Dáil Éireann debate -
Wednesday, 16 Dec 1992

Vol. 425 No. 3

Edinburgh Summit: Statements.

The Taoiseach

It is with great satisfaction that I report to the House on the European Council in Edinburgh on 11-12 December where Ireland was represented by myself and the Minister for Foreign Affairs, Deputy David Andrews, with the Minister for Finance, Deputy Bertie Ahern and the Minister of State for European Affairs, Deputy Tom Kitt, also in attendance. I had the Presidency Conclusions of the meeting laid before both Houses of the Oireachtas last Monday.

Edinburgh was a major success both for Ireland and the Community. EC funding for Ireland at a high level is now assured to the end of the century. With a resolution of the Danish problem, the Maastricht Treaty is back on the rails, giving a much needed boost to confidence. Negotiations on enlargement can now begin. The issues of subsidiarity and transparency have been ironed out. Other measures were agreed to boost investment and employment in the Community. For Ireland, the most important issue was the question of Community financing up to the end of the century and the proportion of this which would be allocated to us by way of the Structural Funds and the new Cohesion Fund.

I should emphasise here the crucial importance of these Funds to the whole idea of the Community. You cannot have integration without regional redistribution. You cannot have true union without balanced development of the different parts of the Community. It is vital to the future of the Community and its hopes for enlargement to include the other democracies of our continent, that this process of integration should proceed rapidly along with enlargement. Deepening is as important a Community objective as widening.

Intensive preparations for the Edinburgh Council went on for several months before the Council, at the level of personal representatives of Heads of Government and Foreign Ministers. I personally met with the British and Spanish Prime Ministers, and the German Chancellor in Bonn. I also sent a number of written communications on structural funding and on my wish to see a growth initiative agreed at Edinburgh, to Prime Minister Major and Commission President Delors.

I am happy to inform the House that these contacts, together with a firm and carefully calculated stragegy and, not least, energetic participation in the Edinburgh meeting itself, have led to what is one of the greatest negotiating successes ever by an Irish Government. Great benefits for Ireland will result from the agreement on Community financing up to the end of the century and especially on the resources to be provided for the Structural Funds and for the new Cohesion Fund over the period 1993-99.

During the course of the referendum campaign earlier this year on the Maastricht Treaty, I said that our objective was to obtain about IR£6 billion over the five years to 1997, as implied by the original Commission proposals. Many people accused me of raising unreal expectations. From the Maastricht referendum campaign right through to the recent election the issue was used to denigrate my credibility. Deputy Bruton on 6 May last in this House accused me of making wild promises and of presenting the £6 billion as a bribe from the European fairy godmother. Deputy De Rossa on 23 October claimed the £6 billion was always an exaggeration and spoke of a "sorry saga of dishonesty, particularly during the referendum campaign, and plain wrong-headed negotiating tactics and objectives". Much of this was echoed in the media. For instance, in the current December issue of "Fortnight" magazine, one of our superior commentators writes of "the infamous £6 billion" receding into the mists. My strategy and my negotiating tactics have been vindicated.

The agreement now reached ensures — and I say this with complete confidence — that Ireland will obtain in excess of IR£8 billion over seven years. This will comprise up to IR£1 billion from the new cohesion fund and more than IR£7 billion from the Structural Funds. A great deal will depend on how well we use this massive supplement to our national resources; but it is beyond question that our country is offered an immense opportunity to raise investment and growth, improve our infrastructure and economic efficiency, and tackle the jobs crisis, further narrowing the gap between living standards here and the Community average.

As part of the agreement, the eastern Laender of Germany and East Berlin will be classified as Objective 1 regions. The development needs of these regions are immense. The Edinburgh Conclusions make it clear that the allocations for Objective 1 regions, together with those for the Cohesion Fund, ensure that, even after allowing for full Objective 1 treatment for the new German territories, the four Cohesion Fund countries will be able to obtain a doubling of commitments between 1992 and 1999.

This remarkably satisfactory outcome is ensured by the fact that, at Edinburgh, it was accepted that the total resources for the Cohesion Fund should be 15,150 million ECU, above the revised Commission proposal for 15 billion and well above the 12.5 billion proposed in the first Presidency compromise of 25 November. That Fund is part of the Maastricht Treaty, but the Edinburgh Conclusions provide, pending its ratification, for adoption before 1 April of an interim instrument based on Article 235 of the present Treaty. This gives effect to a proposal by Ireland, first raised when I met Prime Minister González in Madrid on 25 September.

The Community will finance up to 85 per cent of project cost under the Cohesion Fund, thus greatly reducing the need for matching finance from the Exchequer or elsewhere. This will also ensure that we can substantially increase total expenditure on economic development, while making steady progress in reducing the debt-GNP ratio and meeting other requirements of economic and monetary union. An agreement that greater account will be taken of national prosperity in deciding on Community cofinancing rates should lead to wider resort to the maximum intervention rate of 75 per cent under the Structural Funds, with similar benefit to the Exchequer.

The Cohesion Fund will provide financial support for projects in the field of environment and in the area of transport infrastructure, including ports and airports. The fund will help finance the considerable expenditure necessary to ensure compliance with existing EC environment directives.

Ireland's indicative allocation under the Cohesion Fund has been set at 7-10 per cent which compares favourably with our 7.5 per cent indicative allocation under the Regional Fund for the period 1989-93. The Cohesion Fund allocations are to be based on certain specified criteria. Those include deficiency in transport infrastructure, which is very relevant to Ireland given the severe disadvantages that Ireland suffers as an island on the edge of Europe.

The widespread recognition that we have used the existing funds in an effective way has been a powerful element in persuading our partners of the legitmacy of our arguments for future resources. This recognition has been expressed by State Secretary Koehler in Germany, by Commission President Delors and VicePresident Bangemann and indeed in the Commission's mid-term review of the 1988 reform of the funds. The expenditure co-financed under the CSF has added an average of 0.5 per cent to the growth rate each year of the programme and, combined with the Government's sound economic policy, has helped to raise Ireland's GDP per head rising from 63 per cent of the Community average in 1988 to 69 per cent in 1991.

The allocations for the various regions under the Structural Funds will be settled later on the basis of the Edinburgh Conclusions. These provide that full account should be taken, as of now, of national prosperity, regional prosperity, population of the regions and the relative severity of structural problems. At my suggestion, the level of unemployment and the needs of rural development will specifically be taken into account. These criteria broadly determined our current share of the Structural Funds.

I should mention with satisfaction that Northern Ireland will continue to be classified as an Objective 1 region. It is also of interest in the context of North-South economic co-operation in Ireland that Community initiatives, for which 5-10 per cent of the total Structural Fund resources are to be allocated are to mainly promote cross-Border and interregional co-operation, so that we are likely to see a new INTERREG Programme.

These, then, are some of the main features of an agreement on structural funding which exceeded the expectations of all outside commentators, but which I always believed was within our capacity to achieve. I certainly do not claim that all the credit is mine. Much is due to the vision and tenacity of Commission President, Jacques Delors and to our Mediterranean allies, but I think it is fair to say that our own efforts, particularly with Germany, also made a decisive contribution. Here I want to pay tribute to Chancellor Kohl, who at Edinburgh delivered on his 1990 undertaking that German unification under a European roof would not be at the expense of the less prosperous member states.

The agreement on structural funding formed part of a wider settlement on the future financing of the Community. The current own resources ceiling of 1.2 per cent of Community GNP will be unchanged in 1993 and 1994 and then rise steadily to 1.27 per cent in 1999.

The settlement ensures, in particular, that there will be enough resources to finance the Common Agricultural Policy, including the compensation payments agreed as part of the Common Agricultural Policy reform. It was agreed at the Council that if agricultural spending were to exceed the guideline and thus compromise funding of the reformed Common Agricultural Policy, appropriate steps to increase the resources for FEOGA guarantee will be taken by the Council and the necessary money provided.

On the resources side of the budget, the Edinburgh agreement gives effect to the decisions in Maastricht and Lisbon that the regressive nature of the present system of contribution to the budget by member states would be corrected. The VAT rate will be reduced from 1.4 per cent to 1 per cent in equal steps over the years 1995-99, thus making more of the financing on to the proportional GNP-related resource. For the four cohesion countries, the limit on their VAT base as a percentage of GNP, will be cut to 50 per cent from 1995, as compared with 55 per cent now. These welcome changes will reduce Ireland's contribution by about IR£15 million a year.

We in Ireland strongly favour enlargement. It will bring several prosperous countries, with a long history of democracy, distinctive national cultures, and an honourable tradition of enlightenment into the Community. These countries are also smaller countries and have similar foreign policy traditions to those of Ireland.

However, we wished to see the deepening of the Community proceed in parallel with its widening. As the Delors II package was the means for the Community to match its ambitions, we firmly adhered to the position, in the run-up to Edinburgh and at the meeting there, that the opening of enlargement negotiations must be preceded by agreement on future financing.

With the agreements reached in the Council on the Danish problem and on the Delors II package, the way was clear for a green light for enlargement, subject to important safeguards for the Community.

Negotiations will start with Austria, Sweden and Finland at the beginning of 1993, with Norway catching up as soon as the Commission opinion on its application is available. The negotiations can only be concluded when the Treaty has been ratified by all 12 member states. Accession conditions will be based on acceptance in full of the Maastricht Treaty and what the Community has achieved, subject to transitional measures.

We asked the Commission in preparing its still outstanding opinion on Switzerland's accession application to take into account the views of the Swiss authorities following the result of the referendum on the EEA agreement on 6 December. We all regret but respect the Swiss decision, but the intention is to proceed with the EEA agreement with the remaining 18 countries.

One of the central issues facing the Council was the Danish situation following the "No" result in the referendum there last June. Ireland's approach to the issues involved was governed by two principles. First, we were anxious to provide every possible support to the Danish Government in arriving at a solution which would enable it to put a positive recommendation to the Danish people that Denmark should ratify the Treaty on European Union. Secondly, we were adamant that whatever solution was arrived at for Denmark it should not involve any changes to the Maastricht Treaty and thereby require a second ratification in other member states and in Ireland's case, a further referendum.

On the issues raised by Denmark, we reached an agreement which satisfied the Danish Government and which has subsequently been endorsed by the seven political parties to the Danish national compromise. This gives grounds for confidence that the agreement will create the basis for the Community to develop together, following a positive result in a further referendum which the Danish Government has undertaken to organise, by April or May next.

At the same time, all of the points of concern to Ireland have been satisfactorily dealt with. The European Council's set of arrangements for Denmark are fully compatible with the Treaty. They clarify various aspects of the Treaty, but neither involve nor require any revision of it, a position confirmed at Edinburgh by the legal adviser to the Council. No change is necessary in our Constitution, and advice from the Attorney General confirms this.

On defence, the arrangements relate entirely to Denmark's position in relation to the Western European Union, a position which is the same as Ireland's. The Maastricht Treaty stipulates that the elaboration and implementation of decisions and actions with defence implications is for the Western European Union. We, like Denmark, will be observers at the Western European Union. Denmark will not be a member of the Western European Union, and neither will Ireland, Like Denmark, we will not be involved in the implementation of military or defence matters in the Western European Union.

The question of a future defence policy is a matter for separate negotiations in 1996, and the outcome of any such negotiations will require the approval of all member states, including Ireland and Denmark. I have also undertaken to put the outcome of any future negotiations on defence policy to the Irish people in another referendum. In the meantime, the specific character of Ireland's security policy is protected under the Maastricht Treaty. In substance, Ireland is not subject to any obligation from which Denmark has been exempted.

Subsidiarity and the related question of openness/transparency were issues which were discussed at the European Council in Birmingham last October. Since then the Foreign Ministers completed a report setting out an overall approach to the application of the principle. An annex to the Edinburgh conclusions sets out the basic principles to be adopted as well as guidelines, procedures and practices. The document specifically states that implementation of Article 3B shall not affect the balance between the institutions; that the principle cannot call into question the powers conferred on the Community by the Treaty as interpreted by the Court of Justice; and its application shall respect full maintenance of what the Community has achieved.

The President of the Commission reported to the Council on the first results of the Commission's review of existing and proposed legislation in the light of the subsidiarity principle. Examples of this review are set out in an annex to the Council conclusions. The Council noted the Commission's intention to withdraw or amend certain proposals and to make proposals for the amendment of items of existing legislation. The Commission is taking a sensible, balanced course, and there is no question of any significant rolling back of Community competence or action in important areas.

As regards openness and transparency, the European Council reaffirmed its commitment to a more open Community and adopted a number of specific measures to that end, such as open debates on work programmes and on major initiatives of public interest, better background information on Council decisions, and greater efforts when drafting conclusions to make them understandable to the public. Practicable steps will be taken to improve the quality of Community legislation and a speedier and a more organised use of consolidation or codification of such legislation will be pursued.

The European Council also welcomed the measures the Commission has recently decided to take in the field of transparency. These include producing the annual work programme in October to allow for wider debate including in national parliaments; seeking closer consultation with the Council on the annual legislative programme; and wider consultation before making proposals, including the use of Green Papers.

The agreement on subsidiary and transparency is a good balance, and should help to bring the Community closer to the citizen without inhibiting the capacity of the institutions to act.

The Edinburgh meeting did not hold a substantive discussion on the Uruguay Round of GATT talks, following a full discussion at a joint Council of Foreign, Agriculture and Trade Ministers on 7 December and ahead of the Agriculture Council meeting yesterday.

We welcome the resumption of negotiations in Geneva, reaffirmed our commitment to an early, comprehensive and balanced agreement, called on all the parties to complete the negotiations, and noted that the final package must be judged as a whole. The Government want such an agreement, which could make a big contribution to boosting world trade and ending recession in many countries. The Government recognises the decisive progress towards it made by Commissioner MacSharry in the deal struck with the US — but we must fully safeguard the legitimate interests of our farm families.

Deputies may recall that, in reporting here on 23 October on the Birmingham Summit, I stressed the concern of people that the Community should, in the run-up to Edinburgh, effectively tackle such problems as growth, jobs and interest rates. I said that the Government would continue to pursue the question of concerted action to help all countries break out of the prevailing economic difficulties. We did pursue the question in all the fora open to us, and I myself wrote to Prime Minister Major, requesting him to give this matter a high place on our Edinburgh agenda.

Finance Ministers in Edinburgh agreed a worthwhile initiative, which was in turn endorsed by the European Council and which has the potential to help kick-start investment and growth in Europe, especially in conjunction with the investment programmes that will flow from the agreed Delors II package. The plan of action we agreed involves two elements — co-ordinating national policies within an agreed framework and supplementing this with Community credit lines. In regard to national action, we agreed that member states should take every opportunity, according to their national circumstances, to exploit the limited margins of manoeuvre available as regards budgetary policy; and switch, to the extent possible, public expenditure priorities towards infrastructure and other capital investment and growthsuporting expenditures. This is very much in line with the economic strategies that we would intend to pursue as a Government.

The Community-level measures include establishment of a new temporary loan facility of IR£3.75 billion within the European Investment Bank to accelerate the financing of capital infrastructure projects, notably connected with trans-European networks; for projects financed from the facility the EIB is invited to raise the normal ceiling on loans from 50 to 75 per cent and the ceiling for loans and grants combined from 70 to 90 per cent; and speedy action by the ECOFIN Council and the EIB to set up a European Investment Fund with 2 billion ECU capital, able to give guarantees to support up to IR$15 billion of projects. These and other actions in the plan could provide Community support for investment in the public and private sectors of the member states amounting to more than IR£22 plus billion over the next few years. To this must be added the much greater investments that will be levered by the Cohesion and Structural Funds.

These agreements should give a fillip to business confidence and, together with the overall demonstration of solidarity within the Community at Edinburgh, help to calm foreign exchange markets and pave the way for lower interest rates. The Edinburgh meeting has again underlined the commitment of the member states to implementing the Maastricht Treaty on the basis of solidarity and co-operation. The exchange rate mechanism of the EMS is a central building block in that process, and the Government are satisfied that the full solidarity and resources of all participants are available to uphold the ERM in the face of unwarranted speculation.

At the end of this month, the creation of the internal market will, in all essential respects, be successfully completed. This is an historic moment for the Community, marking the fulfilment of one of the fundamental objectives of the Treaty of Rome. Some 340 million consumers in the Community will, as a result, have more choice and lower prices. We expressed confidence that the Single Market will boost job creation and sharpen the international competitiveness of business in Europe.

For some time past there has been an inability to decide where new Communty bodies should be located. This issue had become entangled with the long-standing controversy about the seats of the principal Community institutions. In 1965, there was a decision on provisional seats of the institutions, but not on their definitive location. The present locations of the Parliament, the Commission, the Council, the Court, the European Investment bank and the European Court of Auditors were definitively agreed in Edinburgh. Ireland will continue to pursue its case for the siting of at least one of the new bodies here, preferably the new medicines agency.

Pursuant to Declaration No. 15 to the Maastricht Treaty, the European Council also agreed on the basis of the proposal of the European Parliament to increase the size of the Parliament to 567 members. This decision will take effect from 1994, and is intended to reflect German unification and is in the perspective of the eventual enlargement of the Community. Germany obtains an extra 18 seats, with pro-rata increases for other member states whose population and level of existing representation justify this. Ireland's allocation of seats remains unchanged at 15, as does that of Denmark and Luxembourg. All three countries have a representation double that of Germany's relative to population.

A declaration on the tragedy in former Yugoslavia focuses on the responsibility of the present leadership of Serbia and of the Bosnian Serbs for the savage acts which continue to take place. The European Council agreed a separate declaration on the systematic detention and rape of Muslim women in Bosnia. The Minister for Foreign Affairs, Deputy David Andrews, strongly supported this German initiative when it was discussed among Foreign Ministers, and he was instrumental in having these unspeakable acts designated as crimes against humanity. He was requested by the European Council at the suggestion of the German Foreign Minister and in the light of his record on human rights issues to act as political head of an EC delegation which will investigate the detention camps and report urgently to the Foreign Ministers.

The conclusion of the European Council on Africa emphasises the Community's readiness to provide economic assistance and to lend support to political processes aimed at ending conflicts, and in South Africa, at proceeding to a transitional government and fully democratic elections. The European Council expressed its full support for the recent Security Council resolution authorising measures to provide a secure environment for humanitarian relief operations in Somalia. At Ireland's suggestion, the importance of ensuring the safety of relief personnel was underlined.

The success at Edinburgh owes a lot to the ability of Prime Minister John Major to develop good relations and understanding with all his colleagues and to his very skilful and determined chairmanship, qualities which, I have no doubt, will enable him to deliver British ratification of Maastricht within an acceptable period. Our thanks are due to him, to Secretary of State Hurd and officials for the well-run Council they hosted in the beautiful city of Edinburgh.

For the Community, the outcome of the Council is a considerable achievement, in reaching agreement on such a wide agenda of complex issues that were also interlocking. Agreement on each was a prerequisite for a settlement on all. The Community is firmly back on the path to European Union. For Ireland, the remarkably successful outcome opens up a vista of opportunity which we must now seize, first, by putting in place a stable Government with a clear developmental orientation.

Finally, I would like to take this opportunity to pay tribute to Mr. Dermot Nally, Secretary of the Government, who will be retiring shortly. He has served this country with honour and distinction and has given invaluable service to successive Governments and Taoisigh in relation to many important, high level political negotiations. I am sure I speak for all Members of this House, we would all like to thank him for his work and to wish him a happy and well deserved retirement.

Mr. J. O'Keeffe

In opening my remarks I would like to join in the tribute to Mr. Dermot Nally for the outstanding service he has given to the country. In many ways we in this House fail to recognise and recall the outstanding efforts of our public servants who work in a dedicated way for our country without public recognition. I am delighted to endorse the Taoiseach's remarks in relation to Mr. Dermot Nally, the retiring Secretary of the Government.

The Edinburgh Summit could have been an unmitigated disaster — that was the outcome widely predicted in the media. The fact that it was reasonably successful in relation to a number of issues has resulted in an atmosphere of euphoria being created by the same media. Here at home that celebratory atmosphere has been further boosted by a most successful public relations campaign which has been swallowed hook, line and sinker by an uncritical media.

At European level it was a bonus to have settled and agreed a response to the Danish problem in regard to the Maastricht Treaty, as also was the agreement on the financial perspectives of the Community up to 1999. On the other hand, the most critical and urgent problem facing the Community was not even addressed. Seven weeks prior to the Edinburgh Summit, a special summit was convened in the wake of the monetary earthquake that had seen the UK and Italy out of the ERM and other currencies, including our own, under intense pressure.

The main purpose of the Birmingham Summit in October was to restore confidence and stability in the currency system. The best that the Birmingham Summit could agree was an understanding that the financial turbulence called for reflection and analysis. The conclusions of that summit stated:

in the light of the increasing size and sophistication of capital markets, greater capital liberalisation and of developments in the European and World monetary systems.

The problem was then referred to Finance Ministers assisted by the monetary committee and the EC Commission with the Central Bank governors "to carry this work forward".

One would think from the conclusions of the Presidency in Edinburgh, and from the report of the Taoiseach, that the financial problems in the Community have been resolved whereas there was not even a discussion on the existence of the enormous monetary crisis which continues to overhang the Community.

Similarly, in relation to the GATT Uruguay Round the differences between member states were not even discussed apart from the usual bland presidency-type statement which reaffirmed a commitment to an early comprehensive and balanced agreement and called on all parties to complete negotiations accordingly. That is as far as it went and anybody who realises the importance of getting a successful conclusion to the GATT negotiations — a fair one which takes into account the problems being experienced by people on family farms — must blink at the thought that there was no detailed discussion on that issue. Therefore, any suggestion that the Edinburgh Summit changed from being an unmitigated disaster — which was predicted a week prior to the summit — to an enormous success on all fronts is not correct.

One would imagine from the very impressive media presentation by the Taoiseach that all our troubles were resolved forever as a result of the Edinburgh Summit. I do not wish to detract in any way from the efforts of the Taoiseach and his advisers at the Edinburgh meeting. They were correct to solidly support the campaign led by Spanish Premier González. It was a good move to stick close to him all the way and the result from the point of view of the overall financial package was very good. It takes some neck for the Taoiseach to come in here and state, with false modesty, "I certainly do not claim that all the credit is mine". The Taoiseach must think that we all came down in the last shower. Everybody knows what happened prior to the Edinburgh Summit. In the run-up to the summit an objective magazine The Economist— I do not know if the Taoiseach reads it — contained a comprehensive article setting out what might happen at the summit. It referred to the insistence of the Spaniards to hold up agreement on any issue unless the campaign they had launched in regard to the financial package was resolved. In the light of the Taoiseach's report to this House, and his earlier media presentation, it is unusual that there was no reference in The Economist to the efforts of Ireland or of the Taoiseach to ensure that there would be a fair and proper resolution of the financial and budgetary problems affecting the Community.

The Taoiseach

Sour grapes.

Mr. J. O'Keeffe

It is a bit Irish of the Taoiseach to come into this House and make a report in the way he has.

The Taoiseach

Does the Deputy want £10 billion now?

Mr. J. O'Keeffe

I suggest that we stick to the facts.

The Taoiseach

I was at the meeting, the Deputy was not and neither were the people from The Economist.

Mr. J. O'Keeffe

The Taoiseach has had his chance and time is running out for him. I did not interrupt the Taoiseach in his contribution but, perhaps, I have struck a raw nerve. I will tell the truth. To convey to this country that £8 billion is available in extra money as a result of the Herculean efforts of the Taoiseach through his blood, sweat, toil and tears at the Edinburgh Summit is pure codology.

We receive approximately £600 million a year from the Structural Funds. At the time of the debate on the Maastricht Treaty we had before us the Commission proposals which involved a five year package worth about £6 billion. The effect of this five year proposal is that the £600 million a year we receive would have doubled to approximately £1,200 million a year.

Our share of the overall package decided at Edinburgh is a sum which will probably work out at about £1 billion a year. The real battle, which has not been referred to here, and when we will be on our own and in competition with the Spaniards, will be to ensure that our share of the overall funds is at the top end of the scale, the 10 per cent rather than 7 per cent of the Cohesion Funds and at least at the existing percentage or more of the Structural Funds. We will not achieve a doubling of the sum we receive annually, but we will get a significant increase and I welcome that.

It is wrong to oversell the result to date as, in effect, providing a crock of gold which will either resolve all our problems or be available for stroke politics. Despite the vast amounts of money we receive from the European Community we have succeeded in establishing the highest unemployment rate in the Community and, unfortunately, it is rising. What is important is that any additional funding made available over the next few years should be carefully spent to achieve the best results in terms of job creation in the short and medium term.

To date the Government has refused to accept the principles of regional development which have brought such benefit to other countries. What passes as an excuse here for a regional structure is essentially an extension of centralised bureaucracy. In effect, we have only one regional development organisation, SFADCo in the mid-west region. Local authority powers have never been developed and the authorities have no direct access to structural funding.

The result is that we, the most centralised country in Europe with the weakest local authority base and virtually no regional structure may be unable to make any appreciable impact on reducing our unemployment figures even with increased structural funding.

I am even more alarmed by newspaper reports of comments by members of the Fianna Fáil Party that the extra EC funding amounts to a crock of gold which they wish to keep their hands on. God help the unemployed here if that is the attitude in relation to funding genuinely made available by other member states of the Community with a view to reducing the disparities between the centre and peripheral areas such as Ireland. In many ways the Taoiseach is like a leprechaun with a phoney crock of gold trying to reach the end of the rainbow. Anyone taken in by this posturing should remember the re-election and retention in office of Richard Nixon who was head of the most scandal-ridden Administration in the United States in this century. A committee was engaged in special activities on his behalf appropriately called "CREEP"— the committee for the re-election of the President.

Bearing in mind the efforts of the outgoing discredited Administration here to cling on to office and the post-Edinburgh posturing of the Taoiseach on European funds, the best warning I can give to anyone taken in by such approaches is to beware of the "CREEPS" when they bring gifts.

It is time we had a real debate about the European issues which we are concerned about rather than the superficial pork barrel type comment which passes for debate and analysis. We should now be analysing why we have not been able to achieve a better result in terms of jobs from the vast sums of money, running into billions and billions of pounds, which we have already obtained through our membership of the European Community. We should also accept that the old formula of keeping not just the electorate but the legislators uninformed on European issues should end once and for all.

Whatever Government emerges from the present negotiations and discussions must, as a first priority, immediately establish a foreign affairs committee so that Members of the Oireachtas will no longer be kept in the dark as to what is happening at EC level. An effort must be made to have a much broader understanding among the general public of these issues.

It is alarming that, in the survey prepared by Lansdowne Market Research, on behalf of the EC Commission by its Dublin office launched yesterday, 44 per cent of those interviewed said that by the date of the Maastricht referendum last June they were only vaguely aware of the issues or did not know what the Treaty was about. That is an appalling figure in a country where the referendum was considered to be of such importance and where, leading up to the referendum, such an effort was made in that short period to try to ensure that people understood the issues involved.

If you look at the survey in more detail you will find that of the people who were asked "By the date of the referendum how good was your understanding of the issues involved?", only 18 per cent indicated that they had a good understanding of the issues. Even in the case of those who indicated they had an understanding, a majority said they understood some of the issues but not all. An appalling figure of almost 50 per cent either did not know what the Treaty was about or were only vaguely aware of the issues. It is an indictment of our democratic system which will have to be resolved.

It is of great importance to ensure that our people remain fully committed to the European ideal and they can only do that in the context of being fully informed on the issues. It was pointed out in the report of the Institute for European Affairs which was published last week that the European Community faces a crisis of confidence. Many external factors contributed to this — the end of the Soviet Empire leading to the emergence of a new security order in Europe, the challenges posed for the Community by the new demands of the Central and Eastern European States and the outbreak of ethnic and regional conflicts in many parts of Europe and the former Soviet Union. Another reason is the world depression and the change in the policy of most EFTA countries towards membership of the Community.

On the internal side there are equally numerous factors which are interrelated. The Maastricht Treaty was essentially a compromise between states with very different views of Europe; these differences emerged through the Danish rejection of the Treaty and significant reservations in the United Kingdom. German unification was a consequence of the collapse of the Soviet empire but that set off a chain reaction which accelerated the consideration of political union. In addition, it imposed unexpected financial burdens on the largest contributor to Community finances and, unfortunately, led to a high interest rate regime, to which I will refer in a moment, which affected other economies, not just Germany, and created the preconditions for the currency crisis. This resulted in speculation against the weaker currencies and the forcing of sterling and the lira out of the ERM.

I hope the Maastricht Treaty will be ratified by Denmark and, belatedly, by the United Kingdom. However, I should like to know what thought or analysis has gone into the situation which would arise if the Maastricht Treaty is rejected and is not ratified by all 12 member states. There is nothing negotiated in the Treaty to cover this eventuality. At a minimum there should be a discussion on the different options available in such an eventuality. This would not in any way take from the heartfelt concern of Europeans like myself who hope that the Treaty will be ratified. Furthermore, it is clear that the uncertainty about the future of Maastricht and the possibility of some member states moving separately towards European Monetary Union have created a difficult policy context for a country such as ours.

It is very clear that the currency crisis has imposed costs in the economy and has had a very negative impact on jobs, competitiveness, living standards and public finances. This requires immediate and decisive action on the grounds of solidarity on the part of the larger member states which anchor the ERM. Essentially, we need concrete measures in support of the smaller states in the narrow band. I do not want to labour the point but I am appalled that this issue was not even raised or discussed in Edinburgh. The serious currency problem has not been resolved and there are measures which could and should be taken at European level to stabilise the situation. As far as I can see, the matter was not even raised in Edinburgh. This is very worrying in relation to the future of monetary stability in Europe.

I cannot see any evidence either of discussions on interest rates which, in Ireland and elsewhere, must be brought down if jobs are to be created and the living standards of those on mortgages are to be restored. This can only be done if there is European leadership with sufficient authority to force Germany to finance its budget deficit by taxation, not by borrowing; to accelerate the timetable for the establishment of the European Central Bank; to reach early agreement with the United States on world trade on terms which are fair and just; and to persuade Britain to rejoin the exchange rate mechanism at a more realistic exchange rate than that at which it became a member. Realisation of these four measures would knock at least five points off present Irish interest and mortgage rates almost overnight. All these things could be done if there was proper political leadership in Europe. They cannot and will not be done unless, at the minimum, these issues are raised and discussed by those at present responsible for conducting our affairs of State. We all have a responsibility to develop Ireland's role as a committed member state of the European Union. We should make it clear that we are willing to shoulder our responsibilities while also insisting on due recognition of our peripheral location with a huge unemployment problem.

I do not think that Ireland will play a full role in shaping the Europe of the future unless there is discussion on and an understanding of what that role should be. I am absolutely clear that we must fight our corner to the best advantage in securing the best return from our membership of the European Union. However, the whole idea of a vision of Europe of the future will be debased if our total concentration is focused on the pork barrel aspect of our membership. The returns in every sense, including financial, would be far greater if we had a more determined and committed European approach in the way we deal with European affairs. Essentially my approach would involve a full commitment to a federal Europe while at the same time not forgetting that any such federal Europe would involve automatic transfer by way of equalising of wealth to peripheral regions such as ourselves.

The approach I propose points to an essential difference between Fianna Fáil and Fine Gael. We want to see more fully developed and more democratic Community institution; we have pressed the case for the establishment of an EC Senate with equal representation from all member states. I strongly urge the direct election of the President of the EC Commission. I do so on the basis of giving more democratic legitimacy to that institution. I believe also that we should open up a debate and establish a position that will enable us to contribute usefully to the next EC Inter-Governmental Conference on Security and Defence. There has been no sense of direction given us from what the Taoiseach had to say in that regard. These issues will have to be faced in the context of the 1996 Inter-Governmental Conference on Security and Defence. Now is the time to get the debate under way rather than have our people vote again in ignorance on a referendum after that conference. As yet neither do we seem to have the self-confidence about our place and role in Europe to enable us talk about what we have to offer to Europe. The fact that we are enormous beneficiaries in financial terms does not mean we have nothing to offer Europe. We have our traditions, culture and approach which could make an impact on the development of European policies. I have to say I totally reject the approach of those who would place our country in a kind of European limbo from which we could self-righteously proclaim our independent position while, at the same time, begging the members of that union to provide us with financial and other benefits of membership.

I might make a brief comment on the question of the external relations of the Community. The question must be raised as to whether we, as Europeans, are happy with the agreed Conclusions of Edinburgh. The ineffectiveness of the foreign policy of the EC sometimes to be demonstrated in the countries of the former Yugoslavia where tens of thousands of people continue to suffer from hunger, cold, and worse. Stories of the treatment of Muslims, in particular of their women, are horrendous. I am glad the Minister for Foreign Affairs has been asked to participate in a delegation to report on that issue. I do not wish in any way to detract from that initiative but, in many ways, the European Council displays its ineffectiveness in its demands and I quote:

that all the detention camps and in particular camps for women should be immediately closed. Free and secure access must be given to humanitarian organisations so that all those detained in the camps can be assisted.

That is a direct quotation from one of the annexes to the Conclusions of the Presidency.

I do not point to the ineffectiveness of the EC on the basis that I disagree with these demands; of course I agree with them. Its ineffectiveness arises because these demands have been, will continue to be ignored, and the European Community will do nothing about them.

Essentially we had an EC summit in Edinburgh the results of which will be of benefit to Ireland, particularly if additional funding is wisely and properly spent. We should be particularly thankful that in the lead-up to the summit Spain took such a strong stand in blocking progress on a wide range of issues unless and until they got satisfaction on their budget demands. The Taoiseach was quite right to fully support the stand taken by Spain which will result in an increase of approximately two-thirds in the Structural Funds for Objective 1 areas, including Ireland, and the establishment of a substantial Cohesion Fund. It would be very unwise to attempt to suggest that the Conclusions reached at Edinburgh have in any way resolved the enormous problems affecting the European Community or that those results in any way will constitute a magic formula for the resolution of our problems, in particular that of unemployment.

Assistance from Europe is welcome, but we will resolve our problems essentially through our own efforts. Indeed, any attempt to delude ourselves to the contrary on the part of prospective Government partners or on the part of the general public, would be a selfdelusion.

Normally an EC summit provides an opportunity for a bilateral meeting between the Taoiseach of the day and the British Prime Minister with a special focus on Northern Ireland. I am very disappointed indeed, despite the pressures on the Presidency, that there was nothing contained in the report of the summit of such a meeting between the Taoiseach and the British Prime Minister. Normally we have such a report but, presumably since there was no such meeting, we do not have a report. Nonetheless it is very important that we place on record our view of the position, of the continued urgency of action in relation to the circumstances prevailing in Northern Ireland.

Every Irish person of whatever tradition or allegiance feels diminished by our collective failure over the past 20 years to end the violence and achieve reconciliation in Northern Ireland and between the two traditions on the island. We must ask, how long more will this continue? A total of 3,000 people have been killed already with thousands more maimed for life. The employment prospects of the entire island suffer from the failure to find a resolution to this problem. It was estimated recently that upwards of 75,000 jobs would be created if the violence came to an end, when we could develop the economy of the island as a whole. This will be achieved only if politicians on both sides of the Border are prepared to take risks for peace. In coming years, with the development of European union and its institutions. I hope the bitterness and sharpness of the differences may diminish leading to a growing acceptance of diversity in a broader European context. In the meantime, there is an absolute need for all of us to continue the search to find a formula that will end the violence and achieve reconciliation on terms acceptable to both communities in Northern Ireland.

Whatever Government may emerge from discussions taking place at present — which will continue over coming days — must seek an early resumption of talks on Northern Ireland. Any such Government must also have the courage to take an initiative to ensure that such talks will not drag on inconclusively. There must be a positive willingness to recommend changes to our Constitution as part of an overall settlement. I predict that history will condemn those who do not have the courage to compromise. In the meantime, the killing and violence will continue unless and until a fair and reasonable settlement has been agreed and achieved.

While the results of the Edinburgh summit are a bit like the curate's egg, good in spots, I am happy with those parts of it that are positive and not happy with those parts that were either over-looked entirely or did not lead to positive results. I mentioned I am particularly unhappy that there was no focus at all, by way of discussion on the margins of the summit, between the Taoiseach and British Prime Minister with regard to Northern Ireland. I hope that opportunity will arise with a new Taoiseach in the near future.

Mr. M. Higgins

In the first instance I might comment on the procedure we are following, not by way of criticism of the specific activities of this afternoon. I believe it was one of the failures of the 26th Dáil that we did not establish a foreign policy committee, with adequate terms of reference, of which I have been an advocate for a very long time; or a European affairs committee, with revised and extended terms of reference, that would enable us prepare for occasions such as EC summits with greater throughness and participation in terms of the options available to us. It is very important that we take note of that aspect. We can think of the mechanism such as that available to us — and which may have been resorted to on one or two occasions when the Government of the day tabled a motion welcoming the conclusions of a summit — enabling a more interactive discussion rather than statements. That meant, for example, that people who put questions that were not clearly answered in the final communiqué could have them answered by the Minister of the day. That is a more satisfactory mechanism.

With regard to the Taoiseach's statement this afternoon the first thing that must be said is that in relation to the Structural and Cohesion Funds the out-turn was better than had been expected. That should be welcomed in the context of a very difficult Presidency. One of the freedoms of being a Member of Parliament is that one is able to comment on the Presidency of other countries. On the occasion of the Irish Presidency I recall rather negative remarks having been made by some of our colleagues in Britain about our running of the Presidency, even before we had commenced, about our capacity to do so at all. Objective commentators looking at the British Presidency will regard it as one which was not a well prepared one. In my view it was a Presidency within which certain difficulties arose. Let us be generous. If, from the jaws of its conclusion, some successes have been snatched, let us note them but, more importantly, place them in context.

In terms of media interest here the Taoiseach, perhaps correctly, stressed what will be the immediate impact of increased Cohesion and Structural Funds. However, in what I have to say I should like not to begin at that point. The Edinburgh Summit came at a moment for either regression or progress in the evolution of the EC.

Let me immediately put to rest something that is very unfair in this House. When people speak from the perspective of a Europe of the peoples or from the perspective of an evolving Europe which is taking its place in an international community of nations, in which the European Community and its institutions will deal with the United Nations and with other fora in which we discuss issues on trade, aid, development and so on, they are considered to be, somehow or other, vaguer Europeans. That is the politest version. I am not sure whom the previous speaker had in mind when he referred to those who would have us live in a European limbo while at the same time begging. This kind of caricature does not serve anybody very well. The reality is that there is room for difference about the future shape of Europe.

With regard to what is called "the Danish problem" I would prefer to say that we are reacting and responding to the Danish decision. If we enjoy the fruits of democracy within our own system we are obliged to respect the democratic decision of citizens in another country with whom we have friendly relations. There are consequences to the Danish decision which have been addressed at many meetings coming up to the Edinburgh Summit and at the Edinburgh Summit. There were responses to the circumstances which arose in Denmark's relationship to the Community, circumstances which I am not interested in fudging. One set of responses to the Danish decision was to leave Danish rights intact within some of the founding treaties of the European Community, while at the same time setting Denmark apart from future evolutionary proposals for the European Community. There were those who erred by excess, who suggested that the rights available to Danish citizens should take second place to the evolutionary aspirations of the members who it was perceived were adopting an uncritical attitude with greater robustness. I am in favour of a greater calm in these matters of foreign policy and diplomacy. It brings a better result in the end.

There are many other aspects that are important. I welcome such good decisions as have come from a difficult meeting and will benefit the Irish people. There is a bigger problem in the European Community around which future presidencies will no longer be able to flurry and just indulge in rhetoric. When we hear phrases such as "democratic deficit" and remarks about transparency, we are really exchanging code words with those people who at a certain level of Community involvement have perceived a great alienation among the peoples of Europe from the European process. I do not say that I welcome that. I am simply saying that by putting a name on it and then proceeding to talk again and again of the democratic deficit or transparency we are not solving the problem. The problem is a deeper one and it needs a deeper response than that.

There is a fundamental distinction between a Europe of the peoples and a Europe of markets, integrated monetary arrangements and fiscal policies. The differences are not irreconcilable, but where the philosophical issue arises is the order in which one places them. Certainly, many of the parties advocated an uncritical approach towards the European Community and argued that we really should accept the greater speed and precision which was manifest in Maastricht in relation to everything economic and monetary. Those who accepted this order of things were regarded as good Europeans, whereas those who went in the reverse order and spoke of social Europe, a Europe of the peoples, were somehow or other lesser Europeans.

I agree with the previous speaker that the greatest problem facing Europe is that of unemployment. It is an even greater problem here. There is a sense in which that problem is combined with others that were addressed in Edinburgh. One should try to be historically accurate about how these emphases come to be. When the Maastricht Treaty was negotiated it was at the time of what one might call the great hubris of Von Hayek's ideas about individualism had been popularised by Friedmann and others and has been used in a vulgar sense by Thatcher and Reagan. This ethos in which the Treaty was negotiated had certain precise assumptions associated with it, which will long be remembered from those remarkable phrases by Mrs. Thatcher — now Lady Thatcher — in her day, in which she said that there is no such thing as society. The idea was that having broken down societies into their individual components — selfish, aspirational, greedy self advancements — one could then put all these bits and pieces together and get an economically viable entity and somehow or other when this has been completed one could turn one's face to those people who were unemployed, to those who had lost jobs and to the manufacturing industry which had been destroyed.

As bodies were left in the field after this great battle that took place — it was not the left that was attacked; they were regarded very often as not being entitled to have an opinion at all — there were Keynsians everywhere, neo-Keynsian corpses littering the field in economics. They had been run from institutes and so on. Therefore, it was with particular interest that I read of the appointment to the seven-person group who are advising Mr. Lamont in the Treasury, of Professor Godley. Professor Godley's work has been interesting for a very long time, not least because he had a penchant for making predictions and those predictions happened to be right very often. He spoke for example, of how the unemployment rate would rise in Britain. He suggested in 1982 that unemployment could reach four million. It went past three million. It is interesting that in his article in the Guardian of five days ago, Peter Marsh said of Professor Godley:

He rejects free-market Thatcherite economics as both unjust and giving the wrong picture of how economies work. He says the most important part of modern economies is not millions of people working as free agents but institutions such as governments, companies, banks and trade unions which operate in a number of unique ways and cannot be fitted into "dangerous and pernicious" theories about free choice.

Now that Professor Godley, heretic, has been given the ear of the Treasury in Britain, one may expect changes in economic policy, unless he is being hired for vicarious pleasure. Among the changes that will take place will be changes in interest rates, possibly further devaluations, changes in relation to the ERM and so on. I make this point only to say that Maastricht is a creature of its time, of its sets of economic assumptions and of the relationship between economic indicators and social indicators. Equally, if there is to be an evolution in Europe, we will see further changes. It may be, and I agree with the previous speaker, that Edinburgh did not recognise the full extent of unemployment, but there is no doubt that future presidencies will have to engage the unemployment problem. This will involve gradually seeking a return of many different and new strategies for priming growth, for redefining employment, for creating greater activity for income distribution.

The weakest part of the Taoiseach's speech was that concerning the joint declarations. He mentioned that the two measures indicated in relation to stimulating a recovery in European growth are the availability of increased levels of funding and co-ordinated strategies. What I understand the peoples of Europe to want is to have those strategies made specific. What is there to co-ordinate? Let us be honest about this.

The old assumptions, this hegemony of a certain very narrow and very dated view of the relationship between economy and society has nearly destroyed human Europe. It has left across the face of Europe a tragically high level of unemployment, bringing with it all the social consequences. There is no point in parties turning around and saying in the middle of such a massive structural impact that what we need is to restore the impulse to work. Are we to give lectures on motivation to work to the millions who are out of work? Millions of people are desperately seeking to become active and millions of people looked on and recognised a shift in the whole emphasis of economic policy in the direction of speculation as opposed to production. People from many countries in Europe who would be on the opposite side of the political spectrum from me and with whom I have spoken, have talked of the difficulty of sustaining even the idea of there being a manufacturing component in the productive economy. The productive economy was dislodged as a desirable place even to seek employment by those who were advocating the theology of speculation. It is an old and dreary time in Europe from which we will all detoxify ourselves. Even those who are trained in economics and the social sciences will begin to think in human terms again. I have to say that, because I think it is important not just to say that the unemployment problem is neglected. There are two specifics I wish to mention. I doubt whether there is a capacity in the Community to sufficiently realise, at ministerial meetings and meetings of heads of State level, the crisis of language there is in Europe, which is only in turn reflecting a deeper philosophical crisis and an absolutely bankrupt set of economic assumptions. If we are to rescue the best of Maastricht the best of European evolution, moving towards a European Community, there must be implemented a significant shift in values. That shift in values will have to come and it is only when that happens that the unemployment problem will move to the top of the agenda.

The Taoiseach referred, too, to accession. A few months ago I had the pleasure of being in Finland and meeting the Finnish European committee and people who had for a long time been working on and writing about Finland's relationship with the European Community. Certainly if the Finns, in accession talks, want to lay emphasis on the concept that the unemployment rate in a particular country not be allowed to depart beyond a certain margin from the average rate without there being taken immediately a series of corrective measures in relation to finance and to additional funding, Ireland should support that. The experience of Finland is interesting, moving within 18 months from an unemployment rate of 3 per cent to one of more than 13 per cent. That has been a dramatic shift within Finland itself. The question of unemployment there is a big element and will be a big element when the accession debate starts in Finland. This is an aspect of the enlargement process that we should examine and to which we should lend some support.

I turn now to the somewhat tedious business of money. The Structural and the Cohesion Funds do affect employment and jobs. It is not a matter of taking from the Community, but I shall return to that point in a moment. One is no less Communitaire because one is in receipt of funds that propose to level up European incomes. Incomes have been raised by a small 4 per cent to 5 per cent to be somewhat less than 70 per cent of the Community average at present. There should be consensus on the issue of increased funds. The mechanism of spending those funds should be accountable and productive. Evidence shows that between 1989 and 1993 the funds we used did not close gaps within regions. For example, employment has fallen by 2 per cent in the eastern part of this county and by 6 per cent in the west, the west having had a higher rate of unemployment and a higher rate of emigration. I do not wish to set up a tension between the regions, I am simply saying that the way in which the funds were spent did not achieve a reduction in regional disparities and it did not have the impact on the unemployment problems that it should have had. One could refer to the funding that found its way to the agricultural sector. Eighty per cent of the funding found its way to the top 20 per cent of agricultural producers. One could say that the funding got swallowed into an agricultural sector rather than being broadly dispersed within an agricultural community. Both the regional allocation and the funding in agriculture had defined consumer consequences in the way in which the funding flowed through by the multiplier in the different areas.

Lest people say that unemployment can be easily answered by achieving an increase in the Structural and Cohesion Funds — as the Taoiseach sometimes seemed to suggest — I would point out that in 1989 our unemployment rate was 17.9 per cent, when the average in the European Community was 9 per cent, and now, as we come to the end of 1992, Irish unemployment stands at 22 per cent while the average rate in the European Community is 9.5 per cent. Increased funding is not an automatic answer to the Irish unemployment problem and if the increased funding is to reduce disparities and be of assistance it must be focused in a way that previous funding was not. If regional structures are to be set up we must make sure that it is done within a genuine regional policy.

Many years ago I was one of the founders of the Regional Studies Association in Ireland. I remember the early papers that were presented. Those papers stressed the importance of a democratic base to the regional structures and of allowing within those democratic structures the possibility of setting up plans, allocating budgets to them and monitoring and implementing them according to targets that were accountable. It is a disgrace that we have not had that. There is also a necessity for transparency in the way in which the funding is spent. We need to get rid of the dead hand of orthodoxy, of everything having to be submitted, which has the result that people do not know whether a payment is a substitute for normal funding or something innovative within a regional structure. An anti-unemployment strategy can be combined with regional structure by involving people. In that way one can participate in creating wealth.

An Ceann Comhairle

I hesitate to interrupt the Deputy. I do so merely to inform him that five minutes remain of the time available to him.

Mr. M. Higgins

I should have liked to raise many other matters. For example, I hope that when the new Government is appointed we will have an opportunity to discuss in a more accountable way our relationship with Western European Union. I welcome the indication in the Taoiseach's speech that a referendum will be held before we enter any commitments of a military kind. The Western European Union will itself be redrafted in terms of structure in the nineties. I deplore that we have moved from a casual observer to a permanent observer attendance without an opportunity to discuss this matter in the Dáil or to seek a mandate from the people to do so.

I should like to refer to a related matter. On pages 48 and 49 of the document from the Edinburgh Summit there is a reference to migrants. This is an issue on which the Community is tested. It is interesting to note that all the earlier paragraphs on page 48 refer to the difficulties which migrants create for receiving countries. The second half of the page makes an outright condemnation of racism and zenophobia. A charter of rights for migrants will be a testing point for the Community and is a matter of great urgency. The combination of migrant inflows and high unemployment where people are often deprived of participation in their own society is a recipe for disaster.

Finally, I should like to refer to the idea of Europe in the wider world and particularly to Yugoslavia and Africa. I endorse everything that has been said about Yugoslavia and the necessity to achieve peace in Bosnia. I do not intend going over the same ground but I do raise a question about those who pressed so hard for recognition at a time when the mechanisms were not in place for dealing with tensions which could have been anticipated, and we will have to look at that in the future. We should never make these mistakes again.

I paid tribute to the activities of the Minister for Foreign Affairs, Deputy Andrews, in relation to Somalia but more is needed. When I was in Somalia the European Community was disgraced by not being represented in Mogadishu. I think it was seeking to be represented in Nairobi while I was there but that was not where the conflict was. I was delighted our Minister for Foreign Affairs and our President visited that area. This paragraph on Africa is markedly bare. It does not address such issues as food, security, the Horn of Africa, or initiatives for restoring civil society in Somalia which is important, nor does it make adequate reference to the issues of aid, trade and debt. When it does look at the relationship to GATT, sadly, it does not show that there is any acknowledgement in the Community of north-south thinking. I warn of the dangers in that approach.

Europe must begin to realise that, in the future, the principal voices will come from the south and they will address the issues of aid, trade and debt and there will not be the polite discourse we have had up to now. I think the migrant problem is part of that issue. The approach to migration is to reach out and offer some failed economic theories and to suggest imposing them on many developing countries instead of listening to the new and imaginative thinking, thinking informed by solidarity, the ecology, new versions of trade and feminism because many of the developing countries are building their best work on work done by women. These are people we should see as our fellow partners and we should be thinking in a planetary way.

If the Europe of the future is to be inward looking, leaving off the agenda the important issues of its sub-population, if at the same time it is refusing to look at the south/north dialogue and if it is going to concentrate on a theory of interests, we will have many more difficult summits than the Edinburgh Summit. The way forward is in the recovery of the moral moment of foreign policy — I mention that consciously — the celebration of solidarity, inter-dependency and its delivery into a meaningful discourse which can be understood, is participatory and will create a Europe of the peoples rather than a Europe of dated and dead ideas and declining institutions.

An Ceann Comhairle

Deputy Pat Cox. I welcome Deputy Cox to the House on this his maiden speech and I wish him success and personal happiness.

Mr. Cox

Thank you very much for your kind words which I greatly appreciate. Since this is my first opportunity to speak in this House may I reciprocate in kind by wishing you in your high office as Ceann Comhairle the best wishes for the conduct of that office in the course of the 27th Dáil. Indeed, it is a curious prospect to describe one's first speech as a maiden speech. I am sure there must be a less sexist phrase in the lexicon of possibilities nowadays to so describe it.

I am pleased that my first speech in this House should be about European affairs because it is one of the political areas in which I have a very deep and passionate interest. I join in some of the comments made by Deputy O'Keeffe and Deputy Higgins in respect of the process in which we are now engaged. There are a number of questions I should like to put. This morning on the Order of Business Deputy McManus put a question and wondered whether there was to be any answer. Unlike her, I know there is to be no answer to any question I raise, because this is a process of making statements, holding forth for half and hour and not having a dialogue or searching through the various issues. That is a regrettable aspect of the business of the House on European affairs. Regardless of who is involved in the incoming administration I hope they will address this matter as a priority. It is one of the failures of the last Government, in which my own party participated, that although we put on the agenda for government reform of the Joint Committee on Secondary Legislation of the European Communities and proposed a much more vigorous joint committee, building on the work done under the chairmanship of Deputy Barry, I regret that nothing happened by the end of the last Dáil to put that extremely important mechanism in place.

On behalf of the Progressive Democrats I join with the Taoiseach's remarks regrding Mr. Dermot Nally the retiring Government Secretary and place on record our deep appreciation for the integrity of his work throughout our period in office. I say that on behalf of Deputy O'Malley and Deputy Molloy both of whom hold him in the highest esteem.

Regarding the issues before us, I propose to limit myself to the extensive, though narrow, ground of the Conclusions of the Presidency and will not go through any wider excursion at this time of other views I may have and share, in some respect, with Deputy Higgins.

The Edinburgh Summit was extremely difficult for the Community because of the unresolved issue of Denmark failing to ratify the Maastricht Treaty, the financing issue and because many of the States which would have to pay more for cohesion and solidarity within the Community were facing severe budgetary problems and one could not automatically presume an easy entitlement to their good will. Notwithstanding their conviction that we needed solidarity and cohesion, their budgetary circumstances acted as a constraint.

There are many countries very anxious to get ahead with the enlargement negotiations. Following the impasse at Lisbon, there were two conditions laid down: Maastricht had to be ratified and the Delors II financial package had to be agreed, because to have neither cleared would leave an impediment in the way of enlargement. The recent tentative conclusion of the GATT Round and the obvious and deep divisions in member states about the impact on their national interest, loomed large in the Conclusions of the Presidency. We had the collapse of parts of the exchange rate mechanism and the severe stress of other parts of it going into the Edinburgh Summit. Indeed, coming out of the Birmingham Summit one was left with a rather sanguine view of what might emerge in the end.

It is worth putting on the record — it has not received too much concentration in the House today — that we are on the threshold of the completion of the Single Market, a major and significant event in the integration of the European Community. In a formal sense the Edinburgh Summit marked the end of the current phase of the Single Market on 1 January next year.

That was the perspective which carried into Edinburgh and it left the Presidency, uniquely, with very many difficult issues on its plate. I have to say that in a recent contribution in Strasbourg after the Birmingham Summit I was moved towards considerable pessimism about the prospects of the UK Presidency. I recalled — it was one of those images which stuck in my mind — 1 July of this year and the meeting which took place in Downing Street between many members of the European Commission, if not all of them, and the members of the British Cabinet. It was a wet day and the delegates came out of Downing Street for what was probably the essential purpose of their business, the photocall for the 9 p.m. news. They stood under a Presidency umbrella with the British Prime Minister, John Major. On the first day of its unveiling, that umbrella had on it the logo of the British Presidency — a white animal surrounded by the 12 European stars. At that time I took this white animal to be the British lion in the heart of Europe and a symbol of the sense of purpose of the UK Presidency. After the Birmingham Summit I wondered aloud in the European Parliament whether, in fact, the white animal might not have been a sheep and whether, after the disconsolate outcome of the Birmingham Summit, the sheep may not even have been a dead sheep. I am glad to say that at the end of the process for a variety of reasons — one was the contribution John Major made by the end, particularly in abandoning some of the more British stances which had complicated his Presidency in the middle and another was the willingness of the paymasters of the Community to put the money and not just the rhetoric up front — we were given a conjunction of circumstances which produced a very satisfactory result on the financial side.

The first point of specific detail I should like to touch on is the completion of the Internal Market. It is a magnificent achievement for the European Community to have done what it has done since 1985 in that regard. This was based on a White Paper at that stage which set out to legislate over 500 items of European legislation which, in turn, required to be transposed into national law in all member states. The process of transposition is incomplete in various degrees in member states but at the European level the 500 primary pieces of legislation are now in place. It is a tribute to the work of all the European institutions and the national parliaments which combined to create the context for the Single Market.

When people in general thought about the Single Market, they looked at a few good tests as to what the popular view of that would be. Certainly one of them was the hope that people would get cheaper cars. Anyone who sat through the debate on the second Finance Bill today and learnt about the registration tax proposed in lieu of excise duty, which we now, as it were, have done away with it to bring us into the European ambit on excise taxes, will realise, of course, that as soon as we opened up the possibility of cheaper cars through lowering excises we closed it for good Exchequer reasons through the new registration tax. That is one of the little points of contact and contract between the Community and the individual where many individuals would have felt somewhat let down.

I observe this only because I want to refer to a bigger and more fundamental part of the contract with a citizen and on which I have a question. This relates in specific terms to the freedom of movement. There is an agreement in continental EC countries, among the Schengen countries — the founder countries minus Italy — to do away with all of the difficulties at borders for individuals. I wonder at the meaning of certain phrases in the Presidency Conclusions. As I said, I regret that my questions will wither on the vine, there will be no response. In any event, I will put the question on the record. It is stated in the Presidency conclusions:

The European Council has had to take note of the fact that free movement of persons within the Community, in accordance with Article 8a of the Treaty of Rome, cannot be completely assured on 1st January 1993.

It goes on to say that the Schengen countries will get on with that job relatively quickly and that other member states — I presume this must include Ireland since we are not one of the Schengen countries — had made known their intention to take various measures to lighten controls at borders on nationals of member states of the Community.

I thought our contract was to do away with border controls for members of the European Community. I know that much of the customs procedure will be done away with — earlier today the Minister for Finance assured the House that Customs and Excise officers would be redeployed to other areas of activity but will we have some kind of border system in Ireland after 1 January in respect of community member state citizens? If we have such a system, how quickly do we propose, if at all, to do away with it? If we have it, why do we continue to retain any need for that? If we continue to have it, are we not in some sense breaking part of the bond and contract across the Community with citizens and their freedom of movement?

The issue beyond the points I have raised in regard to the Internal Market on which I would like to touch in respect of the Presidency Conclusions and which I greatly welcome, is the emphasis on subsidiarity and transparency. This emphasis is extremely important. I hope — this point has been made by previous speakers — that we will learn from subsidiarity and transparency á la the EC lessons and principles which we might choose to apply more here in Ireland no less than we expect them of our mutual engagement with the member states of the European Community. In particular, the notion that decisions should be taken as close to the people or communities as possible is a founding principle of the concept of subsidiarity and if it is good for the European goose it ought to be applicable and good for the Irish gander in terms of local authorities, community groups, partnerships between communities, statutory agencies, voluntary groups and so on.

I also welcome the fact that there is an emphasis on more transparency. It was totally apparent during the Maastricht debate in Ireland and elsewhere that the language of the Community and the nature of its business are so far removed from ordinary experience that people found it too distant and remote to relate to it all. I do not know if the moves on transparency will make a huge difference but they are a start in the right direction. From now on when the Foreign Ministers meet in general affairs councils on occasion — not on every occasion — and ECOFIN, the Finance Ministers meet on other occasions we will at least get to see what they were saying on our behalf as there will be a televised process at least for opening statements. We will also know when there is a vote — there are many voting procedures in the Treaties — and we will know who voted what way. We are also entitled to know the explanation of a vote when one is given. This House should insist that when Ireland votes an explanation be submitted so that we and the Irish people, will know why votes are called on our behalf and cast in a certain way. I welcome those aspects of the conclusions.

In respect of subsidiarity, I greatly welcome the fact that good sense prevailed in the end. A British Presidency proposal, or at least a council proposal I saw floating around Brussels some months ago, that all European legislation had to be tested first for subsidiarity, in other words who does what and whether we have got the lines clear, and only then could one talk about the substance of the law, was a Trojan horse designed to trip up everything before it started.

I am glad the Presidency Conclusions do not provide for such a system. That is a welcome relief. My fear was that in the hands of some of the detractors of the European ideal and the European movement we would see subsidiarity used as a means of dismantling what we have achieved over several decades.

With regard to the Danish question, the device of a unilateral declaration to be submitted by Denmark is an interesting one. I welcome the fact that explicitly in that declaration there is a provision which confirms that Irish citizens who, after the Maastricht Treaty is ratified as I believe it will be, by virtue of their Irish citizenship are also citizens of the European Union, will have the opportunity to vote or to run in local elections in Denmark and to vote and run in European elections in Denmark. They will also have freedom of movement in and the right to reside in Denmark. None of those rights of the citizen will be partitioned or diminished by the Danish declaration which will be made unilaterally but which raises certain questions about the citizenship issue. That is important. If such a confirmation were not written down as explicitly as it is, I believe Irish citizens would be entitled to challenge in the Irish courts the diminution of the rights which they voted for in the Maastricht Treaty. It is a significant and worthwhile accomplishment of those who negotiated this package with Denmark to build in sufficient guarantees for those who have already signed on by giving some freedom and comfort to those in Denmark who wish to move forward to the extent they can with the Community at large.

On the question of enlargement, I welcome the decision to proceed with the enlargement debate with Sweden, Austria and Finland. I note a brief passage in the Taoiseach's speech which refers to Switzerland and its recent negative vote in a referendum on the European Economic Area. While the Taoiseach made a brief reference to this, I regret the fact that in more than 100 pages of the Conclusions of the Edinburgh Council there is not a single reference to the Swiss decision and no reference to the European Economic Area. I have a question to ask, although I know I will not get the answer. Will the whole European Economic Area agreement which was recently ratified by this House prior to the dissolution of the last Dáil not now have to come back here on some subsequent date for ratification? Can somebody tell me, if not today then on another occasion, what is to happen to the Cohesion Fund under the European Economic Area agreement? That was a fund of 1.5 billion ECU. It was to be comprised of 500 million ECU in grants and 1 billion ECU in loans and 25 per cent of that was to come from Switzerland, which has opted out. What is to happen to that? Are the other countries meant to make up the balance? It is a significant issue because we stand to be a significant beneficiary. It was part of our mutual engagement with the countries of EFTA when we agreed to the Treaty that this fund would be established in the terms I have described. A key player is out, a key partner is missing. What will happen?

On the question of immigration, I agree with remarks about the need to tackle racism and xenophobia in the European Community. I note a reference in the Conclusions to the desire to avoid uncontrolled immigration because it could be destabilising. Further there are remarks on the Dublin Convention on Asylum which has not yet been ratified. On behalf of a party which is a liberal party, I have great problems with the way we in this country currently deal with the question of asylum. I have a file of correspondence with the current Minister for Justice. I have visited people in prison who have done no more wrong than seek political asylum in this State and who find themselves incarcerated as if they were common criminals. It is not good enough in a country which so often wears its heart on its sleeve in foreign policy terms that people who arrive here destitute, lonely, vulnerable and in many cases not able to speak our language, find themselves in a position where our first response, if it is not to trundle them back on the flight from whence they came, is to put them into a prison and cool them off for some months. It is not an acceptable way of behaving. There is a lot in this Conclusion which we need to fix up at home as well as looking at the wider European problem.

The suggestions in the Conclusions with regard to economic recovery are rather wishy-washy. Anybody who reads them will see what I mean. I will refer to one or two points from this section of the Conclusions because they are worth drawing to the attention of the House. One of the questions is how member states can individually contribute to economic recovery. Several points are made as to what they can do. I noted with great interest that the Taoiseach quoted two of them and ignored two or three others. I thought it significant that he should exclude some of the criteria. Those he quoted were that we should take every opportunity, according to national circumstances, to exploit the limited margins of manoeuvre available with regard to our budgetary policy. Secondly, to the extent possible we should switch public expenditure priorities towards infrastructures and other capital investment and growth supporting expenditure that would earn a worthwhile return. I and my party very much support such a prospect of capital investment that yields worthwhile economic returns, but I hope in so far as our political debate is moving in that compelling direction in policy terms that we do not use the rhetoric of real return as something to be confused with the substance of real return.

In the 1970s and 1980s an interesting exercise was done in regard to the public capital programme. An economist did a simple exercise by asking what would the position have been if we got for the money invested in the Irish public capital programme the same rate of return as we would get by putting the money into the bank. Our budget deficit was then 12 per cent of national income but we would have had a budget surplus if the capital was only as productive as sticking it in the bank down the road. I question when I hear talk of productive investment. I buy the sentiment but I would like to see the substance.

I should like to put on record the parts the Taoiseach did not mention as elements to be considered. It is stated that there should be measures to encourage private investment, especially in small and medium enterprise, that there should be a reduction of subsidies and an enhancement of competition and market flexibility and that there should be major efforts to restrain wage settlements in the public sector. This is the prescription given by the Presidency in its Conclusions, having discussed what the Commission recommended, and the leaders of the member states, including the Taoiseach, have signed on for this.

The major disappointment for me as an Irish person observing the summit is the conclusion on the European Monetary System. It disappoints me in a European and in an Irish sense. In a European sense the European Monetary System and the Exchange Rate Mechanism are the key to developing economic and monetary union. How will we achieve the single currency and what goes with it? The answer is that, as a Community, we will cross one bridge. That bridge is the Exchange Rate Mechanism. What has happened to that bridge since we defined it as the key way to achieving the single currency? Large parts of that bridge have fallen off into the river, carried away in whatever tide of speculation was there. Italy fell off almost as quickly as it was linked into the system, as did the United Kingdom. The Spanish peseta loosened twice with devaluations and remains vulnerable and the same story applies to the Portuguese escudo. The Irish punt, a core part of that bridge, and construction, and the Danish kroner, both tightly linked in the narrow band of currencies since the beginning, have been under stress several times in a major way in recent months.

Anyone at European level who believes in the European construction towards the single currency would have to give priority to the exchange rate process, and that is a failure of European leadership. I suspect it may reflect the difficulties that the UK Presidency has in taking a lead where it has had so much difficulty on its own record in that regard.

It has been an enormous policy failure from an Irish point of view not to have focused on something that has now, perhaps, 30,000 Irish jobs in the firing line in the next few months, that has Irish businesses and householders stretched with high interest rates. Let me read the Conclusion lest anyone thinks that I exaggerate in talking about it as an enormous failure. This document runs to about 110 pages. I found one sentence on the exchange rate system which was, "the European Council reiterated its commitment to the European monetary system as a key factor of economic stability and prosperity in Europe". There is some commitment to what is at the moment our glaring short term economic problem and to what is in European construction terms perhaps one of the biggest problems of all.

In respect of the famous funds, like Deputy Michael Higgins, I would prefer to come to them at the end than at the beginning because my sense of Europe is much broader, deeper and more committed than the "Jonesist" mentality. Nonetheless I do not wish to deprecate the fact that I believe cohesion and solidarity are a cornerstone of the European developmental process, part of the cement of integration. In relation to the funds, the achievement is a significant one. The diplomacy before it was significant. The blocking of the four cohesion countries as a bloc was a powerful instrument to achieve their just rights — not a question of getting grants — as part of the European Community.

I agree with the Taoiseach that one should salute the Germans and others who will dip into their pockets to pay. For my part I will not deprecate the efforts of Irish people involved either. It has been a powerful achievement, given the financial constraints at present. It is less than it might have been for the next several years but more than any of us expected on any realistic or fair assessment in advance. It was an achievement by the officials and the politicians who went there. As I speak of Irish officials in particular I want to salute the quality of their work in European terms on our behalf no less than our politicians. In the annual report of the Court of Auditors of the Community we are gold medalists on a number of counts vis-à-vis funds; we are quicker at getting them, we get more of them and we turn them more quickly into actual projects. We have two gold medals, and we win them every year, and that is a tribute to the quality and capacity of the Irish public service and their national commitment as part of this overall process.

The final point I wish to cite from the Conclusions is an important one. The Cohesion Funds are available to us and I am glad they will be. They will be worth a great deal. However, I draw the House's attention to what is called in the document, macro economic conditionality. We will get the money if we keep our budget in order. If we have excessive deficits under Article 104 of the Maastricht Treaty we will not get the money and the reasons are spelled out clearly. I welcome that constraint. One of the difficulties is that we did not have a "Maastricht corset" on our spending capacity for so many decades before. I welcome the conditionality and I commend it to the incoming Government as a key criterion in the national interest because it makes sense at home and in Europe.

The Edinburgh Summit has been a steadying influence on the Community. It has put a good foot forward if not our best. The failure to deal with the exchange rate system is a glaring error which will have to be addressed by the Danish Presidency. I welcome the prospect of enlargement and I would welcome it if this House provided the opportunity for Members to be more engaged in the European dialogue, to build the institutions and expertise in the House that will allow us to make our fullest contribution.

Proinsias De Rossa

The Taoiseach has today delivered himself of a rather triumphalist contribution particularly in relation to the funding which he has brought home. I do not envy him or begrudge him the public relations coup he has managed to pull off, but it probably has as much to do with the negotiations from which he hopes to achieve much over the next week or two as it has to do with reality of what was achieved.

During the referendum on European Union, Democratic Left warned that the treaty agreed between Heads of Government at Maastricht was simply not adequate for the needs of people in peripheral regions of the Community such as Ireland. We pointed out specific defects in the Treaty in the economic, social, democratic, security and defence spheres which made it an unacceptable basis on which to attempt to build European Union, a concept of which we are fully supportive.

One of our principal concerns was that the commitment to providing for the development of the peripheral regions was both insufficiently funded and inadequately directed. The Taoiseach returned from Edinburgh quoting figures like a combined Structural and Cohesion Fund package of between £7 billion and £8.3 billion as proof of a successful summit. Obviously, the Taoiseach is quoting £8 billion but others are quoting £7 billion. What is being lost sight of is that the £8 billion is not in any sense guaranteed and that the £8.3 billion to which I referred is the maximum it is possible to achieve. However, experts have indicated that in total the combined Structural and Cohesion Funds could be as low as £7 billion over the seven years which would be significantly below what was promised in the referendum campaign and, indeed, would be only marginally higher than the rate of funding we have received in the current range of Structural Funds.

In his bout of triumphalism the Taoiseach quoted me as saying on 23 October that the £6 billion was always an exaggeration. He said that I spoke of a sorry saga of dishonesty, particularly during the referendum campaign, and claimed wrong headed negotiation tactics and objectives. He went on to say that much of this was echoed in the media. Unfortunately much of what I said during the referendum campaign was not echoed in the media. Perhaps if it had been we might have got a better result. Nevertheless I want to point out that the Taoiseach, as is his wont, was quoting very selectively from what I said in this House on 23 October. In the course of statements on the Birmingham Summit on 23 October I said, as reported in column 679 of the Official Report:

Both the Taoiseach and the Minister for Finance are suggesting that "things are tightening up everywhere and there is a lot of tough negotiating to be done". Next we will be told that it was a negotiating tactic with expectations having to be kept high in order to obtain the optimum outcome. It would be an apt epitaph to a sorry saga of dishonesty, particularly during the referendum campaign, and plain wrong headed negotiating tactics and objectives.

I went on to say:

The fundamental error was, from the outset of the negotiations, to focus on an increase in the Structural Funds as the solution to our cohesion problems. We ought to have pressed for a system of financial transfers such as apply in other federal systems. Even within its own terms, the Structural Funds are not the best means of utilising the moneys which we do receive.

In the same column, I said:

We should have put less emphasis on Structural Funds, which we get by grace and favour, and instead supported the creation of an interventionist industrial policy to put the objective of regional cohesion at the heart of efforts to raise the technological capability of European firms.

I have no problem whatsoever in standing over what I said on 23 October.

I still believe that the approach of this and previous Governments in relation to funding from Europe for Ireland and other peripheral regions is the wrong one. Regardless of how one would consider the sums gained at the weekend at Edinburgh and their size they have still been obtained by grace and favour. It would be far better for this country within the European Community if there was a federal system of transfers of funds which would be automatic depending on needs and not, as I said, the subject of haggling and negotiation every three or four years.

These figures and the apparent calm in which the meeting took place at Edinburgh are receiving favourable comment and are in contrast with the fears that the Summit could have witnessed a further deterioration in the Maastricht process and a further retrenchment by the member states away from solidarity with the poorer regions, but we must ask ourselves what is really involved in the crock of gold which the Taoiseach now claims to possess.

At the time of our referendum, voters were promised a figure of £6 billion over five years. It now appears that what is on offer is around £7 billion over seven years — and that is the maximum figure. The tantalising figure of £3 million a day which it is claimed will flow into Ireland is being waved around by the Government as proof of the extent of the Taoiseach's success at Edinburgh. As a result of the pay-out during the first round of Structural Funds the inflow to Ireland was close to £2 million a day. When factors like inflation are taken into account the new figure is greater but not significantly. As I said, we are talking in terms of a maximum figure of between £6 billion and £7 billion over seven years, whereas voters were promised during the referendum campaign a figure of £6 billion over five years. I do not propose to bore the House with mathematics but taking the worst possible scenario if we get £6 billion for Structural Funds over seven years this works out only marginally greater than the £2 million per day that we are currently getting.

All such moneys are of course welcome but the problem is that during the period of the last Structural Funds, job creation and a convergence of Irish and EC average living standards failed to materialise from EC assistance. It is clear that the money was not used in a planned way to create employment and that the Structural Funds are not geared to the needs of the peripheral regions.

I am sure that Deputy Cox, who is an MEP, as I was in the past, would tell the House that there are numerous reports at EC level which are highly critical of the way in which funding from the EC — Structural Funds, Regional Funds and funds under the Common Agricultural Policy — is used and that in many respects these funds act against the best interests of peripheral and poorer regions. I do not propose to rehearse the figures involved but if the Common Agricultural Policy was examined closely it would be clearly seen that it has worked, in the long term, to the disadvantage of farmers, the farming community and the agricultural industry.

Democratic Left has consistently argued that the allocation of funds should be linked to an EC industrial policy which would assist development in the less well off regions. In support of this point I would like to quote one person who was in a position to know whether Ireland was gaining or losing from the jobs policies being implemented by the European Community.

Speaking recently he said that the "greatest disappointment" of EC membership "has been our inability to generate new job opportunities ... The Community's philosophy has always been to get the economy right and the jobs will follow, but this approach must be questioned in the light of experience". The same speaker added:

Despite the aspirations expressed in the Treaty, redistribution within the Community is still on a very modest level and, as long as it remains at this level, there seems very little prospect of narrowing the gap between richer and poorer. It should also be noted that adaptation to Community rules has demanded much greater adjustment by the less developed countries, who generally have had to fall in line with the preferences of more powerful members.

Who was this speaker? It was none other than the current Taoiseach speaking then as Minister for Finance to the Association of Irish Chartered Accountants in Great Britain in July last year.

The facts are that however much money we obtain from European Community sources it will not deliver for the mass of Irish people unless it is spent correctly. That requires a deliberate shifting of resources to promote economic development in Ireland. The Edinburgh Summit would appear to have barely addressed these inadequacies and this leaves a major question mark over whether the people of Ireland can hope to be any better off as a result in terms of long term economic development and sustainable jobs and wealth creation.

The fundamental error from the outset of negotiations was to focus on an increase in the Sructural Funds as the solution to our cohesion problems. Instead, as I have said and as I said in my statement on the Birmingham Summit, we should have pressed for a system of financial transfers such as apply in other federal systems. The crucial question for peripheral regions such as Ireland is not bigger and better Euro hand-outs but rather investment and divestment decisions of the Euro multinationals who are being supported by the Community to face United States and Japanese competition. That is the route to ensuring a real shift of development from the over-crowded centre to the peripheral regions of the Community.

We also require far greater democracy on how spending of EC funding is decided and allocated, particularly on the national level. The current system in operation in Ireland is over-centralised in the Department of Finance. Local and community-based organisations have long pointed out the need for greater democratic involvement and accountability in this process. The Combat Poverty Agency, for instance, has correctly pointed to the lack of any apparent commitment to the needs of the estimated 50 million people who live in poverty within the Community.

It is clear that the Maastricht process of developing the single market and creating more efficient economic policies in the member states is having an increasingly adverse effect on the unemployed, the marginalised, the homeless and the other victims of the new European Community. The deaths of three homeless people from hypothermia in our own capital city in the past few weeks bears stark testimony to the consequences of economic philosophies and the policies that derive from them which put profit before people.

At the time of the Maastricht referendum Democratic Left argued that the Irish Government should demand a renegotiation of the Treaty to equip it to deal with Ireland's essential needs. We pointed out, for instance, that if the initial Delors II package and its crucial component of a phased increase in the budget from 1.2 per cent of Community GNP in 1993 to 1.37 per cent in 1997 had been implemented in full and if the promised average growth rate of 2.5 per cent had materialised, unemployment in the Community would still be about 500,000 higher in 1997 than it is today. Indeed, even this Delors II proposal was a revised version of a report prepared at the time of the Single European Act proposals in 1986 when he pointed out that a budgetary allocation of 1.4 per cent of GNP by 1993 was required to compensate for the effects of the introduction of the Single Market.

It is now proposed that the budget will reach only 1.27 per cent of Community GNP by 1997. It is therefore highly unlikely that any real progress towards achieving cohesion will occur for the remainder of this decade. We are likely to remain stuck in our position of two thirds of the average EC living standards, a position we have held virtually unchanged over the past two decades of Community membership. Again, I would refer the House to the Taoiseach's speech today and his rather selective comparative figures on Ireland's living standards vis-á-vis European living standards.

One of the most glaring omissions from the Edinburgh Summit is in the area of social policy. It is now generally estimated that by the end of this year and the deadline for the 1992 process, approximately 95 per cent of the Single Market provisions will have been implemented, but only about 30 per cent of the provisions of the social dimension will be in place. This is a scandalous betrayal of the citizens of Europe in regard to the concept of a Community. Indeed since the adoption of the Social Charter, the main preoccupation seems to have been to seek means to water down the provisions of what was a largely aspirational document in any case. During the Presidency of the British Government, which has been particularly hostile to the concept of a social Europe, there was just one meeting of the Social Affairs Council, and the main achievement of that meeting was to introduce further diluting factors such as the decision on maternity rights, whereby except in the case of the UK women in other EC states will obtain no new benefits.

Perhaps the most interesting feature of the Edinburgh Summit was the manner in which it managed to effectively redefine the Maastricht Treaty to cater for the situation which has arisen in Denmark, following the rejection of the Treaty in the referendum there last June.

The agreement allows for exemptions from vital aspects of European union for the Danes in the areas of the single currency, common defence, European citizenship and common policing. Yet, at the time of the Maastricht referendum the Government here insisted that no renegotiation was possible, that re-opening the issue could collapse the whole Maastricht process, and that if we were successful in re-opening the case, the chances were we might end up worse off as a result.

Under these conditions the Irish electorate were subjected to a virtual blackmail "take it or be left behind" scenario. Since then it has become clear that voters in other countries have identified serious flaws in the Treaty. The agreement with the Danish Government allowing for a new referendum in that country next year shows that, as usual, anything is possible and achievable in politics if the commitment and determination is there. Denmark has won the right not to participate in the third stage on European Monetary Union and according to the summit decision "will not be bound by the rules concerning the economic policy which will apply only to member states participating in the third stage of European Monetary Union."

I note recently that commentators in the German Bundesbank has indicated that, due to the consequences of German unification, Germany may have difficulty in adhering to the full European Monetary Union strictures. Yet, the Irish Government has consistently persisted with a level of spending cuts and restrictions in line with European Monetary Union demands which are resulting in immense economic hardship for large numbers of people in this country.

Denmark has also won agreement not to participate in decisions and actions which have defence implications. Given Ireland's status as the only EC member state not a member of a military alliance, the Irish Government should have demanded a clear non-militarist and nonnuclear policy for the EC. Again, this is a case of an opportunity missed for Ireland due to a lack of desire to approach the EC with anything other than a begging bowl approach.

We have, however, an opportunity to again raise the issue of a more powerful pro-peace voice for the Community in the negotiations for expansion of EC membership which now seems likely to occur. Austria, Sweden and Finland, three countries with substantial experience of neutrality, are likely to be involved in talks on membership during the Danish Presidency. I propose that the Irish Government involve itself at a high level in any EC reaction to these applications and actively support whatever proposals emerge from the three applicant countries in relation to military and nuclear de-escalation and the development of the EC as a stronger force for peace and peaceful resolution of conflicts in Europe and the world. This makes more urgent the need for foreign affairs and European affairs committees to start discussing these areas.

In this regard it is vital that the Community develops a new approach to assist sustainable development in Africa, Asia and Latin America. The summit document boasts of having supplied a large amount of assistance to "overcome the disasters of drought and famine" in the developing countries. Unfortunately, many of the crises in developing countries are linked to civil wars and conflict carried on using weaponry purchased from EC members states. The decision at an earlier summit to "streamline" the EC arms industry and sales is a sobering reminder of the reality of EC policy towards the developing world. The admission of Nordic countries which have a good reputation on issues such as ODA levels and trade with developing countries opens up new prospects for a more enlightened EC approach in this area.

Finally, there is the question of internal democracy in the EC institutions and for the Community's citizens. I note that the summit has responded to the need for more transparency by sanctioning television cameras at some Council meetings in future. This may make for occasional, perhaps very occasional, good television, but the requirement for greater democracy demands something more substantial.

There is a need for fundamental reform in the operation of the EC and its institutions. We cannot expect the construction of the European Community to succeed if in the process democracy is the loser. The lessons of the past year, where it is abundantly clear that citizens in all the member states are becoming increasingly uncertain about the direction and future of the Community, must be taken on board. Two years ago the Conference of Parliaments in the European Community spelled out a number of detailed proposals to make the Community more democratic and responsive.

Democratic Left has outlined similar proposals which would include giving powers of co-decision to the European Parliament, referral of draft Community legislation to the Dáil for consideration, more formal involvement of citizens and non-governmental organisations in EC decision and policy-making and transfer of certain powers on a direct and statutory basis to regional and local authorities subject to limited central guidelines.

This commitment to democracy, more necessary now than ever if the Community is to develop, seems to have been forgotten at Edinburgh. I am reminded of a comment from the previous Taoiseach on the issue of greater powers for the European Parliament in an earlier Dáil debate, that "we do not wish to see decision making become slower and more difficult." That indeed seems to be the overall attitude to any proposal for greater democracy in the EC. If we should have learned anything from the events on another part of our Continent in recent years it is that people will only for so long tolerate being denied a full part in the decision making which affects their daily lives.

Minister of State at the Department of Agriculture and Food (Mr. Browne,

Wexford): I move:

That the Dáil adjourn until 12 noon on Tuesday, 22 December 1992.

Question put and agreed to.

The Dáil adjourned at 4.50 p.m. until 12 noon on Tuesday, 22 December 1992.