I propose, a Cheann Comhairle, to make a statement on the European Council held in Milan, which I attended with the Minister for Foreign Affairs, Deputy Peter Barry, on 28 and 29 June. The Council, which for the first time was attended by the Governments of Spain and Portugal, was concerned to a considerable extent with the proposals made in the report of the Ad Hoc Committee for Institutional Affairs, consisting of personal representatives of Heads of State or Government and chaired by Senator Dooge. I, therefore, invited the Senator and he was good enough to accompany me, in a consultative capacity, to Milan. I have arranged for the conclusions of the Council to be laid before the House in the usual way.
We spent some time in the House last Wednesday discussing European Union and other aspects of the Community. I do not propose, therefore, to go in detail into the background to the recent Council.
The Milan Council was the first for a long time to have had before it the opportunity of an indepth discussion on the way the Community is working and of its prospects, unencumbered by immediate and controversial topics like budget limits and contributions, enlargement, the super-levy etc., which have virtually monopolised earlier Councils. This provided the opportunity which the Italian Presidency took for setting two days aside for Heads of State or of Government to discuss the Dooge Report, the question of a new Treaty on European Union, the report of the Committee on a Peoples' Europe, the internal market and technology, including the French EUREKA proposal, as well as the current economic and social situation, trade relations with Japan and famine in Africa.
The meeting continued from approximately 11 a.m. until late on Friday night and again from 10 a.m. to 9 p.m. on Saturday. The Council was, in my experience, unique in the range and complexity of the subjects dealt with.
The major problem facing Europe today is unemployment. The European Community, with a budget equivalent to approximately 1 per cent of gross national product of the Community, is in no position at present to tackle this problem through solutions involving expenditure. It can, however, act in other ways that will help to sustain and create employment. First — and above all — it can improve the way in which it makes decisions. Even if the Community were endowed with unlimited resources, it could not act effectively if its decision-making processes were deficient. This, therefore, is one reason why I have been so concerned to ensure that the Community can improve its capacity for making decisions. The relationships between its different institutions — primarily, the Parliament, the Council of Ministers, and the Commission — are extremely relevant to the efficient working of the European economy.
Next, if the market, which the Community was established to encourage, is not free and unified so that it is a single market like the United States or Japan, then it will defeat the very purposes for which it was established. Enterprises must be able to develop their full potential in a market of 260 million, soon to be of 320 million, people. If this is not done, we shall all be the poorer; and Europe could well become, as Signor Spinelli has suggested, a border region between two great empires. This was a second major concern in Milan — how to set about unravelling effectively the tangle of conflicting industrial norms, product standards, border controls, fiscal and other practices which continue to fragment the market and entangle the Community in an irrational and frustrating web of restrictions and rigidities.
The third of our major concerns — which, as I have suggested, centre around the problem of economic growth in Europe and our ability to tackle unemployment — was the way in which Europe is falling behind technologically. This can and has been exaggerated but there is need for action to ensure that industry located in Europe can take part in the market of the future. One estimate of the extent of what could be involved is that markets based on space products alone — including new alloys, new medicines, new exploration mapping and forecasting techniques — will by the end of this century be worth about $200 billion approximately, twice the entire market for services and products for the entire airline industry at the present time. Europe, and we in Ireland, just cannot afford to be left out or to fall behind in this race.
These then, were the three major concerns lying behind our deliberations in Milan: how to improve the institutional arrangements of the Community — which are difficult and complicated enough with ten members but will become even more so with enlargement to 12 — so as to enable it to work efficiently and democratically; how to complete the internal market so that the people of Europe can benefit from the full potential of what is now the single largest trading bloc in the world; and how to ensure the Europe, which has led the world for so long in so many areas of science and technology, does not fall behind now in the development of the products and services of the future.
Against this background, I feel a certain sense of disappointment that proposals before the Council for improvements in the decision-making process that could be undertaken now — that is, reinforcing the practice of majority voting and strengthening the executive powers of the Commission — did not secure support from every member state. However, with the support of seven member states, the Presidency is to take the steps necessary to convene an Inter-Governmental Conference with a view to submitting the results for decision to the next European Council to be held later this year in Luxembourg. The governments in favour of the convening of this conference were the six original members of the Community and Ireland. Spain and Portugal will be invited to participate. Major themes of the conference will be the question of amending the EC Treaty, in accordance with Article 236, as regards the decision-making process of the Council; the Commission's executive power; the powers of the European Parliament; and the extension to new fields of activity in line with the proposals made by the Dooge and the Adonnino committees.
The conference will also look at the question of a treaty or agreement on a common foreign and security policy on the basis of France-German and United Kingdom texts.
I should like to express my appreciation of the manner in which the French and German Governments, conscious of our special position of neutrality, worded Articles 8.1 and 8.2 of their draft treaty so as to place security matters other than political and economic aspects — viz. matters with possible defence implications — firmly outside the framework of the proposed political co-operation arrangements, as they are at present, and within the Western European Union framework, and of the manner in which the British Prime Minister accepted this significant change by reference to the equivalent paragraph 8 of the British draft treaty, on the basis that the Franco-German version met the needs of the Irish situation more effectively and clearly.
These passages of the Franco-German draft treaty are:
Article 8.1: The signatory States... reaffirm their readiness increasingly to coordinate their positions on the political and economic aspects of security.
Article 8.2: Those among the signatory States who wish to co-operate more closely in the field of security will do so within the framework of the Western European Union while respecting the role which falls to the Alliance, and their specific situation and strategy within the latter.
On this point at the conclusion of the discussions, I entered on the records a formal declaration, referring to the Conclusion on Institutional Affairs to the effect that:
Without prejudice to its position on other points, Ireland accepts the wording of the first indent of the fourth paragraph viz. that dealing with Political Co-operation on the basis of paragraph 8.1 second sentence, and paragraph 8.2, of the Draft Franco-German Treaty.
On the next major theme — that of the internal market — the European Council asked the Council of Ministers to initiate a precise programme of action with a view to achieving completely and effectively the conditions for a single market in the Community by 1992 at the latest. This means:—
(1) the removal of physical and technical barriers to the free movement of goods within the Community, in particular the adoption of common or compatible standards for major new technologies in order to open up public purchasing and satisfy the requirements of business;
(2) the creation of a free market in the financial services and transport sections;
(3) the creation of full freedom of establishment for the professions; and
(4) the liberalisation of capital movements.
I stressed here that the advantages which a single market could bring to the Community as a whole would not be evenly distributed unless specific measures were taken to counterbalance the centripetal effects. The Council accordingly agreed that the creation of a single market should contribute to furthering the more general objectives of the Treaty, including those of harmonious development and economic convergence.
I should also add on this point that some of the proposals in the Commission White Paper deal with fiscal harmonisation. I said that, in so far as Ireland was concerned, the concept of harmonising excise duties and VAT could have unacceptable consequences and that, in particular, if taxes were to be harmonised then we should also think in terms of harmonising welfare provisions within the Community. In other words, if the Community wishes to harmonise the revenue raising powers of Governments — and there are many arguments for this — then it must also look, as an absolute precondition, to the consequences and to the programmes which those revenues are used to finance. The conclusions record, in paragraph 3 of this section, the need for a special examination of this subject.
It is all very well to speak of improving the way in which the Community works and of achieving a unified market by the year 1992, but this does not meet the case of the man or woman now who has no job. Unemployment, which, as I have said, is the most serious problem facing Europe today, must be addressed by the Community as well as by member states. I commended to the European Council in some detail the excellent report submitted by the Italian Minister, Mr. Goria, in his capacity as Chairman of the ECO/FIN Council, of which I am placing a copy in the Library together with a similar document on the EMS. In this report, which follows directly from a statement I made in the Dublin European Council last December as to the need for consideration of stimulatory measures, attention is drawn to the need to give priority in all member states to combating unemployment. The report follows the case I made then as to the need to ensure an appropriate level of demand in Europe so as to take over from the US economy if present trends towards slacker activity in the United States are reinforced.
My intervention is closely reflected in the Presidency Conclusions which invites the ECO/FIN Council to consider the extent to which the convergence already achieved in inflation levels and imbalances — viz. in regard to external payments and Government budgets — would enable the Community to intensify the battle against unemployment. The Commission is also to report to the European Council in December on the present inadequacies as regards economic growth and employment in the European economy, in comparison with its major competitors among the industrialised countries and on the new strategies that could be implemented to remedy the situation.
The support for a co-ordinated European approach in advanced technological research for civilian purposes, involving both the French EUREKA project and the Commission's constructive proposals along the same lines, was unanimous and remarkably enthusiastic. The Council expressed the wish that the EUREKA project sponsored by President Mitterrand for France should be open to those non-Community countries which had already shown interest in taking part in it. These include Norway, Sweden, Switzerland and Austria.
As regards follow-up, France would continue the steps it was taking, by convening before 14 July, in collaboration with the Council Presidency and the Commission, an ad hoc committee of Ministers for Research or other qualified representatives of the Governments of countries which had responded positively, and representatives of the Commission.
The Council considered that the follow-up should ensure exploitation of the potential benefits of the Community dimension by establishing a close link between technological development and the effort to break down the barriers to a full internal market; by tying it in with other common policies, in particular trade policy towards the Community's main partners; by reducing the risk of unnecessary duplication of national efforts and assembling a "critical mass"— or minimum necessary scale — of financial and human resources; and, finally, by obtaining the maximum benefit from the technical and financial instruments immediately available to the Community, including those of the European Investment Bank.
In recent days agreements to co-operate in a number of the most advanced fields have been concluded by European companies from a number of countries inside and outside the Community. This development was noted with interest by the Council. I should also mention that on the eve of the Milan meeting we received a further letter on EUREKA from the French Foreign Minister which made if fully clear that his Government had taken on board the concerns we had conveyed to them and had accepted that small and medium sized firms and research centres should be enabled to participate effectively in programmes under EUREKA and to benefit fully from the results of the research.
A major issue which came up at Milan related to how this new initiative should be organised, with particular reference to the role of the Community, as such, and of the Commission. This will no doubt be teased out further before and at the meeting of the ad hoc committee decided on by the Council. The Government will be giving careful consideration to how best to advance Community and Irish interests.
Against the background of increasing dangers to the world's multilateral trading system, the Council also discussed the Community's trade relations with Japan. It fully shared the serious concern of the recent Foreign Affairs Council at the very limited progress made by the Japanese authorities in opening up the Japanese market. We, therefore, endorsed the request made by our Foreign Ministers to Japan to increase its imports of manufactured goods and processed agricultural products, and to liberalise Japanese financial markets and internationalise the Yen, and asked the Commission to press for progress in these areas during the visit this month to Europe of Prime Minister Nakasone.
A Community which has perfected its decision-making processes and its internal market arrangements and is in total accord with its trading partners throughout the world — if one can imagine such a harmonious condition — would still be incomplete if it were to be seen by its citizens as remote, inaccessible and incomprehensible.
This is the essence of the problem addressed by the ad hoc committee on a People's Europe. The report of the committee contains concrete recommendations on the right to vote in elections to the European Parliament, on strengthening the right of petition to the European Parliament and on a possible role for a European ombudsman; on co-operation in television production; on setting up a European Academy of Science, Technology and Art and on the feasibility of a Euro-lottery to finance cultural projects; on voluntary work camps, exchanges between schools and universities and the organisation of Community sporting events, Community teams and combating violence at sporting events; on the organisation of volunteers for development work in the Third World; on provision of a Community emergency health card, easier access to medical treatment when travelling in the Community, greater Community co-operation in combating drug abuse; on twinning of towns and cities; and on the adoption of a Community flag and anthem.
The Council approved the recommendations on these questions and requested the Commission and the member states to implement those recommendations which are within their respective competences. The Foreign Ministers have been asked to report to us at our next meeting in December on progress. We also emphasised the especial value of a French proposal to launch a programme of action at European level against cancer.
The Council noted that two-thirds of the 1.2 million tonnes of cereals or their equivalent, committed at our meeting here in Dublin in December last, has already reached the recipients or was en route to Africa. We agreed that new food aid requirements could arise, particularly if rain during the rainy season which had just started in Africa, was to be insufficient. We welcomed the Commission's proposal to mobilise 500,000 tonnes of cereals equivalent, additional to the normal aid programme, and asked the Council of Development Aid Ministers to examine this urgently. As regards the long term, we agreed to support the food strategies and efforts of African countries to achieve food self-sufficiency as well as to give priority to the battle against desertification.
As the principal focus of the Council was on economic and institutional affairs, we had little time to discuss major political issues of international importance. In this regard, the Council adopted conclusions only on the question of relations between the European Community and the Council for Mutual Economic Assistance, better known as COMECON.
The Heads of State or Government also had an exchange of views and information on the Middle East situation and on terrorism in the world today.
In the margin of the Council, I had a meeting with the British Prime Minister, Mrs. Thatcher, to review progress in the discussions on the situation in Northern Ireland. As is customary, no substantive communique or other statement is issued on the content of these brief meetings.
In conclusion, the Council was, as Deputies will gather, concerned with a wide range of problems confronting Europe and the world. I can touch here only in outline on the discussions which, as I have said, extended over two long days. I think that a significant step forward has been taken in the decision to hold an intergovernmental conference, with a view to deciding on necessary improvements in the working of the Community's institutions and in its decision-making process.
On the matters of contention, the majority of countries found it possible — indeed went out of their way — to accommodate Irish interests. Our concerns on neutrality were met. The conclusions explicitly respond to the concerns I expressed in regard to unemployment and economic convergence. Particular Irish concerns in regard to the advanced technology proposals have been accepted; and our reservations in relation to vital national interests in the decision-making process are coming increasingly to be recognised as valid and indeed acceptable by many other member states, some of whom originally proposed measures in this area ostensibly in advance of the Irish position.
While I regret the inability of the Council in Milan to give firm and agreed guidelines there and then on the decision-making proposals before it there, I am satisfied that the Community has at least the possibility of making the changes necessary to improve its efficiency and confer on its 320 million citizens, equitably, the benefit of a sophisticated and unified market with industries at the frontiers of technology and an agriculture which is among the best in the world.
