Dáil Éireann debate -
Thursday, 28 Sep 1995

Vol. 456 No. 2

EU Heads of State Meeting: Statements.

The Taoiseach

I am glad to have this opportunity to make this statement. This was an informal meeting and not one where decisions were taken or recorded. The transactions of the meeting were confidential and, therefore, Members will not expect me to speak other than in general terms and certainly not to represent the positions of others in what I say.

The informal meeting of EU Heads of State and Government which I attended in Majorca on 22 and 23 September was not a European Council. No specific decisions were taken nor were conclusions adopted. The meeting was, however, a very valuable and constructive exercise and it provides a focus for what I hope will be useful and informative statements on European issues in this House this morning.

As the Heads of State and Government gathered in Majorca they were acutely aware of the challenges facing the European Union. These challenges can be set out by way of the following series of questions. First, how can the Union ensure that it is relevant and accountable to its citizens? Second, can the Union deal with all the issues arising from prospective future enlargement in a way which protects its achievements to date and also satisfies the realistic aspirations of those countries that wish to join? Third, can the Union realise its full potential in contributing to the achievement of European and world security in the broadest sense?

Achieving the right answers to these questions poses a most formidable task for the Union. The answers will flow in part from a number of key upcoming events notably the 1996 Intergovernmental Conference and subsequent enlargement negotiations. The response of the Union to its ongoing day-to-day agenda will also play a key role especially in meeting the current needs and aspirations of its citizens. We cannot simply wait for the Intergovernmental Conference to deliver a panacea for all the Union's ills. Action must continue to be taken to respond to those issues of greatest concern to the citizens of the Union. That is a political task.

In my intervention at the Majorca meeting I laid great stress on that point. The citizens of Europe are first and foremost concerned with economic and personal security, with jobs and with crime. Matters such as institutional issues and the decision making balance between various institutions, fascinating and important though they may be, are secondary. The Union must not become fixated on debate on such matters at the expense of citizens' real concerns. Practical issues which make an impact on people's lives must be addressed at European level if the European Union is to be a continued success.

Jobs are the first concern. Undoubtedly the employment issue has exercised the Union in recent times especially since the publication of the Delors White Paper in December 1993. Detailed follow-up work and analysis of the problem has been undertaken by the relevant ministerial councils. The 1994 Essen European Council set out a number of prescriptions for member states in regard to the formulation of employment policy. What has been lacking, however, and this is a point which I underlined at the Majorca meeting, is closer co-ordination of member state policies on employment. We need to make a concerted effort to reduce the cost of creating employment in Europe relative to the cost of creating employment elsewhere. That can best be done on a co-ordinated basis whereas if individual states attempt to tackle it they may get into fiscal or competitive difficulties.

I am aware that there are different views in the Union both as to the cause of European Union unemployment and as to the appropriateness of increasing community competence in this area. What is not in doubt — and I also made this point at the Majorca meeting — is that the employment performance of Europe is considerably poorer than that of the other great trading blocks, namely the United States and Japan. Unemployment in the European Union is almost twice the American rate and three and a half times higher than in Japan. More importantly, unemployment represents a huge waste of human resources and a crushing burden on the already fragile public finances of many member states.

The December European Council meeting in Madrid will look at the employment issue in some detail. There will be an expectation of action among the European public especially those who are unemployed who see the workings of the European Union as having very little to do with them. In short the employment issue is the key test of the relevance of the Union to its citizens.

The other key area of public concern which I focused on in my intervention at Majorca relates to the citizen's personal security, that is the issue of crime, including drug trafficking. Organised crime especially in the area of drug trafficking does not respect national boundaries. Crime is a problem which impacts on the citizens of all member states. They expect a co-ordinated and effective response to the crime problem from the Union. I questioned whether the current arrangements based largely on intergovernmental co-operation under the Justice and Home Affairs pillar of the Treaty were appropriate for the tasks of fighting trans-national crime. I indicated that we need to look at the Justice and Home Affairs provisions of the Treaty and to consider what aspects should be brought under pillar one of Community competence; and giving the Commission a right of initiative in this key area. Even without Treaty changes we need to consider what can be done under the current provision.

In the specific case of drug trafficking I repeated my view that consideration should be given to the establishment of a European Coastguard to counter trafficking in illegal drugs at sea. Ireland is especially vulnerable to such trafficking. As Deputies are aware countering the drug menace is a major priority of the Government and the Minister for Justice has recently unveiled a package of domestic measures in this area. We are also focusing on what can be done at European Union level and the Government has established an interdepartmental committee chaired by the Department of Justice to investigate and come forward with recommendations on all the available options at European level to counter the supply of and demand for illegal drugs. This will be a priority issue for the Government at European level both up to and during the Irish Presidency of the European Union.

As evidenced in referenda in various countries there is a sense of alienation among sections of the public vis-á-vis the European Union. Probably this sense of alienation extends to all other political institutions, such as national and local institutions but it is only in respect of the European Union institutions that the people are asked to pass judgment in a referendum. If the European Union is to command support from the public in referenda on any changes that may be made to its founding treaties, it must be seen to deal not with abstract problems of concern to administrators and European politicians but the concerns of real people. That is why I have stressed that for its own sake as well as the importance of those issues, European Union must be seen to be capable of tackling problems such as unemployment, crime, personal security and the drugs menace.

The second main theme of my contribution at the Majorca meeting was the need for the institutions of the Union, especially the Commission to become more visible and accountable to the citizens of member states. It is generally accepted that the citizens of the Union see the decision making process in the Union as remote and one in which they do not participate. The turnout in European Parliament elections has been very low in comparison with National Parliament equivalents. This feeling of remoteness leads to apathy which in turn can lead to ambivalence and disillusionment. Ways must therefore be found to make the Union more visible on a localised basis throughout member states. One option I postulated in this regard at Majorca was appearances by individual Commissioners before relevant committees of national parliaments and also indeed at local authority level. This could be an especially feasible proposition in an enlarged Union with additional Commissioners from new member states. A separate option would be to look at the possibility of trans-national lists in the European Parliament elections. I have no doubt this whole area of what might be termed the democratic legitimacy of the Union will feature high on the agenda of next year's Intergovernmental Conference.

I will turn now to the future key agenda items facing the Union. Our discussions in Majorca proved especially valuable in allowing for a frank and wideranging exchange of views on the key agenda items. Naturally the discussion revealed differences sometimes of emphasis and sometimes of substance in the approach of individual member states. Deputies will appreciate that the nature of our discussions were such as to debar me from attributing specific positions to individual Heads of State or Government. I can, however, give the House my impression following the Majorca meeting as to the general current position in regard to the strategic agenda items, namely, the 1996 Intergovernmental Conference, enlargement of the Union and economic and monetary union.

In regard to the 1996 Intergovernmental Conference there was no desire in Majorca to pre-empt the work of the reflection group on which Ireland is represented by the Minister of State for European Affairs, Deputy Gay Mitchell. The reflection group will report to the European Council in Madrid. The group is currently engaged in an intensive round of negotiations and I anticipate that its report to Madrid will set out the issues which it believes the Intergovernmental Conference should address as well as sketching out options on how these issues should be dealt with. In these circumstances, Majorca wisely avoided the temptation to negotiate Intergovernmental Conference issues in advance.

I expect that the commencement of the intergovernmental conference will take place during the Italian Presidency and will be announced at the Madrid summit. The Intergovernmental Conference will continue in session during Ireland's Presidency. The date the Intergovernmental Conference will conclude will depend on the substance of the agenda and the willingness of member states to reach consensus on the issues involved. If consensus can be forged the Irish Presidency will be able, if required, to conclude the Intergovernmental Conference during its tenure.

I have previously set out, in this House and elsewhere, the general Irish approach to key Intergovernmental Conference issues especially in the institutional area. Our approach, while naturally protective of Irish interests, will also be guided by what is right and realistic for the Union as a whole. The objective of being relevant and accountable to the citizens of the Union must also guide the work of the Intergovernmental Conference.

A primary concern of the Intergovernmental Conference will be to prepare the Union institutionally for the next round of enlargement. Ireland fully supports the right of the central and eastern European countries — CEECs — Cyprus and Malta to membership of the Union. As has been made clear in the conclusions of both the Corfu and Essen European Councils, negotiations on the next enlargement of the Union will take place after the conclusion of the Intergovernmental Conference. The Majorca meeting did not alter this timetable.

The next round of enlargement will undoubtedly be more difficult for the Union than was the previous one. The central and eastern European countries are well below the EU average in terms of economic development. This will obviously raise difficult questions as to how existing common policies should be applied in the aspirant countries. It will no doubt be advocated in some quarters that the state of development of these countries will require radical surgery and, indeed, dilution of existing common EU policies such as the CAP if the Union is to absorb the newcomers. I strongly advised against such a course at the Majorca meeting. The European Union is based not just on economic efficiency but on the principle of social solidarity between the strong and the weak, be they countries, sectors or individuals. That essential political commitment to social solidarity is expressed in policies such as the Structural Funds and the Common Agricultural Policy and if they were lost as a result of enlargement the Union would lose something essential.

Naturally I am motivated in this by a desire to protect Ireland's interests in areas of core national concern such as agriculture. I am equally motivated by a desire to preserve and build on the deepening process that has taken place to date. The Union must retain policies like the internal market and CAP which have contributed so much in economic and social terms to the Union. Enlargement must not be used, therefore, as a pretext to dismantle what has been already achieved.

The enlarged Union will extend to the borders of Russia. At Majorca the Heads of State and Government had a long discussion on the current and future security architecture in Europe. A significant feature of this discussion was a recognition on all sides of the need for sensitivity towards Russian concerns as regards security. The unanimous view was that the Union's partnership with Russia should be developed to the maximum extent possible. Russia has an important role to play in Europe, for instance, in bringing peace and reconstruction to the former Yugoslavia. We should use the OSCE, which links all of the European states, together with the US and Canada effectively to provide a focus for security concerns that Russia and its neighbours may have.

I also hope that Russia's membership of the Council of Europe can be achieved at a very early date. I will ask our parliamentary delegation on the Council of Europe and in the parliamentary assembly to do everything it can on behalf of Ireland and in Europe's interest to speed up the application of Russia for membership of the Council of Europe. The Council of Europe plays a particularly important role in fostering respect for human rights.

With regard to economic and monetary union, Deputies will recall that the Majorca meeting commenced against the background of comments attributed to the German Finance Minister, Theodore Waigel, as to the eligibility of certain countries for economic and monetary union. In our discussions on this topic at Majorca we firmly committed ourselves to the convergence criteria for European Monetary Union as set out in the Maastricht Treaty. There was no desire to reopen this issue at the Intergovernmental Conference.

Our discussions also focused on the question of monetary cohabitation or the relationship between the single currency zone and the currencies of those outside European Monetary Union. Concern was expressed at the potential inherent in this situation to distort competitiveness and to disrupt the operation of the single market. The Cannes European Council mandated the Commission to produce a report on this issue and it is clearly a matter which will have to be addressed in the context of the move to European Monetary Union. I expect we will discuss it in Madrid.

As far as Ireland is concerned our intention is to be among the first group of countries eligible to join European Monetary Union whenever it commences. Government fiscal policy is based on this tenet. Ireland has always supported a strict interpretation of the convergence provisions in the treaty and of the timetable and procedures set out in it. Speculation at this stage as to which countries will or will not qualify tends to generate uncertainty which is not helpful to realising the agreed European Union goal of economic and monetary union. I counsel people who wish to speculate for domestic political reasons about who might or might not be on the list not to do so and to recognise that in so doing they are damaging the convergence and cohesion that is necessary to achieve our shared objective as set out in the treaty.

Mr. B. Ahern

Is that directed at Theodore Waigel?

The Taoiseach

Yes, and if the Deputy says something similar I will direct a similar criticism at him.

Mr. B. Ahern

He is the only one who has said anything.

The Taoiseach

In company with a number of colleagues I expressed my concern in Majorca at the resumption of nuclear testing in the south Pacific by France. I underlined my view that this action made rational and calm discussion of the security options in Europe extremely difficult. Ireland does not subscribe to a security policy based on nuclear deterrence and our view of recent suggestions by France about adjusting the scope of and access to its nuclear deterrent should be understood in that light.

As I indicated when reporting on my meetings in Majorca with Prime Minister Major, I raised with the British Prime Minister the strong concern in Ireland at the presence of nuclear power stations on the west coast of the United Kingdom. I stated that the 1993 incident at Wylfa power station in Wales was a matter of particularly grave concern to the Irish Government. The Prime Minister undertook to revert back to me on the points which I raised. In the EU context I raised with the Prime Minister the question of the proposed sale and 100 per cent disposal of Irish Steel to Ispat International and, in light of the forthcoming discussions on this issue at the Industry Council in November, I asked the British Prime Minister to support the Irish Government's proposals in this regard.

This was an informal and useful meeting. I compliment Prime Minister Gonzalez on the way in which he chaired the meeting because he did so extremely well. All the participants would agree with me in saying that they did not recognise the headlines in the newspapers the following day which indicated that the meeting was a high noon type situation where many strong views were expressed and people appeared to be in conflict with each other. On the contrary, the atmosphere was quite different. People certainly expressed their concerns freely. However, theirs and contrary views were heard with respect and the atmosphere was extremely good. It gave me more confidence in the future of Europe than any other meeting I have attended in recent years in terms of the cohesion that plainly exists at the highest level between the relevant countries. If our partners consider it useful that Ireland host a similar informal gathering during our Presidency, we will be more than willing and anxious to do so.

Mr. B. Ahern

The informal European Council meeting in Majorca was supposed to provide a quiet reflection period in the lead up to important decisions at the intergovernmental conference next year. It highlighted the frailty and the sense of possible crisis looming for the whole European enterprise. The Taoiseach has stated that the meeting was confidential and private and we cannot expect to know what happened at that meeting but, judging by the comments made to the international media and to our own media who were there, it certainly seemed to be about a crisis looming in Europe. It highlighted disunity and also real problems on the way ahead.

The European Union does not present a happy picture at the present time. There are a number of factors involved in that: the profound disagreements about eligibility to participate in economic and monetary union, which were barely papered over; the deep unease about the French Government's unilateral resumption of nuclear testing, without any consultation with its partners; the stalling of the Schengen agreement because of the terrorist attacks in France — in effect we have long had our own Schengen agreement with Britain; the humiliating impotence of Europe in Bosnia, where the Dutch UN troops felt unable to intervene to prevent the massacre of Muslims; the disharmony between France and Germany, who have provided much of the leadership in the past; a Commission that does not, for the moment, enjoy the extraordinary prestige and authority it had under Mr. Jacques Delors and the continued damaging and corrosive effects of the British Euro sceptics, who have been reflecting on the results of the recent European Parliament elections in Sweden.

A weakened Europe faces the prospect of further substantial enlargement, which may dilute its cohesions, partly because some existing larger members are finding it difficult to adjust to the new member states and the effect that they have on their influence over the running of the Union. The challenges are formidable, as the Taoiseach has stated, and a concerted will is needed to overcome them. I am glad to hear the Taoiseach, who was quite critical and disillusioned after his first meeting, feels more confident. I know from experience that when officials are left outside the door and statements are put away, one tends to get a more frank exchange of views of where people think they are going, rather than what they say to the media in fixed press conferences. The statements are usually circulated the day before the meeting or are, at least, outside Ministers' bedroom doors when they get up on the morning of the meeting.

The Taoiseach

If they go to bed at all.

Mr. B. Ahern

The Taoiseach is getting used to how it happens. I see the point that, while people are away, they may at least give directions and give a lead of what they say outside. The challenges are formidable. The experience of the currency crisis in 1992-93 should teach us that there is no room for complacency about the road to economic and monetary union. There is battle on to determine who will be the initial participating countries.

Debate itself, as we have seen, is capable of having damaging economic effects right now through its impact on currencies and interest rates and not just in a few years time when the actual decisions have to be taken. The markets will continue to involve themselves in that speculation. They thrive on that type of business and, no matter what the Taoiseach, I or anyone else says, that is the way it will be. They will hang on every speech and every little line on a Reuter screen. When the currency of countries not able to participate suffer from depreciation, higher inflation and lost investment, will countries outside the EU benefit and gain competitive advantage? Will the markets be able to exploit the doubts and the lack of confidence and vision to wreck the European Monetary Union before it ever gets off the ground as, in effect, they did for a while during the last currency crisis?

There is a huge uncertainty facing the entire project which needs to be resolved by an objective and impartial approach. On objective criteria, countries like Italy and Belgium have a huge public debt ranging from 110 to 140 per cent of GDP which shows no sign, so far, of coming down. Other countries, including France, have public deficits at least 2 per cent above the Maastricht criteria, with the markets sceptical of recent budget proposals. There has been considerable acrimony between Germany and Italy, in particular, which was effectively written out of the scenario by the German Finance Minister, and less obviously between Germany and France. We have had our own problems with Germany in the past in this regard with, in many respects, much less cause given our strict observance of the Maastricht criteria.

At the same time, the German Government is under pressure from the opinion of its own public, as European Monetary Union involves giving up the Deutschemark, the symbol of post-war German success and the bond of reunification. This is seen by Germans as the greatest sacrifice of all. I regard the present uncertainty as deeply worrying for Europe and not just from an Irish perspective. Of course our future prosperity is bound up with the success of the European Union. My party continues to hold that view and will continue to hold it regardless, but we have to be careful of the way ahead. Currency turmoil can be economically damaging, as we know to our cost.

The problem with European Monetary Union is that we seem likely, at the moment, to be creating a two-tier Europe. If one studies the statements of various people who are in the know, one will see that they continually advert to this position. I try to stop myself from stating this, but the fact of saying we hope to be a country going forward in the first round is, in itself, an acknowledgment that everyone will not be in the first round. This is used by the markets unfairly to say who will be in or out. Everyone, including Finance Ministers, uses that phrase. It is then seen at all times that we are talking about a first tier and second tier, or a two-speed — which is more damaging — Europe. This is potentially divisive unless certain countries succeed in improving their economic performance, which, by far, would be the best solution. A closeness of the economies will get over the problem better than anything anyone can say. If the economies genuinely harmonise, there will not be a problem about European Monetary Union. The problem arises when the economies are separated and there are huge divergencies between their level of debt.

We have had a good financial record to date since we turned the corner in 1987. Next year's budget has to be credible and must live within this Government's self-imposed parameters. This will involve Ministers making hard choices and accepting, in effect, a pause in real terms in the growth of public expenditure and maybe even some cutbacks. It will be interesting to see if the Government will have the political will to do what it has promised. It failed its first test this year. It must succeed in 1996 and this will require clear leadership from the Taoiseach. No Finance Minister can achieve it on his own. The drop in Ireland's position in the world competitiveness league from ninth to 22nd in three years shows that the outside world is watching critically. There has already been some loss of confidence and there will be costly penalties attached to a failure to improve our performance and the competitiveness of our tax system.

The great unknown quantity in our situation is whether, perhaps under a new Government, Britain will decide to participate in European Monetary Union. This is a live debate on every financial programme in the UK. If it does our position should be relatively easy, provided our public finances are kept on the rails. If it does not there could be serious costs attached both to going into European Monetary Union without Britain or staying out of European Monetary Union with Britain. We are committed in principle to European Monetary Union participation by the Maastricht Treaty. I am glad to hear the Taoiseach state there is no intent by member states to start rewriting the Maastricht Treaty and no intent to do that at the intergovernmental conference. That was a fear earlier in the year. We must ensure that our economy is in tiptop competitive condition by 1999 so that we can make the final decision about European Monetary Union from a position of strength. As our participation in the EMS showed, we are not automatically dependent on what Britain does or what decision Britain takes, but we would nevertheless have to take the possible economic consequences of joining without Britain seriously into account, just as France would if it were to join without Spain and Italy. I am glad that our European partners now recognise that this is a problem with European dimensions and not just one peculiar to Britain and Ireland.

I will raise parliamentary questions on this issue later in this session and maybe the Taoiseach will take action on it. However, I still believe we should be undertaking a fundamental examination of the options because, if we do not do that, we will run out of time on the issue. That work must be undertaken, but whether it is done internally by the Government — and the Taoiseach knows my view on that — the Government would need outside consultants to see what are the policy options. Even if it was done confidentially, I would be happy to see it.

It is argued outside the House that a White Paper should be prepared to address the issues associated with European Monetary Union — such as how it will affect our banking system and our vulnerable exporters. These issues should be addressed but this has not been done. Some European groupings and people in the academic world have done excellent work but this is not a substitute for a fundamental examination of the consequences of European Monetary Union, a single currency and the states which will and will not be part of such a currency. We should undertake such an examination. The Taoiseach knows from talking to his EU colleagues last week that several countries have done so or are in the process of doing so.

It is obvious that the next round of Structural and Cohesion Funds should have as one of its objectives the underpinning of European Monetary Union, both with regard to countries which are able to join and those which are not. The long term benefits of a strong and stable single European currency are potentially huge. A small country like Ireland should particularly benefit provided the common currency does not render us totally uncompetitive vis-á-vis our immediate neighbours. These factors cannot be conclusively assessed but they need to be closely monitored.

There is a worrying tendency for large member states to try to lay down the law for smaller ones. Perhaps this is a symptom of the fusion of big countries' power and influence in a further enlarged Union. In my view, interpretation of the treaties and the obligations they place on member states is much better left to the European Commission, the European Council and the European Court of Justice.

The French unilateral decision to resume nuclear testing in the Pacific sits ill with aspirations for a common foreign and security policy. Most member states do not want to turn the EU into a nuclear superpower which would fundamentally alter its character. Nuclear weapons are absolutely irrelevant to the resolution of the vast majority of conflicts likely to arise, if not all. They would, for example, be no solution to the problems in Bosnia. The type of impotence which consists of standing by while massacres are carried out within earshot does no credit to Europe. Peace-keeping troops must be mandated to prevent such massacres.

My party is willing to support more active participation by Ireland in European peace-keeping efforts on a flexible case by case basis without entering into existing formal alliances based on cold war doctrines of nuclear deterrence to which we do not subscribe. At the Rome European Council in 1990 and in Article J.4 of the Maastricht Treaty, Ireland effectively negotiated an opt out clause from NATO and the Western European Union and protection for its continued policy of military neutrality with regard to existing alliances. Article J.4.4 of the Maastricht Treaty states that "The policy of the Union...shall not prejudice the specific character of the security and defence policy of certain Member States..."

We do not accept the linkage which members of the Christian Democratic Union Party in Germany try to create between our participation in European Monetary Union and participation in a military alliance. Austria will certainly participate in European Monetary Union but it will not be told by Germany to give up its military neutrality. Full Western European Union membership is not one of the Maastricht criteria. We have suffered too long from opinion makers in this country who have been unnecessarily ready to sacrifice our ideals to our interests. Fianna Fáil is more tough-minded in its approach, ready to make a constructive and developing contribution to security consistent with our traditions and ideals and not based on a wholesale abandonment of them.

The Taoiseach

We are all idealists now.

Mr. B. Ahern

I detect no similar clarity and consistency on the Government benches. The Minister for State at the Department of Foreign Affairs with responsibility for European affairs has advocated full Western European Union membership, the Tánaiste is flirting with the ideal of membership of the NATO associated Partnership for Peace but he is frightened of exposing his political flank and the position of Democratic Left fluctuates between a shadowy adherence to former principles and a kick over the traces style of pragmatism. Perhaps the long delayed White Paper will provide enlightenment about where the Government stands collectively on this.

A great deal of nonsense is spoken by larger countries about not all member states being able to appoint EU commissioners. Most of the larger countries at present appoint two commissioners and have not suggested giving up one. Most European cabinets, such as the French Government, consist of about 25 or 26 members. The membership of the present European Commission — there are 19 commissioners — is way below this. If the EU is to retain democratic legitimacy, each member state must be directly represented at Commission level. The President of the Commission is from the smallest country. Ireland is the next smallest member and our last three commissioners, Mr. Peter Sutherland, Mr. Ray MacSharry, and Mr. Pádraig Flynn, have made an outstanding and disproportionate contribution.

European Union is about solidarity, cohesion and integration between the nation states of Europe. While political leadership is needed — we should be grateful for many of the Franco-German initiatives of the past — Europe will not work on the basis of formalised big power directorates while the rights of some nations are less equal than others. These are clear messages which must be conveyed at all levels.

The EU seems to be going through a worrying phase. The Commission has not settled down to the high levels it had over the last few years. It has ambitious plans which would put European vision, solidarity and determination to the test. We all look forward to the Irish Presidency and the constructive part we have always played when we held the Presidency in developing the way forward. The intergovernmental conference which will, in part, be handled by the Irish Presidency, will make sure we can constructively keep the agenda moving forward. The European Council informal meeting in Majorca raised more questions than it answered. Ireland must look after more than its narrow interests and we all accept this. It must contribute to finding European solutions which will take account of different situations and interests.

The Taoiseach briefly mentioned the initiative on coastal security with regard to drugs; perhaps he will expand on it in his reply. Many countries share our position on this issue. Without informing us of what happened at confidential meetings, will the Taoiseach tell us whether there is only talk about this matter and if countries are still avoiding making decisions? The decision to be made, which has been discussed for about three years at meetings of ECOFIN and meetings dealing with security, is whether Europe will provide funds on a centralised basis for countries in peripheral locations where there have been major drugs finds. I accept this was an issue when Fianna Fáil was in power. If Europe is serious about crime, drugs and co-operation in an area where this can easily take place, it should bring this matter to a conclusion.

We look forward to the summit later in the year and we hope that the confidence with regard to some of the issues held in private by the Taoiseach will become public at that stage.

Miss Harney

When we debate European issues which are of importance to this country we tend to concentrate on neutrality, how much money we might receive from the EU and the institutional arrangements which need to be made, particularly whether we have a commissioner. Important as these matters are, I do not believe that, for the foreseeable future, they are the fundamental issues as far as this country and the EU are concerned.

On the last occasion we had a debate of this kind I stated that there is an urgent need to streamline the decision making procedures of the Union. I say this as somebody who attended Environment Council meetings for nearly three years. I found these procedures extremely frustrating and disillusioning and I often thought that if the citizens of Europe could see how Ministers made decisions they would despair. Council meetings always began around 9 a.m. but it was frequently midnight or later before decisions were made. Although it was clear in the mornings what the decisions would be, the level of bureaucracy and the lack of clear procedures made it impossible for them to be made in a reasonable fashion.

I agree with the Taoiseach with regard to institutional change. However, I will not concentrate on these matters but on European Monetary Union, enlargement and nuclear power. I also wish to speak about Northern Ireland, which the Taoiseach did not mention but which was discussed at important meetings on the margins of the informal Council in Majorca.

We are proceeding apace to join European Monetary Union. Any briefings I read from Government sources, usually non-attributable, seem to suggest that Ireland is going to join regardless of what the British do. While the Taoiseach did not say that this morning, he did say that we would be eligible to join and I support that. We should meet the Maastricht criteria not necessarily because we wish to join an economic and monetary union but because it would be good for industry and the economy generally.

It is unrealistic for us to proceed down the road to European Monetary Union when there has been insufficient public debate on it. This economy is not ready for European Monetary Union. We have not analysed the implications or even looked at the terms on which we might join. The Government should put forward a paper outlining these factors.

Our biggest trading partner is the United Kingdom, although official statistics under-estimate the extent of our trade particularly as it affects the labour intensive, indigenous manufacturing sector. If this country joined the European Monetary Union and Britain stayed out it would have enormous implications for employment and would be catastrophic for the economy. The UK is an important market for our exports. On our domestic market virtually any product that is transportable can easily be brought here and, in addition, our industry must compete with the UK.

The UK is also our biggest source of tourist revenue and invisible exports. In third markets since Irish industry frequently has to compete with the United Kingdom, the value of the Irish pound vis-á-vis sterling is a key determinant in how we perform as a trading nation. It is unrealistic for anybody to suggest that we can go on regardless of what the United Kingdom does. If we join a currency union we may force industry to compete with a devalued sterling. Unlike 1993 when we had the option to follow sterling downwards, we will not have that option if we belong to a currency union.

Besides the trade implications there are also major implications for the creation on this island of a single economy which is the wish of many Members as well as many industrialists and business people. If Northern Ireland belongs to a free floating currency and we belong to a currency union where decisions will be made in Frankfurt and Brussels, it will not be possible to create a single island economy here. For that reason alone it would copperfasten partition.

For all those reasons the Government should set out the options. If we join a union as I envisage it at the moment, it will probably be a German monetary union. The Taoiseach does not like us to refer to this but I will mention it anyway because we can see that the German Finance Minister has questioned the ability of Italy to participate in the European Monetary Union. A member of the Bundesbank's council has questioned France's capacity to participate.

Are we realistically saying that Ireland and a few other hard currencies will join in what essentially will be a German monetary union? Remember the Germans' commitment to low inflation. They will preserve the Euro-currency with the same integrity as they preserve the Deutschemark. They will force participating countries to have a budget deficit of about 1 per cent of GDP. No Irish Government in a generation has been able to come near that. This year it will be 2.5 per cent and that is when we take into account the £2.4 billion coming from the European Union.

Looking at the Government's present policies, does anybody in this House suggest that we might realistically achieve that kind of budget deficit? Of course we will not. If we look at the unseemly row going on between the Minister for Finance and some of the high spending ministries, we can see just how difficult that might be. Over the last 15 years our national debt has grown by £22 billion. During that period, Labour has added £1 billion to the national debt every time they have been in Government. Are we seriously suggesting that the Labour Party and a Labour Finance Minister, with that record, will be able to join the German school of fiscal discipline? I do not believe we are.

On the issue of enlargement, I am impressed with how fast the former communist countries are liberalising their economies. For example, Hungary's privatisation authority is currently asking a London based bank to privatise their country's entire electricity generation and distribution system. They have broken the company up into 13 subsidiaries. Such economies are loosely regulated with low labour costs, and Ireland will have to compete with them whether we like it or not.

The former communist countries are also major food producers so that part of the EU budget which currently goes to agricultural support will have to be much more thinly spread. Ireland will not receive anything like the £2.4 billion that we will get from the European Union this year. We have four years before that kind of money runs out so we need to start using it very wisely indeed.

That Euro money should not go towards current spending, it must go towards once-off projects to boost our competitiveness for the development of sustainable infrastructure. I feel strongly about that but it is not happening. A little is being spent here and there on ongoing financial commitments which is very unrealistic.

We must address the issues and consequences for this economy, and for the EU, of enlargement and of the European Monetary Union. I am not a Euro sceptic. I like to think that I am a Euro realist having formerly been a Euro enthusiast as were most Members of this House. It is time for a bit of Euro realism.

I welcome the fact that the Taoiseach raised the problems of the Wylfa nuclear plant with the British Prime Minister. For many years most Members of this House have been calling for the closure of Sellafield. However, no matter how often we call for it to be closed, we all know in our hearts that it will not happen because 10,000 people work there and it creates millions of pounds for the British economy.

We should seek the establishment at international level — perhaps in the first instance at European level — of an appropriate nuclear agency with powers of inspection. The International Atomic Energy Agency only has such powers when the sovereign government involved invites them. Of course, that is an inadequate inspection system.

The Irish Sea is the world's busiest sea lane for submarines carrying nuclear weapons. This country has a huge vested interest in ensuring the creation of an international nuclear inspection agency because we know that Chernobyl and other places well outside the EU have the capacity to affect us just as much as nuclear plants closer to home.

The idea of an agency with powers to inspect and set down safety standards should be on the agenda for Ireland's EU Presidency. It should be an agency that can inspect when it wishes, as well as ensuring that the concerns of member states affected by these nuclear plants are taken on board. The creation of such an agency needs to be high on our agenda since our two nearest neighbours, France and Britain, are not just military nuclear powers but also use nuclear power to generate a substantial amount of their electricity.

When I was in Opposition with the present Taoiseach and the Minister for Social Welfare, Deputy De Rossa, there was never an occasion when I disagreed with their approach on Northern Ireland, and I do not say that lightly. It is a subject about which many of us in this House have deep concern and a huge interest. However, the emphasis placed on Northern Ireland by the Taoiseach and that Minister seems to be very different from the emphasis put on the matter by the Tánaiste. When it comes to the North we must all choose our words carefully. I read what the Taoiseach said at Dublin Castle on 8 September and what the Tánaiste said to the British-Irish Association the following day. You do not need to be a genius to see that there is a different emphasis and approach in what they said.

I support the Taoiseach when he rightly says that the two Governments may well, and could, move on without Sinn Féin. I was delighted to see that that was the Government's approach because I was beginning to get worried. In a very forthright interview in The Sunday Times last week it was clear where the Minister, Deputy De Rossa, stood. However, the comments by the Tánaiste in relation to preconditions and so on are unhelpful. Talking about decommissioning as being unpractical and unrealistic does not make a worthwhile contribution to the current debate.

The Downing Street Declaration is clear. In paragraph 10 the two Governments reiterate that the achievement of peace must involve a permanent end to the use of or support for paramilitary violence. They continue to say that it is only on that basis that people can take part in talks. Threatening violence is not compatible with paragraph 10 of the Downing Street Declaration. We must make it clear that anyone who threatens violence if the two Governments establish an international commission to look at the question of decommissioning is not living by the terms of paragraph 10 of the Downing Street Declaration as negotiated between the two Governments. I continue to ask the Taoiseach questions in the House because the public is entitled to know where the different parties stand on the fundamental questions which affect us in relation to Northern Ireland.

Giving up arms should not be done for the sake of the British Government because it does not matter what the British Government thinks. Arms in the hands of the paramilitaries were used to kill fellow Irish people and it is for them that they should give them up if they are committed to peace and democratic principles. Every right thinking person knows that keeping Semtex and armaments of that kind is not compatible with a commitment to peace and democratic politics.

It may be the case that talks will begin without all the parties being there. That would be regrettable but it may be necessary. What is important is that the Governments create the environment or the circumstances where it would be foolish for parties to stay away, where it would be clear that they are staying away and where it would be unreasonable for them to stay away because the environment is right for them to participate. I believe that the overwhelming majority of people in the North and South would support both Governments moving ahead in that context. I hope that is the context on which the Government moves ahead.

We listen too much to the words of Sinn Féin. The Church of Ireland's submission to the Forum for Peace and Reconciliation was forthright and direct. It lodged its strong objection to the use of the Constitution to deal with any social legislation. However, the Government proceeds to ignore it. If Sinn Féin had made such a declaration, it would not have been ignored. It angers me and many other people that legitimate groups can be ignored in the Government's approach on certain issues but that we go out of our way sometimes to take on board those whose raison d'être I must question when I hear what went on behind the scenes during the last summit.

I do not wish to make the problem more difficult for the Government because I know how difficult it is and I will give as much support as is necessary. However, I want the Government to speak with one voice on this matter because if it does not, it will send the wrong signals and cause confusion and uncertainty which will create more difficulties for it.

I hope we have an early summit between the two Governments and that they will be able to be at one on decommissioning. It is not the only issue but, as the Taoiseach said, it is a key issue if we are to build trust between the two communities. After 25 years of violence one cannot expect democratic politicians to sit down with others who have armaments, such as Semtex, around the corner or down the road. No democrat could be expected to take part in talks in that context. We all need to see a gesture from the paramilitaries on both sides and I made that clear to the party I met last week. We want to see movement on both sides and we do not want a chicken and egg situation where one will not move unless the other does.

The Taoiseach

The list of problems mentioned by Deputy Bertie Ahern which the European Union faces is an accurate one, but the consensus at the meeting I attended for two days was to overcome these problems. Europe or anywhere else has not reached the end of politics. As long as there are problems, there will be a need for politicians. There is no situation in Europe which will not need politicians to fix things. There will always be problems but we should not speak about Europe in terms of crisis, despair or alarm because there is every reason to believe that these problems will be overcome as were previous ones. It requires restraint in the use of language about the eligibility of other currencies.

The same consideration also applies to the matter to which Deputy Harney referred in the latter part of her speech. The peace process on this island also requires restraint in the use of language. Talking about crises and using the language of alarm may give some form of reassurance to one's own supporters, just as the remarks of Theo Waigel, Germany's Finance Minister, gave solid reassurance to the Bundesbank committee he was addressing. However, it does not help to solve the problem; it creates problems.

Miss Harney

I did not mention a crisis.

The Taoiseach

I offer the same advice about the use of language to Theo Waigel as I offered to Mr. Gerry Adams — cool it. If we want political solutions we should not use the language of confrontation.

It is important to understand republican concerns about the peace process. They are worried that it might be suggested that they are involved in a form of surrender. That is not what is being asked. They are being asked to meet the requirements of the Downing Street Declaration and to give trust and assurance to others.

It is equally important to understand the concerns, for example, of the German people about the Deutschemark. It is important to point out that the Deutschemark existed before the Federal Republic; it is older than the state. It is the symbol, more so than the Federal Republic's constitution, of what post-Germany is. It is not easy, therefore, for them to give it up, which is why they want strong assurances and I hope they get them.

I was interested in Deputy Ahern's characterisation of his party as dewyeyed idealists on the matter of European defence — the only people who are willing to protect the holy grail of sanctified national views on this matter. Fianna Fáil was more realistic about such issues when it was on this side of the House.

Politics is a matter of give and take; one cannot take without giving. We should look at all the problems we face, including our personal, physical and political security in Europe as part of the process of give and take. While we must preserve our ideas, we must recognise that it is in concert with others, not in isolation, that we have the best opportunity of fulfilling our ideas. The agenda in Europe is not an a la carte agenda, but a table d'hôte one. We can negotiate the composition of the menu.

Mr. S. Brennan

Is it all or nothing?

The Taoiseach

I believe that the concept of opt outs in Europe is wrong. It is important to negotiate a collective agreement and if it means that all we or others can get is 50 per cent of what we want, that is what we should aim for. The Maastricht Treaty was structurally unsound in the opt outs it granted to individual member states on social policy. If we must temper our ambitions to ensure that everybody comes with us, that is what we should do because it would be an aberration in European constitution making if we were to have a culture of opt outs in the future.

I said in Majorca that I believe the social policy opt out by Britain was wrong and corrosive. I do not believe that course should be followed in future and I hope it will not be sought by Ireland in other areas of activity in the Union. We should seek to build as much as we can together. If we cannot reach the desired level, we should be satisfied with what we can reach together. Let us not place any member state in a position where it feels the need to opt out. This is also the approach we should apply to the peace process on this island.

We should understand the reservations some people have about coming to the table and we should seek to meet them. We should not characterise the decommissioning of arms as a problem for one Government. The problem is people trusting one another. It is a problem for people who have lost limbs and the families of those who have died. They are not yet willing to trust that the arms which injured them will not be used again. The problem is to find a formula — everybody's ideas on this are welcome — to give those families the reassurance they need to allow their political representatives to sit in the same room with the political representatives of those associated with the people who did them an injury. It is not a problem of Government or preconditions; it is a practical problem of trust.

I ask any Member who has doubts about this matter to put themselves in that position. If Deputy Brennan's brother or sister had been injured by a paramilitary organisation, would he be keen to see Fianna Fáil sit down with representatives of that organisation without some assurance that the arms were not going to be used again? Of course he would not but it would be legitimate for him to seek such a reassurance. If that applies to Deputy Brennan, Deputy Harney or myself, it equally applies to nationalists in Northern Ireland who have been injured by loyalist arms and to unionists in Northern Ireland who have been injured by republican arms. Together the two Governments are seeking to wrestle with and solve the problem of reassurance and trust.

Let us put this in its true context and let us not, as we so often do in this country, seek to project our problem on to somebody else's shoulders and say it is their problem. This is our problem more than anyone else's. I urge Members to reread the Downing Street Declaration which was negotiated by my predecessor, Deputy Reynolds, and towards whom I have been frequently generous in my praise. I ask them to look at paragraph 6 of that document which imposes, not on the British Government but on this Government or any of its successors, an obligation to build trust between the two communities in Northern Ireland. That requires us to do many things in this State to make people happy about dealing with us. It also means that the question of arms, while not the main problem, is one of the problems that most certainly must be dealt with if we are to achieve trust. Without trust, we have no settlement.