Dáil Éireann debate -
Thursday, 24 Oct 1985

Vol. 361 No. 2

European Communities (Amendment) Bill, 1985: Second Stage.

Minister for Foreign Affairs (Mr. P. Barry)

I move: "That the Bill be now read a Second Time." The purpose of the Bill before the House is to fulfil Irish constitutional requirements to allow Spain and Portugal to become members of the European Communities. To do this it is necessary to amend the European Communities Act 1972 by adding to it the Treaty of Accession of Spain and Portugal to the European Economic Community and to the European Atomic Energy Community.

Although Spain and Portugal can accede to the European Coal and Steel Community through a decision of the Council, the Irish Constitution requires that both the Treaty and the decision must be made part of the law of the State.

The negotiations with Spain and Portugal were completed in May of this year and the Treaty of Accession was signed in Lisbon and Madrid on 12 June. Since it has been agreed that the date of accession should be 1 January 1986, both the present member states and the applicants must complete their national ratification procedures in time to meet this deadline. Once the Bill before us becomes law, the way will be clear for Ireland to ratify the Treaty of Accession

The European Community is a community of free and democratic states. Since the middle of the seventies both Spain and Portugal have undergone a political and democratic transformation and have rediscovered their rightful place in the European mainstream. For Spain and Portugal, therefore, membership of the Community represents above all, a commitment to, and a support for, the democratic form of government. This consideration clearly governed the decision of both countries to apply for membership of the European Community in the late seventies. It is also the reason why from the very beginning Ireland, in common with the other member states, maintained a consistent position of political support for the applications of Spain and Portugal.

The preamble to the Treaty of Rome spoke of an ever-closer union among the peoples of Europe. Moreover, in the preamble, an invitation is extended by the six founding member states to the other peoples of Europe who share their ideal of strengthening peace and liberty to join in their efforts. This was the political inspiration and imperative which led the Community of Six to expand by successive enlargements: first to the Community of Nine, then, with the accession of Greece, to the Community of Ten. Now, that expansion is to continue southwards with the accession of Spain and Portugal.

Geographically speaking, the Iberian peninsula is, above all, a European peninsula. As the Southern platform of the Continent, it represents its natural extension towards the Mediterranean, Africa and the Arab world. At the same time, there has been a constant intertwining of the histories of Spain and Portugal with their Northern neighbours and a consequent cross-fertilisation of ideas and cultures. It is logical, therefore, that Spain and Portugal should be incorporated into the European Community — a Community to which they are a geographical extension and which represents for both a pole of political and economic attraction. The Community of the Ten fully appreciates why our two new partners decided that their future lies within rather than outside the European Community.

Negotiations opened with Portugal in October 1978 and with Spain in February 1979. While there was awareness on all sides of the difficult and complex issues that would have to be resolved, the Community, by opening negotiations, affirmed their political support for democratic Spain and Portugal and their wish to have them as partners in the European endeavour. It is true the negotiations moved very slowly for a long time mainly because of the preoccupation of the Community with considerable internal problems of their own. Then there were also, it must be admitted, very great difficulties in having the present Ten member states agree on common Community positions to put to the applicant countries in the negotiations. There were, as it turned out, a whole range of issues where national interests were involved for one or other member state. However, under the French Presidency in the first half of 1984 important progress was made and the European Council at Fontainebleau reaffirmed the commitment of the Community to enlargement.

Nevertheless, at the time when Ireland assumed the Presidency of the Community in the middle of last year, quite a number of the major issues in the negotiations remained to be solved. During the period of our Presidency, therefore, we made enlargement a priority issue, in a determined effort to achieve, the kind of breakthrough in the negotiations that would allow the deadline of 1 January 1986 to be met. The Irish presidency made a particularly significant contribution to achieving real and substantial progress in the negotiations. As an example, I would mention, in particular, the agreement on the highly complex and sensitive issue of wine that was reached at the Dublin Summit in December 1984. This helped to unblock a central problem in the key agricultural chapter and allowed consequential progress to be made in the other negotiating chapters. This opened the way for the Italian Presidency to bring the negotiations to a successful conclusion in May of this year.

The agreement resulting from the negotiations represents, overall, a balanced series of transitional arrangements. It would not be possible for me here to deal in detail with all the issues covered but I would like to draw the attention of Deputies to a number of important aspects of the arrangements. I should mention that an explanatory note is being made available to Deputies which sets out the results of the negotiations with Spain and Portugal in the main areas.

Over a seven year period, industrial tariffs will be dismantled. In the case of Spain the rate of dismantlement will lead to a reduction of 52.5 per cent in customs duties over the first three years which is a satisfactory result from the Community's point of view. In the case of Portugal, where custom duties are in any event much lower because of the trade agreement concluded by the Community in 1972 with Portugal as a member of EFTA, there will be a 50 per cent reduction in basic duties over the first three years.

During a period of three years from accession Spain will be required to complete the restructuring of its steel industry in line with Community steel policy.

While this is being done, those member states, including Ireland, which at present impose national restrictions on the export of scrap metal to Spain will be able to continue to do so.

In the agricultural sector, the central difficulty was to devise arrangements that would allow an orderly integration of exports of Spanish fruit and vegetables into the Community market and provide access for the Community's northern products, that is, dairy products, beef, veal and wheat to the Spanish market. In the case of Spanish fruit and vegetables this will be achieved by means of a specific two stage transition over an overall period of ten years.

During the first four year period, the access of Spanish fruit and vegetables to the Community will be maintained at present levels. In the case of the Community's northern products there will be immediate access to the Spanish market within agreed limits.

Enlargement also requires changes in the Community's institutions. As from 1 January 1986, Spain and Portugal will, of course, be represented in all the Community institutions and will participate in the decision-making process. For example, in the European Parliament Spain will have 60 seats and Portugal 24 seats. Within a period of two years from the date of accession the new member states will hold elections to choose their representatives for the European Parliament. In the meantime, their national Parliaments will designate their representatives. The number of members of the Commission will be increased from 14 to 17 to include two Spanish nationals and one Portuguese.

Spain's vote within the Council will be weighted at eight and Portugal's at five, bringing the total number of weighted votes in the Council to 76 instead of the present 63. Deputies will be aware that the weighting of each member state's vote in Council is determined on the basis of population. The purpose of the weighting system is to allow for decisions to be taken by qualified majority when a certain proportion of votes is achieved. These and other specific institutional adjustments agreed in the accession negotiations are, of course, subject to whatever future institutional changes may take place arising out of current discussions on further moves towards European integration which at present are taking place at the intergovernmental conference of member states. Spain and Portugal are participants fully in this conference.

The results of the negotiations provide significantly improved opportunities for Irish exporters in a number of fields. In the industrial sector, the abolition of tariff barriers by Spain and Portugal over seven years and the abolition after accession of quantitative restrictions on imports should be of considerable assistance to Irish exporters who, in the past, have sometimes experienced difficulties in gaining access to the Spanish market. In the agricultural sector, our exporters of dairy produce, beef and pigmeat will have an immediate opportunity to make an inroad into what is not only an important but also a growing market.

As I said earlier, Ireland was anxious to support the candidate countries in their desire to strengthen their democratic systems through membership of the Community. We were at the same time concerned, of course, to protect important Irish interests. This can be shown most clearly in the agreement which has been negotiated with Spain in the fisheries sector.

Fisheries were among the most difficult areas of negotiation for the Community as a whole and the most difficult for Ireland. For the Community, there was a need to ensure that the integration of Spain would not disrupt the delicate balance of the common fisheries policy which had been worked out for the Ten in lengthy and very difficult negotiations. Under the common fisheries policy as negotiated, we were able to ensure that Ireland's fisheries interests were protected and that the scope was provided for their further development. Ireland had to ensure that these arrangements would be protected in an enlarged Community. I am pleased to state again for the House, that the agreement between Spain and the Community on fisheries represents a very positive and satisfactory outcome for Ireland. The arrangements which we secured strictly limits Spanish access to waters and fish stocks around Ireland.

The broad details of the agreements reached on fisheries are these. From 1986, only 150 Spanish and Portuguese vessels will be allowed to fish at any one time in the waters of the present Community. Most importantly for Ireland, Spanish and Portuguese vessels will be entirely excluded for ten years from fishing in the Irish box, that is the 50 mile zone around our coast. When eventually in 1996 the Irish box is opened up, at most only 93 vessels, of standard 700 horse-power size, will be allowed to fish in this 50 mile area. However, in practice, of course, these vessels will not be concentrated in the Irish box only but will also be fishing in the much greater area of the total Community waters.

The Community, at our insistence, secured a commitment from Spain to negotiate an orderly and phased access by Spanish vessels to the Irish box after 1996. I should emphasise that as a member of the Community, Spain will be bound by the rules of the Common Fisheries Policy on total allowable catches, fishing quotas and conservation of stocks and its vessels will be subject to inspection in Spanish ports by Community inspectors. I remind Deputies that the accession of Spain means the opening up of a huge export market for fish and there will be opportunities for our exporters which must not be missed.

Spain and Portugal will have access to the Structural Funds, European Social Development Fund, European Social Fund and the FEOGA Guidance Section from the date of accession.

In the case of the Regional Fund it will be necessary to revise the financial entitlements of the member states to take account of the new members. The provision of shares for Spain and Portugal means that the shares of the present member states must be reduced in percentage terms. However, we feel strongly that the less prosperous member states, should not have to accept a real fall in their receipts because of enlargement. This matter is at present under discussion in Brussels and we are insisting, and shall continue to insist, that there should be no erosion in our current level of financial transfers from the fund.

The European Social Fund provides for the designation of the whole of Ireland as an area of absolute priority. As such, we, together with a number of other regions in the Community, benefit from a reserved allocation — at present 40 per cent of the total fund. These regions of absolute priority are also entitled to a higher rate of assistance — 55 per cent.

Given the low level of development of Portugal and certain regions of Spain these will have to be included in the areas of absolute priority. It has already been agreed that the 40 per cent figure will be revised upwards to take account of these new regions. We are, of course, pressing in Brussels for an increase in the allocation which will be sufficient to meet the needs of all the regions of absolute priority.

To avoid any impairment of the effective functioning of a Community of Twelve it was essential for the Community to agree to increase its own resources above the existing ceiling of 1 per cent of the member states' VAT bases. Without a significant increase in own resources, it would have been difficult to sustain the present Community policies, including the Community's efforts to reduce differences in the levels of development of its regions, not to speak of implementing new policies which the Community needs to strengthen its capacity in the industrial and technological fields. The questions of enlargement and of endowing the Community with new own resources were, in fact, inextricably linked. The Community has taken an important and necessary step in agreeing to increase its own resources from 1 per cent to 1.4 per cent of the VAT base from 1 January 1986, the date of enlargement. However, the Government have argued, and will continue to argue, that it is necessary to envisage a further increase in own resources at an early date. We believe, as the Dooge report advocates, that the Community requires to be provided with "a stable revenue base for a sufficiently long period". We shall, therefore, continue to advocate that the achievement of concrete progress towards the goal of European Union requires that the Community consider the adequacy of its financial resources in terms of, first, enabling the Community to strengthen and further develop its existing policies; secondly, enabling the Community to meet the new demands which the impending enlargement will place on its resources; and thirdly, enabling the Community to develop necessary new policies.

The Intergovernmental Conference launched at the Milan Summit in June last is in many ways a response to the challenges which enlargement poses for the Community. The conference is considering Treaty amendments in such areas as the Community's decision making procedure, the Commission's executive powers, the role of the European Parliament, the consolidation of existing Community activities and the extension of Community activity into new fields. As part and parcel of the Government's approach to the work of the conference, we are seeking, together with others who share our concerns, to focus attention on the need to give effective expression, in a revised Treaty, to the objective of increasing the economic cohesion of the Community and to providing for the steps necessary in this regard. The Government have tabled proposals in this sense at the conference. It is our intention to seek to ensure that the objective of increasing the cohesion of the Community is kept well to the forefront in the work of the conference.

The Government hope that the forthcoming enlargement of the Community will supply a stimulus to the efforts required of all member States if real progress is to be made towards the goal of European Union.

With these remarks I commend the Bill to the House.

Mr. G. Collins

The Minister for Foreign Affairs, Deputy Barry, deserves to be congratulated in his capacity as Foreign Minister for the way he handled the negotiations during his term of Presidency, negotiations which were extremely delicate and protracted. The Minister and those advising him did a great job of work at the time. The criticism which was levelled by way of off-the-cuff remarks by some of his colleagues at the time I resented and felt was unjustified. I do not want to go any deeper into it, but it is very easy for people to criticise and say that progress has not been made as rapidly as it should have been made. Because of what was involved I am perfectly satisfied that a thorough, in-depth examination of all issues had to be made, otherwise our Minister and Government would not have been doing their duty to the Community, to themselves or to their colleagues. I feel I should say that because I think I have a fair idea of the volume of work involved and the very great personal effort that was required of the Minister to ensure that he was doing what he had to do as well as it should be done.

The purpose of this legislation is to seek approval by Oireachtas Éireann for the enlargement of the EC so as to accommodate Portugal and Spain who have concluded their negotiations on the question of entry and who are to become members of the EC shortly, on 1 January 1986. This debate provides us with an excellent opportunity to comment on the success or lack of success of EC policies as they are today and how they are going to be affected as a result of the enlargement of the EC with the addition of Spain and Portugal. We have had a number of discussions on this question in this House during the course of the negotiations and the record shows that at every opportunity I felt the responsibility to advise and to sound a note of caution that not sufficient groundwork was being undertaken to provide for the welfare of member states even at present let alone what was likely to happen when membership was increased. Whereas it is desirable to accommodate Spain and Portugal, because they have as much right as anybody else to be members of the EC, nevertheless, due to the lack of proper preparation by member states to put the EC on a sound economic footing, we are going to worsen an already extremely bad situation as far as the EC is concerned.

EC policies must be looked at very critically. One that I want to raise and comment on is the regional policy. Unfortunately, the European Regional Policy has failed to live up to our expectations. Far from reducing the gap between the EC's rich and poor regions and nations, it has failed to prevent an increase in the regional disparities. I am alarmed at this trend and fear that if it continues unchecked EC cohesion could be jeopardised. I have always held the view that regional policy must be one of the pillars of EC policy. It is the only Community instrument which sets out specifically to reduce unemployment through job creation and it is tragic that its resources remain totally inadequate. The regional policy accounted for only 4.8 and 5.2 per cent of the overall EC budget in 1982 and 1983 respectively, and now it appears that for 1986 the budget level wil be frozen at the 1985 level. I am convinced that the sums being provided are derisory. I would like to propose a motion that a significant increase be made of the EC's own resources to permit essential additional expenditure on the regional policy.

Some recent developments in the regional policy have given rise to concern. An example is the implementation of new regulations which came into force on 1 January of this year. While I welcome the basic thrust of the new regulations, I regret that the Council were unable to address themselves to the fundamental problem, namely, lack of resources. I welcome the intention to concentrate some aid in the EC's weakest region and to provide more assistance for small and medium sized business, but I would like to think that disadvantaged countries such as Ireland and Greece will be able to take up their full quota entitlement.

I also welcome the move towards programme financing and greater involvement at local level of local and regional authorities in their decision-making process. I would have preferred this to have been taken a step further, having advocated that payment should be made directly to regional authorities in preference to national exchequers. We are one of the EC members who have payments made to the National Exchequer. This is a mistake, not only by the Commission but by the National Government. We all know that the Commissioner has acknowledged that local authorities are better equipped and more knowledgeable about areas and regions to prepare a proposal for the Commission and that they should be permitted to make it directly to the Commission. In the same way payments should be made directly to these local bodies where they will be far more beneficial not only to the local committees concerned but to the EC and to its image abroad among member countries. When they are made through the National Exchequer it is very difficult to identify the benefits that have flowed from a grant from this Regional Fund. To do it in the way I suggest the Commission should press member states not already doing it in this way to start direct payments and then it will be easy to identify where the money from the regional policy is going.

People in the Community areas concerned would at least be able to acknowledge that definite benefits are coming to those areas from the Community. This is very important when one considers the general lack of interest among the general public in European affairs.

We are all familiar with the crippling financial situation which exists within the Community and the way in which the Community has been staggering from one crisis to another in recent years. The public haggling that went on with regard to increasing the 1 per cent VAT and the difficulties which were made by member states who were opposed to increasing the 1 per cent VAT have certainly been very unhelpful in creating a credibility in the Community that is so necessary if it is to have the public support that we all want it to have. One must fault the Taoiseach and his colleagues, as Heads of Government for their failure to bring about a realistic percentage increase in VAT which would help the Community to implement the plans which have already been agreed if the Community is to live up to the expectations of the honourable men who founded it. Unfortunately, the attitudes taken up by certain member states were not taken up having regard to the future of the Community and to the welfare of the Community but for purely nationalistic reasons in an effort to score "successes or victory" for the member states concerned.

Now we have the increase of VAT rate at 1.4 percent coming into operation in 1986 but all Members in this House would accept that even at that level of 1.4 per cent, the finances will be insufficient to finance the Community with its present membership not to mind the additional burdens on Community resources with the membership of Spain and Portugal bringing approximately 60 million people extra into the Community. There can be no doubt that, as it was, we were struggling from one financial crisis to another, and many of us are genuinely worried that the type of schemes which would benefit our country and countries like ours will not be financed as they should be. This will defeat one of the main ideas of the founding fathers of the Community, that is the idea of convergence.

The fact is that the total Community budget is only 2 per cent of public expenditure in the member states. More than that is lost each year through frontier delays and far more than that is lost through our failure to exploit the advantages of a unified market of nearly 300 million people for the new high technology industries. A great effort has to be made by the Leaders, the Heads of Government, at their Summit meetings to deal with these problems. I am talking about the frontier delays. Occasional reference is made to it but more can and should be done to insist that we have no waste of resources.

While we welcome the Spanish and Portuguese into the Community, the Minister must accept that there is genuine concern, particularly within the fishing industry. Our fisheries are likely to be severely affected by the Spanish fishing fleet, despite what the Minister has said — that the Spanish and Portuguese will be excluded for ten years from the 50 mile zone around our coast and that from 1996 only 93 Spanish vessels will be allowed to fish in that area. This is what the Minister envisages will happen but it would be extremely unwise to believe that even up to now we have been able to keep the Spaniards from fishing illegally in our waters. They are doing so almost continuously and it will be exceptionally difficult, if not impossible, for us to police our waters after 1996 and indeed for that matter up to that date. I regret that the Minister has been unable to convince his colleagues in Government that a far greater investment will be necessary in the fishery protection service if we are to have any hope of realistically policing our fishing grounds.

At a later stage our spokesman on Fisheries will be making a more comprehensive contribution on the fisheries question but I should mention that in the past year there have been 120 prosecutions for illegal fishing within the Community waters as a whole and that 56 of those related to Irish waters. In other words, almost half of the offences occurred in Irish waters. I am convinced that we have not made the investment necessary to protect our fisheries and I can only express the hope that we will have enough time in which to do so. Otherwise our fisheries will be decimated by the Spanish fleet.

It is regrettable that, during the negotiations on enlargement, the Government failed to get agreement on the development of a Community policy on forestry, a policy I have advocated here on a number of occasions.

After oil, forestry products represent the single biggest import category of the European Community, accounting for more than 11,000 million ECUs per annum. There is no Community policy on forestry which is surprising. I know that the IDA were involved in reporting on the development of the Irish timber industry for the eighties, that they produced a worthwhile report which said that forestry, unlike agriculture, was not covered by the Treaty of Rome and that therefore it is difficult for the Commission to implement a full forestry policy. They said there would be difficulties in obtaining agreement and means of support for forest development, in obtaining a consensus on an industrial development strategy for the industry and that there would be problems in altering the situation where concessions on timber imports are used as a bargaining position in trade negotiations with timber exporting countries. The report concluded that because of these factors it was considered unlikely that any timber industry development strategy would be agreed and implemented in the immediate future.

It would have been very much to our benefit if we could have devoted our energies to the creation of a forestry Community policy and it would certainly be of great value and would have very sound economic benefits. I regret very much, indeed, that while the negotiations for entry of Spain and Portugal were proceeding we did not use the opportunity to insist that a particular special package for us, to cover areas such as I have mentioned, was introduced and that we as one of the weaker members of the Community could not have been helped in the same way as the Greeks were helped when they were able to successfully negotiate a Mediterranean Package amounting to £1.5 billion in the next seven years in an effort to help them. Indeed it is a shame that no specific measures designed for Ireland to offset costs of enlargement came our way and the Government must stand guilty in this area.

I am extremely worried that the Community may not be and are not likely to be ready for enlargement. I say that with deep regret. At this very late stage I want to impress upon the Government that there is very great responsibility resting on them to ensure that appropriate finances be made available immediately within the Community to accommodate not just the existing ten member states but also to provide for the additional members. This Government have not been strong enough in making their views known in this area and in insisting that the Community should have been on a sounder economic and financial footing than at present if we are to accommodate the additional members.

We must remember that in discussing the future direction and enlargement of the European Community today, we are also discussing the future of the Irish nation. Ireland's place is in Europe, but history has taught us that we must never rely on others to ensure our interests and welfare. We cannot afford to assume that there is a benevolent presence somewhere out there in Europe which will take care of all our problems and release us from our responsibilities. The realities of the situation in which we find ourselves, 12 years after becoming a member of the European Community, should remove from us any temptation to indulge in such illusions. There is no case to be made for sacrificing our vital interests solely for the sake of being regarded as good Europeans. We must rid our minds of illusions of that kind and concentrate on an analytical assessment of where we stand today. It is with regret that we look back on recent meetings of heads of state — the Milan Summit and the Stuttgart Summit, meetings which were billed by the propagandists as major occasions. Indeed, it is with regret that we recall the Stuttgart European Council two years ago when the Taoiseach came home and claimed in this House to have saved the common agricultural policy. We know to our cost what has happened since.

The economic development of the European Community in the last 12 years has been extremely disappointing. There are no convincing remedies for the unemployment crisis in the Community. In being unwilling to tackle this problem directly the leaders of Europe have virtually abdicated from their responsibilities. It is no accident that most of these find themselves in serious political difficulty at home. The Taoiseach will not be the only head of Government in the Community in recent times to have suffered disastrous political reverses. Instead, we have proposals from summit meetings and the European Union, committees such as the Dooge Committee, reports such as the Spinelli report coming from the Parliament which in my mind are, in part at least, exercises in political escapism. In setting up the Dooge Committee our leaders gave priority to political and institutional questions over economic questions. European leaders have been behaving as if they believed that economic problems were secondary and that the political will needed to tackle them was missing.

In 1973 when we joined the Community, there were 2.5 million people unemployed in the nine member states of the Community. Today there are 14 million unemployed and on 1 January next there will be another additional 3 million Spaniards and fewer than half a million Portuguese to be added to these figures. When we joined the Community 12 years ago our unemployment rate was 65,000 people. Today it is around 240,000 and allowances must also be made for an additional approximate 50,000 young people who have emigrated in the last two or three years. As far as our own situation is concerned, we must go back to the fifties to find any parallel with the high unemployment and high emigration we are now experiencing. Truthfully, it is not a position that we expected to be in when we joined the Community.

In the last two years unemployment in Ireland has risen faster than in any other EC country and to twice the EC average. Industrial investment in manufacturing industry fell by a catastrophic 39 per cent in volume terms here in 1984, while rising by 7 per cent on average in the EC as a whole. Employment in indigenous industry has been devastated over the last few years while productivity growth in multinational firms is not being translated into economic growth by increased employment in the country at large.

An NESC study published in 1981 showed that the gap in living standards between member states has widened, not narrowed, since we joined the EC. Surely, having regard to what I have said, we must all agree that that gap will be wider still tomorrow. The concern is that it is going to be wider still tomorrow with increased membership having regard to the failure of our leaders to do anything to provide sufficient funds for the Community. When we joined the EC we could look forward to significant money transfers and consequent Exchequer savings. In 1972 we had no budget deficit and a minuscule foreign debt by today's standards. Yet today this country has major financial problems which despite all the propaganda engaged in by this Government have grown since they came into office.

It is not my intention to paint a picture of unmitigated gloom. There have been significant improvements in living standards and in social conditions since 1973. We have captured a significant share of high technology industry. Farmers, while not as well off as in the late seventies, were given a window of opportunity from which many have drawn lasting benefits. Some of the increase in employment in the late seventies, some 60,000 jobs, chiefly in the services sector, have been retained.

With regard to the farmers, I wish the Minister would give us a clear picture of how he sees the future of the common agricultural policy now that the Community is going to be enlarged; how he sees the pricing in the future, in the immediate and short term, for agricultural produce, and how the enlargement will affect the lives of our farming community. I feel that there will be such pressure on the amount in the budget available for common agricultural policy programmes that there will be less money available. As a result of that, there will be a lowering of standards for our agricultural community.

Our position outside the Community would have been an immensely difficult one, that I readily accept, but we must analyse what has gone wrong and, indeed, we must question whether the remedies proposed in the Dooge report or Spinelli report or, indeed, on offer from the summit meetings, have any hope of real improvement in the situation. Here I shall resist the temptation to talk about European lotteries, which was part of the announcement after the last summit meeting, or the twinning of towns or other silly little things which helped to fill the pages of statements after that meeting.

Naturally, we must question how further enlargement of the Community without proper provision for the enlargement will affect us. The two international crises of the seventies are undoubtedly the factors initially responsible for the severe recession, the effects of which are still with us. It is a fact of history now that the Community, faced with its first serious challenge, did not prove an effective instrument for responding to the crises. The issues were, of course, ones which affected the whole western world. To the extent that there were any attempts at a co-ordinated response they took place within the OECD, and under the auspices of the economic summits of the Seven which have produced no real results.

As a market and as a trading block the European Community serves some function. As far as wider policy issues are concerned, whether they be political or economic, the EC has often turned out to be little more than a forum to coordinate the Community attitude.

The EC has not used its considerable strength as a "block" to bring about a co-ordinated economic recovery. One must question again whether an enlarged Community will be any more successful. There are a number of policy options that have been or could be considered.

The first option, much favoured by some of our partners, goes under the name Completion of the Internal Market, the Dismantling of Frontiers, Non-Tariff Barriers and State Subsidies, the harmonisation of tax rates and so on. The argument for this option is roughly that the United States and Japan are markets without internal barriers, while there are all sorts of real and hidden barriers in the European Community. It has to be said that our interests in regard to such a programme work in both directions. It is said, for example, that foreign investment which might have come to Ireland is being diverted to the larger Continental countries who practise a State purchasing policy that favours factories situated in their territory. On the other hand, much of our own industry is handicapped not so much by invisible trade barriers as by poor marketing.

The Oireachtas Joint Committee pointed out: "Lowering our tariff barriers has decimated our traditional industries with consequent unemployment". A completely integrated internal market based on a laissez-faire survival of the fittest philosophy is unlikely to favour Ireland, if only because of our national geographical disadvantages on the edge of Europe. It is a policy likely to favour the heartlands of the Community, south east England, northern France, the Benelux countries, Germany and northern Italy.

If an economy like ours, which has become to a great extent dependent on multi-national firms, is allowed to become a dumping ground for cheap goods from inside and outside the EC, it is not likely to provide its people with anything approaching full employment.

It has been recognised far too little in the past that economic integration imposes considerable costs on weaker and more peripheral economies, with activity naturally gravitating towards the centre and to the most densely populated regions. Unless there is an operation of a meaningful policy, unless the different areas of the Community are brought up to somewhat the same level, then one can forget about economic integration, in the full sense of the word, and monetary union. Economic integration, without a proper redistributive mechanism, is 19th century economics. It is as if we tried to run this country on free market principles with virtually no social or regional policy. It is with regret that we must note that there are no safeguards whatsoever for the less developed regions within the Community such as Ireland.

I believe that the Government must get away from the notion that we are uncritically in favour of more economic integration without compensating transfers and benefits. Indeed, the Greeks rightly pointed out in the Dooge Committee report:

The overall gains from economic integration are not only unevenly distributed, but may also disguise losses for the less prosperous regions. The creation, therefore, of an integrated market and a technological community needs to be supplemented by a very substantial effort to strengthen the Community's cohesion by promoting regional development and the convergence of living standards.

I do not accept the criticism which speaks of the "begging bowl" attitude. It suits our partners to paint Ireland as a large beneficiary of Community membership, merely from the fact that we have received several hundred millions in benefit from the Community across the counter. It is ignored, of course, that Denmark, which has the highest per capita income in the Community, also receives the highest EC transfers so that most of what we obtain from the Community is not specifically related to our stage of development.

No Irish Minister or official should be diffident about alleged windfalls from Europe. These are simply the outcome of Community policy. Are we really so naïve as to suppose that the biggest net contributor to the Community — the Federal Republic of Germany — benefit least from the EC, as we are so often told in uninformed media? I would argue, without fear of contradiction, that the Federal Republic of Germany benefit far more from the Community than we do. Indeed, their trade surplus with the EC in most years is equivelent to or exceeds their payments to Brussels. We need to think straight about these aspects. We must get out of our head once and for all the idea that we are somehow specially favoured by the EC or by our partners. The stark truth is that we are not. We are, and remain, one of the less favoured regions of the EC and we should have no illusions about it. It is long past time that we should be forming a practical working alliance with those countries that are in a similar situation, so as to obtain effective distributional Community policies.

The six, plus Britain and Denmark, have per capita incomes per year based on purchasing power or parities of between $8,500 and $11,000. Ireland's per capita income is just over $6,000 or 57 per cent of Germany's. We are behind Spain with an income of $6,800, but ahead of Greece with $5,400 and Portugal with $4,500. In terms of economic development we can be grouped with the new southern European members of the Community, Spain, Greece and Portugal. Their experience of the impact of Community membership in relation to the traditional industry is likely to be similar to ours.

There is no doubt that we will exercise considerable muscle within the Community. We can choose to join them in seeking a fairer redistribution of the wealth of the Community or we can choose to pretend that we belong to the top tier and with false pride continue to suffer in dignified silence. This bears looking at now more than ever with the enlargement of the Community.

Everybody knows that the Community has stagnated in recent years. Everybody knows that it is stumbling from one crisis to another, that it has not been able to finance its policies, that grandiose schemes to give effect to the idealism of those who founded the Community have had to be shelved because of lack of money to implement them. I will not list the schemes we had in this country which had to be put aside because they could not be implemented. Now the Community is being enlarged and we are to have three extra commissioners. We will have an additional 60 million people to cater for and even without that we would not have enough finance to pay our way.

Our leaders of today, the heads of Government and the heads of State, have reneged on their responsibilities towards the concept of a European Community. They have neglected and reneged upon their responsibilities to give it the economic independence it should have. I accept what the Minister has said today, that he and the Government are committed to doing their utmost to ensure that more money will be made available. The 1.4 per cent VAT will not be sufficient to meet legitimate calls on the Community purse. Many will argue that the 1.6 per cent which is being spoken about will also be insufficient and that there is a great urgency about providing at least 2 per cent VAT from early January if we are to ensure that Europe has a chance to succeed.

The preservation of a sound, healthy Europe is important to Europeans as a whole and it is vital to us as a small nation on the periphery of Europe that it should survive. Therefore there is a greater responsibility on us and on our elected leaders to ensure that it is helped to survive.

Mr. Durkan

I welcome this Bill which will have the effect of giving our approval to the enlargement of the Community to 12 member states. It will have the effect of increasing the EC as a trading community with a population of 300 million. This must be of benefit to the Community as a whole. Despite what many people say about European bureaucracy, I believe that as a trading base it must be beneficial to all of the countries involved when the Community becomes larger. All nations in the group will be encouraged to work together towards the kind of economic and, we hope, political union on which the Community was founded.

I congratulate the Minister and the Government in regard to fishery safeguards. I think the Government have been successful in ensuring that the fishing industry will be safeguarded after the induction of a nation with a very large fishing fleet, three quarters the size of the entire EC fleet. That is a fairly formidable piece of competition but the safeguards are such that our fishing industry will be given time to gear itself for that kind of competition. It has always been said that Irish people have been competitive when it is put up to them. Now they will face up to the new competition realistically. They have been given sufficient time to do it because of the safeguards negotiated.

As Deputy Collins said, it will be necessary to improve the policing of our fishing waters in the interim period of ten years, and thereafter, so that the interests of Irish fishermen will be catered for in the best possible way. Therefore, fishery protection will need greater investment in order to provide a structure that will be able to police at least a 50 mile limit.

The EC are at a crossroads. During the years many developments have taken place but from the point of view of the founder fathers the degree of co-operation has not been achieved which they would have liked to see. As a small nation we fear that in such a pool of large fish we could be very vulnerable. As Deputy Collins said, nobody will fight our case for us so we must fight it ourselves. That is so in the US, in which the smaller states have to fight their special cases with the Federal Government when they do not get the slice of the action they would like to get.

In the EC there is the danger that some of the powers who want greater unity and do not seem to be getting the co-operation they feel necessary may move towards what is called a two speed Europe. In my opinion that would be disastrous from Ireland's point of view. In a two speed Europe as sought by those putting forward that idea Ireland would find itself left with a decision either to move into one or other league. Those in the higher tier could move ahead at a fast pace towards full economic and political unity and would naturally be more concerned about those in the new inner circle and less concerned about those in the lower tier. That would be bad for the entire Community but particularly bad for this country.

The Dooge report has been debated here but not at the length its importance would warrant. We should address ourselves much more seriously to the need for a firm decision as to how far we are prepared to go toward full political co-operation. We are a small community with a small economic base and generally we have been very good Europeans. Perhaps in a big field the small boys have to keep the rules lest they suffer, but it behoves the bigger boys by virtue of their size to be magnanimous and to set an example. Greater responsibility rests with the large powers in the EC to give the lead in regard to the main problem of unemployment.

I have spoken to people in my constituency and there is a feeling there that, while on the one hand we have gained from our EC membership, nevertheless our unemployment situation has got worse in the last couple of years. That is not an Irish problem entirely. It applies right across the board in and outside Europe. Moving towards full political integration, with all the responsibilities inherent in it, seems to be a little premature when we consider the serious social and economic problem of vast numbers unemployed. We would be far more constructive at this stage in applying ourselves more vigorously to reducing unemployment by all means available in the Community and by the introduction of other means if necessary. That should be a first step towards fuller economic integration and, ultimately, political unity.

Political union in itself is all very well and we here should support it, but it should not be made the means to an end: it should be an end in itself, coming after we have achieved greater economic co-operation. It is important that our Ministers and our Commissioner should apply themselves, in discussions on European union in the next couple of years, to achieving greater economic stability. There is a feeling in Europe at the moment that those who do not want to progress at a faster pace towards political union should not be allowed to impede the progress of the Community as a whole. I do not necessarily agree entirely with that. Nonetheless we should be aware of developments that have taken place there and setting our sights on what we recognise to be our targets. If we do not do so now, it may be too late in the not too distant future.

Over the past few years this country has achieved a great deal by way of membership of the EC. Deputy G. Collins referred to this also. Many people believe we have achieved benefits disproportionate to our contribution. Looking at certain aspects of our benefits in isolation it may well appear that way, but that is not entirely the case. In respect of many of the benefits we have received we have had to buy plant and machinery and other services required. Even countries such as West Germany, who are very heavy contributors, have benefited by virtue of aid to a country such as ours which spent that money constructively in purchasing goods, materials and services from much more developed countries such as Germany. There is no question of being a case of all benefit and no contribution. As Europeans we have done our job and fulfilled our role exceptionally well. We should never be ashamed of going to Europe, stating our case clearly and unequivocally and, whenever the need arises, protecting our interest in a dignified but strong way.

This country has received quite a deal from its involvement with Europe. There are areas from which we could benefit further, two being the Regional and Social Funds. Here I am thinking of land drainage. On a visit to the North of Ireland a couple of years ago I was impressed by the amount of land drained as a result of EC aid. There appeared to be greater emphasis placed on acquiring aid there and utilising it on the drainage of land. I can think of approximately 2,000 acres in my constituency which urgently require EC or similar funding for drainage purposes which has not happened to date. I refer to the Allenwood and Robertstown area of County Kildare which is well known. I am sure, even to your good self, a Leas-Cheann Comhairle. That is an example of one area which would benefit from funds for land drainage which could have a greater impact on the community than merely by way of agricultural assistance.

Whenever European Union is mentioned the questions of Irish sovereignty, neutrality and defence arise automatically. There were sufficient safeguards outlined in the Dooge report by way of response from this country to such fears. It is understandable and correct to say that in any situation that might develop in which sovereignty or neutrality would be affected, or one in which we might be involved on a European scale, we have taken the right attitude in protecting our interest. There are many people who contend that, in terms of modern warfare, neutrality is no longer an issue. That may well be the case. Hopefully that will never arise but, if it did, we might well find ourselves caught in the middle.

On the other hand, there is more to be gained by being neutral, by not being a contender in the military sense of the word, when at least we would not constitute a primary target. I suppose it follows that if one is not a primary target one is a secondary one. But the advantages to be gained from being neutral far outweigh involvement in the whole responsibility that is NATO and all that goes with it. There are those within Europe who contend that, if we are to be good Europeans, we should be prepared to accept all responsibilities. As long as there is room for small countries, economies and powers within the Community, then the Community must be prepared to accept that small nations have a right to establish our priorities and to protect our vital national interests. If that means we are going to be neutral then we should not apologise for being so.

The same applies to the protection of a vital national interest. We have not always had to resort to the veto or some other such measure. At the same time it is good to know that some such measure exists. That has been provided for in the Dooge amendments proposed to the Spinelli report. While one should never abuse a privilege, whether in the form of a veto or anything else, there is no harm in having an extra string to one's bow which carries the advantage of copper-fastening and safeguarding our interests.

Deputy G. Collins mentioned Ireland's position in terms of living standards as compared with those obtaining when we first entered the EC. What he said is quite right. We have not kept pace. In fact we have fallen behind somewhat which is ironic. That does not necessarily mean it has been occasioned by our involvement in the EC. Our partners accelerated at a faster rate than we and, since they had been moving at a faster pace before entering the Community, they were in a stronger position to avail of the newer markets open to them in the larger Community and they would benefit to a greater extent within a shorter period of time. We are catching up. The proposals contained in this Bill will do nothing more than afford this country a larger market for its goods and services which is most desirable. While it used be said in times past that countries with different traditions from ours might not be all that beneficial to us for marketing purposes——

An Ceann Comhairle

As it is now 5 p.m. would the Deputy please move the adjournment of the debate.

Debate adjourned.