Vol. 468 No. 1
1 Mr. B. Ahern asked the Taoiseach the regions or cities that will be chosen by Ireland to act as candidates for pilot projects on territorial and local employment pacts, as outlined in the terms of the Conclusions of the European Council meeting in Florence. [14031/96]
2 Mr. B. Ahern asked the Taoiseach whether the Government accepts and endorses the views of the Tripartite Conference of the European social partners as submitted to the European Council. [14032/96]
I propose to take Questions Nos. 1 and 2 together.
The proposal for territorial employment pacts forms part of the proposals made by President Santer for a European employment pact. These proposals were considered by the tripartite conference held under the Italian Presidency in Rome, and later by the European Council meeting in Florence.
The social partners meeting in Rome endorsed the broad strategy contained in President Santer's proposals. In particular, they welcomed the approach which seeks to combine sound macroeconomic policy, the orientation of EU policies to maximise growth and employment and the adaptation of the labour market. The discussions in Rome endorsed the importance of social dialogue at both national and EU levels. The Government welcomes the social partners' endorsement of President Santer's proposals.
The conclusions of this tripartite conference were taken into account by the European Council meeting in Florence when it considered President Santer's proposals. In that context, the European Council invited member states to select regions or cities which would provide the basis for pilot projects on territorial and local employment pacts. This is a recognition of the importance of local effort for economic development and job creation. This approach is already reflected in Ireland in the emphasis we have placed upon local development strategies. The area based partnerships, established on a pilot basis under the Programme for Economic and Social Progress, are themselves based on a local employment pact between employers, trade unions, State agencies and the local communities.
I envisage that all of the Irish partnership areas will participate in some way in this new Europe-wide arrangement. There are 11 partnership companies in Dublin and I envisage that it would be useful to have an overall employment pact for Dublin which would reflect the work and ideas of all of the partnership companies. I will be progressing this proposal in association with the Minister of State at my Department with special responsibility for local development, Deputy Gay Mitchell.
If I have read the conclusions and data correctly, the Florence summit did not progress the work of President Santer in any important way. President Santer and his officials have been criticised in the European press recently for putting forward the proposals in that form on the basis that they had not sorted out the issue in advance. A major part of the trans-European network was rejected almost in its totality. Does the Taoiseach see any possible way of getting that back on the rails during the Irish Presidency? Chancellor Kohl has said he does not visualise a major employment initiative within the Community and that it is a matter for individual member states. Is that the road we now have to take?
Is the Taoiseach essentially taking the area based approach, which was constructed as part of the Programme for Economic and Social Progress some years ago, as Ireland's contribution for the European Union territorial and area based strategy? Is there really nothing more to it? Is that a correct assessment of the situation?
The fact is that Ireland pioneered the idea of area based employment pacts. We were doing this under the Programme for Economic and Social Progress before the European Union decided it should be done on a wider basis in Europe. The area based partnerships we have established represent the model which we expect many other European countries will follow in their response to the Santer proposals.
As far as the wider question posed by the Deputy about the Santer pact is concerned, it would not be correct to say that the Florence summit did not respond positively to the pact. On the contrary, the Santer pact, which involves governments of the member states and the social partners in agreeing a programme of action on employment, will proceed.
There is a difficulty in financing the trans-European networks which are large infrastructural projects such as the TGV Est, for example, the new train line from Paris to the German border. There is a problem given the pressure on a number of member states' budgets and the requirements of the Maastricht criteria, which are quite exacting for some member states that are already over the limit, in putting aside the money. However, there is no lack of commitment to the concept of these trans-European networks and, while there may be some delay in financing them, I am confident that they will go ahead.
Having discussed in some detail with President Santer what he has in mind for the pact, my view is that it will be similar to the approach taken in Lord Cockfield's White Paper on the internal market. In other words, you take a range of initiatives — some of which are at a fairly advanced stage while others are at an early stage of preparation — and present them together in a concerted programme as a unit.
Given the decision making process of the European Union, which is inherently slow and tentative, the concept of bringing a range of pro-employment measures together in one package, as President Santer is doing, is a good one. There will be much more progress on a whole range of issues — the number of issues contained in the Santer package proposals are very extensive — such as pro-employment measures, at European level as a result of situating them in a broad employment pact rather than attempting to approach their advancement on a case by case, Council by Council, proposal by proposal basis.
I listened with interest to the Taoiseach. Like our party leader, I was extremely upset to note that the pact put forward by President Santer had not been agreed. I do not know whether that was a combined decision, but it seems that Finance Ministers had a great say in whether it should go ahead. It remains to be seen whether bringing the measures together in one composite package, as suggested by the Taoiseach, will lead to their speedy implementation. President Santer referred, in Europe and during his recent visit to Dublin, to a target figure to halve unemployment numbers by the year 2000. Does the Taoiseach intend to bring to the table specific unemployment targets for this period, as I have requested for a number of months? Surely it would be a headline to set a specific target, particularly for long-term unemployment, whereby at the end of our six months Presidency the numbers would be reduced. Does the Taoiseach agree with that approach?
There is always a risk in setting specific targets unless one is satisfied that measures are in place and economic conditions exist to achieve them. There may be a tendency to involve oneself in headline grabbing by setting targets without having the means to back them up. It is particularly important that there is a concerted programme of measures to promote employment across the whole range of European Union and national member Government activities. It is important not only to move, for example, on training but to move simultaneously on sound currency policies which reduce interest rates, thereby making investment more profitable, and on the completion of the internal market which makes trade more easy and, therefore, makes the sale of the products of additional employment easier.
A concerted approach is needed across the whole range of economic instruments rather than the simple seting of headline targets. Any targets set should grow out of the measures adopted rather than the reverse. There is a risk involved in the approach suggested by the Deputy. I would much prefer, during the Irish Presidency, to concentrate on getting the individual elements of the Santer pact agreed than on setting elaborate targets.
As the President did.
I am glad the Taoiseach confirmed that the Programme for Economic and Social Progress of some years ago is being adopted throughout Europe. We are doing nothing new other than following the area-based strategy of those programmes. Some improvements can be made to our programmes, but structurally they are a very good idea. I support the Taoiseach's suggestion of a co-ordinated role for the 11 programmes within the Dublin area. Given that President Delors put forward a package of employment initiatives at the Edinburgh summit in 1993, employment proposals were put forward in Essen in 1994 and President Santer is now bringing forward proposals, are we not simply rerunning the same issues? It seems that issues such as training, disadvantaged areas, structural unemployment and developing ongoing programmes under the Structural Fund round are being rejigged. During the last Irish Presidency motions about the structural problems of the long-term unemployed were successfully passed. Has Europe dealt with any of those issues? Even if we succeed in putting forward an initiative, does it mean anything in a European context? Is it not the case that, as Chancellor Kohl, stated, everybody paddles their own canoe? While limited resources may be allocated to some scheme at the end of the year, we are simply dealing with words and with each Presidency the structural unemployment problem of the EU is increasing.
It would be very unjust to the German Chancellor to suggest that his approach on European matters generally is one of inviting people to paddle their own canoe.
I was referring to employment.
I will come to the Deputy's point, but lest the memorable phrase he chose to use is linked with Chancellor Kohl, in the interests of accuracy it is important to point out that no European leader is more committed to the idea of pooling sovereignty within Europe than the German Chancellor.
There is certain merit in what Deputy Ahern said in that, given the slowness of the European decision-making procedure, there is a tendency to repeatedly bring forward ideas, which failed to be fully implemented in the past, until they are eventually implemented. After each economic cycle the residual level of long-term unemployment has risen and that is of deep concern to all member states of the European Union. We recognise that whereas, for example, the United States can get its unemployment level down to about half that here, admittedly at a high social cost — some of the jobs in the United States are at incomes lower than social welfare payments in Europe — we in Europe find after each cycle that our residual level of unemployment is higher than it was at the beginning of the cycle. That is a matter of serious concern and demonstrates a structural problem in our economy.
Governments and the European Union can deal with some of those problems — for example, the internal market, the taxation of employment and whether it pays to take a job, the issue of training and whether it is a State responsibility — but there is also a responsibility on social partners to build flexibility into the way work is remunerated so that it is more attractive for employers to take on an extra employee, to employ a human being rather than use a mechanical method. That requires an overall change in the way our society as well as our economy works in Europe. In that context the report that will be presented to the European Council in Dublin in December on the employment issue is exceptionally important. I hope it will represent a more frank and detailed analysis of the underlying reasons for the increasing level of structural unemployment in Europe than has existed previously. I hope that by facing these problems honestly together we will be better able to deal with them, but I do not think this issue is susceptible to superficial treatment. It is a profound malfunction of our economies in Europe. We in Ireland have seen comparatively good performance in so far as unemployment here has fallen in recent years by approximately 50,000, whereas in most other European countries over the same period unemployment has risen. Even taking account of the fact that we have fared comparatively better than other European countries, our level of long-term unemployment is, historically, unacceptably high. A structural approach is essential, therefore, and I hope that by promoting the idea of social partnership at European level we can, through social partnership at national level, build flexibility into the system that will make it more attractive, whether by virtue of taxation, the wage setting mechanism or market opportunities, for people to either make or take a job.
I am concerned that we have dwelt unduly long on these two questions, as Members can observe. I call Deputy Bertie Ahern for a final brief question.
I wish the Taoiseach well in whatever report he prepares. A similar proposal to that outlined by the Taoiseach was put forward under the Commissioner for Social Affairs at the end of the Edinburgh Summit in 1993 and the Essen Summit in 1994. I am sure a proposal will be put forward following the summit to be held here at the end of 1996. The preparation of those proposals involved a detailed examination of the best systems and structures in each country. To clarify what I said about Chancellor Kohl, he stated that in regard to employment issues people should paddle their own canoe.
I know.
Local taxes, PRSI, the tax wedge and the poverty trap are issues for domestic politics. The Chancellor is correct in that; we can deal with those issues. Rather than looking at capital projects for highways across Europe, for which President Santer failed to obtain approval, it would be better to put our efforts into the Taoiseach's solution to the problem. This problem concerns people who are not affected by market forces but experiencing long-term unemployment. I urge the Government not to follow a broad brush approach that involves the building of motorways, tunnels, etc. but to expand area partnership schemes and concentrate on areas of high levels — up to 80 per cent in some cases — of poverty and unemployment. We must do something for people in those areas rather than examine structural employment at all levels across Europe.
There is a tendency to debate this matter which is not appropriate now.
It is important also that we should look at the European Union Treaty and the priority it gives to employment. We have, for example, a very powerful monetary committee which has powers to deal with monetary affairs at European level. There is no equivalent employment committee provided for in the Treaty and while I would be the last person to suggest setting up a committee at European level would solve problems on its own, there is a need to ensure that at European level there is an inbuilt structural bias in favour of employment generation in both the policy making and the policy implementation of the Union. There is no doubt the primary responsibility remains at national level but action can be taken to improve the context for employment creation at European level. One only has to have regard to the fact that Europe's levels of unemployment in different member states tend to increase and decrease together to recognise that there is interdependence in Europe in terms of employment policy. We must ensure that interdependence works in a positive and not in a negative way.
