This House, indeed this country, and the wider European Community, are today faced with an utterly unprecedented situation. The shock waves of the Danish referendum outcome are still reverberating throughout the Community, and the ripples are plainly evident here too.
Long before yesterday the referendum on European Union was a source of some confusion and difficulty here at home. Not only is the issue of European Union — to do with Economic and Monetary Union and Political Union — extremely complex and far-reaching in itself, but we had the added complication of the entanglement of our own abortion controversy and the ill-fated Protocol No. 17, which sought to deal with that issue but which became especially complicated as a result of the judgment in the "X" case.
It is understandable, therefore, from a human point of view if some members of the public around the country, already somewhat bemused, confused and befuddled about the sheer complexities of what they were being asked to vote on come June 18 next, should now simply decide to shut off completely when the added complications of the Danish decision are taken into account and decide to have nothing at all to do with the June 18 referendum. These are human and understandable enough reactions in this enormously complex situation. But our task as politicians is to chart a way out of the uncertainty and the political fog that is undoubtedly enveloping the whole question of European Union, particularly for our own people as they prepare to go to the polls in two weeks time.
What we require therefore is cool, rational, dispassionate and informed debate on the issues now confronting us in relation to the forthcoming referendum and the issue of Euopean Union. It is not a time for rushing self righteously to final judgements. Detailed legal clarification is absolutely essential from the European Commission in Brussels, and indeed further clarification is needed here about the status of the decision facing the electorate on June 18 in light of the decision by the people of Denmark less than 24 hours ago. There is little doubt, on the face of it, under Article 236 of the Treaty of Rome, that any revisions or amendments of that Treaty which the Maastricht Treaty undoubtedly constitutes, requires unanimous endorsement by all the member states of the Community. On the face of it therefore, as some commentators have already alleged, the Maastricht Treaty as signed on 7 February last may appear to have been dealt at least temporarily a fatal blow.
That is something that has to be very carefully considered. As Leader of the Progressive Democrats, and indeed as a member of Government, I am obviously party to a range of legal opinion on the implications of the Danish decision which is going to require further careful consideration. For instance, we need to fully explore and reach definitive conclusion about the extent to which there is a possibility for the European Treaty to remain in place. The news from Denmark this morning that interest rates there have gone up and their stock market has fallen has already highlighted the negative repercussions for that country of the vote yesterday.
Undoubtedly economic developments of this kind will lead to much soul searching and reflection on yesterday's decision. Therefore the whole question of what the Danes will do next in consideration of their position within the European Community, and in contemplation of the proposed European Union Treaty, must be given very careful consideration by them.
We are faced with a situation which, as I said at the outset, is only unprecedented but is also evolving by the hour and by the day. For this reason we can only expect to achieve more clarity regarding the tantalising legal questions now overhanging the Maastricht Treaty after some further issues are fully teased out. Notwithstanding the legal uncertainties which have to be clarified definitively, it is entirely appropriate that the legislative arrangements and other plans for the June 18 referendum should stand. Some people are speaking of the possibility of cancelling or postponing the referendum now fixed for 18 June by order made by the Minister for the Environment. Article 46.2 of the Constitution provides as follows:
Every proposal for an amendment of this constitution shall be initiated in Dáil Éireann as a Bill, and shall upon having been passed or deemed to have been passed by both Houses of the Oireachtas, be submitted by referendum to the decision of the people in accordance with the law for the time being in force relating to the Referendum.
Clearly there is no obvious constitutional basis for withdrawing the Bill from the people once it has been through the Oireachtas; nor is the Eleventh Amendment on June 18 confined to the Maastricht Treaty. It also authorises the State to ratify the European Patents Convention. It does not direct the State to ratify the Maastricht Treaty. It merely authorises such a step. It also provides that no acts done or measures taken in necessary consequence of such ratification should be invalid under our Constitution.
There is a danger that the pre-existing consensus in favour of the Maastricht Treaty could fall prey to doubts and protest votes. We have to keep a steady nerve in this unwelcome and unprecedented dilemma. We do not want our votes to be futile or redundant. Least of all do we wish that Ireland would send a false or inconclusive message to our European partners. While there may be legal uncertainties at the moment bedeviling European Union, there should be, I contend, absolutely no politicial reservations in the way of Ireland's total commitment to and involvement in the process of creating a closer Union of the Community's member states.
The whole European movement, which started out as an economic system aimed at ending terrible wars in Europe, has now matured over the past 35 years to a political federation seeking to unite all Community citizens under the common name of "European", enjoying rights of free movement as citizens of Europe, along with free movement for goods, services and capital. The ambition of Jacques Delors and other political architects of Maastricht is the creation of nothing less than a United States of Europe. Ireland can gain immeasurably — economically, socially and politically — from that process. The Irish people therefore face a very fundamental choice on June 18 and we must not confuse the politics with the legalities of that position. We Irish people must make our own decisions for ourselves.
We have the right to accept or reject the Maastricht Treaty, but we cannot assume — no more than the Danes can — that the process of European Union and the huge momentum behind it emanating from the founder states of the European Economic Community — notably France, Germany, Italy and the Benelux countries — will simply come to a halt in order to accommodate us. It appears to me that, like the Danes, we have the choice of remaining on or getting off the European train. We do not have the choice of stopping it entirely.
Moreover, we must not confuse the reasons why the Danish people have decided to vote against European Union with Ireland's vital national interests, which overwhelmingly lie in the fullest realisation of economic and monetary union and the greater development of a unifying political process. Nothing that happened in Denmark yesterday detracts in the slightest from the absolute vital national importance for Ireland of our fullest participation in that whole process.
In view of the Danish decision yesterday, it would now appear that the verdict of the Irish people on the whole process of European Union is going to take on a significance previously unimagined, as the eyes of the people in the other eleven EC states focus upon us and the decision we will take. In one sense this is a weighty challenge to confront, but on the other hand it does offer us an opportunity to demonstrate to our fellow Europeans the overwhelming commitment of the Irish people to the whole concept of the European Community. This exciting and pioneering excursion in human optimism, achievement and ambition has undoubtedly been dealt a severe blow by yesterday's decision in Denmark. But the Irish people have the opportunity in our upcoming referendum to reinvigorate the whole European Union process and to give a renewed mandate and endorsement to that exciting project.
I believe too that the people of Ireland should demonstrate concern and consideration for the situation of the Danish people in light of yesterday's decision. Like us, they are one of the smaller member states of the Community and I would very much like to see whatever arrangements are needed being taken in Denmark to ensure that the Danes can maintain their rightful position as full participants in building the European Union. The smaller nations, I believe, have a unique contribution to make to the building of the Community; in underlining its diversity and by developing its capacity for the strong to help the weak. It is all summed up in the cohesion objectives of the European Union Treaty. For that reason, as one of the smaller member states, I believe it is important that we enjoy the solidarity and the shared interest that particularly bind the smaller and more peripheral states within the Community. In that context Denmark and Ireland do have important common objectives.
That, of course, is not to endorse the particular objections that appear to have underpinned yesterday's referendum outcome in Denmark. There, the overwhelming consideration appears to be fears about what the European Union might entail for Danish-German relationships and the outcome would also seem to have been heavily influenced by the current standing of the Danish Government with its own electorate. These issues are not paralleled here in Ireland. Our referendum will provide us with an opportunity as Irish people to make one of the most important and fundamental decisions since the foundation of the State. Notwithstanding the Danish outcome, I am confident there will be a significant majority in favour of the Maastricht Treaty here in Ireland, because it will be clear to the innate good sense of the Irish people that this country should and must, be part of — and indeed provide leadership for — a progressive and outward-looking Europe.
Ireland has gained immeasurably in political, social and economic terms since we joined the European Community in 1973. It would be inconceivable for this country not to want to play a full part in the historic developments now being put into place to build a new Europe — a Europe which will not alone be better able to provide improved living standards for its own people but a Europe that will also be a pole of stability and strength and a force for peace in the new, international political order which is now evolving from the profound changes that have taken place in Eastern Europe and in the former Soviet Republics.
Without question unemployment is the single greatest social and economic domestic problem this country faces at the present time. With over 280,000 unemployed it is right that we question what influence our membership of the European Community has had on these figures. More importantly, it is right that we ask what contribution our membership of the European Community can make in helping to tackle our unemployment problem in the future. In my view, outside the Community the level of unemployment would be even greater than the unacceptably high levels which obtain at present. It is not difficult to see why this is so. Economic growth in Ireland over the past 20 years, helped by significant resource transfers from the Community, has been over one-third higher than the Community average. This has been accompanied by an increase of over 70,000 in the total number of people employed in the economy over that period despite the significant falls in agricultural employment.
The achievements of recent years, which brought our economy back from the brink of economic and social chaos, would not have been possible without the significant support made available by the community. Direct financial transfers from the Community amounted to almost £2 billion last year alone in net terms, or almost 6 per cent of our total national income. For every £1 we contributed to the budget of the community we received £6 in return. In addition, the Single Market Programme, which will remove trade barriers between the member states of the Community and which will be completed by the end of this year, has already attracted significant investment in manufacturing enterprises in Ireland, particularly from countries such as the United States and Japan, to take advantage of the opportunities which the Single Market will provide across Europe. This investment has been an important factor in the more then 55,000 increase in employment achieved in the non-agricultural sector over the past five years.
The process of voluntary European integration has slowly evolved since the end of the Second World War a vision of a new Europe took hold, a Europe which would not be rent again by self-inflicted wounds in the name of a narrow nationalism and associated militarism. The slowly emerging process was brought to a new and more formal plane by the establishment of the European Economic Community under the Treaty of Rome in 1957. Thirty years later the Single European Act of 1987 provided the legal basis for bringing the integration process beyond the sphere of simply economic co-operation towards the ideal of a genuine European Community. As part of that process the richer countries of the Community — and Germany in particular — agreed to a very significant increase in the resources to be transferred to the less developed countries of the Community to help close living standards between different countries and regions. A new and perhaps inelegant, phrase was coined — cohesion — to represent this commitment to closing the gap in living standards between the various regions of the Community.
The commitment was genuine. It involved a doubling in real terms between 1987 and 1992 of the resources to be transferred to the less developed regions to restructure their economic bases in the context of creating a Single Market. Ireland has made good use of these additional resources. Under the reform of the Structural Funds put in place to promote the economic and social cohesion objective of the Single European Act, Ireland has received commitments of over £3 billion to support the structural reform of the economy. This has supported a level of public and private sector expenditure for development purposes that would not otherwise have been possible.
The Community's commitment to the development of less-developed countries such as Ireland is strengthened under the Maastricht Treaty. The role of the Structural Funds as a principal instrument for transferring resources from richer to poor areas of the Community is re-affirmed and greater flexibility has been provided for in using those funds for development purposes — in the area of educational facilities, for example.
For the first time the Treaty provides that the Commission will report every three years on the progress made in achieving economic and social cohesion and will bring forward appropriate proposals where these are needed. This will ensure that the development of the less prosperous areas of the Community remains high on the agenda. In future the formulation as well as the implementation of Community policies and actions must take the social and economic cohesion objective into account, an objective that is given full status under the Articles of the Treaty for the first time. A new cohesion fund is to be established before the end of 1993 which will provide additional resources to support environmental and trans-European transport networks for the first time, together with the Commission's proposals for a two-thirds increase in Structural Funds, which form the Delors II package. The outcome of these proposals should be that Ireland can achieve a doubling of financial transfer commitments under the Structural and Cohesion Funds over the five years to the end of 1997 in the negotiations that will take place over the coming months.
The provisions of the Maastricht Treaty relating to Economic and Monetary Union are those with the greatest long term implications for the business sector in Ireland. The Treaty provides, in three stages, for the achievement of full economic and monetary union by 1999 at the latest and the subsequent replacement of national currencies with a single Community currency. The first stage has already started — from 1 July 1990. It includes the completion of the Single Market programme by end-1992; the removal of controls on capital movements, particularly between member states; and the greater co-ordination of the economic and monetary policies of Community countries. The second stage will start on 1 January 1994 and will involve the more intensive co-ordination of economic and monetary policies. Broad guidelines for both the Community and member states will be laid down by the Council of Ministers and the multilateral basis within the framework of these guidelines. The process will involve certain constraints on the budget deficits of member states and the way in which such deficits can be financed. The first steps in the creation of a European system of central banks will also be taken by the establishment of the European Monetary Institute which will operate to achieve closer co-ordination between the monetary policies of member states.
The third stage will start on 1 January 1999 at the latest. It will involve a European system of central banks consisting of a European Central Bank as an independent body with full responsibility for a single monetary policy for the Community together with the central banks of the member states.
The ECU will become a currency in its own right. The rates between the currencies of the different Community countries in relation to each other and in relation to the ECU will be irrevocably fixed.
Membership of the Community's Economic and Monetary Union at the third stage will be confined to those countries which meet certain economic norms, specified in the Treaty, in relation to price stability, Government budgetary deficits, exchange rate performances, the level of interest rates and Government debt.
From Ireland's point of view full participation in Economic and Monetary Union is a logical objective of our economic policies. Ireland has already one of the most open economies of the Community with imports and exports together equivalent to well over 110 per cent of total national output. By participating fully in the process now leading to Economic and Monetary, and to Political Union, Ireland will send a clear signal of economic stability and discipline to potential investors of both domestic and overseas origin in the Irish economy.
Exchange rate uncertainties will be removed with a resultant downward pressure on interest rates. These developments will greatly facilitate our efforts to increase investment in the manufacturing sector, for example, and the retention of associated employment that would otherwise be lost if we allow any uncertainty to develop in relation to our full commitment to the process of European economic integration now under way.
The eventual emergence of a single currency will remove transaction costs for Irish trade within a Community which at present accounts for three-quarters of our total exports, and two-thirds of our imports. Such transaction costs bear more heavily on the small and medium-sized industries which characterise Irish industry so that their removal will also be relatively more beneficial to Irish industry.
