I attended the Luxembourg European Council on 12 and 13 December last. I was accompanied by the Minister for Foreign Affairs, Deputy David Andrews, and the Minister for Finance, Deputy Charlie McCreevy. The outcome of the Luxembourg European Council is set out in detail in the Conclusions of the Council, copies of which I have placed in the Library of the House.
The Luxembourg European Council was an historic occasion. The launch of the next enlargement process involving ten countries of Central and Eastern Europe and Cyprus has initiated, in the words of the Council Conclusions, "the dawn of a new era, firmly putting an end to the divisions of the past". Apart from the launch of the next round of enlargement other key outcomes of the Council were the agreement to intensify the review of the Union's common policies and future financial framework by using as a working basis the Commission's Agenda 2000 proposals and, in the context of Economic and Monetary Union, resolution of the so-called Euro X issue.
This successful European Council builds on a very successful period for the European Union in recent years. The launch of Economic and Monetary Union is now a little over a year away. The Union has shown great cohesion and determination in charting the difficult path to this rendezvous. As a result EMU is on course to start on 1 January 1999.
The Treaty of Amsterdam also marks a further important step forward for the Union. The treaty contains many important and new provisions on issues of real concern to Europe's citizens. It will allow Europe to address more effectively the most direct concerns of citizens in the areas of employment, crime, the environment, public health, consumer protection, social exclusion and non-discrimination. The provisions of the treaty have already been drawn on at the highly successful Employment Summit last month to ensure better co-ordination of member states' employment policies.
These important recent initiatives of the EU were built on the solid foundations laid by the founding fathers of the European Community and their successors. The result is the successful political and economic entity which the EU is today. In the same way as the Common Market, as it was then known, acted as a magnet for Ireland in the 1960s and early 1970, membership of the current European Union is the priority of the new democracies of Central and Eastern Europe. This demands a generous and open response from the European Union and I am glad that the Luxembourg European Council agreed such a response.
At Luxembourg the European Council considered applications for membership from ten Central and Eastern European States and from Cyprus. After considering the opinions of the Commission on each applicant state the European Council decided to launch an accession process comprising all 11 applicants. In making this decision the European Council also affirmed that all the applicant states are destined to join the European Union on the basis of the same criteria and that they are participating in the accession process on an equal footing. The process is, therefore, an inclusive one. This feature was particularly welcome to all the applicant states.
In recognition of the need to intensify efforts to prepare for membership, the European Council also agreed to an enhanced pre-accession strategy for the applicant states. The key to this new strategy is the creation of a new instrument, accession partnerships, which will mobilise all forms of assistance to the applicant countries of Central and Eastern Europe within a single format. Taking account of the assessment set out in the Commission opinions, the European Council decided to convene bilateral intergovernmental conferences in the spring of 1998 to begin negotiations with Cyprus, Hungary, Poland, Estonia, the Czech Republic and Slovenia on their entry into the Union. While this is a signal that these countries are at present more advanced in terms of their preparedness for EU entry I again emphasise that the enlargement process is inclusive of all 11 applicants.
Ireland, as a supporter of the enlargement process, will adopt a positive approach to the enlargement negotiations. However, nobody should be under any illusion as to the magnitude of the task. The ten associated states of Central and Eastern Europe have a combined population of 106 million, yet their total combined GDP corresponds only to that of the Netherlands and their average per capita GDP is approximately one third of the Union average.
The issues and challenges raised by the next enlargement are, therefore, clearly of a different nature from those raised by previous enlargements. I stress, however, that enlargement provides opportunities as well as challenges for Ireland. As the economies of the associated states develop and as their standards of living rise new markets with significant potential for Irish exporters will open up. There has already been a dramatic increase over the last few years in the level of Irish exports to the five Central and Eastern European states, with which detailed negotiations will initially commence.
In a further measure to encourage closer relations between the applicant states and the EU, the European Council agreed to set up a European conference. This conference will bring together the member states of the European Union and the European states aspiring to accede to it which share its values and its internal and external objectives. Initially, the EU offer to participate in the European conference will be addressed to Cyprus, the applicant states of Central and Eastern Europe and Turkey.
The European Council also considered the position of Turkey in depth. This issue will be dealt with in detail by the Minister of State in his statement on behalf of the Minister for Foreign Affairs. However, I stress that the European Council confirmed Turkey's eligibility for accession to the European Union and stated that its application will be judged on the basis of the same criteria as the other applicant states. The situation with regard to Turkey, as well as Iran, formed part of my discussions with President Clinton, when I also availed of the opportunity to brief him generally on the outcome of the Luxembourg summit.
The European Council conclusions underline the need to ensure in advance that the Union is in a position to cope with enlargement under the best conditions by making the adjustments deemed necessary to its policies and their financing. It considered that the Commission proposals in Agenda 2000 are an appropriate working basis for further negotiations for an agreement on the Union's policies and the financial framework. The conclusions adopted by the European Council in this key area are welcome from an Irish viewpoint. We have always accepted that the Commission's Agenda 2000 proposals set out in a comprehensive and balanced way the issues facing the EU's common policies against the background of enlargement.
Decisions were not taken in Luxembourg on the share-out of EU funding under the next round of financial perspectives which begins in the year 2000. The Commission will next year submit detailed proposals for revised Structural Fund regulations and lengthy negotiations lie ahead. Member states' allocations will not be decided for some time, probably as late as 1999.
Because of our recent economic performance Ireland will approach these negotiations in a comparatively better position economically than was the case on the last occasion. As I stated at the conclusion of the Luxembourg Council, we should welcome our improved economic performance. It has delivered more employment, stable public finances and low inflation and interest rates. Our good performance has also been assisted by EU transfers. We have used these transfers in a wise and progressive fashion. We are testimony to the success of the EU's cohesion policy. Care must be taken to ensure this success is nurtured and sustained. EU transfers to Ireland will continue to have an important role in achieving this and this must be recognised in the detailed Agenda 2000 negotiations.
Ireland continues to have significant development needs in relation to our relatively underdeveloped infrastructure and our continuing employment needs. In addition, because our movement towards average Community GDP is so recent, we have not had the opportunity to accumulate the national stock of wealth and capital available in other member states which have been relatively prosperous over a much longer period.
The Commission has recognised in Agenda 2000 that any transition from Objective 1 status under the Structural Funds must be gradual, and has proposed transitional provisions for regions which exceed the threshold for Objective 1 status. We welcome this recognition because it is essential that the aims of Objective 1 in Ireland are met fully and on a sustainable basis. Ireland emphasised at the European Council that transitional arrangements must be adequate in both content and duration. It is in everyone's interest, especially that of the Union as a whole, that a cycle of dependency be avoided and that Ireland's relative success story continues. A period of consolidation is definitely required, if Ireland's present achievements are not to be undermined.
I will put these and other points to President Santer tomorrow when we discuss Agenda 2000 at our scheduled meeting. We will not discuss specific allocations for Ireland at our meeting — that is for future negotiation. I welcome the opportunity to set out Ireland's broad position and to ascertain in more detail the Commission's approach. At my meeting with President Santer I will also raise the introduction of Ireland's proposed single rate of corporation tax notified to the Commission some months ago and the new regional aid guidelines agreed by the European Commission yesterday.
On agriculture, the European Council took note of the work done by the Agriculture Council on the agricultural aspects of Agenda 2000. It agreed the process of reform begun in 1992 with the MacSharry reform should be continued and that the end result should be economically sound and socially acceptable and should make it possible to ensure a fair income for farmers.
The European Council also took an important step towards the achievement of EMU when it agreed on a mechanism for economic policy co-ordination. This mechanism includes provision for informal meetings among Ministers of states in the euro area to discuss issues connected with their shared specific responsibilities for the single currency. It is also provided, in this context, that whenever matters of common interest are concerned, they will be discussed by Ministers of all member states. The objective here is to minimise any possibility of a division between member states participating in EMU and those that will not participate from the beginning. This is in Ireland's interest, especially in view of our close trading links with Britain. The Council also confirmed that the ECOFIN Council remains at the centre of economic co-ordination as the sole decision-making body in this area for the entire Community.
The European Council noted that following on the successful Special Council on Employment, held on 20 and 21 November last, Union action to promote employment is now in place. The Labour and Social Affairs Council, at its meeting on Monday last adopted the employment guidelines which were approved by the Special European Council on Employment. The Council also noted much useful work which was progressing in the justice and home affairs area. Particular satisfaction was recorded with the adoption of the first concrete measures for putting into effect the action plan to combat organised crime. This action plan was an initiative of the Irish Presidency. It is gratifying from an Irish point of view to see that this initiative and initiatives in the drugs area are bearing fruit.
I met the British Prime Minister, Mr. Tony Blair, in the margins of the European Council meeting. Our discussions focused on the talks and we agreed that, from 11 January, for a ten week period, the two Governments would work to drive the process forward. We also discussed Bloody Sunday, the case of Roisín McAliskey and prisoner issues, including transfers and tariffs, and the level of the military presence necessary in the current situation. We reaffirmed our strongly held view that, with goodwill and resolution on all sides, an agreement could be put in place which would be fair to all and acceptable to all reasonable people, both Nationalist and Unionist. We confirmed that May 1998 continued to be our target date for completion of the talks process.
The Prime Minister and I also reviewed progress on the wide-ranging programme of bilateral co-operation which the two Governments had agreed earlier this year to take forward and intensify. Following our meeting, we issued a statement and a progress report on co-operation between Ireland and the UK — Developing East-West Relations. The report details more recent developments in the co-operation that is taking place in a great many areas of public policy. It is not necessarily exhaustive, but it illustrates the co-operation that is taking place and the wide range of areas involved. Copies of the report have been laid before both Houses of the Oireachtas.
Luxembourg, and particularly Jean Claude Juncker, the Prime Minister, can take much pride in the achievements of its Presidency. The two European Councils were very successful. They succeeded in advancing the Union's agenda in important areas. I have worked in various councils with Jean Claude Juncker, on the Social Affairs Council, ECOFIN and European councils. Our careers have followed a similar path. While he represents a small country, his chairmanship of the European Council, the Social Affairs Council and the ECOFIN Council was a great achievement. Most of my colleagues will know him well because he has been on the scene for a long time. To undertake such a task, attend all the meetings and tour the capitals on two occasions is more than should be asked of the leader of any country, not to mention a small country. He made tremendous efforts during Luxembourg's Presidency.
The task for the Union now is to complete the Agenda 2000 process which has been initiated at the most recent Council. Ireland will approach the negotiations on Agenda 2000 and on enlargement in a positive frame of mind. On the eve of Ireland's 25th anniversary of membership it should be recalled that Ireland has always adopted a positive approach to our membership of the European Union. We have not been afraid of change and we have always sought to participate actively in shaping change in the best interests of Ireland and Europe. This approach has served us well and will be the approach which will guide us through the difficult negotiations which are to commence in 1998.