Vol. 492 No. 2
2 Mr. J. Bruton asked the Taoiseach the way in which Ireland's entry to EMU and a satisfactory outcome in the negotiations on Agenda 2000, particularly the next round of Structural Funds, will set the agenda for his Department's work in the economic and European areas as mentioned in his Department's strategy statement. [12666/98]
3 Mr. J. Bruton asked the Taoiseach the policy formulation activities and initiatives promoted to date by the economic and social division of his Department. [12668/98]
I propose to take Questions Nos. 2 and 3 together.
As Taoiseach and Head of Government, I have a leadership role and a corresponding involvement in major policy areas and this is reflected in my Department's statement of strategy. In this context, Ireland's participation in the third stage of economic and monetary union from 1 January 1999 has been taken fully into account in the development of national economic and social policy and was a central concern in the negotiation of Partnership 2000.
The economic and social policy division in my Department assists me in my role as Head of Government by ensuring that the relevant key objectives of Government policy are pursued and achieved. These objectives are set out in the Government's programme, An Action Programme for the Millennium, and in Partnership 2000.
The principal activities of the division derive from monitoring the implementation of Partnership 2000 through convening quarterly meetings with the social partners and the production of progress reports. This is done in close co-operation with the relevant Departments. The division also fosters the co-ordination of measures across Departments and agencies to ensure quality service delivery in the context of Partnership 2000. This is achieved through participation in a number of cross-departmental groups, the convening of special meetings and the production of policy papers.
Issues where the division has taken certain specific initiatives in the recent past relate to the work of the Cabinet committee on social inclusion, the development of Government policy on the information society, the future development of the International Financial Services Centre and the study of proposals for a basic income.
A satisfactory outcome in the negotiations on Agenda 2000, particularly the next round of Structural Funds, are priorities central to the work of the European and international affairs division of the Department. The division plays a key co-ordinating role in developing the national approach on the Agenda 2000 negotiations. The fact that it provides the secretariat to the Ministers and Secretaries General group on EU policy is of particular importance in this regard.
Regarding Agenda 2000, what advice has the division given the Taoiseach on the steps necessary to implement the promise he made that Objective one status would be retained for the west and the midlands?
I stated that the negotiating position of Objective one status would not be retained for any specific reason. What has been stated is that there are two options in discussions: one is to retain Objective one status for the entire country for the transition period; the other is to subdivide the country if it is advantageous. Two things must be determined for the latter to happen: one is Commission approval because subdivision is not automatically allowed; the other is that it must be ensured the country gains overall in monetary terms. It is not clear that would happen, it is a negotiating card we can use in the process at this stage. We have not declared which stance we will adopt and neither have other countries.
Is the Taoiseach aware that his pre-election programme did not mention two options and that it was very specific in stating that Objective one status would be maintained for the west, the midlands and the Border? Is the Taoiseach abandoning that aspect of his pre-election commitment?
We will have Objective one status in the transition period but it will not be the same as it was before because Ireland has exceeded the qualifying GNP figure. The country could be subdivided and surveys have been done on this in the Department of Finance. I first initiated such surveys in 1994. Regions could be prioritised for the old style Objective one status. That is something we will bear in mind in the negotiating period.
Does the Taoiseach accept his party is engaged in naked hypocrisy on this issue? The Fianna Fáil group in the Seanad has tabled a motion to the effect that Objective one status should be retained for the west, the midlands and the Border and there is no mention of the other option the Taoiseach mentioned. His party in the west advocates Objective one status for the region indefinitely and not on a transitional basis and his entire party advocated that stance before the election. The Taoiseach is now telling the House that there are options and that he has not made up his mind on the matter. Is it possible that the schizophrenic attitude between Fianna Fáil in Cabinet and in the Seanad might be resolved?
I object. Deputy Bruton has little experience of this kind of negotiation as he was not involved in the negotiations in 1989 and 1993. I handled both very successfully for the country and I will do the same with this one. It would be awfully foolish and it is something that only Deputy Bruton would do to declare our negotiating stance in advance.
The Taoiseach, in reply to a question from Deputy Bruton, stated that in the course of the transition period, whatever duration that may be, the country will have Objective one status. Will the Taoiseach clarify that? Has the Commission already signalled that the country will have Objective one status or that it will be subject to a transitional process based on that status?
No, we will not have Objective one status because we no longer qualify under the relevant criteria. We will either have an amended Objective one status for either the entire country or for certain parts of it. We will not receive the same amounts of funding. There will be a transitional arrangement which will not grant as much funding as when we had Objective one status. There is no name for it yet but it will not be the old style Objective one status.
Does that mean the comment the Taoiseach inadvertently made earlier that the country will have Objective one status in the next period of Structural Funds is incorrect and that there will be either Objective one status for parts of the country or an overall transitional system for the country as a whole? Does he agree that the point of the motion tabled by Fianna Fáil in the Seanad is precisely to obtain a separate advantageous arrangement for the west and not the national arrangement to which the Taoiseach refers? Does he also agree that, if Objective one status is retained for the west, it will be to the cost of the rest of the country, but that that is precisely what the Fianna Fáil Senators seek?
I do not believe I am answering questions on Seanad motions. I want to state the Government's negotiating position. Owing to Ireland's economic success, we will no longer qualify under the criteria for Objective one status. However, the Commission proposes a lengthy transition period which it is hoped will last until 2006, although there will only be a four year period for Cohesion Funds. However, as the Deputy knows, there is considerable difficulty with that. A number of member states do not accept that countries which have joined economic and monetary union should have Cohesion Funds. I do not believe that will stand up to analysis but it is a negotiating position. On the basis of Commission proposals, we will continue to receive a significant amount of funding until 2006 under the Objective one envelope or whatever it will be called in future. Our key objective is to ensure the maximum level of funding is obtained for Ireland and my negotiating stance in discussions with different Heads of State and with the Commission is to see what exactly is their negotiating stance and what it is likely to be over the next year.
As Deputies know, it is unlikely negotiations will be completed quickly. Little happened in Cardiff other than to set the timetable and some of the crucial criteria. Matters should have progressed towards the final arguments by the Vienna summit in December. The special German summit in March will wrap it up. That is how it is operating. No one is likely to concede anything this side of the Vienna summit, so we will have to decide in the final negotiations what is best for us. We must argue that, despite good economic figures, we still have an infrastructural deficit and then see how best that stance can be maximised. That means either opting for the transitional period up to 2006 or subdividing the country, if that can be agreed. Some say this will be easily agreed but I do not believe that to be the case. However, if it was agreed it might be advisable for us to go down that road and take out some regions such as the Border and the west. That would exclude other areas where there is considerable social disadvantage. Other member states have the same difficulty. Yesterday I met Prime Minister Guterres who has the same problem with Lisbon which is at 88 per cent and will be ruled out. It is a matter for each country as to how they approach the negotiations. I will not concede our strategy at this stage.
While it is important to maximise the assistance for Ireland, it would be grossly improper to abandon those urban areas which are seriously disadvantaged in pursuit of a lobby from the west. Presumably they believe their case but there is serious concern, particularly in greater Dublin, that the Structural, Cohesion and Social Funds will no longer be available to Dublin where ten of the 11 most disadvantaged areas are located.
We have always had Objective one status for the entire country. That is still the case. Arguments are made by other organisations which I will not outline. Some of these arguments have considerable merit but there are downsides for other regions. We have to see what is best and the decision we make must be for the entire country. Some argue that one could get more by going the other way. I argue that if we have Objective one status only for a transitional period and hold Cohesion Funds for the entire island, that is hard to beat in monetary terms. There is much negotiating to be done. The commission's documents of last autumn and 18 March are not the full picture.
Where does the Taoiseach stand on the attempt to obtain Objective one status for Northern Ireland permanently rather than on a transitional basis? Does he support this case? If so and if he also opts for the idea that this State would have transitional Objective one status, does it not mean that in eight years Leitrim will no longer have Objective one status while Fermanagh will? Does he regard that as a reasonable outcome?
There has been no more than a mention of Northern Ireland having Objective one status. I have checked with the commission to see how serious a proposal this is and it has only been mentioned. There has also only been mention of the other proposal in which the six Border counties, north and south, should be included. I do not see any great support for it.
The Taoiseach will get little support in County Meath.
People in County Meath view these issues on an all Ireland basis. We are an all Ireland county.
(Dublin West): With regard to Ireland's entry to EMU, is the Taoiseach's Department preparing for some of the likely scenarios which will result, in particular, the fact that the traditional bail out methods in times of economic crisis, such as devaluation, will not be allowed? Budget deficits will be pegged and public borrowing strictly controlled. With that regime already in place inflation is beginning to rise and may rise further next year. What preparations is the Department making for this situation? Will there be a return to the attempt to squeeze the public sector and the wages and conditions of workers, particularly public service workers, to squeeze more productivity without rewards? Why should workers co-operate with that when successive Governments have failed to prevent racketeering in the building industry and the housing market which has put a modest house out of the reach of an ordinary worker? Will the Taoiseach comment on the contradictions involved?
That sounded like a Second Stage speech on the Economic and Monetary Union Bill which will be before the House next week. The criteria were fixed under the Maastricht Treaty which was voted on by the people. The subsequent discussions and arrangements for removing measures such as competitive devaluations are part of what we must live with and work to. We have done so for many years. We fulfilled the criteria in most years in the past decade. Pressures will always arise because of economic cycles. They have been a reality for the past 290 years since 1700. There will be ups and downs in the economic cycle in the future and it is clear what mechanisms are and are not available. We will have to live within the expenditures and incomes policies and whatever policies are put forward by Governments in their financial statements. That is how we will have to order matters. I am sure these matters will change as time goes on. That is what we signed up to in economic and monetary union.
Does the Taoiseach agree that the negotiating strategy of leaving open until Vienna the option of whether to go for transitional Objective one status for the whole country or whether to sub-regionalise the country to maintain indefinite status for some regions, means that he is choosing the transitional option for the whole country? It will not be possible to obtain indefinite Objective one status without establishing the area and a system of government separate from central Government well in advance. If the Taoiseach pursues the strategy of leaving it all until Vienna he is giving up on the option of retaining Objective one status for the west, the midlands and the Border areas.
That is not correct but I will not spell out our negotiating position as no one else in Europe is doing so. Very good data is available in the Department of Finance on the regions. The question is what gives us the most resources.
That is not the question.
In terms of the overall country——
That is a huckster's policy.
The other strategy is the period of transition in which we ensure that we maximise our receipts. We can only do so in two ways. We have only used one way up to now. Perhaps there is only one way as we may not get approval for dividing the country.
The Taoiseach will not get approval if he does not ask for it.
We put forward both cases a long time ago. I have been working on this since last November-December. However, in terms of the negotiations over the next six months, we will ensure that we get the best strategic interest. Deputy De Rossa stated that this was not the only issue. If one were to seek Objective one status for one small region, others could be placed at a disadvantage. This has to be taken into account. At least three or four countries have adopted the same position of not stating how they will proceed.
Does the Taoiseach accept it is time the overall structure was looked at? This island is in a unique position. The criteria that apply to countries in central Europe cannot be applied to this island. It would be extraordinary if only part of it was granted Objective one status. The level of infrastructural development would be seriously affected as a result. This should be spelled out clearly in negotiating any future agreements. There is a necessity to retain Objective one status for the entire island.
We no longer qualify under the relevant criteria for Objective I status.
As they apply at present.
On a GDP basis.
What about GNP?
We still would not qualify.
That debate is over.
It has been made clear by the countries funding the programme that the figure of 1.27 per cent will not be breached. A new mechanism is not on.
Why will the Taoiseach not say that Fianna Fáil cannot deliver on its pre-election promises?
We are seeking the maximum level of funding to meet our ongoing development needs to the benefit of the less prosperous regions. We have given the Commission chapter and verse on our infrastructural needs to which Deputy Barrett referred.
I tabled a direct question to the Taoiseach on this issue last week but it was transferred to the Minister for Finance.
The Deputy should, please, ask a question.
I am glad the Taoiseach is at last addressing the problem.
I answer every question at Question Time, from A to Z.
The Taoiseach does not.
Supplementaries?
The British Prime Minister, Mr. Tony Blair, has stated publicly that he will support an application seeking Objective one status for the six Northern Border counties in the period 2000-7. A submission has been forwarded to the Taoiseach by the Border regional authority. The six Border counties have a cast iron case——
The Deputy should ask a question.
——for the retention of Objective one status in the next tranche of Structural Funds to keep abreast of developments in Northern Ireland as a result of the peace initiative under which the Chancellor of the Exchequer, Mr. Brown, has announced a £315 million package. Will the Taoiseach support an application seeking Objective one status for the six Border counties in the period 2000-7?
I have stated precisely what we are doing. We have not stated whether we will seek Objective one status for the entire country or whether the country will be divided into regions.
The Taoiseach was quite clear on the issue before the election, it is in the manifesto.
I am still quite clear on it. We will seek the maximum level of resources for the State.
That is not what the manifesto states.
