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Dáil Éireann debate -
Wednesday, 31 Mar 1993

Vol. 428 No. 6

Ceisteanna—Questions. Oral Answers. - Unemployment.

Martin Cullen

Question:

4 Mr. Cullen asked the Minister for Enterprise and Employment the discussions he had with his EC colleagues at the recent industry Ministers meeting in Copenhagen; the proposals he made for dealing with our unemployment crisis; if any new schemes are to be initiated; if so, the amount of funding to be made available and the criteria for participation in such schemes; and if he will make a statement on the matter.

I attended an informal meeting of Ministers of Industry on 19 and 20 March last at Nyborg in Denmark. There were three items on the agenda for the meeting viz.: industrial policy, the situation in the steel industry in the Community and the situation in the shipbuilding industry. Because the discussions on industrial policy and the situation in the steel industry took more time than anticipated the discussion on the shipbuilding industry was very brief and was effectively postponed to the May Council of Ministers of Industry.

In the discussion on the steel industry the Commission reported on recent developments. Major retrenchments in the industry have been announced in Germany. Financial arrangements for necessary rationalisation in the industry are under consideration by the Commission. The Commission is investigating whether recent support made available by Spain and Italy to steel industry projects are compatible with EC State aids policy for the industry. These issues will be considered again at the next Council meeting in May.

The discussion on industrial policy was wide-ranging. The Presidency had circulated a paper broadly endorsing the previous Commission approach to industrial policy published in 1990. Basically this proposes that the best approach to the promotion of a strong, competitive industrial structure is to adopt what are known as "horizontal" measures across all areas of public policy which create the conditions within which profitable industrial projects can develop and prosper. The objective is to promote permanent adaptation to industrial change in an open and competitive market. The need is also accepted to establish better control of Government subsidies for industry, especially in the case of highly capital-intensive projects.

There was a widespread acceptance at the Council that these principles of an industrial policy for the community remain valid. I made the case that the approach and principles adopted for a Community industrial policy, while still of relevance, need to be examined and updated in the light of developments that had since taken place including the high levels of unemployment now found across all Community countries. I stated that the currency turmoil of recent months has been of particular importance from an industrial policy point of view. It has undermined investor confidence in productive investment projects with a consequent diminution in employment and the analysis of that important issue called for at the Birmingham Summit was not yet available. I emphasised the need to have this commission on analysis available as a matter of urgency.

I endorsed the need to improve controls over State aids, particularly in the more prosperous and central regions of the Community which use these aids to attract investment at the expense of employment in peripheral regions of the Community. I also stressed the importance which a Community industrial policy must attach to the development of small and medium-sized industries which are of particular importance to the creation of employment in Ireland. I drew attention to the opportunities for employment creation in smaller countries from the increasing interaction of new developments in telecommunications with the production, distribution and marketing of industrial products. I stressed that a dynamic Community industrial policy is necessary and must be based on the solid foundation of a European Single Market and the development and application of new technologies which require to be made widely available to small and medium-sized industries in countries such as Ireland with the support of Community policies.

There was widespread agreement at the Council on the need to update the Commission's 1990 document on industrial policy in the light of the discussion at the Council and the Commission are to do further work on this.

I thank the Minister for his answer but, as I am sure he would agree, half of it was jargon and gave no hint of action. I take it from what he said that he does not have specific proposals to tackle unemployment here, which is far worse than in the rest of Europe. The Minister referred to State aids for industry. In relation to what happened in Digital, did he refer to the possibility of State interference in that debacle some weeks ago and use it as an example to show it appeared that sovereign Governments were interfering in the normal commercial process by offering incentives to companies to locate in one country as opposed to another?

I specifically stated at the Council that it made nonsense of Community industrial and regional policy if the level of State support for industries in the golden triangle — Germany and the Benelux countries — was higher than that which could be obtained in any of the countries on the periphery of the Community, including Ireland, Scotland, Spain, Portugal or Greece. I also referred to the need, as part of an integrated industrial policy, to bring telecommunications systems, in particular the telephone system, in all the Twelve member states into line as quickly as possible to allow disadvantaged countries on the periphery of the Community, including Ireland, to avail of the benefits associated with top quality telecommunications systems to gain access to the rest of the market. To answer the second part of the Deputy's question, I did not specifically raise the case of Digital; I referred to the general position, that countries on the periphery of the Community would be placed at a disadvantage if national governments or regional governments, such as the German Lander, are able to outbid bodies such as the Industrial Development Authority or the Scottish Development Authority.

I am disappointed with the Minister's reply. Will he agree that he had a tremendous opportunity at the meeting of the Council which, as he said at the outset, was an informal one to use the case of Digital in making his argument? It is extraordinary that the Minister did not refer to it or use it as a specific example in highlighting the imbalance within Europe and the need to strengthen the regions. It seemed that what happened in the case of Digital flew in the face of the development of an evenhanded policy. The Minister mentioned the shipping industry which, as I am sure he agrees, is of prime importance to us. There is a number of proposals on the table at present to develop the Irish shipping industry, including one relating to the possibility of investment in mobile assets. I did not catch the date for the next meeting——

I am sorry to interrupt the Deputy, but he appreciates there are two remaining priority questions to be disposed of and that time is fast running out.

May I ask the Minister when the next meeting is due to be held and if the shipping industry will be on the agenda? Will he make any proposals or will there be any opportunity to introduce new schemes which may be of help in tackling unemployment?

The questioning is over-long.

The item on the agenda related to the ship building industry and not the shipping industry per se. The next Council meeting is due to be held in May.

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