Mary Harney
Question:3 Miss Harney asked the Taoiseach if he will report on the statement he made at the Europe of the Regions Conference at the Royal Hospital, Kilmainham, on Tuesday, 29 October 1996. [20342/96]
Céisteanna—Questions. Oral Answers. - Europe of the Regions Conference
I addressed the "Europe of the Regions" Conference at the Royal Hospital Kilmainham on Tuesday, 29 October. As it is quite lengthy, I have arranged for my address to be circulated in the Official Report, with the permission of the Ceann Comhairle.
The following is my address:
Ladies and gentlemen, I would like to acknowledge the initiative of the Institute of European Affairs in jointly organising this conference. I think it is also only fair to acknowledge the valuable work done by the Philip Morris Institute in helping to inform debate on the major issues and challenges facing the European Union. Papers produced on European issues by the institute are of a high standard.
Regions provide a vital step in the ladder which leads from the citizens of Europe, via local and regional government, to the national state and on to the European Union. We are, therefore, all part of a Europe of Nations, a Europe of the Regions, a Europe of the People.
Regional Policy in Europe has come a long way from its humble beginnings in 1975. The original European Regional Development Fund, European Regional Development Fund, was established with comparatively limited terms of reference. That was the beginning of a process which has seen the EU develop a range of instruments and policies designed to reduce regional disparities.
The Structural Funds are an integral and vital part of EU economic and social cohesion policy. They are designed to compensate for the fact that the benefits of European economic integration, and the Single Market in particular, are not equally distributed across the Community. They are intended to improve the productive potential of peripheral regions so that they can compete more effectively in an integrated Europe.
Ireland, through effective implementation of Structural Funds programmes and our successful efforts in creating a supportive macroeconomic environment, has made good use of its Structural Funds assistance leading to progressive convergence towards EU average GDP and GNP per head. However, Ireland has, and will continue to have for some time, very substantial development needs. Our national income level, most appropriately measured in terms of per capita GNP rather than GDP — is still insufficient to allow us to realise our full potential as a region of the Union. There is much to be done to raise employment opportunities to the level enjoyed by more advanced member states.
For example, despite substantial investment under the Community Support Framework, CSF, and the Cohesion Fund our internal transport infrastructure is still relatively under developed by European standards. It will require further large scale investment. Our location on the edge of Europe means that high access costs continue to be an additional burden faced by firms in our trading sector over and above that faced by their competitors in more central locations. These cost handicaps are quantifiable and are directly linked to our geographic location.
Ireland's indigenous industries are still weak and under-developed compared to indigenous industry in the more developed regions of the Community. This sector will need support well into the next century to upgrade its R & D capacity, to improve its management and marketing capabilities so that it can match the best in Europe.
While Ireland has a reasonable R & D capacity it is well below that of the more developed regions of the Community where the tradition for centres of excellence goes back centuries. Although the revolution in information technology has made possible the rapid communication of ideas, peripheral regions such as Ireland will need continued Community support to upgrade their R and D capacity.
There is, of course, much we can do to help ourselves. Financial and investment institutions in Ireland do suffer from having a higher priority for shorter-term returns relative to institutions in continental countries. We need to examine the market pressures that create this short-term outlook and the overemphasis on physical security in our financial system. Germany and Japan may have lessons for us in this regard.
Economic and social cohesion by definition means more than closing the gap in living standards and employment opportunity between Ireland and the Community average. We must at the same time address the specific needs of the most socially disadvantaged. In Ireland's case one of the most pressing social problems facing us is the comparative extent and pervasiveness of long-term unemployment. If we are to achieve social cohesion this problem must continue to be tackled. We need EU help with this.
But, again, there are things we can do to help ourselves. Long-term unemployment is closely linked to educational failure. The long awaited regionalisation of our educational system will enable us to address the factors which give rise to school-drop out rates being much higher in some areas than others and to regional and school variations in leaving certificate results.
Negotiations on the new round of structural Funds for the period 2000-2005 will commence after the Intergovernmental Conference concludes, probably in mid-1997. The negotiations will take place at a time when the European Union is facing unprecedented change in preparing for enlargement to the East. This enlargement, incorporating countries with considerable development needs, will be a new challenge for the principle of cohesion and convergence.
However, the principle of economic and social cohesion, firmly enshrined in the Maastricht Treaty must be fully maintained and implemented. The enlargement to the East which will bring many benefits in terms of both stability and economic opportunities, should not undermine the application of cohesion policies to existing member states. This will not be easy. All choices have costs. Enlargement will have costs as well as benefits, and it is best to know that.
One relevant factor in relation to the next round of the Structural Funds relates to income per head of population. This is one of the key criteria used to determine the allocation of structural funding under the current round and is measured using Gross Domestic Product, GDP. In so far as Ireland is concerned, the rapid growth of our economy has greatly enhanced our convergence to average EU GDP levels; from 63.4 per cent of the EU average in 1998 to an estimated 89.7 per cent in 1995 and over 90 per cent for 1996.
It must be remembered though, that in the case of Ireland, GDP considerably overstates national income. Our GNP is about 12.5 per cent lower than our GDP. GNP is a more accurate measure of national prosperity because it allows for profit repatriation and external debt service payments. GNP measures the money we actually have to spend. This disparity is not mirrored in other member states. Their GNP and GDP figures are much closer.
The Commission's interim report to the Madrid European Council on the effects on the policies of the EU of future enlargement to the East set out preliminary orientations for the development of cohesion policy. This would indicate that the Commission do not envisage any dramatic change in the proportion of budgetary resources devoted to cohesion within the existing member states for the period 2000-2005. It would also suggest that there will probably not be any major departure from the concentration of the funds on the regions of the Union "whose development is lagging behind". As a federation, the EU's overall budget is tiny when compared with other federations. The integrative force of the single currency will force Europe to look at the size of its budget.
To sum up, Ireland has demonstrated that it has the capacity to use Structural Funds effectively. In many ways it has been a showcase for the merit of well-formulated and targeted EU regional policies. I am satisfied that funding for the many needs which will remain after the current round of structural Funds is fully justified and that we will use them to best effect to complete the modernisation of the economy.
Committee of the Regions
The establishment of the Committee of the Regions under Article 198 of the Treaty on European Union saw the role of regions within Europe being formally recognised by all the member states. The committee allows regional and local interests to be effectively represented at a European level. The committee is formally consulted by the Council and the European Commission on legislative proposals and initiatives in a wide range of areas ranging from education to economic and social cohesion. This recognises that in some countries, like Germany, the regions have almost as much power as the federal government. This is not true of other countries, and we cannot impose uniformity.
The Intergovernmental Conference, IGC, in its consideration of the institutions of the Union will examine the role and functioning of the Committee of the Regions. Ireland believes that the Committee of the Regions as a relatively new body has worked well. We are fully supportive of the committee and are open to considering any measures which would enhance its role, while keeping in mind at all times the importance of preserving the institutional balance of the Union. In this regard, we need to bring regional policy closer to our people. How many Irish citizens know of the existence of the Committee of the Regions and who represents their region on the committee? Very few, I fear on both counts.
Regional Policy in Ireland
Ireland has traditionally lacked a formal regional government structure although in the past there were non-statutory regional development organisations which were concerned with regional planning and development. In other areas, such as health services, tourism and industrial development, regional structures were also developed However, these regional structures developed in an ad hoc manner, each with its own remit and, in some cases, different geographic area.
In 1994, in order to formalise and reform this situation, eight statutory regional authorities were established. Each authority comprises elected representatives from the principal local authorities in the region. This gives the authorities a representative mandate of a kind while also giving them a direct link to the local authorities in the region.
The regional authorities in Ireland were consulted in drawing up the national plan on which the community support framework is based. The various sectoral programmes in the CSF also take account of the development needs of the regions. Regional authorities through their EU operational committees monitor the implementation of Structural Funds programmes in their regions.
Devolution Commission
While the regional authorities are relatively recent, the system of elected local government at community and city level is long established. It provides a vital focus for local democracy and democratic accountability. It is fair to say, however, that local government in Ireland exercises an unusually limited range of functions. This is anomalous, given the strong sense of local identity which characterises Irish society. It contrasts with the vibrant voluntary sector at local level, which has been at the heart of our strong network of local development bodies, supported by the Structural Funds.
To address this anomaly, last year the Government established a devolution commission on local government reform. The commission's task is to recommend a renewed system of local government guided by the principles of subsidiarity, accountability, integration, effectiveness and participation. The commission has published its interim report which outlines a framework for the future direction of local government here. The Government has accepted many of the commission's recommendations, including that the local government system should have three levels — regional, county and sub county.
We have also accepted that local government should act as the focal point for local development effort for the future. We must also retain the vitality and innovation of the present system, which was so strongly endorsed by the OECD in its report on Irish local development policy, earlier this year.
However, the defining characteristic of local government is the electoral process, the mandate thus given to members of local authorities and their accountability to the electorate. The Government, therefore, considers that the essential requirement for local government renewal is an enhancement of the role of the elected members of local authorities in setting policy for local services and giving political leadership to socioeconomic development at local level.
The Minister for the Environment is currently preparing a report on how the primacy of the electoral process should be reflected in the local government and local development systems. In particular, the Minister is preparing recommendations on how the distinct role of elected members relative to the officials of local authorities and other bodies engaged in public service delivery and socio-economic development at local level can best be expressed and supported. The Government believes that this will enhance the capacity of local government to fulfil its role in a democratic society, not least by providing a greater incentive for capable and talented citizens to offer their services to the community through the local democratic process.
The Minister for the Environment, in consultation with the Minister of State with responsibility for local development is also drawing up frameworks for partnership and co-operation between local authorities, which embody representative democracy and local community development organisations, local partnership companies and county enterprise boards and Leader groups, which embody participative democracy. These frameworks will reflect the different situations in different areas, and will take account of EU and other statutory requirements.
In the meantime, we have asked the commission to accelerate its analysis of additional functions which might be transferred to local authorities and to come forward with proposals for the devolution of powers and functions to local authorities before the end of the year. However, we cannot ignore the fact that devolution is not easy because, as we have seen in debates on local taxes and services, the public often expects uniformity in local arrangements rather than local variations. Real devolution will mean real differences from one area to the next. This variation may be the price of effective local democracy. With effective devolution, it is a price worth paying for the creativity and innovation which real empowerment makes possible.
General EU Agenda
I would now like to speak to you on the major issues on the EU agenda which are currently preoccupying the Irish Presidency. When the Irish Presidency of the EU commenced on 1 July last, I identified the following key priority areas: secure jobs; safer streets; sound money and a peaceful Europe. The Irish Presidency has been fully engaged to seek to make real progress in these areas under the existing Treaty.
Secure Jobs
Europe needs to create a strong, job-creating economy. Unemployment is a waste of human resources and contributes to social problems such as crime and social exclusion. To raise the skills and improve the competitiveness of our workers we need to take co-ordinated European action on education and training and on investment in infrastructure.
We also need to adopt a proactive approach at local level and this is an area where Ireland has given a lead through the local development programme. Local partnerships helped many statutory bodies to co-operate with one another at local level in a systematic way, sometimes for the first time. The involvement and co-operation of the social partners is also vital.
The Irish Presidency is on course for the adoption of substantive conclusions on employment policy at the Dublin European Council in December and thereby chart an employment strategy for Europe for the future. This strategy must ensure that the EU continues to take account of regional disparities.
Safer Streets
I am glad to state that the Irish Presidency has seen major progress in measures at EU level in the fight against crime. Criminals do not respect or allow themselves to be hampered by national borders. Nor should we allow ourselves to be hampered by borders in tackling them. Recent steps taken by the Justice and Home Affairs Ministers will therefore see increased co-ordination and co-operation between police forces in combating organised crime.
We must also confront issues such as Cybercrime, where people are using the Internet and information technology to commit crimes. We have seen how those perpetrating the gravest crimes against children are using technology to promulgate information about how these unspeakable crimes can be organised and committed. In response to this depravity the Irish Presidency has acted to have the remit of Europol extended to deal with trafficking and abuse of children.
Likewise, in relation to drug trafficking, we have to develop a co-ordinated response at all levels to bring international drug traffickers to justice. The Dublin European Council in December will adopt substantive conclusions which will greatly assist a coordinated Europewide response to drug trafficking.
Action is of course also needed at national and regional level to deal with drug abuse. In Ireland, the recent report of the ministerial task force on drugs recognises the crucial role of local communities in tackling drug abuse. The simple message is that all levels of Government and the community must be involved in a co-ordinated way to tackle crime and drug abuse.
Sound Money
Turning to the priority of sound money, the Irish Presidency has made good progress in relation to economic and monetary union. It is important to continually place on the record that, contrary to some claims, EMU will be good for jobs. A stable currency is good for jobs. It is no accident that the post-war period was a period of fixed exchange rates and high employment. In contrast, the period after the 1973 oil shock featured currency instability and falling employment.
The convergence criteria for EMU are the recipe for stable economic growth, low interest rates and thereby more jobs. They create a framework in which long-term business planning will become possible. The elimination of transaction costs for cross-border exchanges will promote increased trade and tourism across borders. It will also, incidentally, lower the barriers between border regions in different nation states and allow them to overcome one of the burdens of peripherality. The conclusions of the December Dublin European Council will be a further important benchmark on the road to commencement of EMU on 1 January 1999.
Peace in Europe
The fourth priority is peace in Europe. I believe that increased political and economic links between the EU and other countries will ensure the promotion of peace in Europe. This was the principle behind the original Coal and Steel Community and I believe that it still holds good today. Peace in Europe will mean better security for the regions of Europe.
Ladies and Gentlemen, Europe cannot be taken for granted. The bloodshed and pain of the Second World War are still within living memory. One of the ways of ensuring that the European Union, and the peace and prosperity it has brought about, survive into the next century is to keep it relevant to the needs and concerns of its citizens.
I believe that regional and local bodies have an important role to play in this process. They act as a conduit between the national and European levels and the individual on the street. Regional governments are a vital link. They provide a crucial bridge in ensuring that a Europe of nations is also a Europe of people.
Thank you.
Will the Taoiseach indicate whether it is proposed to proceed with the devolution of powers to the regions, either through the regional authorities or the local authorities? What progress has been made on that?
The Government is considering, with the aid of the devolution commission, a number of issues which might be suitable for devolution to local authorities. Also, the Minister for the Environment is examining the role of local authority elected members, as distinct from management, to see if a shift of responsibility can be made in favour of members in defined areas of activity. Further, the Minister for the Environment is currently in consultation with the Minister of State with responsibility for local development, drawing up frameworks for partnership and co-operation between local authorities and the many local partnership and community development organisations being aided from public funds and are operating coterminous or parallel with local authorities.
Is the Government working to any time frame for the implementation of change in this area? Will we see change in the lifetime of this Dáil?
I hope we will. My intention is that we will act as quickly as possible when the devolution commission brings forward specific recommendations on the devolution of functions.
What is the time frame?
The devolution commission is being invited to produce a series of reports rather than one final report, each of which will be decided upon quickly when it arrives. A Cabinet subcommittee will meet immediately when a report on a particular area of devolution comes to hand with a view to making the necessary decisions on implementation. That mechanism is in place so there can be a quick follow up to a report. However, obviously, we have to wait until reports are submitted by the devolution commission, which is continuing to work intensively.
Will the Taoiseach inform the House of any changes implemented so far in this area?
The changes to which I referred are ongoing. There has not been any significant devolution of additional functions in the recent past. There is a process of examination to identify areas where devolution might take place. We are also looking at the respective functions of local authority members and managers. We are awaiting a further report from the devolution commission on the matter.
It is all being done with mirrors, it is a mirage.
It is behind dirty panes of glass.
Has the Government given any more thought to whether Ireland should be broken down regionally for the next round of Structural Funds? What decisions has the Government made on that matter? I asked some time ago if we were preparing regional statistics on a per capita basis so that we could make a case on a regional basis if the entire country was not accepted as an Objective One region.
Ireland will make its case for the retention of Objective One status on a number of grounds which I outlined in my speech on the occasion in question. I referred, in particular, to the under development of our internal transport infrastructure; the fact we are one of the few island members of the Union without access such as the Channel Tunnel to surface transport to other member states means we suffer from certain, inherent, in-built handicaps simply because of our geographical location. I also drew attention to the difficulties facing small, indigenously owned industry here and the comparative under development of our R and D capacity.
In addition, the measure used by the European Union to determine the income of countries, namely gross domestic product, is not a suitable means of measuring Ireland's real income position. There is a gap of 12.5 per cent between our GNP and our GDP. I made the case that our GNP is a more real measure of our true position. In colloquial terms, our GNP measures the money we have to spend and our GDP measures the money we have to spend plus money that comes in and leaves again in almost the same transaction because it is not available to us to spend domestically. In measuring the true income position of any household or country it is more appropriate to use disposable income rather than theoretical income. Hence the Government will make a case for the retention of Objective One status. The negotiations on this matter do not open until mid-1997 and we should not prematurely yield ground in any issue concerning it or engage in any exercise of the kind suggested by the Deputy which could be construed as preparing to yield ground.
This is a significant statement; it is the first time the Government has declared its policy on how the negotiations on the next round of Structural Funds will be handled. I am glad the Taoiseach made this statement as many national bodies believed the matter would be dealt with in other ways and not on a nation-wide basis.
I agree with the Taoiseach that when the decision has been made we should build our case on it. What preparations are under way to build a case which shows we can live within the criteria applied to the last round of Structural Funds in 1993? It is not only a question of GDP and GNP, which have been affected by repatriations. To complicate the matter further, the EU has started to use the GGD position, the general government deficit position. Even though we will probably be at the EU average and will meet all the Maastricht criteria in regard to debt etc., what work is under way to develop and prove our case so that the Government and Opposition can row in behind it? This will enable us to maximise our efforts to secure as much funding as possible under the Regional Fund, the European Social Fund, FEOGA and the other specialist funds available at that time. The data available from the Central Statistics Office will not help us to sustain our case, and that has been the difficulty for some time.
The detailed work on this matter is the responsibility of the Minister for Finance. The Department of Finance, which has always been responsible for Ireland's management of EU funds, is taking the lead role in the preparation of our case. In my speech at the Royal Hospital I set out the broad case for the continuance of support for Ireland from the Structural Funds under Objective One for the period 2000-05. We will develop this case in the coming months, but obviously it is not in our interests — or in those of the Union — to open this debate prematurely. We are still operating within the existing Delors package arrangement and we should continue to implement this. One of the most convincing things we can do to justify further support is to show we are using the money well and doing everything within our power and resources to complement the achievements and aims for which we are receiving European money. I highlighted this in my speech and referred to a number of measures we can take to achieve these objectives.
Will the Taoiseach arrange for either him or the Minister for Finance to set out the work being undertaken in preparation for the next round of Structural Funds? It is not simply a matter of saying the M50 or the Athlone bypass are great developments. We must organise ourselves properly so that we can fight this major battle, ensure we can live within the criteria laid down for the last two rounds of Structural Funds and argue a coherent case. This will not fall out of the sky and the Department of Finance, the Central Statistics Office and other experts must prepare the data. It is a year since I first asked about the preparations which were under way to enable us to organise ourselves properly for the next round of Structural Funds. We are talking about billions of pounds for the national economy in the areas of agriculture, training and economic and infrastructural development. It is not enough to say we will do this, that or the other.
I must dissuade the Deputy from debating the matter now.
It is an economic argument and we should know what is being done to ensure we are organised properly.
I agree with the Deputy about the importance of carrying out this work and if he wishes to obtain further information on its detail he should table a question to the Minister for Finance who is responsible for carrying it forward. I outlined the general Government position on the matter in my speech at the conference in the Royal Hospital, Kilmainham.