Maastricht Summit: Statements.

I propose, a Cheann Comhairle, to make a statement on the European Council which I attended with Deputy Gerard Collins, Minister for Foreign Affairs and Deputy Bertie Ahern, Minister for Finance, in Maastricht on 9 and 10 December.

Because of the unusually late hour at which the Council finished its work, the Presidency conclusions only became available comparatively late yesterday. As soon as the documents became available, I laid before the House and circulated to party Leaders the texts of the draft Treaty which formed the basis of the discussions at the European Council, the Presidency conclusions, and the documents which set out the agreed changes to the Maastricht Treaty texts. I will, of course, see that definitive and consolidated texts are provided as soon as we receive them.

The discussions which have already taken place in this House — most recently on Thursday and Friday week last — and replies by the Ministers concerned and myself to Parliamentary Questions, cover well for Deputies the background and the subject matter of the Council. Essentially, we were discussing in Maastricht the form and content of a Treaty on European Union.

The Maastricht Council was a success. It can be described as historic. The outcome was that we established a new European union. It is a political union of the Twelve member states which will have a common foreign and security policy, unified economic and monetary systems, a single market, a charter of social rights, and Community competence in a greatly increased number of important areas. It will promote a new level of prosperity among the people who belong to it and improve the quality of their lives.

For Ireland the outcome was very satisfactory. We will share fully in the benefits of the new union, and our economic and social interests have been specially favoured and protected. The Treaty will, therefore, bring an ever closer union among the people of Europe; the promotion of economic and social progress based on free and open competition and the market system; measures to assert the identity of the Community on the international scene; and strengthening the protection of the rights and interests of the nationals of the member states through the development of the concepts of European citizenship, of cohesion and of social policy.

The new Treaty we adopted will provide the legal framework for the existence and continued development into the next century of a political entity of 340 million inhabitants, constituting the largest single trading bloc in the world. It is vital, in my view, that the competences exercised by this union, and its political capacity, should be coherent as between themselves and fully in balance with the economic strength of the union.

Indeed, we have already seen the potential of the existing Community as a force for democracy and as a continuing source of social and economic stability in Europe. The challenges facing us are in no way diminishing. Even as the Council was meeting in Maastricht, news of developments in the USSR lent emphasis to this point.

The Government will be setting out the proposals in the Treaty and the main considerations affecting Ireland in a White Paper to be published early in the new year. I should, however, at this point like to assure Deputies that the operation of the Treaty will be governed by the principle of subsidiarity. This means that the Community will take action in areas which do not fall within its exclusive jurisdiction, only if, and in so far as, these objectives can better be achieved, by reason of the scale or effects of the proposed action, by the Community than by the member states acting separately.

Much of the work in drawing up the draft Treaty documents has been done by the Intergovernmental Conferences on Economic and Monetary Union and on Political Union, first launched as a joint enterprise during the Irish Presidency in 1990. The Irish contribution to these conferences has been consistent and sustained.

I had, before the Maastricht meeting, discussions on matters of bilateral interest or of concern in the Community context, with the President of the Commission, Mr. Jacques Delors, with the President of the European Council, Mr. Rudd Lubbers, with the British Prime Minister, Mr. John Major, with Mr. Enrique Baron, President of the European Parliament, and with President Francois Mitterrand. My discussions with Prime Minister Major also covered Northern Ireland matters. I have placed copies of the communique issued after that meeting in the Dáil Library. I also had bilateral discussions, immediately before or in the wings of the Maastricht Council, with Prime Minister Cavaco de Silva of Portugal, and Prime Minister Gonzales of Spain.

I propose now to outline the issues and major decisions of the Maastricht Council.

First, on procedures: the Council was addressed, in accordance with what has become the practice, by the President of the European Parliament, Mr. Baron.

The President of the Council, Mr. Lubbers, set out the agenda which he had previously indicated as covering six major issues. These are: economic and monetary union, which has for its ultimate aim a single currency for the Community; economic and social cohesion, involving the application of the principle of Community solidarity in the distribution of the economic benefits of the union among the member states and regions; social policy, which has a similar objective in so far as individuals are concerned; foreign and security policy, which will assert the union's identity in the world; the global presidency package concerning the "democratic deficit" Community competence and solidarity and the perspective for the future development of the Union — focusing particularly on the question of how best to continue the process of European integration.

For Ireland, the major concerns in this agenda relate to certain aspects of the proposals for cohesion, economic and monetary union, social policy, common foreign and security policy and other questions which I will touch on.

Before going on to deal with these issues, I should like to emphasise again the commitment of the Government to the concept of European Union, both in its economic and monetary aspects and in its political purpose. In pressing to have our concerns accommodated, we underlined our fundamental adherence to the concept and principle of European Union, which we fully support.

Cohesion was an important priority for us in the negotiations in both Inter-governmental Conferences. An economic and monetary union which did not have firm provisions for sharing the benefits of the union with the less well-off regions would not be a union worthy of the name. In fact, without such firm provisions, an economic and monetary union would have the effect of concentrating the benefits of the union on the already well-endowed central areas of the union. This would be gravely damaging to the economic and social wellbeing of the less well-off regions particularly those, like Ireland, which are peripheral to and distant from the main economic centres of Europe.

We had a clear negotiating strategy, therefore, from the outset to ensure that the Treaty contained the fullest possible recognition of cohesion as a basic objective of the Treaty and that this recognition was accompanied by firm commitments to the measures, including financial measures, to achieve cohesion.

We took the lead, therefore, in tabling amendments to the Single European Act to ensure full recognition of cohesion as a basic objective of the union. We were extremely successful in our negotiations and, as a result, the new Treaty contains provisions which are highly satisfactory and a substantial advance on the provisions of the Single European Act. These provisions comprise: the inclusion of cohesion and solidarity between member states among the basic objectives of the Community; the addition of rural development among the basic cohesion objectives contained in the Rome Treaty; the requirement that the formulation and implementation of all other Community policies, such as agriculture and trade policies, policy on R & D and State aids, and the implementation of the Single Market, must take account of cohesion and must contribute to its achievement; the requirement that the Commission report every three years on the progress towards cohesion and on how the various Community policies and funds and national policies have contributed to it. These reports are to be accompanied, if necessary, by appropriate remedial proposals.

We were not satisfied with that, however. We made clear in our conference negotiations and in all bilateral discussions that, unless the Treaty were accompanied by firm commitments on practical measures to bring about cohesion, we would find it impossible to accept the Treaty, and we could not recommend it to the Irish people.

We decided that the firm practical commitments we sought should be contained in a protocol to the Treaty so that it had the highest legal status short of being in the Treaty itself, which would not be appropriate for details of practical programme commitments. It was for us a major success that a protocol on cohesion was adopted reflecting the concerns and commitments we wished to see reflected in such a protocol.

The Cohesion Protocol has clear new commitments which the union must now honour to assist the faster economic and social cohesion of the less well-off regions with the more prosperous regions. These commitments include two we were particularly concerned to obtain. The first is that the rates of Community intervention under structural funding can be modulated to avoid excessive increases in budgetary expenditures in the less prosperous member states. It will be evident to everyone in the House that that is a most valuable concession to have won as structural funding is not beneficial if the burden of the national matching contribution is excessive.

The second new valuable commitment is that the scope of the Structural Funds will now be extended beyond the traditional areas of funding in order to cover the specific needs of individual less prosperous member states. Again, it will be evident to all in this House that a widened scope for structural funding is a particular advantage and need for us.

These two new commitments will have profound significance in easing our budgetary difficulties in matching increased structural funding.

The protocol reaffirms the continued roles of the Structural Funds and provides that their appropriate size from 1993 onwards will be decided in 1992. This is also a firm commitment which can only be interpreted as presaging a further increase in the funds in view of its linkage to the task of the Community in the area of economic and social cohesion.

The biggest success we had, however, in the area of cohesion was the provision in the Treaty and the protocol that a Cohesion Fund will be established before the end of 1993 to make a financial contribution to action designed to promote cohesion in the fields of the environment and the trans-European networks. Our special need in relation to this new fund is acknowledged in the fact that it is provided that in the transport networks special attention will be given to island and peripheral regions. This new fund is confined to member states whose GNP per capita is below 90 per cent of the Community average and who fulfil the conditions of economic convergence under European Monetary Union or have programmes under way to do so. Ireland fully meets these criteria.

The fund will have special significance and application in Ireland. We suffer more than most countries economically from our peripheral location distant from our markets because we export equivalent of two thirds of our output. The deficiencies and inefficiencies in our transport communications with our markets impose a heavy economic cost which reduces significantly our competitiveness. This new fund designed for island, land-locked and peripheral regions will enable us to make dramatic improvements in our transport communications by improvements in national roads, harbours, airports, ferries, and transport facilities generally to increase transport speed and reduce transport costs.

As regards the environment, we have a huge environmental programme to finance in this decade in reducing water and air pollution and developing our water supplies and water purification systems. We know from our discussions with the Commission that our peripheral and environmental needs were specially intended when the fund was proposed.

It is notable that for the first time we have a significant fund that is specifically earmarked for the environment as one of its key objectives, as every one is agreed that environmental protection is an essential but costly task with important trans-frontier implications.

It is important to understand that this new fund will be additional to the Structural Funds so that one of our major concerns that there should be an increased flow of funds to assure and accelerate cohesion has been met.

Ideally, we would, of course, like to move towards more automatic transfer mechanisms. In the Programme for Economic and Social Progress we set this out as a longer term objective of our EC policy and we shall continue to work towards it. However, we recognise from the early stages of these negotiations that the degree of integration likely to emerge from the IGCs would fall well short of the degree of political homogeneity that provides the framework for such mechanisms in existing federations. There never was any prospect of getting agreement at this stage on initiating now such mechanisms, and suggestions that we should actively seek them were completely unrealistic.

The outcome of Maastricht, therefore, in regard to cohesion has been an outstanding achievement. We have secured a whole range of binding legal provisions in the Treaty and, in addition, have secured firm commitments in a legal protocol which far exceeds in status and certainty the Declaration on the Structural Funds adopted on the occasion of the Single European Act. Between the Treaty provisions and the protocol provisions we can expcect substantial increases under more flexible conditions than ever in the transfers of resources to aid our cohesion which was our fundamental negotiating position in agreeing to economic and monetary union.

Ministers for Finance attended the Council for the discussion of this time which was central to our consideration of the move towards European Union. Fortunately, the bulk of the Economic and Monetary Union Treaty provisions had been agreed before the European Council meeting, so this area did not take up much time at the Council, though Finance Ministers meeting concurrently in the same building as Heads of Government in Maastricht did have a busy time there.

The main item which had to be considered was the decision-making arrangements for the transition to Stage III of European Monetary Union, leading to a single currency for the Community. There was a great desire on the part of most countries, including Ireland, to ensure that the process being set in train would be irreversible and would lead within a reasonably short and certain period to the establishment of full European Monetary Union.

The agreement which was reached provides for two possible procedures. The first, which will apply at end of 1996, provides for a decision by qualified majority at that time to set a date for Stage III, if a majority of the member states fulfils the necessary convergence conditions for the adoption of a single currency and it is considered appropriate for the Community to enter Stage III.

If by the end of 1997 the date for the beginning of Stage III has not been set under this procedure, then the date of 1 January, 1999 will be set. This date will apply automatically, without the need for a further decision. However, a decision will be needed, by qualified majority, on which member states fulfil the necessary convergence conditions. Only those countries will move ahead to full European Monetary Union at that time.

The UK and Denmark sought and obtained special protocols which allow them to take a further decision on their participation in Stage III, at the time that the date for transition is being decided. This arose because of special circumstances in those countries. All the other member states, with the exception of the United Kingdom, are firmly committed to moving to Stage III. The United Kingdom at this point are not committed to such a move: neither are they committed against it. They say that the decision to go ahead or not to will be taken at the time.

I am fully confident that Ireland will be in a position to move to Stage III of European Monetary Union with the first group of countries. The convergence conditions which must be met are set out in the draft Treaty documents. They relate to price stability, a sound budgetary position, convergence of interest rates and a stable currency in the Exchange Rate Mechanism of the EMS. We are already in a better position than many member states to meet these conditions and intend to continue with the necessary policies to sustain and indeed improve this position over the coming years. I need hardly, of course, point out in this House that one of the reference values to be taken into account in assessing a country's ability to move to Stage III is a ratio of Government debt to GDP of not greater than 60 per cent — and this is very important — or evidence that the country's ratio is moving consistently downwards to that figure.

Overall, the European Monetary Union decisions now envisage that Stage II start on 1 January 1994, with the establishment of the European Monetary Institute.

Stage III will start anytime from 1997 onwards and at least on 1 January 1999. The European Central Bank will be set up just before the start of Stage III, and the single currency and single monetary policy will apply from the start of Stage III. The economic side of European Monetary Union will be characterised by close co-ordination of monetary policies and by provisions to avoid excessive budget deficits.

On social policy an important concern of the Community is to ensure that the union does not become simply an area or organisation concerned solely with the creation of wealth. It must be our concern also that the citizens of the Union, through its organisation and operations, benefit also from its progress. In this context, we stressed the overwhelming importance which we in Ireland attach to employment. Our proposal that the promotion of employment should be among the first objectives of social policy was accepted during the preparatory work for Maastricht.

The discussion in Maastricht on social policy was certainly the most protracted and possibly most difficult of all our work there. I do not intend to detain the House with details.

From the outset of the negotiations on social policy in the Intergovernmental Conference, Ireland negotiated constructively to achieve a sound basis for agreement. I approached the negotiations in Maastricht in this spirit and found the Dutch Presidency and partners willing to go as far as possible to find a compromise acceptable to all. Unfortunately, it did not prove possible to accommodate the very special concerns of the United Kingdom. In the circumstances, the other eleven decided to move ahead on the following basis.

First, the present Treaty text, beyond which the United Kingdom was not willing to proceed, remains unchanged.

Second, the other eleven member states have concluded an agreement strengthening the Community's capacity to act on social policy. This agreement is essentially the same as that contained in the Presidency's draft Treaty. This approach sets a series of objectives for the Community and its member states, including, as the first objective, as we had argued in the negotiations, the promotion of employment. It also modifies the decision-making arrangements which will apply to decisions in the social policy area. In particular, the areas covered by qualified majority voting are significantly extended. Certain sensitive areas are reserved for unanimity or are excluded from Community competence. The agreement also enables the social partners to play an important role in social policy formulation.

The text agreed by the eleven contains a definition of working conditions in the list of issues for qualified majority voting which is not as clear as we would have wished. Deputies will be aware of our concerns on this point which I expressed to the House on 28 November. However, as Ireland has always been committed to progress by the Community I did not see any scope for seeking, as the UK has been given, what is virtually a permanent derogation from a major common policy. This approach is in line with what we took in the past with the EMS, with the Social Charter when it was agreed in Strasbourg in 1989 and, of course, at Maastricht when we agreed with the overwhelming majority of member states on the irreversibility of the move to full economic and monetary union. It is, above all, in line with our refusal to accept a two-tier Community. Having agreed to join in the further progress to be made by the Community in the social area, we will be relying on several important aspects of the new Treaty to ensure that our particular concerns are taken fully into account.

First, the Community now has, as I have said, a strong and comprehensive definition of subsidiarity. This principle will have to be taken into account in the formulation of the social legislation in particular.

Second, there is provision that social policy directives must avoid imposing undue burdens on small and medium-sized enterprises in such a way that might inhibit their creation and development. Given the situation which now exists on social policy, we will be insisting that this requirement is fully and scrupulously observed by the Commission in its proposals.

Thirdly, there is a requirement that directives should have regard to the conditions in each of the member states. The UK, our major trading partner, is not party to the new social policy, and this could have implications for competition. Again we will expect that this factor will be fully taken into account by the Commission.

Fourthly, there is the provision, arising from an agreement between the European Trade Union Confederation and the European employers' body that was taken up by the Intergovernmental Conference, that before submitting social policy proposals, the Commission shall consult management and labour about the possible direction of Community policy and that if the Commission then decides to go ahead with Community action, it will obtain the opinion or recommendations of the two sides of industry on the envisaged proposal.

On the concerns which I have heard expressed about the effect of social policy on competitiveness, I need hardly point to the facts that some of the countries inside and outside the Community with the highest productivity and the highest standards of living have also the most advanced social legislation; and also to the requirement in the proposed Treaty, as it stands, that the very first sentence of the Social Chapter requires the Community and its member states to have as their objective the promotion of employment.

I regret that it was not possible for us to move forward as Twelve in this vital area. I understand the reasons behind the decision of the UK to remain with the existing provisions. But if we wanted to maintain social progress in the Community yet avoid a damaging breakdown in the Treaty negotiations, we had no choice but to adopt the solution that we did, with an agreement that is not formally part of the Treaty, but which will be implemented for all practical purposes as if it were. I cannot understand how anyone who claims the interests of workers at heart should advocate forcing a complete breakdown bringing progress on the social charter to a halt throughout the Community. For the reasons I have mentioned it was unthinkable that Ireland should refuse to join in a major step forward by the Community in an area to which member states attach a very high priority. I am sure that on the basis of the provisions which I have outlined our essential concerns in the area of working conditions will be understood by the Commission and by our partners.

The agreement on a common foreign and security policy is along the lines I described to the House on 28 November. All the main negotiating objectives I set out then have been achieved.

It was important that the negotiations should succeed on this issue. Faced with the remarkable changes in Europe and international affairs over the past few years, it is clear that the Community needs new and strengthened mechanisms for dealing with the world: indeed that is a fundamental principle on which the draft Treaty is based. Moreover, our international partners expect that a Community more united economically and politically will be able to deal with them in a more coherent and co-ordinated manner. I believe that the provisions agreed on a common foreign and security policy will equip the union to respond effectively to the major challenges ahead through strengthened and expanded co-operation and through joint action.

The principle issues I want to deal with now concern the provisions on majority voting and the agreement reached on security and defence, which were the major focus of discussion by Heads of State and Government on this chapter.

In so far as voting is concerned, I have previously outlined to the House our view that an immediate move to majority voting would be inappropriate in an area as sensitive as foreign and security policy. Our preferred solution to this issue — which was one of the more difficult in this Chapter of the Treaty — was for a procedure whereby the Council would by unanimity define those matters on which decisions are to be taken by majority. And this was what was agreed.

This procedure will admit the principle of majority voting in the area of foreign and security policy, allow the practice to be introduced gradually, but will provide the essential safeguard we require.

In so far as security issues are concerned, the main points of agreement from Ireland's point of view were: first, that the framing of a common defence policy, which might in time lead to a common defence, is a matter for future negotiation in another inter-governmental conference in 1996. We accepted this in line with our long-standing commitment to partners that we would be prepared to enter into negotiations on a defence arrangement for the Community. The scope and nature of a common defence policy will be matters for that future negotiation. And they will have to be agreed by unanimity.

Secondly, the Treaty provides that the policy of the union will not prejudice the specific character of Ireland's security and defence policy. This is a most important provision. It enshrines in Treaty language the achievement secured at the second Rome Summit last year which recognised our traditional position. This was a major objective in the negotiations and I am satisfied that our traditional approach to foreign and security policy is fully protected.

Thirdly, the Treaty makes it clear that joint action by the European Union will not extend to defence issues. All decisions and actions of the Union with defence implications will be matters for the Western European Union. And any requests made by the European Union to the Western European Union must be agreed by unanimity among the Twelve.

The nine members of the Western European Union have in a separate declaration set out their views on the future of European defence, including the practical organisational arrangements they intend to make to enable the Western European Union to implement issues referred to it from the European Union. The matters covered by this declaration are essentially for the members of the Western European Union. From Ireland's point of view what is important are the legal commitments we will enter into through the European Union Treaty itself. These are the only obligations that we will take on. And I want to emphasise these will not involve us in a mutual defence commitment. They will not oblige us to join an alliance. And they will not involve us in taking an obligation under the Western European Union Treaty or subscribing to policy platforms adopted by the Western European Union.

The provisions on the common foreign and security policy will enable the Community to play a fuller and more coherent role in international life commensurate with its standing in the world and its responsibilities. The Treaty sets out the objectives for the union's common foreign and security policy and gives the union the means to achieve them. This is an important outcome of the Maastricht meeting. But equally important will be the actual policies that the Twelve will pursue under the new framework. Already the Twelve have a basis for certain policies through European political co-operation. The Treaty on European Union will enable these to be expanded and strengthened and new policies added by unanimity. Ireland will play a full and committed part with its partners in developing policies for the European Union based on the values that have traditionally informed our approach to international issues.

The need to enhance the democratic legitimacy of the union has been a major issue of the negotiations on political union. While I am firmly of the view that in our country democratic legitimacy is guaranteed by this House and by our local government system, I do recognise the concern that, at the European level, certain deficiencies do exist. The role of the European Parliament and the powers which it has in the legislative process of the Community have been significantly strengthened as part of the agreements reached in Maastricht. The Parliament's position in relation to the legislative process has been strengthened, rights of petition and inquiry have been formalised and the appointment of a Community ombudsman has been entrusted to it.

The most important development, however, is in the area of decision-taking where Parliament will now have a right to reject the Council's position in a number of important areas of Community policy. This will allow Parliament to have a greater say and influence on the nature of future Community legislation. The areas which have been selected include education, culture, consumer affairs, research and technology, trans-European networks, environment and the Internal Market.

From what I have said, Deputies will gather that the discussions at the Maastricht Council were wide ranging, complex and detailed. The debate was conducted with force but always with a common objective so as to arrive as far as possible at consensus — for after all what we were discussing was the future for the Community both in its own right and a basis for stability in Europe and the world. The fact that the Council was conducted amicably despite the many contradictory or opposing views and that it was brought to a successful conclusion is due in large measure to the skilled and determined chairmanship of the Dutch Prime Minister, Mr. Ruud Lubbers — to whom I would like in this House to convey my appreciation of his work and thanks for his courtesy and hospitality.

Conclusion of the new Treaty on European Union at Maastricht marks a memorable epoch in the history of our Continent. The new Union Treaty will have immense consequences for the future development and prosperity of Europe as a whole. It has become evident over recent years that all European countries now look to the Community as an anchor of political stability and as an economic magnet, and that association with it and eventually in many cases the perspective of eventual membership offer a vital ray of hope, which encourages the recently liberated democracies of Central and Eastern Europe to persevere on what is in the short term the difficult path of creating a stable society based on a market economy.

The new union will create a higher level of cohesion and solidarity between the different member states. There is an increased determination to act together in common. There is increased acceptance of Community responsibility for the welfare and social rights of all the citizens of Europe, especially in the less developed regions. The irreversible steps towards economic and monetary union will encourage even before its completion a major effort to achieve both economic convergence and greater cohesion. Across the Community, we are striving to create a modern, enlightened, progressive society, that is both efficient and humane, prosperous and caring, committed to economic development, yet environmentally sensitive.

The new union will act together to promote the security, and common interests and ideals of the Community. It will become an increasing influence in the world.

In Maastricht, we had from the point of view of the Irish interest successful conclusions on cohesion, economic and monetary union, foreign and security policy, social policy and on the many other important but less fundamental changes proposed in the way in which the Community conducts its affairs. The conclusions of the Council will be embodied in a formal Treaty which will be drawn up and signed as soon as possible and will form the basis of a referendum here in 1992 after publication of a White Paper. I will, of course, ensure that Deputies and others will have full access to the formal Treaty text as soon as it becomes available here.

I recommend the conclusions, as they emerged in Maastricht, to this House and to the Irish people.

No matter what the result, the end of the Maastricht Summit in the early morning of 11 December 1991 was bound to be an historic turning point for Europe. Maastricht is and was the last chance for the twelve existing members of the Community to decide the powers, financial resources, social mission and democratic character of the European Union that will be enlarged out of all recognition over the next few years. Over the next ten years the energies of Europe will be entirely devoted to enlarging the Union agreed at Maastricht to include Austria, Sweden, Norway, Finland, Switzerland, Malta, Hungary, the Czech Republic, the Slovak Republic and possibly Poland and the three Baltic states.

The other dominant concern over the next ten years, now that internal business has supposedly been dealt with at Maastricht, will be the relations with the remaining Slav countries to the East and the South, who will not be ready for membership this century. The entire centre of gravity and centre of intellectual concern in Europe will move to the East after Maastricht. This process of enlargement and adjustment will be so all-consuming and all-absorbing that little energy will be left to right any internal defects within the Community which may remain as a result of work not completed at Maastricht. By that criterion Maastricht was in a sense a last chance for this century to settle the Constitution of Europe. It is by that criterion of the last chance for this century that the Maastricht Summit and its Treaty must be judged. By that criterion I believe the result is not as good as it could have been for Europe and not as good as it should have been for Ireland.

Why is this so? In part it is so because the Taoiseach did not go to the original Summit in Rome which launched the Maastricht process with any overall Irish vision for or of Europe. He did not go to Maastricht with any such vision either. In failing to do so, I contend that he put himself at a grave negotiating disadvantage. His oft repeated plea for specific financial commitments for Ireland on grounds of social justice and cohesion was directly negatived by his reluctance to support the Social Charter for many months. The Taoiseach's lack of conviction, demonstrated here again today, on the need to defend the European Union once it is created, on the idea that there should be clear democratic accountability of the European Union and on the idea that there should be a single unified Treaty with a single unified decision-making process rather than a series of bilateral associations between states — the so called three pillars approach rather than the one pillar approach, which is the right one — in terms of the creation of a genuine federal Europe damaged his case for a truely federal system of redistribution of resources from rich to poor. The Taoiseach's ambiguities damaged the case he was attempting to make.

The Taoiseach was and is an á la carte federalist. Thus, he lacked conviction in European matters, as in all others. Thus, in European matters, as perhaps in most others, he is a tactitian, never a strategist. Indeed he never had any strategy so far as these negotiations were concerned other than one of getting as much as possible and giving as little as possible — the mentality of the huckster. Europe will never be built on huckstering, bartering or giving as little as possible to get as much as possible. One must make a convinced investment in the European vision. Unfortunately, the Fianna Fáil Party have no deep inner conviction about Europe. They have no deep sense of commitment to the creation of a unified Europe. They are reluctant members of the Community and their desire is to get as much as possible from the Community and give the Community as little as possible. That is not the approach which will get the best for Ireland in Europe. It is a mistaken approach and a mistaken negotiating strategy. I believe we will, unfortunately, see the negative results of this as time passes.

I want to use an analogy to describe the negotiating stance of the Government in these and other European matters. At Maastricht it was decided that Europe would progress forward on a two lane highway. Ten countries decided to go into the fast lane; another country, Britain, decided it would opt for the slow lane; and the twelfth country, Ireland, could not decide which lane it wanted to be in. It decided to travel at an uncertain speed with one wheel in the fast lane and the other wheel in the slow lane. In other words, Ireland, under the present Government, tried to position itself so as to slow down some of the traffic in the fast lane while protesting that it did not want to move over to the slow lane. This, as any motorist will tell you, is a dangerous way to travel and is liable to try the patience of other drivers. Indeed, occasionally one is liable to be run down. That is essentially the approach of the Government so far as negotiation in Europe is concerned.

There are some in this House — I do not know how many yet — who would prefer if we pulled over on to the hard shoulder altogether and let the traffic continue. That seems to be the position of perhaps one of two of the bureaucratic Leftist parties in the House, but I do not know. It is at least an honourable, if misguided, position. I simply cannot understand the position of the Fianna Fáil Party and the Progressive Democrats — the parties who want to travel the European highway with the wheel in both lanes. These two parties, true perhaps to their common roots, want to substitute — we saw this very clearly from the Taoiseach's utterances on defence here today — sophistry for moral courage and try at the same time to get the best of both worlds.

Let me substantiate this analogy. The two Government parties argue that Ireland is politically entitled to a large financial commitment from other countries' taxpayers because we have agreed to become part of a close political and economic union. Yet at the same time as they are asking for this money they say they are unwilling to give a clear unambiguous commitment ever to take part in the defence of the European economic and political union from which they want the money. They believe that issue should be postponed or fudged. At the very same time as they are looking for this extra money they baulk at extra powers for the democratically elected Parliament of the proposed union. Such powers as were granted were granted reluctantly by Ireland, and it was only in the last few weeks that the Taoiseach indicated any favour at all because it was then inevitable that others were going to give those powers to the Parliament. He made that concession when he addressed the Intergovernmental Conference on Economic and Monetary Union recently. Yet it is that very Parliament whose democratic mandate is required to raise the money we are asking others to spend in this country.

If we are not prepared to give the Parliament this democratic mandate, how can we ask it for the money? However, that is what we are doing. We are defeating ourselves. At the same time as we are looking for more money the Government insist that the tax policies necessary to raise the extra money in Europe should remain a matter of unanimous decision with the Council of Ministers. We are afraid they might ask us to reduce some of the taxes going into the Department of Finance. If we insist that tax matters remain unanimous in the Council of Ministers, that means the big, rich countries will be able to veto extra tax resources for Europe and thereby ensure we never get the money we are looking for. Our policy on that issue is self-defeating.

Unless we get rid of unanimous decision in tax matters in the European Council of Ministers the new European Union we are creating will never have enough money to live up to its commitments in this Treaty or any other Treaty. It is very regrettable that tax resources as distinct from commitments, legal and otherwise, were not a key part of the Maastricht Treaty, because without the tax to pay for them the commitments will be just words on paper. This is the sort of anomalous position in which drivers trying to drive in two lanes at the same time tend to find themselves.

I want to make clear the position of the Fine Gael Party — one of the Christian Democratic parties which perhaps are the major political force in ten of the 12 countries which met at Maastricht — on the issue of a two speed Europe. The Fine Gael Party believe — without hesitation — about tax policy, about the social charter, about defence, about security, about foreign policy, about giving extra powers to the European Parliament, that Ireland should join unambiguously the other parties in Europe's fast lane and make the number of countries travelling in the fast lane 11, not ten. Let us make up our minds here in this House and get on with it. We cannot continue in this process of ambiguity as far as a two speed Europe is concerned.

Against that political background, let me now assess the outcome of Maastricht. The agreement to set up a single European currency is a huge step forward. If that was the only provision in the Treaty it would make it worthwhile and worth endorsing. It will save large costs for businesses throughout Europe. It will help exporting countries like Ireland. It will help tourism within Europe, and we are a country that hopes to benefit from tourism. It will promote efficiency. People will know the value of products no matter in what part of Europe they are buying them and they will be able to compare prices easily. It will promote competition, it will make Europe efficient and it will create a true sense of our being citizens of one great European country. If they were the only provisions in this Treaty of Maastricht, the economic and monetary provisions would make it worth endorsement by the Irish people, and that I heartily welcome. I commend the Taoiseach and others for whatever part they had — and I am sure it was a considerable part — in that achievement. So also do I welcome the extension of the powers of the Community into new areas such as the environment and consumer policy. The European Commission will have considerably enhanced powers in those areas and will be able to ensure that the market is fair as well as free. That, too, is welcome.

However, the much-heralded protocol on economic and social cohesion, to which the Taoiseach referred in his speech, will only work if the wording of the protocol is sufficiently precise to enable it to be enforced in a court of law. Without the commitment of financial resources we may well have to have recourse to law to make that protocol work. Having read the protocol fairly carefully I conclude — I hope I am wrong — that Irish lawyers, on behalf of the Irish Government, would have extreme difficulty in court forcing the European Commission or the European institutions to do anything very specific on foot of the wording of that protocol. However, I hope I will be proven wrong on that point. I am sure the Taoiseach will be able to get legal advice on that matter.

The proposal to set up a new special cohesion fund, in addition to the existing Structural Funds, will only be of help to Ireland if it does not diminish the money available through the Structural Funds already. Ireland already does disproportionately well from the existing funds. The crucial difficulty is that the Treaty of Maastricht has made no commitment at all to creating extra money and an extra tax base for Europe. Without an enlarged tax base the danger is that the setting up of this new cohesion fund could actually reduce the amount of money available to Ireland by diverting money from funds from which we get a disproportionately large share perhaps to a cohesion fund from which we might get only a proportionate share. If the total amount of money is the same we could actually lose as a result of the establishment of the cohesion fund, even though we would be benefiting from it, because the net amount of money would not be changed. That needs to be clarified as soon as possible.

The total exemption of Britain from the Social Charter will, I fear, give bodies like the Scottish Development Board, the Welsh Development Board and, indeed, the Northern Ireland Industrial Development Board a big marketing advantage in competition with the IDA in North America and Japan. I have met the Keidanren in Japan in the past and I know they are foolishly obsessed with paper provisions in regard to employees' rights, shareholdings, information and so forth. They are very excited about that. In fact, the provisions in the Social Charter may not mean a great deal in terms of the efficient running of any business and many of them may be conducive to more efficient running of business by better exchange of information; but that is not how it is seen in Japan and in the boardrooms of North America. We are now going to have a situation where British development agencies will be able to go to Japan and North America and say: "look, we can give you cut price access, if you locate in Britain, to all of the single European Market but you will not have to pay the social price; whereas if you go to Dublin, Castleblayney, Clones or anywhere in the Republic or any place else in the rest of Europe you will have to pay the full social price as well as getting access. Given that you do not have much time to go into the law and study the protocols in detail would it not be cheaper and easier to send your project tour to Britain first and if you get an adequate location there, do not bother about the other countries." I believe we have handed Britain a major negotiating advantage in terms of industrial development and overseas investment in Ireland.

Likewise, I believe that Britain's ability, acknowledged in this Treaty, to opt out of the single currency may well mean that the Irish Border at the end of this century will be the only land frontier in Europe where travellers will have to change their money. For a party that have prided themselves in their twin national objectives, one of which was to re-unify this country, to put their name to a Treaty the result of which may well be that the border at Aughnacloy or Newry will be the only border in Europe where people have to change their money is surely a ludicrous and unfortunate situation. I saw no evidence in the Taoiseach's meeting with Prime Minister Major to suggest he made any progress in pursuading Prime Minister Major, who apparently is a reasonable man, of the totally unreasonable character of the proposed opt-out as far as North-South relations in Ireland are concerned. There were many words about bilateral meetings and so on. The Taoiseach could be meeting Prime Minister Major once a week for the next six years and he will not undo what may well be the result of that being the only border in Europe where people have to change their money at the end of this century.

I should say, Sir, that the precedent of national opt-outs which the British won in this Treaty is a very bad one and will create immense problems in the negotiation of enlargement to include other countries. I can see the Czechs, the Slovaks, the Austrians, the Swiss looking for opt-outs á la Grande Bretagne, opt-outs a la Major. If Major is entitled to an opt-out, why not the Swedes? Everybody will want an opt-out now once Maastricht agreed to the principle. I think it will make negotiation very difficult.

My other concern is that the Treaty does not contain sufficient provisions to stamp out the unfair financial help that rich countries can give to their businesses and farmers in competition with businesses and farmers operating in smaller and poorer countries like Ireland. The MacSharry reform plan for the Common Agricultural Policy may well lead to the re-nationalisation of agricultural policies. This will not be done overtly but through concealed schemes like extra local social security concessions and entitlements, extra income tax breaks — which only apply in national law — and extra concessions of one kind or another, perhaps on local taxation. Already we have a situation where a very wealthy country like the Netherlands have detailed local complicated tax breaks, which are virtually impossible for any non-Dutch speaker to understand, designed to attract mobile industrial investment to the very centre of the Community and the Netherlands on better financial terms than we are giving here on the periphery. There is no sufficient control in the European Community Treaties to stamp out these special sweetheart deals which big countries will be able to give their farmers to avoid the effect of the Common Agricultural Policy changes and to their industrialists to avoid the effects of the open market. Unless there is control on aid of that kind we will not achieve cohesion and there is nothing in the Maastricht Treaty that is significant in terms of solving that problem.

I believe — and I have said this before in this House — that our case for extra resources in Ireland does not depend on the begging bowl — we are not looking for charity, we are entitled to extra help on very clear grounds. I will mention four: first, the Economic and Monetary Union — the single currency — agreed at Maastricht will deprive us of the right to use the exchange rate to protect our export industries. We will never be able to do that again. If cohesion is to be achieved we will need extra resources to compensate for the losses.

The proposed reforms of the Common Agricultural Policy threaten a huge and disproportionate loss for Ireland, a loss that will not be suffered in the same proportion by any other EC country. We need help with that.

The opening up to Eastern Europe, with the problems there, will create disproportionate problems for Ireland. Eastern Europe is heading into an economic depression similar to that suffered by the West in the early thirties. The EC have no choice but to help out and there are three ways in which we can help. We can give aid or allow Eastern Europeans to immigrate to Western Europe or we can open up EC markets to Eastern European products. Wealthy EC taxpayers will have a natural tendency not to want to give too much aid and they will not be keen on immigration either, because huge numbers of dispossessed East German citizens arriving at the railway stations of Berlin and Brussels will add further to the racial tensions which exist on the Continent.

Those two options will not solve the problems of depression in Eastern Europe so the third option of opening up the markets will be taken. Will that affect sophisticated machine tooled industries in Western Europe? It will not, because there is nothing in Eastern Europe to compete with that. However, Eastern Europe can produce cheap, unsophisticated food products such as beef and butter, the sort of thing we have trained our industry to produce for EC intervention over the last 15 years. The opening up of trade with Eastern Europe which may be inevitable will destroy whatever support for agricultural incomes is left after the MacSharry plan has been put through. That is another reason why we needed special help at Maastricht, and why the Taoiseach's protocol must be examined with some care.

It is important to recognise that, with the exception of Britain, the declared aim of all the states who gathered at Maastricht was to build a genuine Federation — to build a United States of Europe. Federations, like the USA, operate on the basis of automatic transfers from rich to poor. Europe cannot claim to be a genuine federation if transfers from rich to poor depend on good contacts and special pleading. To a great extent that is what it will depend on after Maastricht. I hope I am wrong. Those are the reasons why we needed a very strong commitment on transfers of finance.

However, money alone is not enough. We must put the money to good use. Pouring European money into badly planned roads, which in some cases add to travelling time, will simply waste European money as well as our own. Pouring money into training by a training monopoly called FáS is also a waste of European money, because we have not reorganised training so that we can benefit more creatively from EC money. The EC money might be better used to reduce the obstacles to work in the tax system, to improve basic education, or even to pay off some of our national debt.

The institutional structure of the Maastricht Treaty is tilted in favour of larger states. There is no commitment to even consider an elected European Senate as part of the European Parliament, in which small states would have representation equal to that of large states. That is the system that exists in the US. Also, the tax and revenue provisions underpinning the treaty are so weak that the European institutions will probably be unable to fulfil their obligations. That will leave a vacuum which will be filled, as it was filled in the past by big states using money and power to rig the rules to their own advantage. The legal structure of the Treaty is also weak. The Commission, the traditional guarantor of small states is effectively excluded from taking the initiative in large areas of new work. It is excluded from justice policy, from taking the initiative in foreign policy and from taking the initiative in defence. The Commission has always been the guarantor of small states. This Treaty represents a shift towards an inter-governmental model where bigger states will have more influence, and away from the traditional Treaty of Rome model where the Commission had the only power of initiative, where small states were protected.

The new principle of subsidiarity about which the Taoiseach spoke so glowingly could prove to be a major Trojan horse in this Treaty. As set out in draft Article 3 (b), this principle may work to the detriment of smaller states. This Article limits the community to acting only where an objective to be fulfilled cannot be sufficiently achieved by member states acting alone. In other words, the new legal presumption arising from that Article is against Community action in a particular area. It is very dangerous. I can see that clause being used in the European court, by Britain for example, to block Community actions that might otherwise have helped member states. That is certainly not subsidiarity as I envisage it. It is a form of subsidiarity that is insidious and may well do damge.

For all its defects this Treaty represents a significant step forward. It does not go far enough or fast enough towards creating a genuine federal Europe. I support the Treaty as a step in the right direction, however hesitant and qualified. I will recommend that my party endorse this Treaty and I will advise the Irish people to do likewise in the referendum.

With regard to defence, the Taoiseach states:

... the Treaty makes it clear that joint action by the European Union will not extend to defence issues. All decisions and actions of the Union with defence implications will be matters for the Western European Union.

That is a grave mistake. We are not members of the Western European Union, yet we have agreed in the Treaty that the Western European Union should elaborate and implement decisions and actions of the union which have defence implications. In that, we have essentially agreed to hand over to the Western European Union responsibility for defence. We have not said that the European Union will have direct responsibility for defence as we should have insisted. We should have insisted on being part of it, on being there when decisions are being taken, on being able to vote on any decisions being taken.

If we delegate to a body of which we are not a member, responsibility for European defence, we are putting ourselves in a position where others will do things in our name and we will not have any direct control over them. That is very foolish and it has resulted directly from the fundamental ambiguity in the Fianna Fáil attitude to Europe. It goes to the very heart of their hesitancy in deciding on which lane they want to travel. They say they are in the slow lane while allowing others to drag us along in the fast lane. We are not driving the car. We are quite literally a back seat driver with the shutter closed over so that the front seat driver cannot even hear what we are saying about where we are going.

The declaration by the member states of the European Union appears, in its present form, to preclude the European Union of which we are a member, from becoming directly involved in defence. It states that the Western European Union is the defence component of European union and the means to strengthen the European pillar of the Atlantic Alliance. We have handed responsibility for our defence to that body. That is not wise. Before the Western European Union expires in 1998 we should insist that next week we want another inter-governmental conference to draw up a defence policy for Europe which will be within the Treaty of Rome and whereby we will have proper control and be full partners. The Irish people do not want their defence to be the responsibility of a body of which they are not a member. We are proud to be Irish in Europe; we are proud to create this European union; we are proud of its social dimension; we are proud of its democratic dimension and we are not afraid to defend it. We want an intergovernmental conference to actualise that commitment on our part.

That is what the Taoiseach should have gone to Maastricht to say, should have gone to Rome to say, and that is what I believe this House should, when it gets an opportunity to debate this matter, say to the European people. We want a new European treaty, not the Western European Union but a new European treaty to defend this union we are creating and we want to share the burdens and the responsibility of that. We do not want to find ourselves in a situation where others are taking decisions which we will have to take the consequences of without having and effective say.

At the outset I wish to place some preliminary remarks on the record in relation to the issues involved. I intend to elaborate on each of them in turn.

In general I would say that Europe must not be allowed to develop merely as a free trade, free market, free for all. Not nearly enough work has been done in Maastricht to remove the fear that this is the direction in which Europe is heading. On that score alone Maastricht will be seen as a disappointment, and those who want to see a Europe capable of accommodating all its citizens in prosperity and growth will have to redouble their efforts in this regard.

In relation to cohesion, it is clear from the reading of the proceedings of the last number of days that we have the Spanish to thank for acceptance of the principle that special funding is necessary to ensure cohesion between the richer and poorer states of the Community. But the agreement so far reached will need to be fleshed out in considerable detail before its true meaning can be assessed. The size of the community's budget and new distribution mechanisms will be key issues, and they have yet to be addressed. There is now an obligation on the Government to ally themselves overtly with Spain, Portugal and other peripheral countries in the run-up to the next Summit if enough flesh is to be put on the bones adopted in Maastricht to make the commitment meaningful.

The breakdown of the Summit over social policy and its replacement by a non-binding agreement on the Social Charter — especially an agreement which at first glance appears to rely heavily on unanimous agreement — is little short of disgraceful. It is also inexplicable, and many will feel that it must now be in the interest of working people, and children and the elderly, throughout Europe that Mr. Major is replaced by Mr. Kinnock as soon as possible. For our own part, Ireland has been too slow to put herself in the forefront of the battle or the Social Charter and that attitude will have to change.

In relation to security and defence policy, turning the Western European Union into "Europe's military wing", as one of the participants apparently described it, is not an expression of common policy in the security and defence areas; it is simply a poor and unacceptable substitute for a coherent policy based on peace and principles of international solidarity and justice.

While the way towards monetary union seems reasonably clear, the development of a common economic approach leaves many unresolved questions. The issue of Ireland's competitiveness is a major unresolved question, and the absence of any mention of European industrial policy, any priority for employment, seriously weakens the value of the whole concept of union. The outcome of the Maastricht Summit will need careful and detailed analysis before the final judgment can be made. I want to make the position of the Labour Party clear on these issues. The developments of the last number of days will lead inevitably to a referendum in Ireland. The Labour Party will take a clear and unequivocal position on that referendum, but we do not intend to adopt that position until we have considered and debated it fully and openly within the party. We will not reach a final view until we have seen the White Paper promised by the Government and the legislation intended to give effect to the referendum.

Many views will be expressed on both sides as this long awaited debate gets under way. I do not propose to prejudge that debate, but I do intend to place my views firmly on the record. What has been achieved so far is not enough in some respects and is unacceptable in others. My principle concerns are these.

The principles of cohesion outlined in the draft Treaty may represent an advance on the present position, but only in principle. The next Summit in Portugal will be vital to ensuring that the principle now established is capable of having meaning in actuality and in practice. Above all else, cohesion has to ultimately include some concern for job creation on a European-wide basis. Without such a concern and concrete policy steps to accompany it, the catching up implicit in the whole principle of cohesion simply will not happen.

The absence of a social chapter in the Treaty will be immensely damaging. The signs are that what has replaced it — the 11-member agreement — will be completely unworkable. There is a great deal of work to be done yet on foreign and security policy. I recognise that this is not an issue which will predominate in the context of what lies immediately ahead, but as yet, there is no underlying set of principles to inform any foreign policy. I want ultimately to see a commitment to peace, to disarmament, to the principle of international support and solidarity and to justice before I consider that Europe has a foreign policy worth defending. I have to say, listening to the Taoiseach's contribution this morning that more matters have been left unsaid and unresolved in relation to the foreign and security policy than have been cleared up by the Taoiseach. The Taoiseach has not, in my estimation, established clearly what role the Western European Union is being allowed and what exactly our relationship to it will be. For example, what is the function of the CSCE? Likewise, when the Taoiseach talks about our traditional policy in these matters I would say to him that the opportunity in the White Paper to expand and to clarify exactly the traditional aspect of Irish policy would be very desirable rather than leaving it yearly that we will endorse and protect our traditional policy in this area.

Finally, it is important that we see how the European Parliament reacts to the Treaty, and that we allow ourselves to be influenced by the views expressed in the Parliament. The developing Europe must be democratic, it must be representative, and it must be accountable. That is not a lot to ask, but again, one has to ask why there has been so much reluctance to go down that road.

When all is said and done, however, the central question for us will remain the degree to which we here in Ireland are ready for the challenges that economic union will bring. Since the start of this year I have been calling for a public debate on this issue. The absence of such a debate has been one of the most worrying features of our preparation for the consequences of European Monetary Union. Debate and understanding of the issues involved is absolutely essential, because without adequate preparation we will fail to achieve the benefits of the European Monetary Union, and we could well suffer most of the penalties. In a major sense, the extent to which we will benefit is up to each one of us. It is up to policymakers, businessmen, workers and citizens generally. If the Government have failed, as I strongly believe they have already failed, it is because they have done little or nothing to alert and prepare the public for what is now just around the corner.

In relation to monetary union, it is intended to make economic union work better. By removing currency risk and the costs of currency conversion it should encourage cross-Border trade; and by lowering inflation in the community it should lower interest rates. Although the cost of changing currencies is the most obvious saving arising from European Monetary Union to the person in the street, the other benefits — if they are achieved — would be far larger. By the same token, a failure to achieve those aims would be very costly for our economy.

It is not yet clear that European Monetary Union will achieve its objectives. In the European monetary system as it is presently structured, the German Bundesbank effectively acts in practice as the Community central bank. The Bundesbank's record in the control of inflation has been excellent, certainly until the time of German unification. On the other hand the record of, for example, France, the United Kingdom, Italy and Spain is a lot poorer. There will be some who will argue that putting the governors of these countries' central banks on the Council of the European Central Bank will not necessarily improve the Community's inflation performance. An improved inflation record is the foundation stone of monetary union. If it is not achieved, the other benefits are jeopardised, especially lower interest rates; and even fixed exchange rates would be in doubt.

Low inflation is undoubtedly in the interests of every Irish citizen and it is the primary rationale for monetary union. In a monetary union, countries forego the right to adjust the exchange rate between their currency and other currencies. This is a mixed blessing. In so far as there are good reasons to devalue or re-value it is a loss. In so far as there are temptations to do so for bad reasons, it may be no harm no longer to have this kind of instrument of economic policy available. Examples of each kind of behaviour are not hard to find.

In the second half of the seventies and the early eighties, Ireland was on a borrowing spree which boomed domestic demand beyond the capacity of domestic suppliers to meet it. This produced upward pressure on Irish prices and a deficit of imports compared with exports. The loss of competitiveness, which resulted from higher inflation than that of our trading partners, was compensated for by periodic devaluations of the IR£. However, that was treating the symptom — not the disease. In that sense, the devaluation options only postponed the time when the real problem — inflation — had to be addressed. Accordingly, it can be argued that easy access to devaluation was not in our interests at the time.

The discipline imposed by fixed exchange rates is not the only possible cost of European Monetary Union. Another one is the restriction on fiscal policy imposed in the Draft Treaty. Specifically, in European Monetary Union, member states must "avoid excessive government deficits". In the case of Ireland, our debt burden is already so heavy that prudence and common sense make it certain that we are not going to take an incautious approach to debt in the future, but if there were room for manoeuvre, there would undoubtedly be an argument that (a) public developmental investment, to accelerate the catching-up of average Irish to average EC incomes, or (b) short term disturbances, could require a budget deficit larger than the 3 per cent which we will now have to aim at, which is in fact a totally arbitrary number without any economic significance.

By the same token, it must be said that the many and pressing social problems within Ireland require a level of public spending and investment which, in all probability, will be ruled out forever once European Monetary Union becomes a reality, unless we achieve very high rates of economic growth.

A possible third cost of European Monetary Union is the fact that interest rates will be determined by a European Central Bank and not by national central banks. In so far as they are set by the Community as a whole, they may not be appropriate for a particular region. However, since this is what the EMS effectively does already, it will not be anything new and cannot therefore be "blamed on European Monetary Union". In any case, the record of national governments throughout Europe in setting interest rates to facilitate growth without igniting inflation has not been very successful in the last 20 years.

Let us not get too carried away about the progress made on monetary union in Maastricht. It is clear benefits will flow from it but the job must surely be to ensure that those benefits flow equally in the direction of Cork as well as Cologne, or working people as well as financiers. That is where economic union and cohesion must come into play.

It has to be said that the most clear-cut risks of substantial costs from European Monetary Union lie on the side of economic rather than monetary union — in our economy's capacity to deal with increased competition. If these costs occur, I already pointed out in the debate prior to the summit that we will have no one to blame but ourselves — thanks almost entirely to the lack of leadership from our Government.

It is quite clear that the Government have concentrated almost entirely in their approach to economic union on a "subsidy-hunting" approach. We have never heard any salient case from the Government about the size of the EC's overall budget, or about the policy measures that are necessary to ensure cohesion as an integral part of economic union. Unless we begin to hear that case being made, coherently and strongly, it will be very difficult to persuade the working people of Ireland, the unemployed, pensioners and others, that Europe means anything at all to them. I would have to say that as things stand at present, the main prospect that economic union holds out is more wealth and more prosperity, but with most of it concentrated in other regions of Europe, not in this country.

In the debate prior to the Summit, I described our position as "hunting for the crumbs and ignoring the cake". I went on to say that:

Nobody could describe this as very smart. The very logic of European Monetary Union makes subsidy-hunting an inappropriate strategy for the medium term. After all, when 1992 — the economic union part of European Monetary Union — was devised, the whole idea was to increase the degree of competition in European economies. Put very bluntly, this meant leaving companies to fight it out between them, with only the fittest being guaranteed to survive. A company or a country which regards itself as entirely dependent on subsidies has all the wrong attitudes when it comes to its own survival at a later stage.

Spain has shown us very clearly how it is necessary to bring single-minded determination to the task of benefiting from economic union. They have done so in two ways — first, by the work they have done in equipping the Spanish economy to deal with competition, through modernisation and efficiency which has led to a high growth rate and, second, in their determination not to take no for an answer from the rest of Europe.

In the run up to the next Summit, in Portugal, the details of new cohesion funds and other policy measures will have to be worked out. The working out of these matters will be absolutely vital if the principle of cohesion is to mean anything in practice.

I want to argue here that over the next months, our Government must set out to forge a clear and distinct alliance with Spain, Portugal and Greece, to ensure that cohesion is backed up by conscious policy measures. In the absence of such an alliance we must make it clear that what has been agreed so far simply does not go far enough in satisfying our needs. For example, we will not, and cannot, accept any situation where the new cohesion fund is financed by cut-backs in other essential funds. What we must be campaigning for is an increase in the overall EC budget, to make additional money available for real and significant transfers.

I want to repeat here what I said in the earlier debate: the real issues in the nineties for economies like Ireland are all "catching up" issues. We have to aim at closing the income gap between Ireland's and the Community's average income. That means that cohesion funding must be real, and substantial, but it also means our industry has to be far more competitive, efficient and reliable than it is at present. We need economies of scale, research and development, a capacity to deliver on time, new products, new processes and new methods of production. We will never be the biggest in Europe, but there is no reason why we cannot be the best in Europe.

I want to refer to the fiasco surrounding the social policy chapter of the Treaty. The only conclusion I can come to, when I examine the record of the Irish Government in this area, is that the Taoiseach must have heaved a secret sigh of relief when the summit capitulated to British Tory concerns about social policy.

The chapter on social policy has now been replaced by an agreement. As I understand it, it is an agreement which requires unanimity among the 11 signatories on all new initiatives dealing with the following areas: social security and social protection of workers; protection of workers where their employment contract is terminated; representation and collective defence of the interests of workers; conditions of employment for third country nationals legally residing in Community territory and financial contributions for promotion of employment and job creation.

In addition, that agreement leaves up to individual member states activities in the following fields: improvement of the working environment to protect workers' health and safety; working conditions; information and consultation of workers; equality between men and women, and the integration of persons excluded from the labour market.

By no stretch of the imagination could this be described as a Social Charter. It can only be described as a mickey mouse commitment to improve the conditions of working people. The new agreement does not even mention pensioners, for example. It has no explicit commitment in relation to people with a disability.

In short, the entire Social Charter is now completely up in the air. Under this agreement we are entirely dependent on the Government, whose approach over the last three years has been almost entirely regressive, for progress in relation to such fundamental issues as equality and the protection of workers' rights. In that sense, Maastricht can only be described as a step into the past. A lot of the work done over many years in relation to social progress has been undone at a stroke and, unfortunately and sadly, there has not been so much as a whimper in protest from the Government.

I hope that in the coming weeks the White Paper, promised by the Government for some time, will be published. It is a matter of regret that it was not published during the past 12 months to allow a constructive debate to take place. Sadly, while people have been bombarded with information on the important issues to be raised at Maastricht during the past ten days prior to that no information was available to those people on the street who were looking for it. Even now, I would say that most people do not understand the technicalities and the detail.

Will the White Paper, for example, deal with the question of what will happen if Britain changes its mind? If, in the wake of the general election in the United Kingdom, a new British Government adopt a different position what facility will be used to allow them catch up and sign the new agreement?

Unfortunately, we were given no assurances from the Taoiseach this morning in relation to the necessity to have a foreign affairs committee in the House. In the presence of the Minister for Foreign Affairs, I say the sooner such a committee are established the better. If we had a foreign affairs committee the Treaty and the conclusions reached at Maastricht could be analysed and thoroughly debated in detail there and there would be no need to make statements for two hours. Unfortunately, we are going to lose vital time. Such a committee could consider this Treaty in detail during January, with the assistance of experts, given that this is an extremely complex area.

I again urge the Taoiseach and the Minister for Finance, if at all possible, to establish a foreign affairs committee before the conclusion of this Dáil session with a brief to look immediately at the conclusions reached at the Maastricht Summit and the contents of the Treaties to ensure that the Members of this House are better informed in relation to the complex issues which, whether we like or agree with them, are going to form the basis of the way in which the country is going to be run during the next 20 to 30 years.

It is regrettable and a major weakness in terms of the politics of this country that we are not yet in a position to be better informed and to have questions answered in relation to these issues. Obviously, we must wait to see what progress is made in relation to the measures setting up the new cohesion fund. Perhaps the White Paper will touch on this issue. I am not sure how conclusive it can be in relation to the cohesion fund, the mechanism whereby it will be established, and its importance in the overall EC budget. We must wait to see the approach adopted by our Government. I hope in everyone's interest that the Government will take a more progressive attitude, now that the protocol has been established and that we can talk about it. The Government should come before the House at the earliest opportunity and tell us what they intend to do. Will they form alliances? For example, will they work with the Spaniards, who led the march in relation to the cohesion funds? Will they tell us exactly what our people will be voting for? Many issues have to be teased out and explained to the House and the people.

I am not sure that the vision of Europe has been advanced significantly to a point where every citizen will have an equal right to share in the new growth and wealth. Sadly, as a result of what happened in Maastricht and particularly what happened in relation to the Social Chapter, the ideal of a Europe of equal citizenship will have to wait for another day.

The value of the Intergovernmental Conference which has just concluded in Maastricht can only be judged on the advances made on issues central to the creation of a democratic Europe seeking social and economic development and whose relations with the rest of the world would be open and non-threatening. In all such aspects Maastricht has failed.

The first key issue dealt with in The Workers' Party document towards a democratic Europe, published in November and outlined by Deputy Gilmore and me in this House two weeks ago, was the need for specific guarantees and adequate funding to ensure cohesion in the Community in the short term and that that cohesion would be an integral component of any move towards Economic and Monetary Union. This has not been achieved and we now face a continuation of the experience of this country as a member state of the Community for the past two decades. During that time there have been various EC sponsored funded programmes and schemes, all of which were ostensibly geared to bring Ireland closer to parity with the wealthier regions of the Community.

The Common Agricultural Policy was cited as a vital component in maintaining the development of our agri-industry and providing spin off jobs. While in recent years total Common Agricultural Policy payments were estimated as being equivalent to £10,000 per farmer, there is no evidence that the Common Agricultural Policy did anything to boost employment in the farming sector or in the processing or marketing of Irish agricultural produce. It led to costly intervention procedures and added £18 per week to the average family food bill. It operated at a time when 35 per cent of farmers left the land and there was no visible corresponding increase anywhere else in the agri-business sector. At the same time we do not have any evidence that food quality improved as a result of Common Agricultural Policy or that it served to maintain the quality of the environment. Indeed, in so far as the last point is concerned, the Common Agricultural Policy emphasis on intensive production methods probably resulted in environmental deterioration.

CAP, one of the most cited mechanisms of EC aid to Ireland, can be said to have brought very few long term benefits to Ireland. More recently, the EC Structural Funds have provided around £600 million a year to Ireland to create the competitive conditions so that our living standards are closer to the EC average. However, there is still rising unemployment and poverty is also rising. We have in fact twice the EC average of people living in poverty. Emigration has only been stalled due to the recession in the US and UK and a decrease in demand for Irish labour on the Continent due to factors such as the unification of Germany.

In short, then, the Community's strategy, as applied, to tackle the problems of Ireland as a peripheral region have been a dismal failure. What is required is an end to a tinkering around with the issue. A substantial increase in funding, necessary as that is as part of the equation, is not adequate. But even the money is only a vague promise, with the amount of funding yet to be decided. What is required, fundamentally, is a reassessment of the manner in which peripheral regions of the Community are assisted by the EC centre.

The Spanish Prime Minister, Felipe Gonzalez, hit the nail on the head last week when he said that without a specific commitment to cohesion to benefit the people of Spain there would be no new Treaty. The Taoiseach displayed no such "Dutch" courage. Instead in his Dáil contribution on Maastricht he merely hoped "to get as clear a commitment as possible" on the issue of cohesion. He did not mention figures. He did not mention new structures, he did not mention new policies. A nod and wink would do him fine. By last weekend he was talking of the need to insert guarantees on cohesion into the Treaty or in an annex to the Treaty. But he was essentially talking like a man with a plane ticket in one hand and a begging bowl in the other. There was little likelihood that such utterings on the eve of the Summit would have the effect of concentrating the minds of the other European heads of government.

It is little wonder then that there is so little to show at the end of Maastricht. One of the Irish Government's few specific requests, the doubling of Structural Funds, has not been met. Why did we not insist in having that written into the Treaty?

If the wealthier member states are serious about cohesion, then they would surely have accepted the need for adequate financial provisions to bring this about. As it is, I understand that there is concern at the European Commission at the manner in which Ireland has used Structural Funding to date; this may impede attempts to get an increase in future. I am certainly aware that many regional and community groups in Ireland are extremely concerned at the shabby manner in which their proposals have been treated in the Structural Fund allocations.

It would appear the Government here would like to treat the regional funds as a kind of super lottery. There is no commitment to ensure that regional funds are spent as part of a Common EC industrial policy which would be specifically geared to diverting new economic growth to the regions, be it Ireland, Greece, Portugal or wherever. Again, not only was this not specifically included in the new Treaty, but the approach to industrial development in peripheral regions was seriously weakened.

The Taoiseach could have insisted, as I suggested, on the use of low interest European Investment Bank loans as an additional funding element where there would be a clear direct benefit to the economy and where public revenue would accrue from the services or industries provided. This could have been incorporated into any new plan, but the Government have not even bothered to consider such an approach.

I mentioned earlier that Ireland has twice the EC average of people living in poverty. Yet I have scanned the Treaty for any specific reference to how the problems facing the 50 million people who live in poverty in this brave new Community are to be tackled. Any progress towards economic union or cohesion must as a central element deal with the issues of the EC's "Fourth World"— the people who live with unemployment, low pay and deprivation in the midst of one of the most advanced economies in the world today, but it continues to fail in that area also.

This leads me to the question of the social dimension, an issue which seems to be a particular cause of cold sweats for Irish Government negotiators. The former Minister for Labour and current Minister for Finance regularly warned of the need to ensure competitiveness and to place job creation ahead of social regulation. Increasing social protection for workers, the argument ran, would almost certainly result in employers being either unable to or refusing to create new jobs. The Irish Government have willingly allowed the British Government to block virtually every move to improve the social dimension of the Community. As a result Irish workers continue to experience lower levels of entitlements than many of their European counterparts, while throughout the Community the right to information on one's workplace or company is still largely denied.

What this points to, in fact, is the adoption of a peripheral mentality by the Irish Government in their negotiations on the Treaty. It is as if they do not believe it is possible for Ireland to attain parity with the developed centre of the EC. We are still stuck at 67 per cent of the average EC income, virtually the same as when we first joined the Community in 1973. The new Treaty, by failing to specify targets or to provide for improvements tied to progress on Economic and Monetary Union, leaves the achievement of cohesion at the whim of the wealthier member states and subject to continual horse trading, and will fail as a result.

Many of the specific economic and monetary implications of this Treaty are as yet unclear. For instance one of the less publicised decisions at the Summit was the approval of a protocol which will save the European pensions industry billions of pounds which it feared it might have to pay out in backdated equal pension benefits to men and women. The protocol, part of the political agreement at the Summit, states that companies will not be required to provide equal pension benefits for men and women for any period of service before 17 May 1990. It has been estimated that in Ireland the benefits for pensioners would have been in the order of £500 million while throughout the Community the benefits would have run to many billions of pounds. Can the Taoiseach inform us what position he took on this issue? Was he in favour of the decision or against? Had he any opinion, or did he have anything to say on the matter at all?

Democracy lost out yet again at Maastricht. The message from the EP President at Mastricht was ignored. The Taoiseach's preoccupation has been exactly the opposite to achieving democratic legitimacy. His objective is to retain as much powers as possible for the semi-secret European Council and to prevent the sharing of real powers with the democratically elected European Parliament. The Taoiseach has cited the fact that we are a small country in a large Community and that Ireland would only have 15 MEPs out of 518 MEPs as reasons for refusing to cede any powers to the EP.

When one compares the outcome of Maastricht with what was needed, we must question fundamentally the Taoiseach's approach. Co-decision status with the Council of Minister, which was a minimum demand of the European Parliament has been rejected. The negative, blocking device, the so-called third reading, for the Parliament in the Maastricht Treaty is likely to be rejected by the Parliament later today as an insult to the people of Europe. The European Parliament is looking for an interpretations conference comprising the European Parliament, the Council and the Commission so that before the final legal treaties are signed in February they can have an input into improvements that could be made to them.

The Taoiseach's stated objections are of course totally spurious. The Dáil's power to direct or influence Government Ministers when they negotiate in Brussels is nil. Much of the Dáil's work is now taken up handling enabling legislation which emanates from the Commission or Council. The overall direction of the Irish economy is now very much controlled by trends in the Community generally. Under European Monetary Union further power is lost over our budgetary strategy.

What the Taoiseach and the other members of the Council of Ministers are defending is not national democracy or the rights of small nations, but the increasing drift into secretive decision making, the kind of "helicopter diplomacy" evident when the British Prime Minister arrived here for four hours of talks before the Summit last week. I have no objection to these types of discussions. They are in fact necessary as a part of the negotiation process. But from the type of dismissive attitude shown to the Dáil in debate before Maastricht, from the type of insipid and meaningless motion which Fianna Fáil and the Progressive Democrats voted through the Dáil after that debate and from the failure of the Taoiseach to take seriously any of the concerns expressed by the Dáil, it is clear that democratic accountability has to be strengthened at national and local level as well as at European level.

What we have got from Maastricht is a travesty of the stated aim of a united Europe. You cannot unite the economies of Europe if on the political side power is ultimately confined to 12 heads of Government meeting twice a year behind closed doors and numerous Ministers meeting in semi-secret. This will be a recipe for eventual disaster. Construction of the European Community will not succeed if in the process democracy is the loser.

Those in Ireland and elsewhere who want to preserve the old order of the nation state, with all its inadequacies, contradictions and tendencies to national and ethnic hostilities, conflicts and xeno-phobias, will see in this denial of democracy a major opportunity to undermine the entire progress towards political union.

In Ireland more than most other EC countries we suffer a double denial of democracy. As I already pointed out, Ireland's fate is already being decided by the Community. There is no question that we can or should leave the EC. It would result in economic disaster and cause unpredictable political consequences. What we must fight for are democratic institutions, centred around the European Parliament at European level and the Oireachtas and the regions at home. Any increase in powers at each level of Government must be accompanied by reform of their operations and their relationships with each other.

The Workers' Party have been the only party in Ireland to spell out clearly the type of changes that are necessary to tackle the democratic void that continues to exist. These include the need to devolve power to the lowest level possible. For instance, there is no reason to concentrate decision making in Brussels or Dublin if it can be more effectively carried out at local level instead. To enable local democracy to function it must have powers and resources on a statutory basis, subject only to consistency with overall strategic planning. Similarly there should be adequate provision for regional, community and other non-governmental citizens' groups to make an input into discussion and decision making at the appropriate level.

At a national level, it is vital that national parliaments should have detailed knowledge of and control over their Governments and Ministers' stance at Council of Minister level. The corollary of this is that the EP should have a co-decision making role with community legislation submitted in advance to the Dáil for consideration while negotiations are still proceeding and while it is being in turn considered by the European Parliament's committees.

The heads of Government and Council of Ministers meetings should also be public, and in Ireland Ministers should consult beforehand and report afterwards to a European Affairs Committee on meetings of the Council of Ministers. The same committee should monitor implementation by Ireland of EC directives. The Oireachtas itself should receive regular detailed reports from the European Affairs Committee on European developments for consideration. None of these proposals or any other proposals, even in broad terms, has been incorporated into the new Treaty. It is therefore incapable, as it stands, of being the basis for the democratic development of the Community.

Turning to the question of a common foreign policy, security and defence, the Government have clearly abdicated any attempt to influence developments. The Taoiseach refused to articulate or specify the Government's proposals. He spoke in general terms of defence of "essential interests" but they did not define what these are. We now know the direction of the EC in relation to security and defence. The Taoiseach has said nothing and has done nothing to offer an alternative, post Cold War perspective on this issue.

We are now being inexorably sucked into association with the Western European Union and NATO. In this regard it is worthwhile recording that the total military spending of the NATO allies is $459 billion, $120 billion more than the combined total of all other countries in Europe, the Middle East and north Africa. In his speech this morning, the Taoiseach said the Treaty makes it clear that joint action by the European union will not be extended to defence issues. Yet under the common provisions of the Treaty, Article B states:

The Union shall set itself the following objectives: to assert its identity on the international scene, in particular through the implementation of a common foreign and security policy which shall include the eventual framing of a common defence policy,

I do not know who the Taoiseach is seeking to fool, but I suspect he imagines that no-one will read the Treaty very closely. He also said "they will not oblige us to join an alliance or will not involve us in taking on obligations under the Western European Union Treaty or subscribing to policy platforms adopted by the Western European Union". However, the Taoiseach agreed to paragraph 4 of Article D of the common foreign and security policy which states:

The policy of the Union in accordance with the present Article shall not prejudice the specific character of the security and defence policy of certain Member States and shall respect the obligations of certain Member States under the North Atlantic Treaty Organisation and be compatible with [this is the key point] the common security and defence policy established within that framework.

Under this Treaty, the European Community must develop a common security and defence policy compatible with the Western European Union and NATO. Who is the Taoiseach trying to fool?

The Taoiseach said we should not object to a relationship between the EC and the Western European Union and NATO. He suggests that this could be for a peacekeeping role. This is an inexplicable proposal regarding an organisation which incorporates a commitment to nuclear weapons. Indeed, NATO recently decided that it would also retain is chemical weapons. The Taoiseach abdicated his responsibility to articulate a positive non-militaristic role for Europe at Maastricht.

The Treaty ignores any possible alternative to developing a militaristic union to defend its interests, and Ireland stands mute and neutered. If Ireland does not begin now to assert a position to the contrary, then a European army and an EC military superpower will be the result and how soon thereafter will it be before we see Irish soldiers in Third World countries, not serving as United Nations peace-keepers but in pursuit of the European version of the US's Monroe Doctrine as applied so effectively in Latin America.

Let me make it clear once again, as we stated in our document, Towards a Democratic Europe, published in November, The Workers' Party are not opposed to the development of a common European foreign and security policy per se, but we have argued and continue to do so, that Ireland should use its voice at Intergovernmental Conference level to seek to shift the focus of such policies. This must mean using Ireland's particular experience to counter those who want to use the obsolete and undemocratic cold war institutions to create a new superpower, allegedly to defend European interests.

Maastricht was a lost opportunity for the Community to turn away from seeking to create a new military superpower. Just when the cold war and the system of hostile military blocs has collapsed and become redundant, the peace dividend is being swiped from under the noses of the poor of Europe and the world.

We have a choice to make at this juncture. On the one hand the Community has set in motion the development of a militaristic defence policy with maintenance of the existing nuclear arsenal of France and Britain and of political intervention in developing countries. We can still insist that the Community can develop a policy which rejects the solution of international conflicts and crises and problems through the use of force. We can insist that the real threats to the security of the EC and the rich world generally lie in the poverty, underdevelopment, lack of democracy and destruction of the global environment under which the majority of the world's population live. For Ireland to take up such a stance and argue it requires the development of a positive neutrality, and not one of being neutered.

As part of such an approach it is essential that we insist that any transfer of powers in the area of foreign and security policy cannot take place until there are democratic institutions in place to control it and, at a minimum, that means co-decision for the European Parliament with the Council.

Similarly the fate of the Community is inextricably linked to the fate of the newly independent countries of eastern Europe. The course of development of democracy, economies and foreign policy in these countries will have major bearing on the Community's own security. It is likely that at least some of these states will actively seek EC membership before the end of the century.

The proposals represent almost total failure on the key questions of regional and social cohesion. The outcome on the regional issue is even worse than we had feared. The Irish Government have not even got a precise offer on EC Structural Funds as a bribe, and, in their stupidity, they have sided with the Thatcherite rump in preventing the development of an industrial policy which would have allowed intervention to direct European industry to the regions. The British Government have been allowed to force the progressing of the Social Charter outside the Treaty into a sort of limbo, where enforcement will be almost impossible. The almost inevitable result is that economic and monetary union, a worthwhile endeavour as part of an overall package, will, without a specific programme for cohesion have disastrous consequences for the Irish economy, and particularly for unemployment levels in Ireland.

At the same time, the position adopted of being co-conspirators with the other 11 members of NATO to develop the EC into a military superpower is a total abandonment of any Irish role in the development of a non-militaristic European security policy. Given the new powers being accumulated at European level, the failure to grant co-decision or any real powers of control to the European Parliament is an anti-democratic step backwards. The concentration of powers outside the Community structure proper and into the hands of the Council and other intergovernmental mechanisms is highly dangerous.

The conclusions of the Maastricht Summit, should not, in my view, be submitted to the Oireachtas or to the people for ratification. Instead, this House should insist that an inter-institutional conference be convened of the Commission, the Parliament and the Council to revise the proposed amendments to the Treaty. Since the Irish representatives at the negotiations so far have been either incompetent or untrustworthy, the European Affairs Committee should contribute actively to such a revision on behalf of the Oireachtas.

It is important to emphasise that there is no going back in the sense of leaving the European Community. The Dáil, therefore, must insist that the Maastricht Treaty be amended. We cannot afford to come back here in five or ten years' time with living standards probably below what they are now. We must not allow the Community to develop politically at an even further remove from its citizens. We must not accept the development of a new European nuclear superpower.

The Treaty as it stands allows, indeed facilitates, the emergence of all three of those developments. It should be amended before being put to a referendum of the Irish people. The Workers' Party, therefore, do not accept this Treaty as it currently stands. It is a recipe for political, economic and social disaster.