A Cheann Comhairle, I attended the European Council in Rhodes on 2 and 3 December with Deputy Brian Lenihan, Tánaiste and Minister for Foreign Affairs. The Minister of State at my Department, Deputy Máire Geoghegan-Quinn, was also in attendance.
Against the background of the Community's renewed momentum towards the single market, the main items discussed at the meeting were: (1) progress towards the internal market; (2) the role of the Community in the world and certain political co-operation items; (3) the environment; and (4) audio visual policies. I have had copies of the presidency conclusions laid before the House.
Following the decisive breakthrough at our meeting in Brussels last February on the major packet of reforms contained in the Delors Plan, our meeting in Rhodes devoted some time to examining the prospects for the further development of the Community and its place in the world. In this context, we noted with satisfaction that the progress made in implementing the Single European Act was already beginning to create a new dynamism in the Community's economy — economic growth in the Community this year is likely to be the strongest since the end of the seventies with the growth in investment the highest for over two decades while inflation should be down to the levels obtaining in the sixties. However, while unemployment has started to decline, it is still at an unacceptably high level.
At the Rhodes Council we had before us the mid-term report from the Commission on the progress achieved in the implementation of the internal market programme. This report indicates that, of the 279 proposals required to be submitted from the Commission about 90 per cent will be tabled by the end of 1988. The shape of Europe as it will be after 31 December 1992 will soon be clearly apparent. At present the Council has adopted one-third of these measures; if one adds "common positions" the proportion rises to almost 40 per cent. The Commission hopes that by the end of the year this figure will have reached 50 per cent.
In some areas progress has been good — particularly in relation to the removal of technical barriers to trade in goods and services and in the liberalisation of capital movements.
In services, and in financial services in particular, important advances have been made. The Council has adopted the far-reaching second non-life insurance directive. All measures needed to create a European-wide banking market have now been tabled including the crucially important second banking co-ordination directive; and all measures required for the complete liberalisation of capital movements have been adopted. The directive liberalising long-term capital movements is already in force.
Work on public procurement, which accounts for such a significant proportion of economic activity in the Community, is now also making progress, and the directive providing for the mutual recognition of professional qualifications has every prospect of being adopted by the end of the year.
The Community regulations governing the Structural Funds, which will double in real terms for the less prosperous regions by 1992, are now expected to be fully in place before the end of the year.
Work on our national development plan that will provide the strategic framework to enable Ireland to benefit from these funds in a fully co-ordinated manner is now well advanced. The plan will be completed early in 1989 so that we can take the maximum advantage of the new arrangements. The plan will essentially consist of national and sub-national expenditure programmes that will serve as Ireland's application for European Structural Fund assistance for the years from 1989 to 1993.
A special effort will be made to outline for the private sector how private participation will be possible either through public-private partnerships or through strictly commercial private investment which will attract European Community matching funds. The kind of projects envisaged include toll roads and bridges, marinas, caravan parks, tourist and leisure facilities, heritage and cultural centres, science parks and forestry projects.
Work is also well advanced in each of the seven sub-national or regional areas throughout the country on identifying strategies and projects for those areas to be incorporated within the framework of the total funds available to Ireland as an Objective No. 1 region. As a result there will be for the first time an input and margin for choice by those at that sub-national level in determining the content of the sub-national applications for European Structural Funds for the five years to 1993.
Deputies will recall from our debate in the House last May that the Cecchini report identified the major economic advantages for the Community as a whole from the achievement of the internal market. I am particularly pleased that one of my main criticisms of that report has now been responded to and, at Rhodes, the European Council called on the Commission to supplement the Cecchini report with an analysis of the macro-economic effects of the internal market on the Community's regions.
At Rhodes, we singled out for priority attention the areas of transport and energy, animal and plant health and the free movement of persons in addition to the other areas which we had listed at Hanover. The inclusion of transport reflects my concern to ensure that the second phase in the liberalisation of air transport should provide for the removal of existing constraints and limitations and for a further significant step in the liberalisation of this sector.
Each of these areas is of considerable importance to us. We have a high animal and plant health status and agriculture is vital to our economy. We have to protect that status which is a valuable asset for the Community at large. Consequently, we believe that removal of controls on movement of plants and animals should be preceded by actions necessary to attain a uniform high level of animal and plant health throughout the Community.
Many countries have difficulties in relation to fiscal harmonisation. VAT rates in the Community in 1987 vary from 1 per cent in Belgium to 38 per cent in Italy. For Ireland, harmonisation of indirect taxes which concentrates solely on the structures, rates and technical arrangements, runs the risk of neglecting the wider issues which the proposals raise for some member states. We will continue to urge, therefore, that regard be had to the development and cohesion objectives of the Treaty, and that the Commission's review of its proposals must ensure that our difficulties of a budgetary, economic and social kind will not be overlooked.
In relation to the free movement of persons, the Council took note of the real difficulties of attaining the Community's objectives and especially the area without internal frontiers. Progress here is linked to progress on the intergovernmental co-operation to combat terrorism, international crime and drug trafficking. The Council agreed that this co-operation will be stepped up to achieve rapid and concrete results and turn Europe into a tangible reality for its citizens. The Council agreed that each of us would appoint a person responsible for the necessary co-ordination.
On the social dimension, we renewed our commitment to ensuring that the internal market will be for the benefit of all our citizens, and we identified a number of particular aspects which need to be taken into account in the Community's work programme in this area. The development of transport infrastructure was also singled out for attention which, of course, is of particular importance for us, given our peripheral situation and needs in this area.
On the environment, we agreed that solutions are urgently needed to such global issues as the depletion of the ozone layer, the rise in the temperature — or the "greenhouse effect"— threats to the natural environment, the problem of water resources, soil erosion, safe management of toxic chemicals and waste, air pollution and problems of urban areas. On my proposal, it was agreed to add the Irish Sea as one of the seas and coastal regions requiring special attention.
What was particularly striking at Rhodes was the spontaneous philosophical discussions we had about the future shape of the Community, with particular reference to its people and its cultural diversity and development. Deputies will see from the Presidency's Conclusions the emphasis placed on the importance of the development of Europe's audio-visual capacity and that the Community's work programme in this area should take account of the recent progress made in finalising the draft Council of Europe Convention on Transfrontier Broadcasting.
We endorsed the proposals from the French Government for the convening next spring of an international meeting of all the parties concerned to develop the audio-visual market on a European scale. It is important that we derive maximum economic benefit from this lucrative market which is estimated to exceed $100 billion by 1991 as well as exploit its potential to strengthen European culture in all its aspects, including the needs of minority languages where Irish was again singled out for specific mention by President Mitterrand. Co-operation in this area clearly needs to be intensified and involve all countries in Europe, otherwise the market will be dominated by outside influences.
On its international role, the Council stressed, inter alia, that the Community will be a partner, not a fortress Europe, that it will be open to the world and that it will seek to strengthen economic and political relations with the OECD countries and co-operation with other countries and regional groups. The Twelve pledged to strengthen the effectiveness of the United Nations and to contribute actively to its peace-keeping role. The Council re-affirmed their determination to strive to overcome East-West division in Europe within the framework of the CSCE process and set out the objectives of their policy towards the countries of Eastern Europe.
The European Council also discussed the situation in the Middle East. They reaffirmed their welcome for the acceptance by the Palestine National Council of the Security Council Resolutions 242 and 338 as a basis for an international conference as well as its explicit rejection of terrorism. Recalling the Twelve's statement of 30 November requesting the US to review its refusal to grant an entry visa to the PLO leader, Mr. Arafat, we agreed that the Twelve should be represented by permanent representatives from New York as well as the Presidency Foreign Minister, when the UN General Assembly re-convenes in Geneva to consider the question of Palestine.
We called on the Lebanese parties to renew their attempts at an agreement which would make it possible to elect a new President and expressed our wish that the intercommunal talks on the future of Cyprus, which are being conducted under the aegis of the UN Secretary-General, will lead rapidly to a solution of the problem.
At the end of the Council, I met with the British Prime Minister, Mrs. Thatcher, for about an hour. The convention in now established that the details of these discussions are not publicised. I can, however, say that at Rhodes the discussion was wide ranging and covered a number of issues, including extradition, fair employment, security co-operation and the review of the Anglo-Irish Agreement. We also talked about Community issues which had come up at the Council. The discussion took place in a realistic atmosphere and views were exchanged openly and frankly. On extradition, I expressed disquiet at the fact that each case now seems to become politicised, and this affects the whole background and is a matter of serious concern in its effects on the legal process and the rights of individuals.
The arrangements and the ambience for the Council were excellent, and I would like to take this opportunity of placing on record my appreciation of the hospitality and efficiency of the Greek Presidency in Rhodes.