economic and social progress could be put in place. The Community urgently needs a similar idealism and similarly ambitious policies to-day.

This then was in brief the broad economic background against which the Community, in its Mandate exercise, was conducting a fundamental examination of the issues and policies which would be required to meet the challenges and, indeed, the aspirations, of the eighties and beyond. Senator Dooge went into considerable detail, in his searching analysis and assessment of the Commission's Mandate Report when, as Minister for Foreign Affairs, he introduced the 17th and 18th Reports on Developments in the European Communities to this House on 22 October 1981 (Vol. 330, No. 3). I do not intend to cover this same ground. However, it may be helpful to Deputies, given the continuing crucial importance for both Ireland and the Community of this issue, if I sketch in briefly some of the background to the question.

The Community has moved from institutional crisis to institutional crisis in the past three years largely as a result of the British view that, as its receipts under the common agricultural policy were extremely limited, it was a disproportionately large net contributor to the EEC budget. In May 1980, following lengthy negotiations, the Council responded to the UK case by agreeing to make budgetary repayments to the British Government in 1980 and 1981. At the same time, they gave a Mandate to the Commission to resolve the problem by changes in the structure of Community policies. It is worthwhile recalling that this examination of policy development was, to quote from the Mandate, to be pursued "without calling into question the common financial responsibility for these policies which are financed from the Community's own resources, or the basic principles of the common agricultural policy".

The Mandate Report was the central question discussed by the European Council in London on 26 and 27 November 1981. The Government, who were represented at the Council by the Taoiseach and Minister for Foreign Affairs — then Deputy FitzGerald and Senator Dooge — with the Minister for Agriculture — then Deputy Dukes — as adviser, took a particularly forceful and active part in these discussions. The issue — and I cannot over-emphasise this point as the coming year will almost certainly see this question being raised in a similarly acute way — had profound implications for the future of the Community as we know it, and for Ireland's position within it.

A reality of Community membership for Ireland was that it involved a balance of advantage and disadvantage as, indeed, it does for every member state. We could not, therefore, entertain, eight years after membership, that this might be changed in an unbalanced way, however worthwhile some of the proposals put forward were, especially in the policy development area. I cannot accept that there is something wrong, or inhibiting to the development of other policies, in the fact that the CAP absorbs its present percentage of the Community budget. As the Community, in the period in question, had really only two fully developed policies, and as one of these had no budgetary impact, it was hardly surprising that the CAP element of the budget was so significant. It is pertinent to add that in past years when adequate funds were available there was no worthwhile development of other policies thus casting doubts, to put it no stronger, on the contention that the CAP cost was the real reason for the non-development of policies in other areas.

I should say as well here that the management of the CAP over the past number of years had resulted in the percentage of the Community budget being taken by agriculture falling from 74 per cent in 1977 to 63 per cent in 1981. I see little logic or merit, therefore, in singling out agriculture as the root cause of any alleged budgetary imbalance within the Community. The problem lies rather in the size of the budget and not in its actual distribution.

In addition to the CAP aspect, the debate on the Mandate at the London Council centred around the chapters dealing with: (a) the development of policies other than the CAP; and (b) budgetary problems. A broad measure of agreement was reached on the policy development chapter but, in the absence of agreement on the other chapters, this remained provisional. In the case of the budget chapter, it was found impossible to reach agreement, especially in relation to the period and principles of the budgetary rebates to Great Britain, and the limitations of budgetary contributions in the case of the Federal Republic of Germany.

The position was, therefore, that, early in 1982 when it became clear that progress on the Mandate was not politically feasible, at least in the immediate future, negotiations on a further ad hoc refund to the UK were begun. This was ultimately agreed on in May 1982 by the Foreign Affairs Council, following very difficult negotiations, including an unsuccessful attempt by Britain to block the 1982-83 farm prices agreement. Elements of the agreement also included the taking of a decision on what was called the “subsequent solution” before the end of November 1982. It has not, in fact, proved possible to meet this deadline.

The momentum to this debate which was lost for some time, largely as a result of the blocking by the European Parliament of the British refunds for 1982, was again taken up last February with the publication by the Commission of a Green Paper on "The future financing of the Community". The Commission will be following up this Green Paper in May next with precise proposals both on the own resources question and on the British budgetary problem. For some considerable time ahead, therefore, I envisage major negotiations taking place on the provision of new own resources, on a definitive resolution of the British budgetary question and on the development of new Community policies. These negotiations will be crucial for Ireland. I will, of course, keep Deputies informed of their development.

Turning to the institutions of the Commuity, the period under report has seen a number of developments to improve co-operation between the Council, the Commission and the Parliament. The classification of expenditure as obligatory, such as most of the spending on CAP, or non-obligatory, over which Parliament has the last word in deciding its level, has been a source of tension between the Council and the Parliament. In June 1982 the Presidents of the three institutions signed a Tripartite Declaration which prescribed formal procedures for co-operation in dealing with this problem and thereby to improve the budgetary procedure and to reduce the scope for conflict in this area. I am sure that this approach is the right one and the declaration marked an advance in this important and significant area.

Parliament has played, as it should, an increasingly influential role in the affairs of the Community. Through its direct election, it has given a particularly democratic flavour to the Community and, while the Government do not always find themselves in full agreement with its views, I look forward to the organic growth of that institution on the basis of its democratic foundations. I must say, however, that it would be unwise to anticipate any radical changes in Parliament's powers, at least in the context of the present lack of progress towards European integration. Such progress is an essential condition for any substantial increase in these powers.

Parliament has adopted a number of resolutions aimed at widening its functions in relation to the other institutions. The resolutions concern Parliament's role in the negotiation of agreements with third countries, its right of legislative initiative, procedures for resolving differences, and its right to be consulted on various issues. The Council has discussed these matters with the Parliament and some progress has been made on co-operation generally between the institutions.

Deputies will be aware that the question of a uniform electoral procedure for the Parliament has been considered by the Council but that so far no agreement has been reached and indeed agreement is unlikely to be reached for the 1984 elections.

Progress was also achieved in the negotiations on the accession of Portugal and Spain to the Community in the first half of last year, when agreement was reached on mini-packages of certain chapters listed in the report. Following the request by the European Council last June, the Commission submitted to the European Council on 3-4 December 1982 an inventory of the problems posed by enlargement.

The European Council welcomed the inventory presented by the Commission which, in its view, constitutes a new impulse to the enlargement process and asked the Council to examine the issues set out in it. A report on progress was submitted to the meeting of the European Council on 21-22 March 1982. The European Council intends to take stock of the situation regarding the enlargement negotiations at its next meeting to be held in June and to give political orientation for the completion of the negotiations. Ireland, along with the other member states, wishes to see a speedy and successful conclusion of the negotiations on enlargement of the Community. At the same time, it must be accepted that the problems facing the Community in the area of own resources must be solved in order to ensure that the Community can cope with the effects of enlargement.

A referendum held in Greenland on 23 February 1982 resulted in a majority in favour of withdrawal from the Community. Arising from the results of this referendum, the Danish Government presented a request that Greenland's status in the European Communities be changed from that of full membership to that of association as one of the overseas countries and territories. The Commission has issued its opinion recommending that this request be acceded to; this opinion is now being examined by the member states and the appropriate organs of the Community.

In March 1982, the Greek Government presented a memorandum concerning its position on its relations with the European Communities. The memorandum referred to the economic problems of Greece, which it attributed partly to Greece's membership of the European Communities, and suggested that special arrangements be adopted to alleviate these problems. The European Council of March 1982 requested the Commission to study and report on the memorandum. In June 1982, the Commission set out the results of its initial consideration of the Greek demands for which it has tried to find answers compatible with existing constraints. The Community has recently presented its report on the Greek memorandum. The report contains a number of proposals for Community measures in reply to the memorandum.

Turning now to the Community's external relations, the period under review saw a deepening of the international recession which placed considerable strains on the world trading system. It is very heartening for Ireland, as a small open economy, that the Community and its major trading partners have, in general, avoided a protectionist response to these strains and that at the recent GATT ministerial meeting delegates undertook to resist protectionist pressures.

This is not to say that there are not difficulties. Deputies will recall the dispute with the United States over European steel exports. I am happy to say that an agreement has been reached in this matter. The United States, and other trading partners such as Australia and New Zealand, have also criticised aspects of the Community's agricultural trade policy. This was, likewise, a particular issue at the GATT ministerial meeting. I am confident that a satisfactory accommodation can also be reached in this matter, although recent subsidised sales of agricultural products by the US in markets in which the Community is a traditional supplier have not helped. The Government will seek to ensure that the Community's right to a fair share of the world market in agricultural produce, which was confirmed in the Tokyo Round negotiations and the principles of the common agricultural policy, are maintained.

The growth in the Community's adverse trading balance with Japan was a matter of serious concern in the period in question. Deputies will appreciate that for certain members states, which manufacture goods such as motor cars, television sets, and so on, which are in direct competition with Japanese goods, this is a very sensitive matter. The Community has, therefore, sought to encourage Japan to open its markets to imports of manufactured goods. I am encouraged by the steps which the Japanese Government have taken in this regard. It is, of course, too early to say what their effect will be but the Japanese Government have shown increasing understanding of the concerns with which Japan's trade surplus is viewed by her trading partners and, despite present difficulties, I feel this augurs well for future relations between the Community and Japan.

I might perhaps mention two other developments which encourage me in the view that the world trading system will survive the current recession. One was the extension to 1986 of the GATT Arrangement on International Trade in Textiles (the so-called Multifibres Arrangement). Without the disciplines imposed by this arrangement, it would be quite impossible to ensure that, while developing and newly industrialised countries got a fair share of the world market in textiles, older textile industries in the developed world had the required breathing-space to adjust to the competition. The other development was the amendment of the OECD Arrangement on export credits, adjusting minimum interest rates upwards, particularly for those countries classified as "relatively rich". This avoided a free-for-all in the rates offered under officially supported export credit systems.

In the period covered by the twentieth report, legislation was enacted to enable Ireland to comply with its obligations as a member of the Common Fund for Commodities. I am pleased to report that the remaining steps necessary before the ratification of the Common Fund Agreement were completed expeditiously. Ireland's instrument of ratification was deposited on 11 August 1982. In the near future, the House will have occasion to look at an individual commodity, jute, for which an international producer-consumer agreement has been negotiated under the Integrated Programme for Commodities.

Deputies will be aware of the Community "Plan of Action to Combat Hunger in the World", which was prepared following an initiative by the Italian Government and a number of European Parliament Resolutions highlighting the worsening world food situation. As part of this programme, the Development Co-operation Council of 3 November 1981 agreed to grant 40 million ECU in exceptional food aid to the least-developed countries. The plan of action aims to provide a framework for combined Community and member state support for the food strategies of individual countries. It was agreed that Mali, Kenya, Zambia and Rwanda should be chosen as the initial beneficiary countries.

The Community welcomed the progress made at the Versailles Economic Summit of June 1982 in the direction of agreement on an early launching of the global negotiations on international economic co-operation for development. Unfortunately progress towards the negotiations is at standstill because of the unfavourable world politico-economic climate. However, Ireland, in common with the other member states of the Community, is committed to these negotiations and will continue to press for them in the appropriate fora. Developments at the recent Non-Aligned Summit in New Delhi, and Group of 77 Ministerial Meeting in Buenos Aires, have shown that a more realistic and pragmatic approach than heretofore is being taken by the developing countries, and attention will now turn to the industrialised countries.

Relations with developing countries in Africa, the Caribbean and the Pacific (ACP) continued to expand during the period under review with the accession of Belize and the State of Antigua and Barbuda to the Second ACP/EEC Convention of Lomé. During this period, too, Ireland ratified the Agreement on the accession of Zimbabwe to the Convention. In the Mediterranean area, the Community is examining a communication to the Council on a Mediterranean policy for an enlarged Community. It is expected that this policy will consolidate and develop co-operation arrangements with the Mediterranean countries in the framework of the "overall Mediterranean approach" worked out in 1972.

I have dealt earlier with the position of the common agricultural policy in the mandate negotiations context. I should now like to say a few brief words about the 1982-83 marketing year price increases which, for reasons which I have already mentioned, were not, unfortunately, agreed on until 18 May 1982. The main features of the agreement were an overall price increase of about 11 per cent together with the continuation of the premium for suckler cows and the introduction of a calf premium at the rate of £21.90 per calf.

There were intensive negotiations during the period under review aimed at the establishment of a common fisheries policy. As Deputies are aware, this policy was agreed early this year. This common fisheries agreement marks probably the most important development in the Community in recent years, with the establishment of what is, in effect, the third fully developed policy area in the Community.

The adoption of the policy also opens the way for the future development of the Irish fishing industry. I am sure Deputies will wish to join me in congratulating my colleague, the Minister for Fisheries and Forestry, Deputy Paddy O'Toole, on helping to bring these negotiations to a successful conclusion.

The growing tragedy of unemployment was, inevitably, of deep concern to the Community during this period. The European Councils in March and June, for instance, devoted considerable time to discussing the situation. They considered that the objective of reducing unemployment called for a co-ordinated policy among the member states to promote productive investment, to increase competitiveness and productivity, and to develop a Community industrial strategy based on a technology and innovation policy. Agreement was reached to step up efforts to modernise European economic structures, to increase the convergence of the Community economies and to develop a specific Community measure to combat unemployment, especially among young people.

In October 1981, the Commission presented to the Council its proposals for the Review of the European Regional Development Fund and a Council working party began discussing the matter in December 1981. These discussions are still continuing. The Review has also been discussed from time to time by Foreign Ministers in Council, and will be on the agenda of the forthcoming Foreign Affairs Council on 25-26 April. Ireland has long called for the development of a comprehensive Community regional policy which could make a genuine contribution towards lessening disparities between regions and we are pressing for this in the review discussions.

The review of the European Social Fund, which was due to be completed by the end of 1982, did not, in fact, begin until October last, when the Commission submitted its proposals to Council and so is outside the period under review. On this subject, too, however, discussions are still continuing.

Turning to European political co-operation, I can report that it continued to develop in a satisfactory manner in the period under review. The Foreign Ministers of the Community, in November 1980, requested a review of the working methods and administrative arrangements of political co-operation. This review, known as the London Report, was agreed by the Foreign Ministers at their meeting on 13 October 1981. The London Report was laid before both houses of the Oireachtas on 16 October 1981.

It is not my intention to go into details concerning the recommendations of the London Report. There was some discussion of these during the debate on earlier Community reports in this House in October 1981. In the London Report, the member states reaffirm their commitment to the process of political co-operation. They emphasise their pledge to consult partners before adopting final positions or launching national initiatives on "all important questions of foreign policy which are of concern to the Ten as a whole". They undertake that in these consultations each member state will take full account of the position of other partners and will give due weight to the desirability of achieving a common position. The London Report restricts the discussion of security questions to their political aspects, that is, to consultations on and the preparation of, the diplomatic activities of the Ten in those fora in which they together, as Ten, encounter such issues. An example of such activity is to be found in co-ordination on arms control and disarmament issues at the United Nations. This provision, though its insertion was of considerable importance to Ireland, in reality does no more than state formally what has been the case in regard to discussions of security issues within European Political Co-operation.

The proposal initiated by Foreign Ministers Genscher and Colombo concerning European Union have been discussed intensively during the period under review.

The object of these discussions is to achieve agreement on the text of a declaration on European Union, incorporating notably a bringing together under the umbrella of the European Council of the functions of the Communities and of EPC, while retaining the essential character of each — the former based on legally binding treaties, and the latter based on political commitments. Closer cultural and legal co-operation is also envisaged.

The discussions also cover proposals to improve the operation of the Community institutions, in particular in relation to decision-taking by majority-voting where the Treaties so provide. Ireland recognises that, where vital national interests are at stake, it can be necessary to defer decisions indefinitely. The abuse of this position is, however, a matter of concern and must be eliminated.

In the discussions on the Genscher/Colombo proposals, Ireland has urged that economic and social progress and the creation of greater convergence between the economies of the member states is the best basis on which to secure progress towards European Union. It is the concrete and visible measures taken in these areas which will enable the peoples of the member states to identify their interdependence and which will form the basis of the solidarity which is essential if the task of building a European Union is to succeed.

Turning briefly to the various areas of tension in the world, which were discussed by the Foreign Ministers in Political Co-operation during the period under review, a number of major developments took place in the Middle East during the period covered by the reports. The Ten co-ordinated their response to these and continued to seek ways by which the principles of the Venice Declaration of June 1980, the basis in their view of a just settlement, could be implemented.

The most serious development, and one whose consequences are still very much with us, was the invasion by Israel of Lebanon on 6 June 1982. The Ten vigorously condemned this action as a flagrant violation of international law. They reaffirmed their support for the independence and territorial integrity of Lebanon and called on all parties to abide by the relevant resolutions of the UN Security Council.

The situation in Poland was, of course, a major preoccupation of the Ten throughout the period under review, as it still is. The Ten reacted, both jointly and individually, to the declaration of martial law in December 1981 and have continued to follow developments closely. The basic attitude of the Ten was made clear in the statement issued by the Foreign Ministers on 4 January last year. In that statement the Ministers appealed to the Polish authorities to end as soon as possible the state of martial law, to release those arrested and to restore a genuine dialogue with the Church and Solidarity. They also noted with concern and disapproval the serious external pressure and the campaign directed by the USSR and other Eastern European countries against efforts for renewal in Poland. The Community later indicated its disapproval of this pressure by limiting the importation of certain goods from the Soviet Union.

Martial law was formally suspended in Poland at the end of 1982 but this suspension was accompanied by a number of exceptional legislative measures some of which appear to create possibilities for repression which did not exist before August 1980. The Ten consider that the distance now dividing the Government and the population in Poland can only be reduced through a dialogue between Government and authentic representatives of all political and social groups as well as by a search for national consensus.

At the CSCE Review meeting in Madrid the Ten are working for agreement on a balanced and substantial concluding document which would mark tangible progress within the human dimension of the Helsinki Final Act and would contain a precise mandate for a Conference on Disarmament in Europe. There are some hopes that it may prove possible to bring the Madrid meeting to a conclusion before the summer. Deputies will be aware that during the period covered by the 20th Report the Falkland Islands dispute was a major issue in European Political Co-operation. I will confine myself here to expressing the hope that we have seen the last of armed conflict in that region of the world.

In Central America the continued growth of tension has been of considerable concern to all members of the Community. Since many of the difficulties were judged to have arisen as a result of the grave economic and social problems of the region particular attention was given to the possibility of allocating more Community aid to the region. By these means it was hoped that the Ten could, with the agreement of the countries concerned, help to reduce tension and promote peace in Central America.

The Ten have pursued their policy of strong opposition to and condemnation of apartheid in South Africa and have supported the efforts to find an acceptable basis for the implementation of the United Nations plan for Namibian independence.

The situation in Afghanistan remains a threat to regional stability and to international peace and security. The Ten believe that Afghanistan must be enabled to return to its traditional position of neutrality and non-alignment and that conditions must be created in which the people of that country can determine their own form of Government free from outside interference.

The Government are following with interest the efforts of the UN Secretary-General and his personal representative to try to reach a negotiated settlement to the Afghanistan crisis. We believe however, that, if these talks are to have any chance of success, there must be a demonstration by the Soviet Union of its genuine willingness to contemplate a withdrawal of its troops in compliance with the various UN Resolutions.

The problem of Kampuchea is also still with us. Ireland, together with out Community partners, has contributed to the international relief effort in the region. Indeed, on that note, I was glad to meet some of our volunteer workers on the borders there recently. We can be very proud of the work they are doing there. In many ways they are very fine ambassadors for this country.

The people of Kampuchea have undergone appalling suffering over recent years as a result of domestic cruelties and the hardship imposed by foreign invasion and occupation, and major efforts are urgently required to secure a lasting political settlement to the crisis — a settlement which must, in our view, involve the withdrawal of Vietnamese troops and respect for the right of the Kampuchean people to determine their own future free from intimidation or coercion.

Deputies will be aware that in recent weeks further attacks by Vietnamese forces have taken place against a number of encampments for displaced Kampuchean civilians along the Thai-Kampuchean border, resulting in a further influx of refugees into Thailand. I wish to avail of this opportunity to deplore these attacks and to appeal to the Government of Vietnam to refrain from any further such actions. Having seen the situation there, I feel very strongly about it. The lot of both sides is bad enough without their being under attack constantly from the Vietnamese forces.

The situation in Turkey has been a cause of continuing concern to the member states, particularly in regard to alleged violations of human rights. In order to impress on the Turkish authorities the extent of their concern, the Ten requested the Foreign Minister of Belgium, Mr. Tindemans, to visit Ankara in March 1982. Mr. Tindemans conveyed to the military rulers the feelings of the governments and of public opinion in the Communities on the matter.

We are now looking forward to the accession of Spain and Portugal to the European Community. Despite difficulties which have arisen on certain economic aspects of the accession negotiations, the Ten recognise the political importance of these two countries' membership. Because of this concern, it has been agreed to associate Spain and Portugal as fully as possible with the procedures of European Political Co-operation. They have been kept informed regularly of developments within Political Co-operation, with a view to gradual harmonisation of their foreign policy positions with those of the Ten. In addition, during the period under review, the first meeting at ministerial level took place, between the Foreign Ministers of the member States, and their Spanish and Portuguese colleagues. This meeting saw a valuable exchange of views on matters of current interest to both sides.

I can record with gratification that the Community and its member states are increasingly seen as a distinct collective political grouping in international relations and that they are able to exert a more effective influence on world affairs. The success of political co-operation lies in its gradual and evolutionary manner of development. It has sought to build on mutual information and consultation in order to clarify common themes in the individual foreign policies of the member states and by so doing it has steadily encouraged the growth of mutual understanding and confidence. Ireland has maintained constantly, however, that steps to intensify co-ordination in the political field must be based on a growing community of interest in the economic and social fields. Consequently, further development of political co-operation must go hand-in-hand with efforts to maintain and strengthen economic integration within the framework of the Treaties.

I appreciate that this introduction gives only a brief summary of the major developments in the Community in the 12 month period in question. If Deputies wish to raise questions on these or indeed on other developments related to Community affairs, I will, of course, try to take up their points and respond.

I would suggest, in conclusion, that what we witnessed in the period in question should be seen as a holding operation in the history of the Community. Member countries wished to move ahead, to develop new policies, to resolve the sterile budgetary dispute and to introduce a new impetus and a new dynamism into Community affairs. And yet, perhaps because of the all-embracing impact of the depression, the ultimate political vision and will was found to be lacking.

In the coming months, we — Commission, Parliament, Council — will again have to look fundamentally at the related questions of additional own resources and the development of new policy areas for the Community. The very future of the Community of Ten, not to mention a Community of 12, is at stake here. I intend that Ireland will play an active, positive and progressive role in these discussions. We must use the strength and vigour of our belief in the Community and its institutions to broaden the debate from the narrow confines of budgetary flows, where it has for too long been bedevilled. We need a qualitative move forward, and quickly, in Europe. Deputies can be assured that we will play our full part in achieving this important and urgent aim.

: I wish the Minister of State every success on his reappointment and I have no doubt that he will make a success of the difficult job with which he is entrusted. I take this opportunity also of congratulating the Minister for Foreign Affairs on his appointment and I wish him every success also. Since both these appointments have been made I am confident that the frequency with which meetings took place during my term in office has not diminished. I have a certain envy of the Minister in that he has a Minister of State to help him. I could have done with such help on occasions and if I had had that help I might have had a different time from that which I have experienced in the past four months.

We are debating reports on developments in the European Communities for a period of two years. While not wishing to cast doubts on the usefulness of these reports as reference works, there is a valid point in relation to commenting on developments up to two years after they have taken place. I do not think there will be any disagreement on either side of the House so far as that is concerned. It is fair to say that the limited number of sitting days in the last Dáil rendered it impossible to fit in such a debate. The only exchanges that take place in this House on European issues relate to formal statements by party leaders. It would be far more valuable if the Minister for Foreign Affairs could report from time to time, perhaps after Foreign Affairs Councils, on issues currently under discussion.

Standing Orders of the House make it virtually impossible to have any worthwhile discussion on these issues through, say, a series of Parliamentary Questions and the normal follow-up by way of supplementary questions on these issues. One could consider raising specific matters on the adjournment but this course of action leaves much to be desired. My original suggestion that the Minister or the Minister for Foreign Affairs might consider reporting back to the House after each Foreign Affairs Council meeting would probably be the best way of giving the House the opportunity to discuss various important issues that arise. Such a procedure would not necessarily take up too much time but would benefit considerably both the House and the public.

One of the most important subjects that has spanned the past two years and which remains unresolved is the financing of the Community. I deplore the narrow focus of the debate which has concentrated on how much different countries put into the Community and how much they visibly take out. It is not so long ago that we had a Heads of State meeting at Dublin Castle and the one headline we all remember from that related to Mrs. Thatcher saying that she just wanted her fair share. That is regrettable. Perhaps I will have more to say about it later on.

Germany makes the largest payments to the Community. There is no doubt about that. Germany is often referred to as the paymaster of the EEC. Their whole economy has benefited and continues to benefit enromously from Community trade, as shown by the fact that they have a trade surplus at least equivalent to their payments into the Community. On the other hand, Ireland may appear to benefit greatly because of agricultural and other receipts, but there has been a very high rate of industrial losses in older industries due to Community membership.

It is also a fact that there has been no change in our relative position with income per head 60 per cent or less than that of the Community average. I have often heard it said — and I never agreed with it — that perhaps we should be the good boys in the EEC context, that we were doing well, and that if we rocked the boat by making further demands we would probably suffer for it in the long run. I remember seeing a document prepared by a senior British civil servant which made the case that Ireland should be reminded that we were doing very well and, therefore, should be the good boys, as it were, while tough negotiations and discussions were taking place. At every opportunity we should make the point that, while we recognise that we are doing reasonably well, so are others, including the United Kingdom. I will have more to say about that later on.

With regard to Community finances, it is a fact that the finances are coming close to the revenue ceiling. Various solutions have been proposed to this problem, but the most straightforward solution would simply be to raise the VAT ceiling. I admit, of course, that that is a somewhat regressive tax and it slightly exaggerates Ireland's payments to the Community on our ability to pay basis. It is far more acceptable than a payments method which would seek to create a direct link with benefits from the agricultural fund. The genuine commitment to the Community of countries which adamantly refuse to increase its funding, to my mind, must be in some question. There is very little point in high-sounding declarations about European unity if every effort is being made in the meantime to restrict the financial base of the Community's activities.

One of the biggest failures of the Community over the past two years has been its inability to co-ordinate economic recovery out of the recession. The limited relevance of the Community to economic recovery has not helped its image. Time and again our Government and Taoiseach sought action at European level with very limited success only. The time has come when one could ask: Can it be justified that so much time should be spent by the Taoiseach of the day and senior Ministers in Brussels at meetings which often produce so little by way of result?

It comes back in part to the unwillingness of the larger countries to commit the necessary resources. If I might be permitted a personal observation, I remember some time last November or December being asked: "What way are things going in Brussels? What is your reaction to them?" Truthfully I said one of the things I found most difficult to understand was the constant inability to make decisions within the EEC. This is so. To get decisions was probably the hardest thing in the world. Our meetings were a series of constant hagglings over the British demand for budget refunds. We spent days and nights trying to find a solution to a problem that exists and to which a solution must be found. However, the problem helped to grind the decision-making process in Brussels practically to a standstill.

The lack of progress made with regard to decision-making on other matters was unbelievable. This time last year we were at the peak of a row between Britain and France in particular on the question and method of refunding the British on their budget rebate problem. At that time I saw some brinkmanship displayed by the British and it often made me wonder if their commitment to the EEC was as strong and healthy as one would like a full member to have. Even though that separate question was totally divorced from the fixing of farm prices for the year nevertheless there was an unofficial link between getting agreement on the budget rebate question and the fixing of farm prices. There were public denials that that was so until a junior minister from the British Parliament admitted late one night that this link was there. The matter was flushed out into the open then. The consequences of that unofficial link which was established for the purposes of intimidating other members to toe the line with regard to the British budget rebate question was a totally unwarranted delay in the fixing of farm prices until 21 May. It was then that we fixed it at a Foreign Ministers' meeting in Luxembourg, a gathering which went on until 4 a.m. The only comment I will make about that is that decisions arrived at at 4 a.m. are often not the best decisions because truthfully we spent many more days haggling later over what decision we had arrived at. Each member state had a different recollection of what was decided. I do not think they have decided the matter yet. I can recall that at the Heads of State meeting in Denmark early in December there was still disagreement on what had been decided on 21 May.

The brinkmanship exhibited at that time with regard to an intimidation to get agreement on the budgetary question for the UK held up the agreement on farm prices and that cost our farmers a great deal of money. At that time some commentators expressed the view that the farming community here were losing in the region of £500,000 per day. We are all aware of the method that had to be employed to get agreement on farm prices in the end. The earlier Luxembourg agreement was broken and farm prices were only agreed as a result of a majority vote, a break in an agreement that has been in existence for a long time. That was wrong because the UK knew there was goodwill on the part of all member states, including Ireland, to try to find a solution to their problem but nevertheless we suffered considerably because of their actions.

One of our principal interests in the EEC is the annual fixing of farm prices. During 1981-82 we obtained outstandingly good packages for Irish farmers. I believe the percentage increase last year was 11 per cent. Although I accept that conditions for 1983 are less favourable Irish negotiations now are unsatisfactory if we are to believe what was printed in this morning's newspapers. The display of arrogance and truculence by the British Minister of Agriculture, Mr. Walker, seems to have floored our case. It is an unfortunate feature of this year's price fixing procedures because the offer of 4 per cent falls far short of what is required. I felt a certain resentment last week when I read that Mr. Walker threatened to object to the calf subsidy scheme and ensure its discontinuation unless we toed the line on other separate issues. Mr. Walker is an extremely able negotiator, a very shrewd person, a man one has to mark very carefully. I should like to think that our Minister for Foreign Affairs or our Prime Minister would let their opposite numbers know that if Mr. Walker is serious about objecting to the continuation of the calf premium subsidy then the British cannot always expect the co-operation we have given on the question of a budget rebate. Mr. Walker is wrong and the facts of life should be explained to him. I am not threatening economic war but we must protect our own interests effectively.

It is difficult to make progress within the EEC when prices which should have been introduced many weeks ago at the start of the season are being delayed. They were a month late last year and we lost out on benefits. I say more in sorrow than in political anger that some of the sneers and comments made about us in Government when we announced the calf premium subsidy were unjustified and unnecessary. A favourite line during the Galway by-election was that the scheme would not work and that calves were being hawked around from one place to another in an effort to register them for the scheme. We must be very forceful in negotiations, particularly on the question of agriculture, because we are dealing with a person who is extremely ruthless in protecting the interests of his own people and Government. Proof of that can be seen in the public squabbles he has had with the French and others.

During the past two years, particularly when we were in Government, we succeeded despite the pressures in maintaining the value of the pound. Only a short time after coming into office this Government were forced into a devaluation which has added £400 million to the foreign debt and set at naught the heavy sacrifice demanded of the taxpayers in the budget. I suspect that one of the main unstated reasons for the devaluation was to cover up for a generally poor performance, particularly in the agricultural sector, in getting and maintaining reasonable prices and achieving a greater increase for farmers than it seems they are now to get.

I now turn to the matter of political co-operation. We all regret the breakdown of the latest Middle East initiatives. I am afraid one of the difficulties in making progress towards a solution is widespread scepticism of American political will. The Israeli Government time and again seem to be able to defy the United States administration with impugnity and it is my view that the Arabs will not firmly take the path of compromise unless they are convinced that the Israelis are taking that path.

I should like the Minister to tell us the position with regard to the Genscher-Colombo proposals. We have no wish to obstruct European progress but we are alarmed at the increasing demands from various quarters that Europe should recognise that it will not make further progress economically and should begin to develop a security-defence dimension. I want to make it crystal clear that as far as Fianna Fáil are concerned we will not permit any tampering with our policy of neutrality. If all that is meant by political aspects of security is that many world problems post a threat to security, then these problems can be discussed. We are not prepared to participate in military decision-making by members of the Atlantic Alliance, nor can we accept that it would be within the competence of the European Community to recommend or endorse NATO decisions, such as the siting of missiles in Europe later this year or to co-ordinate military interventions outside Europe by member states. The Minister should make this clear in any discussion on the Genscher-Colombo proposals. I would welcome a full debate in the Dáil on these proposals so that their implications could be publicly discussed and our European partners would be in no doubt that they represent no change in our position of neutrality. We have made it clear that meetings of Minister for Defence are absolutely unacceptable to us.

The Minister spoke of the question of the admission of Portugal and Spain to full membership of the European Community. My recollection is that about Christmas time there was a 75 per cent achievement in regard to the question of Portugal's accession. That figure was given to me by the Portuguese Foreign Minister. Being a small nation I suggested that Portugal's entry should be taken on its own and should not have to wait until the Spanish question had been settled. I did not find much support for this suggestion and it appears that Portugal's accession will be delayed until such time as the Spanish entry has been sorted out. I clearly recollect that at that time progress on the Spanish question had reached the 30 per cent mark and that many great problems, including the fish problem, remained to be solved. The fish problem has a specific interest for us because the Spanish have the biggest fishing fleet in Europe. They have approximately 3,300 fishing boats. If we spoke to our fishermen on the west coast they would tell us how big a threat they are to their livelihood and to our fish stocks.

There will be major problems for us but we are not against the accession of those two countries. There are big problems for us in the Community in relation to their accession and we should talk about them in this House. Should we, because of the present difficulties within the Community, rush into having two additional members before sorting out the existing difficulties, particularly the financial ones? Can we not get agreement from others, because we are at the ceiling as far as income is concerned, about restructuring the Community's finances? As I have already said, because of my experience of the failure to make decisions, if there are two additional members sitting around the table, those difficulties will be magnified one-sixth. I do not believe that anybody will disagree that things will not be any easier.

We would like to protect our situation within the Common Market. If there is to be a further drain off, as there must be, particularly in the case of Portugal, because it is a poor nation, how will that affect us if something is not done in the meantime to strengthen the financial arrangements within the Community? This problem was being faced up to certainly up to Christmas. Perhaps the Minister of State will be able to state if any progress has been made there. Will it take more money away from the CAP? What will the Mediterranean scheme cost? Will there be a shift in emphasis from Northern Europe to the Mediterranean? If that happens it will have an affect on us and we need to examine this very closely.

There is another matter, which is new but to which we must be alerted, the question of full members renegotiating their position once they are in. That has already happened in the case of Greece. The Minister of State said the question of renegotiation there is concluding and they are now looking for better terms. The British are doing the same thing under a different name. They are looking for their fair share and they want to get out as much as they put in, which takes away from the spirit of the Community. These matters must be examined. If the Greeks rushed through their negotiations for the purpose of getting in and, having got in, want to have a new set of negotiations perhaps there are ways and means that, if we feel we can benefit from examining our situation, we should look at that also.

I note what the Minister of State said with regard to the US steel problem, which was very much in evidence over the last year. This caused a serious problem for the Community. It is only natural between the USA and the EEC that problems will arise. I was shocked at the lack of structures that should be in existence to deal with problems of this magnitude. The President of the Commission at one time was a Dane and then a German who went to deal with the American administration officials in Washington. A different man went each time. I failed to get agreement that the Foreign Ministers would as a group meet the Secretary of State, Mr. Shultz, because the French do not want the Foreign Minister of the Ten, for their own particular internal reasons, to meet the Americans or to meet anybody as a group to discuss economic matters affecting the Community. We had officials of the Commission and the Commissioners going to meet people in the administration in Washington. The whole thing smacked of inefficiency and, as a result, the big row over steel dragged on and on and demanded a lot of time for discussion. We did not make any decisions on the matter. I believe there is room for improvement there. I am not saying that I have the answer to it. The suggestions I felt might improve the situation were not acceptable. I hope the Minister and his advisers can come up with better suggestions which might help.

I am glad to see that the EEC are making progress with Japan. If the situation there were not so serious one could say it was amusing. The Japanese markets were practically closed completely to us but yet imports from Japan were exceptionally large. I am glad to see that the situation is changing although admittedly very slowly. I hope the Commission will follow this up because there is a very large market there which we should have access to. If I were asked to give an honest comment on my last meeting of the European heads of state it would be that I witnessed the obvious frustration of all the heads of state incapable of coming up with anything worthwhile to deal with the great problem of unemployment in the Community. I am sure the number has risen since then but at that time there were 12 million people unemployed and very little progress was made with regard to doing something worthwhile for them. Almost a full day was taken up with discussing the situation. Suggestions were made but nothing worthwhile has come forward to deal with the problem.

I have dealt briefly with political co-operation and the Middle East. The situation in Poland occupied much of our time during the course of the political co-operation meetings as did Central America. The situation there is extremely difficult and we would all like to see it sorted out completely. During my attendance at the United Nations during the month of September I had discussions with a number of people from Central American countries and with some in particular the divergence between their views and the views of the United States are so wide that one sees great difficulty in solutions to the very serious problems emerging in a very short period.

I was glad to see that the Minister of State mentioned the question of Turkey. I was very impressed with what the Belgian representative, Mr. Tindemans, did during the course of his visit to Ankara in the early part of last year. I hope the promise he got from the military in Turkey that free elections will be held within two years will be kept. It is a sad situation which exists where former prime ministers and politicians are jailed instantly if they comment on the military regime or their operations. It is not necessary for me to repeat what the Minister said about Afghanistan, Poland or Kampuchea. There is no disagreement between us on that.

This debate would probably have been better if we were not discussing a report which covers two years. The Minister should consider having a debate in the House after each of the Foreign Affairs Council meetings. The House would find that more interesting and would be kept in touch with what is going on.

Debate adjourned.