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Dáil Éireann debate -
Wednesday, 10 Mar 1999

Vol. 502 No. 1

Ceisteanna – Questions. - Official Engagements.

Joe Higgins

Question:

1 Mr. Higgins (Dublin West) asked the Taoiseach if he will report on his discussions with EU leaders regarding Agenda 2000. [5778/99]

John Bruton

Question:

2 Mr. J. Bruton asked the Taoiseach if he will report on his attendance at the EU Heads of Government meeting in Germany on 26 February 1999; and if he will make a statement on the matter. [5783/99]

John Bruton

Question:

3 Mr. J. Bruton asked the Taoiseach the meetings and discussions he had with other EU Heads of Government at the informal summit in Germany on 26 February 1999; the subjects discussed; and if he will make a statement on the matter. [5905/99]

John Bruton

Question:

4 Mr. J. Bruton asked the Taoiseach the discussions, if any, he had with the President of the EU Commission, Mr. Santer, when he met him at the informal EU Heads of Government meeting in Germany recently; and if he will make a statement on the matter. [5908/99]

John Bruton

Question:

5 Mr. J. Bruton asked the Taoiseach the plans, if any, he has to consult with the social partners following the Agenda 2000 and the EU Heads of Government summit meetings in Bonn; and if he will make a statement on the matter. [5910/99]

John Bruton

Question:

6 Mr. J. Bruton asked the Taoiseach the preparatory meetings he will have before his meeting in Brussels on 3 March 1999 with the Belgian Prime Minister, Mr. Dehaene; if an agenda has been agreed for the meeting; and if he will make a statement on the matter. [5915/99]

John Bruton

Question:

7 Mr. J. Bruton asked the Taoiseach the preparatory meetings he will have before his meeting in Brussels on 3 March 1999 with the President of the EU Commission, Mr. Santer; if an agenda has been agreed for the meeting; and if he will make a statement on the matter. [5916/99]

Ruairí Quinn

Question:

8 Mr. Quinn asked the Taoiseach if he will report on the outcome of the informal meeting of EU Heads of Government on 26 February 1999; and if he will make a statement on the matter. [5969/99]

Ruairí Quinn

Question:

9 Mr. Quinn asked the Taoiseach if he will report on his meeting with the Belgian Prime Minister; and if he will make a statement on the matter. [5975/99]

John Bruton

Question:

10 Mr. J. Bruton asked the Taoiseach the membership of the Cabinet committee and the expert technical group on Agenda 2000; the number of times the committee and the group have met; and if he will make a statement on the matter. [6071/99]

John Bruton

Question:

11 Mr. J. Bruton asked the Taoiseach if he will report on his recent telephone conversation with the German Chancellor, Mr. Schröder; and if he will make a statement on the matter. [6072/99]

Joe Higgins

Question:

12 Mr. Higgins (Dublin West) asked the Taoiseach if he will report on his discussions with EU leaders in Petersburg. [6104/99]

Trevor Sargent

Question:

13 Mr. Sargent asked the Taoiseach the discussions, if any, he had with European counterparts at the recent Bonn summit regarding Ireland's situation in relation to Agenda 2000; and if he will make a statement on the matter. [6266/99]

John Bruton

Question:

14 Mr. J. Bruton asked the Taoiseach the plans, if any, he has to visit South and Central America later in 1999; the countries he will visit; the events he will attend; the meetings he will have; the preparatory meetings he will have in Ireland prior to undertaking the trip; and if he will make a statement on the matter. [6599/99]

Joe Higgins

Question:

15 Mr. Higgins (Dublin West) asked the Taoiseach if he will report on his discussions with EU President, Mr. Jacques Santer. [6658/99]

Trevor Sargent

Question:

16 Mr. Sargent asked the Taoiseach if he will report on the meetings he had when he visited Brussels last week; and if he will make a statement on the matter. [6843/99]

Trevor Sargent

Question:

17 Mr. Sargent asked the Taoiseach if he will report on his meeting last week with the President of the European Commission, Mr. Jacques Santer; and if he will make a statement on the matter. [6844/99]

John Bruton

Question:

18 Mr. J. Bruton asked the Taoiseach if he will report on his recent meeting in Brussels with the President of the European Commission, Mr. Jacques Santer; and if he will make a statement on the matter. [6848/99]

John Bruton

Question:

19 Mr. J. Bruton asked the Taoiseach if he will report on his recent meeting in Brussels with the Belgian Prime Minister, Mr. Jean-Luc Dehaene; and if he will make a statement on the matter. [6849/99]

John Bruton

Question:

20 Mr. J. Bruton asked the Taoiseach if he will report on the official engagements he undertook on his visit to Brussels on 3 March 1999; and if he will make a statement on the matter. [6850/99]

Ruairí Quinn

Question:

21 Mr. Quinn asked the Taoiseach if he will report on his meeting with the President of the European Commission; and if he will make a statement on the matter. [6863/99]

Ruairí Quinn

Question:

22 Mr. Quinn asked the Taoiseach if he met last week with the EU Commissioner on Social Affairs; and if he will make a statement on the matter. [6864/99]

Ruairí Quinn

Question:

23 Mr. Quinn asked the Taoiseach the additional meetings, if any, he will have with other Heads of State between now and the European Council meeting in Berlin on Agenda 2000; and if he will make a statement on the matter. [6866/99]

John Bruton

Question:

24 Mr. J. Bruton asked the Taoiseach if he will report on his meeting in Brussels on 3 March 1999 with Commissioner Padraig Flynn; the topics raised; and if he will make a statement on the matter. [6923/99]

John Bruton

Question:

25 Mr. J. Bruton asked the Taoiseach if he will report on his recent meeting with the Irish Creamery Milk Suppliers' Association; and if he will make a statement on the matter. [6977/99]

Ruairí Quinn

Question:

26 Mr. Quinn asked the Taoiseach if he will report on his second meeting with the Belgian Prime Minister; and if he will make a statement on the matter. [7054/99]

Joe Higgins

Question:

27 Mr. Higgins (Dublin West) asked the Taoiseach if he will report on his meetings, if any, either formal or informal with Commissioner Padraig Flynn since the passing of the Dáil Éireann motion concerning the Commissioner. [7191/99]

I propose to take Questions Nos. 1 to 27, inclusive, together.

I spoke with the German Chancellor, Mr. Gerhard Schröder, on Monday evening, 22 February. We discussed the then forthcoming informal summit in Petersburg and, in particular, the agriculture proposals under the Agenda 2000 negotiations. The Chancellor indicated that he was aware of the problems these proposals posed for Ireland but stressed his confidence that an overall compromise on agriculture could be found. I will meet Chancellor Schröder in Dublin on 19 March as part of his tour of capitals in advance of the special meeting of the European Council in Berlin on 24 and 25 March.

The EU Heads of State or Government and the President of the Commission had an informal summit in Petersburg in Germany on 26 February. As had been decided in advance, given the nature of the summit, no formal decisions were taken and no written conclusions were issued. The summit commenced with a brief meeting with the President of the European Parliament, Mr. José Maria Gil-Robles. The first working session focused on the future financial resources of the Union. We discussed and developed ideas on the reform of Cohesion and agricultural policies and reviewed the possible options and guidelines for a compromise package, in preparation for the conclusion of the Agenda 2000 negotiations at the special meeting of the European Council in Berlin. I outlined Ireland's position, the losses we would face even under the current Agenda 2000 proposals from the Commission, our significant development needs, notably infrastructural, and made clear the areas of central concern to Ireland.

The next part of the summit, which took place over lunch, included discussions on external issues such as the situation in Kosovo, the Middle East, the Oçalan case and a short report on the summit meeting between the European Union and the Russian President in Moscow. We took the opportunity to discuss the process to fill forthcoming vacancies within the EU, including the next President of the Commission and the High Representative for CFSP. President Santer also delivered a brief progress report on the current work on reforming the Commission.

The final session allowed for further discussion of Agenda 2000 related issues. I should stress that, following this summit and the recent meeting of the Agriculture Council, I remain confident that we can obtain an equitable outcome for Ireland in the negotiations. The Petersburg meeting also presented me with an opportunity for a short bilateral meeting with the British Prime Minister, Mr. Blair. We discussed the current situation in Northern Ireland and developments in the peace process.

I met the Belgian Prime Minister, Mr. Jean-Luc Dehaene, and the President of the European Commission, Mr. Jacques Santer, on 3 March in Brussels. These meetings focused on the current state of the Agenda 2000 negotiations, particularly following on from the informal summit in Petersburg. I emphasised the principal points of concern to Ireland. I stressed again the considerable development needs of Ireland and the importance of an equitable outcome from the negotiations. I also discussed issues of a bilateral nature during these meetings. In relation to the Northern Ireland peace process, I thanked President Santer for his support in particular, and the support of the Commission in general.

While in Brussels, I also took the opportunity to meet briefly with European Commissioner, Padraig Flynn. We had a useful discussion on the current state of the Agenda 2000 negotiations. The meeting, at this point in the Agenda 2000 negotiation process, gave important insights on the Commission's perspective on some of the issues of most concern to Ireland.

The Cabinet sub-committee and the expert technical group on Agenda 2000 which I chair has met and will continue to meet in preparation for the Petersburg Summit, bilateral discussions and the forthcoming Berlin Summit meetings. The membership of the Cabinet sub-committee is comprised of the Tánaiste and Minister for Enterprise, Trade and Employment and the Ministers for Foreign Affairs, Finance, and Agriculture and Food. This committee is serviced by the expert technical group which I also chair and which is comprised of senior officials from the Departments represented on the Cabinet sub-committee. The Cabinet sub-committee held an initial meeting in early January. The expert technical group has since met six times.

Most recently, I chaired a high-level meeting of Ministers and Ministers of State on 2 March when, together with the Minister for Agriculture and Food and senior officials, I briefed the meeting on the Government's strategy on Agenda 2000 and the issue of regionalisation. All papers produced by the expert technical group are submitted to the relevant Ministers on the sub-committee. In addition, I discuss the relevant issues with individual members of the Cabinet sub-committee as necessary.

The issues involved in the Agenda 2000 negotiations and their implications have been discussed on a regular basis, as part of my ongoing contacts with the social partners. For example, I had a meeting on Thursday, 25 February with the Irish Farmers' Association representatives about progress in the negotiations. I also met representatives of the Irish Creamery Milk Suppliers' Association on 2 March. We discussed the Agenda 2000 proposals and in particular those relating to agriculture. The outcome of Agenda 2000 will form an important context for negotiations with the social partners on any successor to Partnership 2000.

I will attend the EU-Latin America and Caribbean Summit in Rio de Janeiro on 28 and 29 June. This will be the first such summit between the two regions and will address a broad range of issues, including the strengthening of democracy, human rights and development matters. The summit will also deal with common action against trafficking in drugs, international organised crime and terrorism and will consider UN reform and a range of economic issues. My schedule in Rio has not yet been finalised, but I expect to have a number of bilateral meetings on the margins of the summit, including meetings to seek support for Ireland's candidacy for a non-permanent seat in the UN Security Council. While a visit to Argentina and Mexico in conjunction with the summit is under consideration, no final programme for these essentially trade related visits has been agreed.

(Dublin West): In the course of the Taoiseach's discussions with EU leaders, was the Government's corporation tax policy raised? Was it noted that, in comparison to the rates of tax paid by ordinary people and the much higher rates which apply to big business in most European countries, this country's current and projected rates of corporation tax discriminate heavily in favour of big business? Have countries which contribute substantially to the EU budget – to the benefit of this country – made strong objections in this regard?

In his discussions with EU leaders, and with reference to his proposed visit to Latin America, has the possibility of a trade war between the EU and the United States been discussed in view of the recent threat of action by the US in respect of the importation of bananas into Europe? The United States Government is throwing its full weight behind multinational companies based in that country. As the Taoiseach knows, this matter involves a much larger agenda because, following a resolution of the current problem, the US intends to seek permission to export beef containing artificial hormones and genetically modified crops to Europe. Were these issues discussed and, if so, what views were expressed?

The two matters mentioned were not specifically on the agenda. The second matter, that of trade, was not raised, although it is referred to regularly and has been discussed by the European Commission. It has also been raised in discussions with the Tánaiste. The issue of tax is also raised regularly. There has been ongoing discussion about tax harmonisation and co-operation. The various corporation tax regimes are being examined and a report prepared which will be presented later in the year. The system in place here for 30 years is transparent. The rates for small and medium-sized industries are being reduced to the rates that apply to large companies. I have explained to my counterparts that this is one of the few member states in which corporation tax has been increased by 25 per cent for many companies. Other countries have still complained, however, about the 12.5 per cent rate. The examination will show that some of these negotiate what we might consider sweetheart deals with large companies.

Designer taxes.

They also boast that they have succeeded in securing a zero rate for some of the major international companies to which Deputy Higgins referred. I look forward, therefore, with great relish to the report.

On the Agenda 2000 negotiations, what will happen if there is a conflict between the decisions taken by the Ministers for Agriculture and the financial envelopes laid down by the Ministers for Finance? Is it the Taoiseach's information that the commitments tentatively agreed by the Ministers for Agriculture are in excess of the annual budget limit set by the Ministers for Finance of 40.5 becu? By what amount do they exceed the limit? How and by whom will the matter be resolved?

The simple answer is that it will make the European Council more difficult. The Agriculture Ministers were asked to negotiate a package within an average annual budget of 40.5 becu over seven years. I spoke to President Santer and his officials this day last week. I do not have the precise figure but at that stage it looked as if the Agriculture Council would be out by about 15 becu.

Yes. I do not want to speculate, it is a question of whether the figure of 40.5 becu can be maintained. Many countries, France in particular, as a negotiating position, have put accounts on the table which account for a large part of the 15 becu. I have continually raised the issue of milk reform, the cost of which is 8 becu. It has been shown that this will not do much for the net contributors. Nothing has been agreed but the Irish position is not supported by the Agriculture Council which is in session again today. Bilateral meetings have been continuing since Monday. I have received no further word that would correct the figures by a substantial amount.

Is it the case that the Agriculture Ministers have agreed there should be milk reform which will not commence until 2002? Does this alter the arithmetic to a significant extent? On regionalisation, has there been further communication with or from EUROSTAT on the Government's proposals? Do the Government's proposals include Clare and Kerry or is there an amendment in that regard? In regard to the lunch time discussion to which the Taoiseach referred at which the Presidency of the European Commission and the High Representative on Common Foreign and Security Policy were discussed, is there a tentative agreement that, if the Presidency goes to a larger country, the position of High Representative, as is normal in EU appointments, should go to a smaller country?

On milk reform, what the Deputy said is a consideration but all the agricultural prices have not been agreed. There is, however, general agreement in the Agriculture Council on the need for reform. The European Council and the farm organisations support this position. One cannot say 'no' to everything. The scale has not yet been agreed. Given the cost involved, 8 becu, this area will have to be looked at. On regionalisation, the original application is still on the table. There were further meetings yesterday between officials of DG XVI and the Department of Finance. Officials of EUROSTAT and the CSO are meeting today. On the allocation of positions, there was no agreement at the European Council on how these should be divided. The matter will be discussed at the June summit at which I will argue that smaller countries should have representation.

Given the importance of the Agenda 2000 talks and the impact the outcome could have on this country, how many conversations has the Taoiseach had, in person or by telephone, with the European Commissioner, Mr. Flynn, since Christmas?

I had a meeting with the Commissioner last week. I also met him prior to Christmas. Officials of my Department, the Department of Agriculture and Food and the Department of Finance have been in touch with him.

Am I correct in saying the Taoiseach has had only one meeting since Christmas with the European Commissioner, the one about which we heard from Tommie Gorman on RTE television?

Has any Head of Government put it to the Taoiseach that Ireland's rate of corporation tax is too low and that our expectations in respect of enhanced funds and the amounts on the table in the Agenda 2000 negotiations cannot be squared? Has a specific proposal of that kind been put to the Taoiseach by any of the Heads of Government?

No. There are two separate issues – Agenda 2000 and the negotiations on the contributions we hope to continue to get as net recipients. The negotiations deal with our relative wealth and our position regarding the 75 per cent threshold. I have had many discussions on these matters with practically all the Heads of Government.

The discussion on corporation tax is centred on what will happen to the taxes of the Union in the context of future harmonisation or co-operation. Heads of Government, Finance Ministers in ECOFIN and Trade Ministers are concerned that one country with a low tax rate will distort the marketplace and result in a loss of investment to their countries. They note that last year Ireland took 27 per cent of US investment to all of Europe. I never accept these concerns and robustly defend our position. I argue that we are efficient and competitive, that the country has worked hard, that there is social partnership, that the output of multinational companies located here is very good and that our workers work hard and are well educated. While several Heads of Government have confronted me on this, I do not believe I have lost a round.

In view of the significance of this and the importance of Agenda 2000, does the Taoiseach believe that EU Commissioner Flynn has a role to play that is of assistance to Ireland?

While Commissioners are independent once they take up office, they all maintain contact with their home countries. The briefings, information and dialogue Commissioner Flynn provides to my officials and officials in the Department of Agriculture and Food, including information he sent me last week, is very beneficial because they provide us with an insight into the arguments. I do not wish to go into detail because of the perceived position Commissioners hold on this. Such briefings are very useful and all other member states do the same.

However, the Taoiseach has had only one meeting with Commissioner Flynn since Christmas.

I do not need to talk to the Commissioner to obtain his insights and information.

Will the Taoiseach indicate if, in his discussions at the Bonn summit or at other meetings, the issue of the growth in inequalities in income distribution in the EU has arisen, including a consideration of the measures to be put in place with Agenda 2000 to address them? On the question of harmonisation, was the need to prevent competitive distortions in the enlarging market discussed? For example, carbon or eco taxes would need to be in place before enlargement to enable the eastern European countries benefit from their labour intensive economies. Is the Taoiseach in favour of this? The ESRI has said that if Ireland was to unilaterally adopt such an approach it would maintain our competitiveness.

That is not the view of Patricia McKenna. What Green Party policy is the Deputy referring to?

In his Budget Statement the Minister for Finance said these matters would be looked at. An examination is ongoing in his Department. Some of the other matters raised by the Deputy are on the agenda of the Environmental Council and the Minister for the Environment and Local Government has been dealing with them.

The issue of the spread of income distribution is a matter for domestic policy. As to what will happen to the tranches of money, that is not part of the negotiations, it is for us to determine domestically within the terms of our fiscal policies. They are not dictated by discussion on matters such as Agenda 2000.

Is the Taoiseach aware that there is a need for fiscal structures to ensure some degree of income redistribution after other mechanisms, such as Structural and Cohesion funding, have been exhausted to counter the tendency for income to centralise in an internal market?

That is a matter for us. Each member state submits its case to the ECOFIN council for examination. We are not confined to a specific system because of Agenda 2000.

What proposals will the Government make on UN reform at the Europe-Latin America summit? Is the Government satisfied that there is sufficient co-ordination in Europe on the battle against drugs? Is EUROPOL moving forward at sufficient speed? Are better extradition arrangements required within Europe to facilitate extradition of international criminals within the Union? What are the Taoiseach's views on the possible development of a European criminal court to deal with those accused of organised international crime within the Union in view of the fact that we have already accepted the precedent of extra-territoriality in the matter of crimes against humanity?

Two of those issues will be discussed. No firm proposals have been made on a European criminal court. It will be a considerable time before it arises. I am in favour of extradition for drugs cases because it is clear that no country, especially a small country, can effectively deal with the drugs problem alone.

This summit is the first meeting of its kind. Latin America continues to be the home of an enormous amount of drugs. EUROPOL has spelt out the routes it takes. Co-operation among administrations, including on extradition proceedings, will be required to deal with it.

We support Kofi Annan's reform system at the UN, including his efforts to secure a less bureaucratic, more streamlined system and his attempts to give more powers to the administration. When he visited Ireland he made clear that many of the things he has been seeking to do since taking office are being frustrated due to lack of movement. Some measures have been implemented and we have supported him on this. While his budget has been dramatically reduced, he cannot get agreement on decisions without a mechanism to move matters through the debating groupings. That is frustrating the considerable efforts he has made.

Does the Taoiseach agree that, following the establishment of the euro, the next big project for the EU is the battle against organised crime? Does he also agree that Ireland is at a specific disadvantage in this area because of the attitude of the British Government in refusing to join the Schengen arrangements? Does he further agree that we are isolated from co-operation in European criminal law matters, with which we want to be involved, because we are being forced by the attitude of the British Government to choose between having customs posts on the Border at Newry on the one hand, if we are to join the Schengen agreement, and, on the other hand, involvement with our European colleagues in the battle against organised crime, which is something we want to do? Can the Taoiseach take steps to persuade the British Government, which is adopting a more enlightened attitude to the euro than its predecessor, to similarly take a more enlightened attitude to involvement in the Schengen agreement than its predecessor? This British attitude is preventing the development of a coherent, Europe-wide battle against organised crime, of which Britain is just as much a victim as any other European country.

Deputy John Bruton is familiar with the negotiating stance adopted by everyone, including Britain, the last time around when there was little flexibility. I have discussed this issue with Prime Minister Tony Blair. The Deputy will be aware that this week, two years later, they are moving on a number of the Schengen provisions.

I agree the only way a country such as ours, whose coastline is used for drug trafficking, can combat the problems of drugs, criminality and organised gangs who have a vast amount of resources and are known to Europol and to different member states is through co-operation. It will not happen otherwise. There are many examples of states which lost out because they did not co-operate. I do not know what the British Government will do on the remainder of the Schengen provisions, but it has shown an openness to move on some of them and others are under discussion.

(Dublin West): I am concerned about organised economic bullying by the United States. Will the Taoiseach state whether the Government will take a hard line in the EU and stand up to this economic bullying? The Taoiseach has a unique insight into this issue from his visit to the United States last year when he was heavily lobbied by representatives of Monsanto, including highly placed members of Mr. Clinton's Administration, to get Monsanto's genetically engineered products into Europe. The Taoiseach knows the pressure these people will bring to bear. He also knows, although he might not agree, that successive Governments have been obsequious to US Governments in many respects.

The Deputy should confine himself to questions not statements.

(Dublin West): Will the Taoiseach stand up to the attempts by the United States to bully their way into Europe for the economic benefit of their multinational companies in the hormone and genetic engineering field?

As regards the Taoiseach's meeting with Commissioner Flynn last week, which should be called the "welcome Taoiseach Bertie" meeting, I know he spent most of his time discussing Agenda 2000, but did he speak to the Commissioner about the missing £50,000 donation to Fianna Fáil?

Was it as bad as it looked?

(Dublin West): Did the Commissioner give any indication of what he did with the cheque and why it did not go into the Fianna Fáil coffers? Is the Taoiseach any more enlightened and less puzzled as a result of that meeting?

While the Monsanto issue was raised with me last year, I did not feel I was extensively lobbied. If I was, it was not successful because the Irish position did not change. The present trade difficulties are taking up a lot of time both with the Commission and the relevant Council. I have no doubt the European position will be strenuously put. This is a forerunner to the next GATT round in the autumn, as happened the last time with Micky Kantor. We will see many such issues between America and Europe over the next few months.

As regards my few minutes' conversation with Commissioner Flynn on matters other than Agenda 2000, I was not enlightened any further.

(Dublin West): Did the Taoiseach try?

Has the Taoiseach formed a view on whether a satisfactory conclusion on the issues of Agenda 2000 will be reached the week after next in Berlin under the German Presidency or does he feel the current gap is so wide it cannot be concluded in March and may go all the way to June?

I am on the side of the countries which believe this should be concluded in a few weeks. The Agriculture Council is meeting in continuous session until it reaches a conclusion. It will be difficult for it to do that but it must try.

There are considerable difficulties in relation to how the Cohesion and Structural Funds will be shared out. This moves back to the position of the 1.27 and how much head room can be created. As Deputy Quinn is aware, at 1.02, European spending is substantially below the 1.27. Everybody wants expenditure controlled in a way that is reasonable and fair. People will argue whether that can be done within the head room, particularly on the agriculture side. Even if 50 per cent of the increase is taken out, we are still talking about 47.5 million euros.

The negotiations will be difficult. People are already saying they will go into the third day. If they are not concluded by 24, 25 or 26 March, we will move into a period where a number of countries have general elections. They have made it clear they will not be available for discussions during that period. It will also be the end of the remit of the Parliament. President Gil-Robles has already set the dates for that.

Will it be March or the autumn?

It will be March or late in the year, which would be extremely serious.

EUROSTAT officials from GD16 and our officials from the Department of the Taoiseach and the Department of Finance are meeting in regard to regionalisation mark two – that is without Deputy Healy-Rae's territory and that of County Clare. If EUROSTAT does not reach a conclusion with the Irish authorities on the original Government proposal of 13 counties, will that affect the outcome of negotiations, which the Taoiseach wants to have concluded in March, on the amount of money Ireland might receive in Structural Funds primarily and Cohesion Funds?

No. The proposals we originally included in the application last autumn are still under discussion. The discussions are between GD16, the Department of Finance, EUROSTAT and the CSO; my Department is not involved. I am interested in their outcome. The Deputy will be aware that there is an attempt by the Commission to push all outstanding issues into the final pot, although EUROSTAT is stated to be entirely independent, so that anything conceded is part of the final round of discussions. I do not like that type of negotiating. It is also happening in other countries on various issues. The Commission would be better to sign off issues to get an agreement. I made it clear to President Santer last week that it would be a tidier way of negotiating. However, if they are all to be thrown into the final pot, so be it.

Is it right to assume that if the current negotiations are to be agreed in March, the amount of moneys Ireland will get from Structural and Cohesion Funds is independent and separate from whether an agreement is made on regionalisation or on Ireland being taken as one region in transition?

That decision will have to be made either before or at Berlin because it would affect the overall figure, although not greatly. It is not a question of what the Structural Funds figure will be if any of the country is given Objective One status or is taken as Objective One in transition, but of what we can do in Objective One areas and the length of time we will have Structural Funds as Cohesion Funds will no longer exist. It is clear from the negotiations that the best we will get is a mid-term review. Even that will be a battle because some countries do not want that for any country or only for countries that will adopt the euro, while some others want an annual review. We are working to the Commission proposal and what will happen after 2006. The question of regionalisation for Ireland and other countries will have to be resolved either before or at Berlin.

In reply to Deputy Quinn the Taoiseach said the Council of Agriculture Ministers might be concluded this week. Do I take it the concept of co-financing has now been abandoned and that the Germans did not get their way on this issue? What influence does the Taoiseach believe that will have on the way Irish farmers will fare in this? It appears there will be major cuts in many of the farm products. Is there a line below which the Irish Government will not go as far as the farming community is concerned?

Jackie Healy-Rae.

I do not want to repeat the replies I gave earlier but I did not say the Agriculture Council will conclude this week. I said I would like it to conclude but I do not see how it can because 40.5 billion euros is the benchmark figure around which they were asked to produce a package, and they are nowhere near that in the negotiations. Co-financing has received little support. The Germans have proposed that the Presidency is strong on this but there is no other support for it and they have moved away from that. The French alternative of degressivity is far more likely to receive support. That has a benefit over straight stabilisation, which others want, but the advantage of degressivity, though not perfect from our point of view, is better than the other two. The way it is operated and in particular the thresholds are important because from an Irish perspective the thresholds will rule out the small holdings. We will negotiate as high a figure as we can – it stands at 5,000 euros, although farm bodies would like the figure to go a few thousand euros beyond that – to take out as many Irish farms as possible.

As the negotiations have progressed this week it appears there will not be major changes in respect of the dairy industry. Is this a major reversal in the negotiations?

It is too early to say. I explained earlier that the cost of the Commission proposals on dairying is eight billion euros. If that expenditure is to be consumed in trying to form a package, many other matters will be ruled out. I cannot see how the proposals on milk reform, at a cost of eight billion euros, can be built into an overall package of 40.5 billion euros. I said that when the proposals were brought forward on 18 March last and now people are facing up to that reality. In terms of what will happen, our preference would be similar to that of the French, that is, that milk reform would be excluded. It does not do anything for us or for the milk quota system if one does not get a good share of it, particularly since we have not got an understanding in regard to the 1984 agreement. I would like to see milk reform off the agenda. An alternative scheme might be to introduce milk reform but at a later date, like the degressivity on the other side. These are issues for negotiation and we just have to look after our interests. If I could get milk off the agenda and get a good package on beef I would be far happier in Berlin.

How far are we prepared to go?

Much of the discussion so far has focused on agriculture, but in the context of a BIM report presented to the Minister last week which indicated that up to £200 million would be required for marine industries, between Exchequer and EU funding, will the Taoiseach indicate the stage at which the discussions will begin on funding for fisheries?

In regard to the discussions to date, other than ourselves only one or two other countries have put down positions on fisheries. The issue will probably be referred to its own Council for debate at a later stage. The tradition has been that the Fisheries Ministers deal with their own matters. In terms of the allocation of the resources, that issue has not been pressed by anybody but we have put down our markers.

The Taoiseach will appreciate, with regard to that segment of the industry, that we are talking about peripheral locations, many of which are classified in the Objective One discussions. It is important that the question of fisheries is not forgotten as it has been in the past. Agriculture tends to dominate discussions of this nature.

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