I wish to report today on the outcome of the European Council in Luxembourg on 28-29 June and to outline the work taking place in the two Intergovernmental Conferences on Political Union and Economic and Monetary Union. The Conclusions of the European Council have been laid before the House in the usual way, and in order to facilitate Deputies for this debate, the draft Treaty of Union which has been drawn up by the Luxembourg Presidency on the basis of the work of the Conferences has also been laid before both Houses of the Oireachtas.
The principal issue scheduled for consideration at the European Council was the progress of the two Inter-governmental Conferences. However, in view of the developments in Yugoslavia Heads of Government agreed that the crisis there should be taken as the first item on the agenda. The Council quickly agreed to send to Yugoslavia the Foreign Ministers of the Troika and a representative of the Commission and to invoke the emergency mechanism of the Conference on Security and Co-operation in Europe.
It is symptomatic of the changed situation in Europe, and of the new responsibility of the Community arising from this, that all 35 participants of the CSCE consider that the Twelve initiative for resolution of the Yugoslav crisis should be the basis of a mission to that country on behalf of all CSCE participating states. Last week, the 35 welcomed the willingness of the Community to organise a mission to Yugoslavia to help stabilise a cease-fire and to monitor the return of armed forces to previous positions and the suspension of declarations of independence by Slovenia and Croatia for three months, so that an overall negotiated solution could be found. The Community is now fully engaged in carrying out this mandate, which is an earnest of the confidence reposed in the Twelve by all the parties in Yugoslavia and by the States of Europe, along with the United States and Canada.
Notwithstanding the crisis in Yugoslavia the European Council did keep to its scheduled business and great credit for this is due to the effective management of a difficult and complex agenda by the President, Prime Minister Santer and his Foreign Minister Poos. My general assessment of the Council is positive. While it was, as Prime Minister Santer has said, primarily a staging post on the way to the Maastricht Council in December it did enable the Heads of Government to take stock of the work of the IGCs and to identify the major issues requiring political impetus and guidelines. Moreover I believe that from Ireland's point of view our important interests in the IGCs and in other significant international negotiations, such as the GATT, were protected and enhanced. I shall deal with these questions in more detail later but at this stage I would like to point to the main results of the Council.
First, we agreed that the final decisions on Political Union and on Economic and Monetary Union will be taken by the Maastricht European Council. This is necessary if the timetable for ratification of the Union Treaty by the end of next year is to be kept.
Second, we identified a number of key areas in the Political Union Conference on which work will need to be intensified if there is to be agreement at Maastricht, and we issued guidelines for this work— in particular on a common foreign and security policy, the powers of the European Parliament social policy, economic and social cohesion, and on home affairs and judicial co-operation.
Third, the Council agreed that economic and social cohesion should be an integral part of the Union, embodied in the new Treaty. It asked the Commission to clarify the ideas outlined to the Council by President Delors for developing the Union's cohesion dimension. Cohesion is an essential part of the negotiations for Ireland and the Council's conclusions on this point represent substantial progress at this stage. In the discussions, I stressed our concerns in relation to the review of the CAP.
Fourth, the Council recognised that there are now broad areas of agreement on the basic components of Economic and Monetary Union, and agreed on the need to make satisfactory and lasting progress on economic and monetary convergance.
Fifth, in the area of drugs and organised crime, the Council agreed on the establishment of a European drugs monitoring centre and on a programme of work for the Maastricht Concil, including work on proposals put forward by Chancellor Kohl.
Sixth, we reviewed progress on the internal market, three-quarters of the measures have now been adopted. The Council identified several matters for priority attention during the coming six months, including important work on the free movement of persons.
Seventh, we reviewed the state of the Community's external relations, both bilaterally with its main partners, and in multilateral fora, including the GATT. Ireland successfully opposed a proposal to change the emphasis in the Community's approach and I can report that there has been no change in the Community's negotiating position on agriculture in the Uruguay Round.
Finally, we issued a number of declarations setting out the views of the Twelve on a range of current international issues, including the Middle East, Iraq, South Africa, human rights, humanitarian aid, and the non-proliferation of weapons. We also agreed that the Community should participate in international action to protect the Brazilian rain forest — an initiative which has resulted from the Declaration on the Environment adopted at the Dublin European Council in June of last year.
From what I have just said and from the text of the detailed conclusions the House will see that the Luxembourg Council dealt with many issues central to the development of the Community and its role in international life. Because of the significance of these for the Community and for Ireland I had a number of bilateral meetings with other Heads of Government before the Council — with Prime Minister Santer on 6 June, with President Mitterrand on 20 June, and with Prime Minister Major on 21 June. My meetings enabled me to obtain the views of these countries at first hand and to convey the Irish position on the major questions likely to arise.
The Conclusions of the European Council and the work of the Inter-governmental Conferences reflect the response of the Community to the great changes in European politics over the past two years and to the challenges thrown up by the profound transformation of the European scene. The old divided Europe which people had perhaps come to accept, in as much as it was familiar, is no more. No longer can we operate on the model of a continent divided down the centre, with two groups of countries in hostile alliances facing each other, and a number of others in a third group, not engaged in alliances but determined to minimise the chances of an ultimate confrontation which would threaten the future of all.
On the Eastern side of the former divide, the Warsaw Pact has ceased to exist as a military alliance, COMECON is no more, and we are the witnesses of the progressive transformation of states, once frozen in a totalitarian mould, into pluralistic and free democracies with market economies.
On the Western side, NATO is engaged in the formulation of profound changes in its approach, changes which start from the acknowledegment that security and stability do not lie solely in the military dimension and that the political content of the organisation should be enhanced. Significant decisions in regard to the military dimension too have recently been taken and announced.
At the same time, the first post-war conventional arms treaty to include both the US and the USSR, signed in Paris in November last, provides for a significant reduction in the numbers of tanks, artillery, armoured combat vehicles, aircraft and helicopters deployed in the European theatre, and opens up the prospect of significant reductions in troop numbers. Germany has agreed already to important reductions in the number of troops deployed on its newly united territory and, following agreement Soviet troops are being withdrawn from Hungary, Czechoslovakia and the former German Democratic Republic, as well as Poland. On the European continent confidence and security-building measures agreed in the CSCE can play an important role in security, reducing the emphasis on military means of ensuring security.
As for the European Community it is fair to say that it has emerged from the turmoil of the past two years with enhanced validity. It has become the pole of attraction for the newly liberated countries of Central and Eastern Europe. At the same time, it is the one indispensable reference point for any future overall European system. The culminating point in the changes affecting Europe over the past two years was the Charter of Paris for a New Europe, adopted by the Heads of State or Government of all CSCE participating states in November last. This announced the end of the era of confrontational division of Europe and proclaimed that henceforth relations between the participating states would be founded on respect and co-operation. It recognised the important role of the European Community in the political and economic development of Europe. In such a new Europe there is inevitably a sense of new possibilities, at once challenging and giving rise to hope. It challenges statesmen to come up with imaginative arrangements which will be adequate to the new situation and which will give the people of Europe as a whole confidence in their future.
The newly liberated countries of Central and Eastern Europe have renounced decisively a bankrupt system and an unequal alliance. It is clear that they look to Western Europe, and the European Community in particular, as the anchoring point for their security in the widest sense of this term. Accordingly, at present Poland, Hungary and Czechoslovakia are negotiating with the Community Association Agreements with a political content. These are seen as stages on the way to further development of their relations with the Community. Indeed it is clear that full membership of the Community is the strategic goal of all three. Other countries of Central and Eastern Europe are likely to follow along the same road, as they make further progress towards full democracy and a market economy.
On the other hand, the countries of EFTA are negotiating an agreement with the Community for the establishment of a European Economic Area. This raises complicated institutional and policy issues and raises the question in some of the EFTA countries, whether the solution is not to be found in application for membership of the Community pure and simple. Two EFTA countries — Austria and Sweden — have lodged applications for membership. In each case, it is notable that an important consideration has been that neutrality has a different specific weight in the new Europe that I have been describing. Clearly, it does not now seem to pose the same difficulties in the minds of some prospective members that it did only a very short time ago. We know that serious consideration is being given in other EFTA countries to the question of Community membership.
At a time when the geo-political map in our continent has changed fundamentally, and is still changing, the place of the Twelve in the new Europe is of decisive importance. This was recognised early by the Heads of State or Government of the Community. Responding to the proposal of Chancellor Kohl and President Mitterrand, they confirmed at their meeting of 28 April 1990 in Dublin their commitment to political union and began the process of examination of treaty changes with the aims of strengthening the democratic legitimacy of the union, enabling the Community and its institutions to act more efficiently and effectively, and assuring unity and cohesion in the Community's international action. This process complemented that already under way on Economic and Monetary Union.
Before taking up the individual issues under consideration in the Inter-governmental Conferences, I want to outline the overall approach that has guided the Government in the preparatory work and in the discussions within the Conferences.
First we have brought to the negotiations Ireland's full and wholehearted commitment to the European ideal of an ever close union amongst the peoples of Europe. It is sometimes overlooked that Ireland's commitment to European construction now extends back a full 30 years to when we first applied for membership in 1961. We accepted at that time, and again when we joined the Community more than ten years later, that the original Treaties were a stage in the process of European integration, and that we would be engaged with our partners in developing the Community and in seeking new ways to give expression to the European ideal. The two enlargements in the eighties, and the Single European Act were steps in that process. The negotiations now under way on Political Union and on Economic and Monetary Union will take us further on the road. But they will not complete the journey. There will be further goals to be achieved. The important thing is that we and our partners have come to a common understanding on the nature of the challenges facing Europe in the nineties. We have committed ourselves to working with our partners in finding solutions commensurate with the historic nature of the changes taking place in European life. I believe Ireland can take some pride in the way in which we participated in the debate on these issues and the Community's response to them during the Irish Presidency last year.
The second point I want to make is that the work of the Intergovernmental Conferences is a joint endeavour. It must reach an outcome which is acceptable to all and accommodates the interests of all on an equal basis. The great strength of the Community and the factor that more than any other has sustained it and enabled it to confront the challenges of international life has been its unity of purpose, of membership, and of organisation. All the member states share the same rights and obligations under a common legal order. The Community has in the past rejected ideas of a two-speed or two-tier Community, and it is a concept that remains unacceptable to Ireland. I said recently that we intend to be founder members of Economic and Monetary Union. We intend also to be full members of the Political Union.
The third guiding factor in Ireland's approach is that the outcome of the two Intergovernmental Conferences should strengthen the capacity of the community, internally in building a strong competitive economy for the benefit of all its peoples, and externally in dealing with the major issues on the international scene. A primary requirement is that we should maintain and build on the successes already achieved. It would be a sad irony if our efforts to develop the Community were to result in a weakening of its foundations, of its capacity for action, or of the common policies already established. All organisations must grow and adapt, and there are overwhelming reasons why the Community must now equip itself to face the changed situation in Europe and beyond.
But there are a number of fundamentals, crucial to the achievement of the Community in the past and essential for its success in the future, which we wish to see preserved and built on. In the sphere of the Community proper these include the supranational as against the intergovernmental character; the sole right of initiative of the Commission in the legislative area; a single legal order; and the overall balance between the institutions, which amongst other things helps protect the position of the smaller member states.
Similarly we must not forget that in the economic area the Community has a range of solid achievements — the Common Agricultural Policy, the Common External Policy, policies to promote economic and social cohesion, the internal market — which have helped to create a dynamic and growing economy and sense of solidarity and unity of purpose between our peoples. It is on this basis that Ireland wants to see the institutional structure of the Community developed, new policies instituted, and the Community's internal and external capacity for action strengthened.
A fourth important consideration in our approach is to ensure that the Community develops in a way that is relevant to our people and will promote their welfare. The Irish people have been and are enthusiastic and committed supporters of the process of European unity. We understand and share the political inspiration behind the establishment of the Community and the motivation of its founders. We understand too that by pooling and sharing sovereignty in the areas covered by the Treaties we can better protect our interests and enhance our prosperity. These two themes — of contributing to a safer European order which would enhance our security, and of developing a more prosperous European economy in which the Irish people would share — have motivated Ireland's initiatives in the Conference on such questions as health, education, culture, and economic and social cohesion; our support for the concept of Community citizenship; and our participation in efforts to find ways of strengthening the Community's external policies.
The Intergovernmental Conference on Political Union opened in Rome in December last. It meets each week at official level and there have been five formal sessions at Foreign Minister level, as well as several informal ministerial meetings on specific questions. The outcome of the first six months work is contained in the draft treaty on the union which has been prepared by the Presidency and the text of which has been laid before the House. I must emphasise that this text is not an agreed draft. It is an attempt by the Presidency to set down in consolidated form "the prevailing drift", to use their own words, to emerge from the work of the two Conferences. At the Luxembourg Council the Heads of Government agreed that the Presidency's draft would form the basis for the continuation of the negotiations. We, like all other member states, will be arguing our case on various aspects of the draft on the basis of proposals and positions we have put forward and on the understanding, embodied in the Luxembourg Conclusions, that final agreement will only be given to the Treaty as a whole— the principle is that nothing is agreed until all is agreed.
In looking at the work of the Inter-governmental Conferences and at the text of the draft treaty it is necessary to bear in mind that the negotiations are focused on two sets of changes which are different in character. One set concerns those adaptations to the legal order of the Community proper designed to introduce or develop common economic, social, and trade policies; to improve the effectiveness of the Community; to strengthen its democratic legitimacy; and to establish an Economic and Monetary Union.
These involve essentially changes in the framework established by the Treaty of Rome. The second set of issues concerns the introduction of new forms of co-operation and action which will form part of the European Union but outside the Treaty of Rome framework. This involves the common foreign and security policy and co-operation on crime, immigration and other matters generally dealt with by Ministers of Justice or the Interior. It is at present envisaged that these two areas will have rules and decision-making procedures separate from the Treaty of Rome.
Not everyone is content with this approach, and there are those who have argued with some intellectual force for a more unified approach based on a single Treaty framework. The debate has been characterised as one between those who advocate building a union on the basis of three separate pillars and those whose preferred image is that of a tree with the branches representing the Community, common foreign and security policy and judicial co-operation. It is, however, generally recognised within the Conference that the nature of the subjects involved and the present stage in the evolution of European Union do not allow for the application to areas such as foreign and security policy and interior matters of the classic Treaty of Rome procedures, and that what is required are new and improved forms of co-operation and common action. Ireland agrees with this. A major challenge to all involved in the Conference is to find methods of co-operation and common action in these areas that will at once enhance the union's capacity and ensure unity and coherence between the union's various activities.
A related issue is the general expression contained in the draft which stipulates that the "Treaty marks a new stage in a process leading gradually to a Union with a federal goal". A great deal has been said and written about this phrase, and it is not certain at this stage whether it will find a place in the final text. For our part I could accept its inclusion in the Treaty. We are already committed in the existing Treaties to an ever-closer union, and the Community already has elements of a federal character which are likely to be enhanced by the outcome of the Intergovernmental Conferences. Expressions of this kind are of course important in setting the general direction of the Community. But what is more important, as the founders of the Community knew, is the precise content of the union — its detailed objectives, its specific activities, its common policies, its institutional structure, its legal order. These are the things that will in the end determine the character of the union and its effectiveness. If we can get these right then expressions about the federal goal or vocation of the union may appear less important obstacles to agreement than they do now.
The Conclusions of the Luxembourg Council make clear the unanimous desire of the Twelve to reinforce the identity and role of the union as a political entity on the international scene. This is at the heart of the discussions in the Inter-governmental Conference on a common foreign and security policy. Before looking at the broader issues involved I want to make three points in relation to the Luxembourg Conclusions on this question.
First, although the Twelve's general objective is clear and agreed there is not yet agreement on what is to be included in a foreign and security policy or on the means to implement it. In particular the key question of the decision-making process — whether decisions should be by unanimity or majority — has yet to be settled.
Second, the conclusions make clear, as did the conclusions in Rome in December, the distinction that we have drawn between security and defence. All member states now accept this distinction.
Third, there is no agreement on the question of a defence identity or role for the union. This is still under consideration in the Conference and will not be decided until its final stages. But the Luxembourg Council did confirm the agreement in Rome in December that any such identity will take account of the traditional positions of certain member states, including of course Ireland. Against this background I would like now to look in more detail at the work of the Intergovernmental Conference on this issue.
The debate has covered points such as the scope of a common foreign and security policy, how decisions on formulating and implementing it would be taken, what the security area should cover, whether there should be provision for a common defence policy, and whether a relationship should be established with the Western European Union, or WEU, a body to which nine Community members already belong and which has a specific brief in the defence area.
As regards the scope of a common foreign and security policy, some member states have proposed that all areas of foreign policy and security policy be brought into the common domain immediately, while others see no need for going further than strengthening the commitment and mechanisms already in place under the Single European Act. In fact, there are still wide differences between member states in important policy areas, and these will not be resolved merely by a decision that there is to be a common policy. Realistically, the idea of bringing all areas into the common domain immediately will not find the necessary agreement. On the other hand, most member states see a need for something which goes beyond the present system of European political co-operation, which is that set out in the Single European Act.
A proposal in this area which has attracted substantial interest, and which aims to establish a mechanism which would realise the objective of going beyond the scope of present co-operation, is that the new Treaty should provide for the bringing of new areas into the common policy domain on the basis of a decision by consensus in the European Council or the Council of Ministers. This would avert the need for a new Inter-governmental Conference whenever new areas were to be brought into the common policy, and would enable the member states to identify areas for inclusion on the basis of priorities agreed by them.
I believe that this is an approach we could consider, provided that we are satisfied that there will be an orderly and disciplined approach to bringing in new areas and that our interests are protected. A mechanism which would allow new areas to be introduced in an ad hoc, unconsidered way, would not be desirable. The introduction of new areas could, for example, be governed by objectives stated in the Treaty itself and prepared by full discussion at expert and ministerial level to determine whether particular areas are ripe for a common policy.
It will also be necessary in our view that decisions in the area of common foreign and security policy should be taken by consensus. A number of partners have proposed that decisions should be taken by qualified majority voting, where votes would be weighted according to the size, population and economic strength of member states or on other criteria. Our view is that foreign and security policy is a very sensitive area for all states, and where it is made the subject of joint action or common policy for the first time, it is simply not realistic to think that states will allow themselves to be bound by the votes of others if interests which they consider vital are at stake.
The area of security is a particularly sensitive one for all the member states. At the European Council in Rome in December last the Heads of State or Government agreed that certain specific areas of security should be considered for inclusion in a common policy. These include issues discussed in international organisations, such as arms control, disarmament and related issues; CSCE matters, certain questions debated in the United Nations, including peace-keeping operations; economic and technological co-operation in the armaments field; co-ordination of armaments export policy; and non-proliferation. We are urging that a close study be made of these areas with a view to determining their suitability for a common policy.
Some partners have taken the view that security inevitably includes defence. I have already said in this House that the Conclusions of the Rome II European Council distinguish between security and defence, treating the latter as something to be considered with a view to the future and without prejudice either to the positions of member states which have existing obligations in this area, such as those in NATO, or to the traditional position of other member states, which, of course, includes Ireland.
The position of successive Governments here has been that, if the Community were to develop its own defence arrangements for its security, then Ireland as a committed member state would consider participating.
A number of ideas have been canvassed, such as joint military forces for intervention outside Europe to protect Community interests, or a mutual defence commitment of the type which already exists in Western European Union. That being said, differences of orientation of a very basic kind have also emerged on the question of a common defence policy for the union.
Some partners favour the development of a defence policy for the union as such, while others object to the union developing its own defence policy and see the defence of Europe as situated firmly in the NATO context. A defence arrangement which the EC works out for itself, and which has Community interests as its primary focus, is clearly different from a system in which existing wider arrangements continue to have primacy and where non-Community members are part of the decision-making process.
We have followed the debate in this area closely. A significant part of it is taking place outside the Community framework in NATO, aiming at a NATO Summit meeting in Rome in November. Within the Twelve, there is an emerging consensus that a defence capability of the union proper is not on the cards at this stage. Indeed, the Conclusions of the Rome II themselves are an earnest of this: they speak of defence "with a view to the future".
In the meantime, the question has arisen whether a link with Western European Union might not be appropriate as a way of establishing a framework within which in due course a defence role for the Community proper and decided by the Community might be provided for. The current Western European Union Treaty remains in force until 1998. In this perspective, some member states see Western European Union becoming a part or organ of the political union. Others believe it should be separate, with a responsibility in the defence and military area which the union does not have; others again see it as potentially a European pillar of NATO or a channel between the new union and NATO. It has been proposed that Western European Union should develop security policy on behalf of the union, or that it should be the implementing arm in the military area for decisions of the union, or that it should take policy guidelines from the political union for its action in the defence area.
These proposals at present run into the obvious difficulty that not all Community member states are members of Western European Union. But even those who are have different views on the future evolution of Western European Union and on the question of a common defence policy.
For some member states, any link established between the union and Western European Union would have to be counter-balanced by a link of at least equal strength between the Western European Union and NATO. The overall shape of relations between the union and Western European Union clearly cannot be decided until the question of principle concerning the role foreseen for the union in defence matters is resolved. It is equally clear that for many of the NATO members among the Twelve, the future role of NATO, which as I mentioned earlier is also under examination in that body, will have an important bearing on their decisions in this area.
There are other proposals for centralisation of decision making in the Council of Ministers, rationalisation of preparatory and support bodies and a role of initiative for the Commission on the same basis as member states, which are generally accepted. The general aim is to rationalise the present separate systems of decisionmaking for Community business and for foreign policy. As such, they give rise to no problems of principle for us.
The development of a role for the Union in Home Affairs and Judicial Co-operation is another significant area of work of the Intergovernmental Conference. It constitutes the so-called third pillar of the Union alongside Community business proper and a common foreign and security policy. What it involves essentially is bringing into the Union the considerable areas of inter-governmental co-operation between Ministers for the Interior and Justice which already takes place outside the scope of the existing Treaties. The external borders of the Community, access, visa and asylum arrangements, immigration, drug trafficking, customs and judicial co-operation, and action against terrorism and organised crime.
Already there is a considerable agreement in principle in the Inter-governmental Conference on this issue. At our Luxembourg meeting Chancellor Kohl brought forward ideas for further developing the work of the Conference in this area, including a proposal for a European Criminal Investigation Office. All Heads of Government are agreed that the fight against drug trafficking and organised crime requires the most vigorous, determined and co-ordinated approach. At Luxembourg we agreed on the objectives underlying the Chancellor's proposals and instructed the Conference to examine them further with a view to the revision of the Union Treaty.
Ireland can agree to a more systematic arrangement for co-operation between the member states on these issues. We are working actively and constructively with our partners on the main issues involved including the scope of the arrangements, the decision-making structure, and the links between work in this area and in the Community proper. Sensitive matters of national jurisdiction are involved for all the member states and we share the view held by most of our partners that at this stage this is an area where the approach should be largely intergovernmental with the emphasis on consensus in decisionmaking.
But, of course, we cannot wait for the outcome of the Intergovernmental Conferences and the ratification of the new Treaty in order to take action in these areas. The Luxembourg Council therefore reviewed current work, especially on the free movement of persons and on drugs. Ireland has welcomed the signature by all member states of the Convention on Asylum and we wish to see early signature of the Convention on the crossing of external frontiers. At Luxembourg I strongly supported the setting up of a European Drugs Monitoring Centre and this was agreed. We also supported the proposals made by Chancellor Kohl to intensify work between now and the end of the year on immigration, asylum policy, drugs and organised crime.
Apart from the negotiations on common foreign and security policy and judicial co-operation that I have just described, a considerable proportion of the work of the two intergovernmental conferences has been devoted to revision of the Treaty of Rome itself.
It is proposed to create new Community competences in the areas of citizenship, energy, Trans-European infrastructure networks, public health, education, culture, consumer protection, tourism and civil protection against natural disasters. It is also proposed to reinforce existing competences in the areas of social policy, research and technological development, and the environment. Finally, and of great significance for Ireland, it is proposed to reinforce the provisions on economic and social cohesion.
All of these areas are very important, and we are taking an active part in the negotiations on them. We have submitted proposals for Treaty texts on education, health, and economic and social cohesion, and have co-operated with the Commission in the preparation of a text on culture.
I have previously stressed the importance I attach to the provision of arrangements for Community citizenship. The conference is considering a range of provisions which will cover rights of residence, facilities to vote in European and local elections in the country of residence, co-operation in the protection of citizens' interests in third countries, and the establishment of a Community ombudsman.
These proposals, in the form in which they have emerged in the Presidency's draft composite text, are largely acceptable as far as Ireland is concerned. In the case of electoral rights, for example, our provisions are among the most liberal in the Community. There may also have to be provision for the extension of citizens' rights as the union develops. But this is an issue which we feel will require further examination in the Conference with a view to assessing the full extent of the commitment involved.
The success of the internal market programme must count among the major achievements of the Community since its establishment. Satisfaction at its success has been accompanied by a realisation that the needs of workers and their role in the development of the single market must be acknowledged and given expression. The Community Charater of the Fundamental Social Rights of Workers, the Social Charter, agreed by eleven member states in 1989, represents a significant development in that direction.
Ireland has already taken a positive approach in this area, and we were able to sign the Social Charter. We are also taking a similarly positive approach in the Intergovernmental Conference. In my view, there has to be a strong emphasis on a Social Europe to match the emphasis given in the Single European Act to the Internal Market. The Programme for Economic and Social Progress is a clear example of what we have been able to achieve in this area. For us, of course, the maintenance and development of employment is a major consideration.
The Conference is considering the extension of majority voting in the social policy area beyond the provisions of the original Treaties and the Single European Act. The Government are, as I indicated in the Dáil on 8 May, favourably disposed in principle to the extension of qualified majority voting subject to exceptions dictated by important national considerations. The draft Union Treaty clearly stipulates certain areas which should remain subject to unanimity. We and other member states have stressed that changes in this area should not impose costs which would have a detrimental effect on job creation and employment.
For Ireland the question of economic and social cohesion is an essential part of the negotiations in the two Inter-governmental Conferences. Cohesion policy is, of course, already covered in the Treaty but in our view the major steps forward now envisaged in European integration require an enhanced cohesion dimension in the new Union.
We were conscious of this in the preparatory work for the Intergovernmental Conferences and our objective at that stage was to ensure that cohesion was placed firmly on the agenda of the Conferences. At both European Councils in Rome I argued that is should be amongst the priority issues. This was accepted by my colleagues and is well reflected in the conclusions of both these meetings.
Our next objective is to ensure that the issue is properly taken up in the negotiations and reflected in the work of the Conferences. I am particularly pleased with the discussion of economic and social cohesion at the Luxembourg Council and with the Council conclusions. There is agreement that cohesion is an integral part of the general development of the Union and that this aspect should be embodied in the Treaty in an appropriate way.
In addition, the President of the Commission made an important and interesting statement at the Council on cohesion policies and on the outlook in this area. He mentioned a number of ideas, including continued growth in the Structural Funds, the setting up of a major infrastructural programme for trans-European networks, a possible special fund for the environment and taking better account of relative wealth in contributions to the Community budget. The European Council asked the Commission to clarify the various ideas it put forward in this statement in time for the December European Council.
I am satisfied, as a result of this meeting, that real progress is being made on strengthening cohesion, both by way of appropriate Treaty amendments and by way of specific actions to implement the cohesion objective.
Shortly after the Conferences began in December last Ireland submitted a series of Treaty amendments related to economic and social cohesion. By taking the initiative we were able to set the scene for the subsequent debate and to influence the attitude of the Commission and other member states with a major interest in the area. Due in no small part to our continuing efforts, the Commission first, and subsequently the Presidency, came forward with proposals for Treaty amendments which recognise the need to strengthen the cohesion provisions. While these proposals do not go as far as Ireland would wish, we welcome their contributions to the debate, as we do the contributions of Greece, Portugal and Spain.
Our negotiating approach is based on an analysis of the need for action to promote cohesion in the EMU context and over the long term and on an assessment of what it is feasible in the current phase of European integration. Our approach is also conditioned by scepticism about the correctness of some of the more sanguine conclusions about the effects of EMU on regional disparities which the Commission drew from its analysis.
Our specific proposals have been made available to Deputies. In essence they provide for an obligation to take account of the cohesion dimension in the formulation of Community policies and in the design and implementation of Economic and Monetary Union; regular reviews of the progress towards cohesion and of the contribution made towards such progress of the various means — national policies, the Structural Funds and other Community policies — with provision, where progress towards cohesion has not been satisfactory, for proposals by the Commission and action by the Council to rectify the situation; and specific Community action to promote cohesion in the second and third stages of Economic and Monetary Union.
In addition to the reform of the cohesion chapter of the EEC Treaty we have also sought to have cohesion specifically recognised as one of the tasks of the Community, and this has been taken up in the Presidency's draft Treaty.
We are active to ensure that our concerns are adequately reflected in the final outcome. In addition to our own proposals, we have supported worthwhile proposals made by other member states. Thus, we have supported the Spanish proposal for a Treaty amendment incorporating a commitment to a rapid review and follow-up decision on the own resources system, so as to reflect much better than it now does the internationally-accepted principle of progressivity, in respect of revenue-raising measures.
Another Spanish proposal is for the creation of an Inter-State Compensation Fund in addition to the existing Structural Funds in order further to promote and underpin cohesion. Our own submission had indeed made the point that in a more fully integrated community or union it would be necessary to move towards systems of financial equalisation such as exist in closely integrated states, some of them federal states, in different parts of the world. Accordingly, we have supported the Spanish proposal.
At the Luxembourg Council we noted that there are broad areas of agreement on the basic components of Economic and Monetary Union and that the draft union treaty provisions on EMU will form a basis for continuing negotiations.
In some ways, the agenda for EMU has a more confined focus than that for political union. However, this does not mean that the consequences of our participation in EMU will be any the less profound.
If it is to be judged a success, EMU must succeed in promoting non-inflationary growth, economic convergence, high employment and economic and social cohesion. It must also be governed by the principles of stable prices, sound public finances, a sound monetary policy and a healthy balance of payments.
There will be a need for the closer co-ordination of economic policies among the 12 members states and for open, competitive markets which will allow this co-ordination to show its best results. On the monetary side, dynamism should be underpinned by the eventual introduction of a single currency which will be the outward symbol of the single monetary and exchange rate policy which most member states wish to see in place before the end of this century. This policy would be aimed at maintaining price stability and, subject to this objective, at supporting the general economic policy of the Community.
In the economic area, we are looking to the establishment of economic policy guidelines which will help to determine, in broad terms, the overall growth path of the Community. As compliance with these guidelines will be an essential element of Community discipline, it will be necessary to devise procedures to cater for the hopefully rare occurrence when one or more members states depart from them.
Deputies will be aware of the emphasis which is placed on the need for budgetary discipline if a successful and viable EMU is to be established. We have demonstrated that discipline and are resolved to adhere to it. However, to copper-fasten our achievement, we, along with other member states, have agreed that certain specific rules be incorporated in a revised Treaty, in particular, a prohibition on monetary financing and a ban on bailing out member states where inappropriate budgetary policies result in them falling into severe financial difficulties. It is also agreed that excessive budget deficits should be avoided and a special procedure will need to be devised to give effect to this aim.
In the final stage of EMU, monetary policy within the Community will be the sole responsibility of the European System of Central Banks. That system will consist of a European Central Bank and of the national central banks of the 12 member states. It will have the power to issue currency and to intervene on the markets, both domestic and foreign. Its independence will be guaranteed by the new Treaty and its day-to-day operations will be carried out by an executive board composed of individuals of proven calibre in the monetary field. Ultimate responsibility for the exchange rate policy of the Community will rest at the political level although close consultation with the ESCB authorities will be an essential prerequisite before any major decisions are taken. There is agreement that the ESCB must be democratically accountable and the new Treaty must provide the framework within which this accountability can be managed.
We are now in Stage I of EMU. Within the Community, there is a very real desire to see the second stage of EMU begin on 1 January 1994. However, a number of measures will have to be in place if this is to be realised. In addition to full liberalisation of capital movements, certain rules in the budgetary area, to which I have already referred, will need to be accepted and there must be real and visible progress in the convergence of the member states' economies. For many countries, this will require a considerable effort if inflation is to be got down to an acceptable level and if their public finances are to be put on a credible footing. Steps are now being taken to develop short to medium-term programmes for convergence on the part of the member states in question. The Luxembourg European Council emphasised the need to make satisfactory and lasting progress on convergence as of now, during the first stage.
The content of Stage 11 of EMU is still a matter of negotiation. One of the principal outstanding issues here is the nature of the monetary body to be instituted in this phase and the date of its coming into operation. In an effort to find a compromise the Luxembourg Presidency proposed the establishment of a board of governors on the entry into force of the union treaty. This board would be responsible for the promotion of the ECU and for the smooth running of the European Monetary System. It would also act to strengthen co-operation among the central banks of the member states.
The ESCB would be established at the beginning of Stage II but it would not become operational until 1 January 1996, unless there was a unanimous decision in favour of an earlier date. That system would take the place of the board of governors and would take forward the concrete preparation for the move to a single monetary policy at the start of Stage III. This compromise seems to me to be a rational way forward and it has found favour with a majority of member states.
To complete the envisaged timetable, it is intended that a report shall be drawn up, no later than 31 December 1996, which will enable the European Council to ascertain whether or not the conditions are in place, including satisfactory progress towards economic and social cohesion, to allow a date to be fixed for the passage to the final stage of EMU.
The role of the European Parliament is a significant issue for the Inter-governmental Conference on Political Union. This indicates the extent to which the Parliament has developed its position in the Community's institutional process in the 12 years since it was first directly elected. It has sought to be heard and has succeeded in being heard.
We in Ireland understand the actual and potential importance of the Parliament. In many areas, it has taken positions close to or identical with our interests. For example, in the area of the structural policies it has been very supportive of the needs of the peripheral regions.
We believe that the Intergovernmental Conference should increase Parliament's influence. And there are a number of areas where we think Parliament's role could be enhanced: we think the Parliament should have the right to confirm the appointment of the commission as a body; we are prepared to look at an extension of its powers to assent to agreements between the Community and third countries and we are also prepared to consider the formalisation of its activities in the areas of petition and inquiry.
In addition to these measures, we believe that a great deal can be done to increase the Parliament's influence in the legislative area. More should be done to ensure that the Council takes account of Parliament's first reading opinions. The existing co-operation procedure introduced by the Single Act which provides for two readings should be extended to new areas of Community activity. At the second reading stage there should be direct discussions between Parliament and the Council in order to see if a common position can be reached. In making these changes, we consider that the role of the Commission in reviewing the amendments proposed by the Parliament and as the intermediary in the contacts between the Council and the Parliament is vital and should be maintained. Overall changes along these lines would considerably enhance the Parliament's powers in the legislative field.
There is as yet no agreement in the Conference on proposals to give Parliament the right of co-decision with the Council on legislative acts. This was confirmed at our discussions in Luxembourg. For our part we are reserved on ideas for full co-decision. In order to facilitate the operation of co-decision, it has been proposed that the present classification of Community legislation should be modified to provide for a new type of legislative instrument — the law — and that the Parliament should be able to share the final word with the Council on the adoption of this type of legislation. In our view the present system of Community legislation has served the Community well, and it does not seem prudent to alter it simply to extend Parliament's powers. If Parliament is to have some say in the final decision in a limited area, it should not be on the basis of an artificial reclassification of legislation but on a carefully defined basis which would have to include provisions for any voting by the Parliament to be by a majority of all its members. Moreover, we must ensure that the arrangements introduced do not add to the already lengthy procedure for processing Community legislation.
A final point I would like to make on the issue of co-decision is the role of the national parliaments. It should be remembered that the national parliaments process a considerable amount of legislation arising out of Community activities. It is also important to remember that the members of the Council are accountable to their national parliaments, and as such the Council has its roots clearly in the democratic process. The Conference has yet to consider proposals on the role of national parliaments, and, when it does, Ireland will take a positive view on enhancing their involvement in the work of the Community.
This, then, is the scope of the negotiation underway in the Inter-governmental Conferences on Political Union and Economic and Monetary Union, and a description of the main issues which have arisen up to now in the negotiations.
The Government agree that the Europe of 1991 and beyond demands that the Community strengthen its capacity for facing this new situation and undertake a new, significant step forward in the progress towards that European Union which has long been its objective.
Ireland is fully committed to this objective. As an organisation, the Community is unique on the world scene, and it is unique precisely because its ultimate objective goes further than those set by other associations of states or international organisations.
Membership of the Community has been of great benefit to Ireland. We have for almost 20 years been able to play a central role in the European body which, as I said at the opening, has been outstanding in maintaining and enhancing its validity while Europe changed around it over the last two years. The Government are determined to maintain Ireland's membership of the Community and the benefits it brings. In the Government's view, this will entail Ireland continuing to play a full and central role in the affairs of the Community as they develop. "Opting out" of the central policies of the Community can seem an attractive proposition only to those who take a shallow view of affairs. It is not an alternative which the Government consider would serve the country's interests.
Our general approach to the two Inter-governmental Conferences, then, is one of ensuring that, as the Community makes further progress in its integration, Ireland will continue to play the full part in all its policies that it has played since joining in 1973. In this approach, we will be serving the interests not only of the Irish people, but of the people of Europe as a whole.
