Dáil Éireann debate -
Thursday, 23 Oct 2003

Vol. 573 No. 2

European Council Meeting: Statements.

Minister for Foreign Affairs (Mr. Cowen):

The Taoiseach and I attended the European Council meeting in Brussels on 16 to 17 October 2003. We were accompanied by the Minister for Finance, Deputy McCreevy, and the Minister of State at the Department of Foreign Affairs with responsibility for European Affairs, Deputy Roche. The conclusions of the European Council have been laid before the Houses of the Oireachtas.

Our meeting last week allowed the Heads of State or Government of the European Union to: take stock of developments in the Intergovernmental Conference; review trends in the European economy and appoint a new Governor of the European Central Bank; take steps to ensure that our borders are not exploited by traffickers; and review a range of external relations issues.

I thank the Italian Presidency for organising a successful meeting. I am happy to say that the ground work being laid by the Presidency will enable us to further advance the agenda of the European Union. A meeting of the Intergovernmental Conference preceded the European Council meeting proper and I will deal with that issue first.

The Intergovernmental Conference flows from the work of the European Convention. On 15 October this House had a first debate on the draft constitutional treaty produced by the European Convention, therefore I will not go over that ground on this occasion. I welcome the opportunity to bring Deputies up to date on what is happening in the Intergovernmental Conference. I emphasise the Government's commitment to keeping this House and the general public informed of developments in the Intergovernmental Conference.

We are at a relatively early stage in the Intergovernmental Conference deliberations. Last week's meeting at the level of Heads of State or Government was the first at that level since the opening of the Intergovernmental Conference on 4 October. In addition, there have been two meetings of the Intergovernmental Conference at Foreign Minister level. Ireland supports the ambition of the Italian Presidency to complete negotiations by the end of the year. We will of course be prepared to take over and advance any work that may fall to us from January onwards.

Last week's discussion focused on institutional issues. The topics covered included the Commission, the European Council, the Presidency, qualified majority voting and the European Parliament. Member states set out known positions on these issues. There was also an informal discussion by Heads of State or Government on the defence provisions of the draft constitutional treaty.

The future composition of the Commission was a main topic of discussion. It is clear that there is a range of views on this matter. Ireland and a number of other countries indicated general satisfaction with the European Convention outcome, subject to some clarification. Ireland would welcome a move to one Commissioner per member state if this can be achieved on the basis of strict equality. Several participants, in particular the accession countries, supported one Commissioner per member state. Five of the larger member states and the Benelux countries indicated support for the Convention outcome. The retention of guaranteed equality in the appointment of the Commission remains of fundamental importance to Ireland and several other smaller states.

It is now generally accepted that a post of European Council President will be created. The issue is how the role will be defined and how the individual appointed to the post will make it work in practice. Ireland believes that the current text is broadly balanced. There is also more work to be done on how a Presidency will be organised in the future in the various Council formations, with significant support for team presidencies.

The definition of qualified majority voting remains a difficult issue. At the Intergovernmental Conference the known positions of those seeking to change the Convention outcome were reiterated. Ireland's point of view is that we would be happy to keep to the arrangements agreed at Nice, but we can also support the Convention outcome. The minimum number of seats allocated in the European Parliament is an issue of particular concern to the smallest members of the Intergovernmental Conference and Ireland is sympathetic to their concerns.

It is generally accepted at this stage that there will be a European Union "double-hatted" Foreign Minister who will be a member of the Council and of the Commission. The details remain to be worked out. We did not expect an outcome last week that would resolve differences on these institutional issues. Institutional arrangements tend to be, understandably, the most intractable part of Intergovernmental Conference negotiations with agreement often only emerging towards the end. However, the session was useful in further clarifying positions. Consensus in favour of continuing to legislate in the Council's sectoral formats rather than in a single legislative Council, as proposed by the Convention, has been reached.

The Presidency has signalled its intention to conduct consultations across a range of issues with participants before the next meeting of the Intergovernmental Conference at Heads of State or Government level. In this regard, an additional meeting in November of the Intergovernmental Conference at this level has not been ruled out. At that stage the possible lines for agreement may begin to emerge. Further meetings at Foreign Minister level are scheduled. Perhaps of most significance from our meeting last week was the outcome of the informal discussions among Heads of State or Government on security and defence issues, an area of particular sensitivity for everyone. Together with a number of partners we made clear our view that the proposals on security and defence in the draft treaty required further consideration by the Intergovernmental Conference and this was generally accepted.

As I have stated in the House previously we wish to see the Union equipped to make an effective contribution on the international stage while respecting the values and traditions of the member states. Existing arrangements in the ESDP are based on openness, inclusivity and accountability to all member states. We firmly believe that this should be the case for any new arrangements in the security and defence area. A large number of member states share these concerns as was clear from the discussions in Brussels last week. As regards common defence, our position is very clear: we cannot participate in an EU common defence unless the people decide so in a referendum. The Intergovernmental Conference will return to these important issues in detail next month and the Presidency has undertaken to redraft the defence articles in the draft constitutional treaty in light of the points made at the dinner discussion on 16 October.

The European Council meeting which followed the Intergovernmental Conference concentrated on three areas – the European economy, justice and home affairs and external relations. On the economy, the European Council noted that after a period of some uncertainty, there are some positive signals emerging in Europe. An improvement in the international economic environment, low levels of inflation, stabilised oil prices and better conditions in the financial markets have been key factors behind a pick-up in economic activity. However, the situation remains fragile and in this context economic polices should continue to be aimed at job creation and sustainable growth and at enhancing economic and social cohesion. The European Council focused, in particular, on ways of stimulating growth by increasing investment in transport, energy and telecommunications networks and by underlining the need for further structural reform. I welcome its focus on re-launching the European economy. Action to boost growth will create more job opportunities and bring greater prosperity to the people of Europe. I also welcome, in this regard, the European Council's endorsement of the principles of the growth initiative which seeks to increase investment by improving the mechan isms for financing growth-related projects. This initiative aims to exploit the resources of the European Investment Bank more effectively, both to increase the funding available for growth related projects and to leverage greater private funding of infrastructure.

The European Council recognises that building modern, efficient transport infrastructures is critical to boosting growth and maximising the potential of the internal market. It recommended, in this regard, that particular attention should be given to proposals on priority projects for trans-European transport networks. In this context the Council suggested that the possibility of a higher rate of Community co-financing of such networks might be explored.

The European Council also considers that the completion of an integrated market for electricity and gas in an enlarged Europe would give a vital impetus to growth through ensuring security of supply and promoting competitiveness. Equally, it views the development of telecommunications networks as being of key importance in promoting growth and, in this regard, considered the availability and promotion of a broadband network to be particularly necessary for the European knowledge-based economy. Viewing innovation, research and development and investment in human capital as crucial to Europe's growth potential, it reaffirmed the importance of action to mobilise investment and put the right regulatory conditions in place.

The European Council's focus on growth was complemented by its corresponding recognition of the importance of building a more competitive European economy. It reiterated the need to eliminate remaining barriers to the completion of the internal market, particularly in the area of services, which now account for 70% of the growth in the EU economy and in job opportunities. Completion of the internal market for services will also be an important issue for our Presidency. It was also recognised that further action to enhance environmental protection and sustainability will contribute to growth.

The European Council reiterated that action to stimulate growth and boost competitiveness needed to be accompanied by effective social policies and a continuing focus on job creation. It made particular reference, in this regard, to the demographic challenge currently faced by the European Union and the need to secure the long-term sustainability of pension systems. While the formulation of policy on pensions remains the responsibility of member states, the European Council considered that certain benefits could accrue from reinforcing open co-ordination in this area.

The issue of growth will be reviewed and concrete proposals advanced within the context of the annual review of the Lisbon strategy at the Spring European Council during our Presidency next March. The Lisbon strategy aims to make the European Union the most competitive econ omy in the world by 2010. The current challenge is to maintain the pace of sometimes deep-rooted reform across a wide ranging agenda encompassing economic, social and environmental renewal.

The Irish Presidency will have the task of bringing greater coherence to this broad-based set of issues at the Spring European Council and of ensuring the smooth integration of the new member states into this process. Our key priority will be to develop an economic climate conducive to sustainable growth and to the creation of high quality employment in the interests of promoting greater social cohesion throughout Europe. Successful implementation of key aspects of the Lisbon strategy will bring concrete benefits to the people of Europe in terms of better services, more prosperity and greater opportunities for business expansion. We are conscious that the decisions we take over the next year will be fundamentally important to Europe's economic future.

The European Council in Brussels last week also addressed the need to effectively manage the European Union's common borders, with a view to enhancing the fight against illegal immigration and the trafficking of human beings. The European Union is committed to the reception and integration of legal immigrants. In this regard, the European Council noted proposals for the creation of a border management agency and the development of a re-admission policy. In addition, the Commission has initiated a study on the relationship between legal and illegal immigration and member states were invited to co-operate fully with this study.

In the area of external relations the European Council addressed a broad range of issues, including Iraq, the Middle East and the WTO. It welcomed the unanimous adoption of United Nations Resolution 1511 on 16 October in regard to Iraq. The conclusions set out the ingredients for a successful outcome in Iraq, which are: An adequate security environment; a strong and vital role for the United Nations; a realistic schedule for handing over political responsibility to the Iraqi people; and, the setting up of a transparent multilateral donor fund to channel support from the international community.

The High Representative, Javier Solana, and the Commission have been asked to elaborate a medium-term strategy for the European Union's relations with Iraq. They will report by next March and, as we hold the Presidency, we will have the role of advancing work in this area. The Council reiterated its commitment to the road map for the Middle East. It strongly condemned suicide and terrorist attacks and called on Israel to abstain from punitive measures including extra-judicial killings.

The European Council regretted the unsuccessful outcome of the World Trade Organisation talks in Cancun. However, it stressed the European Union's continuing commitment to multilat eralism and to an early resumption of the Doha Development talks.

Following the European Council meeting, I accompanied the Taoiseach to a bilateral meeting with the Prime Minister of Luxembourg, Jean-Claude Juncker. Discussions covered a range of issues on the European Union agenda including Ireland's Presidency priorities.

Mr. Kenny:

I wish to share time with Deputy Gay Mitchell. Last week's summit marked another important step towards the creation of a constitutional treaty for the European Union. While some progress was made on the treaty, several of the crunch issues have yet to be decided. A resolution of at least some of these residual issues may be possible during Ireland's upcoming Presidency of the European Union.

The Fine Gael Party is broadly satisfied with the outcome of the work of the Convention on the Future of Europe. I pay tribute to the Irish representatives on the Convention for their work, in particular, the Irish member of the Praesidium, Deputy John Bruton, whom I know worked well with Deputy Roche in his capacity as Minister of State with responsibility for European affairs.

Given that the Convention included representatives of the governments of all member states and the acceding countries, the draft treaty should not be the subject of fundamental changes. In terms of the outstanding international issues, our priority is that the principle of equality of representation in the European commission, first established in the Nice treaty, is maintained.

On the eve of the European Council meeting, I met with several prime ministers and the various party leaders of the European Peoples Party – to which Fine Gael is associated – to discuss a number of aspects of the draft constitutional treaty. We agreed that the EPP would support an inclusion in the treaty of a reference to Europe's Christian heritage. This point was strongly supported by a number of speakers as it is evidently a matter of considerable interest to them.

This summit was most notable for the progress achieved in the establishment of a stronger foreign and security policy for the European Union. If any lesson has been learned from the war on Iraq it is that a Europe without a single, cohesive voice risks being split, silenced and, therefore, sidelined in global affairs. We learned the salutary lesson that no policy meant no voice, no say and, therefore, no role in bringing a more enlightened view of the global interest. As far as the Fine Gael Party is concerned, this should never again happen. The world is changing and we, Irish and European, must change with it. A peaceful, secure changing world, demands a strong America and a strong Europe. Some may say that Europe's polyglot civilisation will, where necessary, provide a good counterweight to the American view. We cannot reduce this matter to a case of either-or. Our best hope lies in both powers working in concert when possible.

Although a common policy of European secur ity and defence appears to be closer to being a reality, thanks to the Government, Ireland's voice has not been heard in this debate. The Fine Gael Party has consistently argued that Ireland should grab the opportunity to become one of the architects of this new policy rather than to settle for an architecture designed by others. This is our chance. We are a confident, modern nation, well able to take our place among the nations of the world. We have an un-missable chance to change the trajectory of power and responsibility in the new, enlarged Europe and beyond. I was disappointed not to hear the Taoiseach express an opinion on such a vital development in the history of the European Union. Ireland is no longer neutral, we are merely unaligned. In the absence of any coherent leadership from the Government parties on this matter, it is up to the Fine Gael Party to obtain clarity on the issue of neutrality. There is no need to debate neutrality, that is long gone.

What we must debate now is what we do next; play someone else's game or get in there and decide the rules. We can and should take this approach. That is one of the reasons Deputy Gay Mitchell published an international peace missions Bill, which respects the role of the UN and the spirit of the UN charter. The legislation it proposes would allow Irish troops to take part in EU-sponsored, overseas peace missions which would be in keeping with the spirit of the UN charter. In this way, we could avoid a repeat performance of the recent Macedonian situation where the triple lock prevented us from doing a valuable peacekeeping job as the mission lacked a specific UN mandate.

Our upcoming Presidency of the European Union will be an excellent opportunity to take a hard look at what we do next as Europeans. While ours is a small country, it is not inconsequential. Over 1,000 years ago, it was the Irish who civilised Europe and colonised the minds of the Continent to end the dark ages. In recent decades, Europe has given us many rights and responsibilities but the reductionist politics practised by this Government may prevent us fulfilling them. Regrettably, the Government's policies are preventing Ireland from properly shaping its own destiny and, by extension, the destinies of Europe and the world.

Fine Gael believes passionately in Europe and Ireland's future role in it. It is time to debate and listen. While people may not always agree with what Fine Gael has to say, they can be sure that on Europe, as with everything else, we will continue to speak the truth.

Mr. G. Mitchell:

I thank Deputy Kenny for sharing his time and providing me with the opportunity to contribute a few words to this debate. When it comes to the Intergovernmental Conference and its conclusions, critics of the process will find it difficult to say every effort was not made to keep Parliament involved and informed at all times. I am grateful to the Minister of State with responsibility for European affairs, Deputy Roche, Deputy John Bruton and the other members of the Convention who came regularly to the Committee on European Affairs before and after meetings, often on Mondays and Fridays. They outlined at length the content of discussions at the Convention and listened to the views of committee members. I am grateful also to the Minister for Foreign Affairs, Deputy Cowen, who attends the committee every month prior to his attendance at the General Affairs Council to provide members with an opportunity to raise important issues on an ongoing basis. Members are now being provided with the chance to raise with the Minister issues in respect of the forthcoming Intergovernmental Conference.

The European institutions and the manner in which they function are vitally important to the success of the EU. They are particularly important in facilitating the successful fulfilment of their roles by the Union's smaller member states. We should renew our attention to institutional questions in the context of the draft constitutional treaty. Fine Gael agrees with the Government's point that any future arrangements must treat each member state in the same way. Large member states will never accept a scenario in which each does not have a Commissioner in which case the future legitimacy of the Commission demands that every member state should have one. It is certainly possible. In a short time, there will be 27 Commissioners before the new Nice treaty arrangements come into effect. To provide for 30 Commissioners would not, therefore, be so difficult. If it must be the case that there are 15 members of the college and 15 other Commissioners operating on a rotating basis, the Nice formula is fair and reasonable. One more effort should be made to examine the possibility of retaining a ratio of one full Commissioner per member state. The Commissioners could work at bridging the democratic deficit by keeping more in touch with national parliaments.

The discussion of defence matters on the second day of the recent European Council makes it clear that a debate on European defence and security policy is taking place. It is not enough for the Government to state that any change will require a referendum as if that should be the end of the debate. Of course, any change will require a referendum. That is the position of Fine Gael and everyone else. The Constitution and the Nice treaty require it. The significant change between Nice 1 and Nice 2 was the elevation of the constitutional content in specific language to address what was in any event the de facto case. That is not the point. What is at issue is what we want for Ireland and Europe in the area of security and defence. Why are we not putting our ideas forward now as one of the architects designing future security structures? That is what we should be doing. A suspicion has been created in the area of security and defence and we have allowed those who wish to play on it a great deal of leeway by failing to be up front about what Irish political parties want.

While I am sure it will draw some criticism, the position put forward by Fine Gael is at least clear. The way forward is to seek to draft the protocol proposed under the constitutional treaty to allow those who wish to take on Article 5, Western European Union type, automatic responsibilities from the beginning do so. The four neutral, non-aligned states should be able to opt in on a case-by-case basis. There is an opportunity to make such arrangements. If we do not make them now and wish to join at a future date we will do so on the basis of rules which have been made by others. The consequence of standing on the sideline is that others will determine the future architecture to which we will have to say "Yes" or "No" in the end. That is not the way to conduct this aspect of the Intergovernmental Conference in the interests of Ireland or Europe.

I remain concerned about the potential undermining of the Commission and, in particular, its President by the appointment of a President of the Council for at least two and a half years. The imposition of a long-term President of the Council is an attempt by some who favour intergovernmentalism to undermine the Community model. We need a very clear job description for the office of President of the Council to outline the way in which that role and the role of the President of the Commission will interact. I hold the view that the European Council as an institution is a creation of national parliaments. The national parliaments should, therefore, have some role in removing the permanent President of the European Council if that person oversteps his or her terms of reference and interferes with the other institutions of the Union. A very powerful President of the Council without any terms of reference could easily, in terms of his or her personality, overshadow the President of the Commission or the Commission itself. One need only look at recent personalities who have held the position of President of the European Commission and others who, like Giscard d'Estaing, have had roles in the Convention. Powerful personalities can influence events.

We should ensure that the divisions in the roles of the various institutions are maintained and guard against opportunities to blur them further. In that regard, the European Council should not decide alone whether a person who has been its President for two and a half years has overstepped the mark. A role could be found for national parliaments whereby a vote of no confidence by one third of them would be required to force a President to stand down. It would be a reasonable check to introduce. Constitution and treaty making is about ensuring that we get checks and balances right. The general thrust of the constitutional treaty as drafted puts in place the various checks and balances which are required. While they have to be tweaked and nuances are needed, I do not envisage that there will be any major change in the provisions out lined. Therefore, it is important to give the requisite attention to the areas in which the final language has yet to be written including the terms of reference of the President of the Council and the protocol on defence. We must seek to have the language written in a way which reflects Ireland's view of Europe and our national interest.

I commend the Minister and the Minister of State for making themselves available on a regular basis throughout the year. I hope that availability will continue notwithstanding the busy Presidency ahead and the Intergovernmental Conference which may continue during it.

Mr. Quinn:

I join with Deputy Gay Mitchell in expressing the appreciation of the Oireachtas Joint Committee on European Affairs for the attendance in this debate of the Minister, Deputy Cowen, and the Minister of State at the Department of Foreign Affairs with responsibility for European affairs, Deputy Roche. The joint committee cannot do the work mandated to it under legislation enacted prior to the holding of the second referendum on the Treaty of Nice with the level of resources at its disposal. It will be unable to fulfil the mandate given to it by this House and the people in the second Nice treaty referendum to ensure adequate scrutiny of European legislation. While I appreciate the constraints on the Minister and his colleague, I am sure the Chairman of the joint committee, Deputy Gay Mitchell, who is present in the House, concurs with my view that the volume of scrutiny work required, in addition to the other commitments of the committee, makes the task of scrutiny especially difficult. This will not become an issue until it is too late, when legislation has been passed without proper scrutiny. At that point all hell will break loose, which will only benefit the Eurosceptics and anti-Europeans.

Before dealing with the defence issue, which was reported in the newspapers over the weekend, I will first deal with the Minister's report on the Council of Ministers meeting. I agree with the Minister that it is early days. The Intergovernmental Conference was discussed last week and as negotiations commence, positions are being restated. For example, at a meeting of the party leaders of the European Socialists Group last Wednesday, there was a restatement of known positions. It is, therefore, too early to speculate on the final outcome.

The Minister diplomatically wished the Italians well in concluding their task by the end of the calendar year. I do not know if that is a wish that the chalice, poisoned or otherwise, will have been consumed by others or if it is a recognition, with most others, that the Italians will not have a diplomatic victory this side of Christmas in terms of completing the treaty. It would be in Ireland's interest if it was brought to a successful con clusion early in the first part of the Irish Presidency in the new year.

While this may not be the time, sooner or later the Minister will have to come off the fence regarding his stated position that he can live with the Nice treaty or the Convention provisions on qualified majority voting. The Treaty of Nice is a bad treaty, with a complicated QMV formula. The Minister of State, Deputy Roche, was actively involved in the work of the Convention in this area and the provisions it agreed are transparent and self-explanatory. Once adopted they will never have to be altered because of the manner in which the system is constructed. While I understand the Government's current position, it will have to at some stage decide whether to support the concerns of the Spanish and Poles, which are, for ludicrous reasons, attached to the Nice treaty provisions. The Minister has more experience of this than most, but the Poles should be told that given the number of times QMV has been used on critical issues of national self-importance, they do not need to adhere to what is a much more complicated system than the one set out in the Convention.

With regard to the institutions, it is necessary the Government begins to give the lead on how it would like to see the role of the proposed President of the Council of Ministers defined. I accept the necessity for the hybrid nature of this institution. The physical logistics of visiting capitals etc. entailed in a six month rotating Presidency in the context of a Union of 25 or 30 member states, means that notwithstanding the perceived benefits of a country holding the Presidency, the interests of the Union would not be best served. In view of this, I and the Labour Party support the proposal for a Council of Ministers Presidency.

However, there are concerns the proposed Presidency will get into competition with the Commission. In view of this, the Government should, as soon as possible, either at the joint committee or elsewhere, take a more proactive role in articulating the kind of operational framework in which it sees the proposed Presidency developing. I do not consider – it is the general view held by most – that the Convention recommendations regarding this institution will be overturned. However, the small print of its operational framework will be critically important, especially as it will affect us all, not only the members of the joint committee and the Members of the Oireachtas, but also the wider public.

The proposed Foreign Minister should be recognised as a necessary compromise in the context of the Constitution of the European Union, which is a mix of shared and equally distributed sovereignty on the one hand, with integrated sovereignty on the other. There is no other similar institutional model in the world. We are, there fore, to a certain extent pioneers in creating intergovernmental type institutions which have this hybrid mixture of pooled sovereignty in some areas and shared sovereignty in others. In view of this, it is only logical that we evolve institutions to reflect the hybrid nature of the way power is being shared and exercised. Given his proactive role, the Minister of State, Deputy Roche, will recognise that many of the smaller accession countries – with the exception of Poland and Slovakia the vast majority are smaller than Ireland in terms of population size – look to us for guidance in these areas, especially given our almost 30 years of experience of membership of the Union. The Government should not be shy about sharing that information, in public rather than in private.

I strongly welcome the appointment of Jean-Claude Trichet to succeed Wim Duisenberg as President of the ECB. Perhaps the Minister will outline if there were any discussions, prior to or at the margins of the ECOFIN Council, about the role the ECB will have regarding the possible change to the rules of the Stability and Growth Pact. It is essential that the credibility of the pact is maintained. The apparent impunity exercised by France and, to a lesser extent, Germany, in their flagrant breach of the pact contrasts with the way in which this country and Portugal, among others, were sanctioned. It does no good for the institutions. There must be one law observed by all. If it is the case that the terms of the pact are too restrictive they should be changed in the light of present circumstances.

The Stability and Growth Pact was constructed in a rigorous manner with an eye to the sense that the new currency would replace the hard currencies of Europe, especially the deutschmark and those currencies in the deutschmark zone. However, we have succeeded beyond our wildest dreams in creating a hard currency. All the fears expressed in the run-up to the ratification of the procedures for the euro currency have been overcome much more emphatically than was feared at the time. In view of this, there is a need to review the pact with the involvement of the ECB, which has the responsibility for it, and the Finance Ministers. If it is not on the next agenda of the Council, it would be in Ireland's interests especially that it be brought to the fore. We cannot, nor can we be seen to allow large economies like France to continue to flout the pact and its rules. I do not get a sense from the Minister's report that, other than ratifying the appointment of Jean-Claude Trichet, this matter was discussed. If it was, perhaps he will elaborate.

Perhaps the Minister will also outline the kind of agency envisaged for border patrols and co-ordination. Is it a reinforcement of Fortress Europe or will it mean dealing more comprehensively with the reality that for so long as Europe increasingly becomes and remains an old, rich society, there will inevitably be a movement of people trying to get into Europe arising from economic destitution or political impoverishment created in their home states? If this is the case, what will be the role of the EU, how will the member states play that role or will the Commission have a separate function in this regard?

As the Minister for Justice, Equality and Law Reform said, Ireland has a substantial number of people who, while utilising the asylum seeking process, are in reality economic migrants. Given the number of work permits that have been issued in recent years, our society has recognised the need for extra skilled labour. Unless the current system, which is unsatisfactory, is dealt with comprehensively and constructively it will fuel the passions of racism not just in Ireland but across Europe. Over the past century, Europeans have not had a very good track record on racism, chauvinism and antagonism towards ethnic minorities and ethnic groups. We have lessons from our past. The economic reality of the future is that we will continue to attract more and more people of different colour, backgrounds and nationalities. We can either proactively recognise this fact and attempt to deal with it constructively or we pull down the shutters, which simply will not work.

I want to turn now to the brief references made to the possibility of stimulating economic growth in the European economy. I do not know if the changes in the criteria for investment which the European Investment Bank is bringing forward will enable Ireland to increase its public infrastructure programme. It appears that the Minister, Deputy Brennan, could quite happily avail of a substantial extra amount of capital to complete the major physical deficit in our road and motorway infrastructure system.

Perhaps the Minister will indicate in his reply whether there will be an impact on our public capital programme over the next three to five years because we are falling behind. The evidence from the Institute of Engineers of Ireland and others is that the national development plan is seriously behind in some key sectors. The gap as a consequence means that our competitive position relative to other economies is being seriously eroded. The threat to competitiveness is not coming from wage demands or other factors. The threat to competitiveness in the Irish economy is coming from the enormous delays imposed on the delivery of services and goods as a result of infrastructural bottlenecks. What is the significance, if any, of the discussions that took place on the changes in the rules in the EIB and in other aspects of investment?

I read a quote in a newspaper to the effect that the Irish Government, together with others, was more in favour of investment in research and development than it was in infrastructure. I would like to know if this is the case and, if so, what is the justification for it? There is a greater need now to deal instantly with our infrastructural physical deficit than with the no less necessary and desirable research and development budget. The other countries in favour of research and development already have a very fine physical infrastructure, while we do not. Perhaps the Minister will reply to this question at the appropriate time.

Finally, I want to refer to the debate in a number of newspapers over the weekend on the movement of Prime Minister Blair away from his current Atlanticist position. At a meeting in Germany between France, Germany and Britain it appears there was a greater signalling by Britain that it would co-operate more with these two countries in building up European defence capacity. Was this a subject for discussion at the Council meeting and, if so, what was its tenor? We have lived for years with lectures from the United States that Europeans must take more responsibility for their defence. The minute any attempt is made to do so, the Americans go ballistic behind the scenes – no pun intended – putting pressure, for example, on the Poles to buy American rather than European aircraft and putting pressure on European countries not to in any way undermine the present infrastructure of NATO, while publicly saying that Europeans must take a greater share of their strategic defence burden.

The Irish position in all of this is very clear. We are committed to the principles of the United Nations and of neutrality. I do not accept the point of view expressed by the leader of the Fine Gael Party, but this is a debate in which we should participate. Irrespective of our particular point of view there is a wider issue which received a lot of public airwaves and print media coverage during last weekend. Apart from a slighting reference in the Minister's speech, there was no indication of whether it was a matter for deep discussion at the Council and, if so, what point of view was expressed by Ireland.

Mr. F. McGrath:

I wish to share my time with Deputies Sargent and Ó Snodaigh.

I am pleased to have an opportunity to speak on the statements on the European Council meeting. I am extremely concerned about the drift by the three major political parties in this House towards a more centralised Europe and the possible creation in the future of a united states of Europe. This drift or, as many would say, sly move, without listening to people on the ground and in view of the recent so-called debate on the European Constitution, is alarming. At least 40% of Irish citizens have major concerns about the EU which recent referenda have clearly indicated.

The big issue for many of us is defence and the whole question of having an independent foreign policy. We are often misrepresented as being anti-economic and anti-social co-operation. The labelling of people did not work in the past and will not work in the future. The Minister should be honest with people and tell them straight that he wants to build a new country called Europe. If that view is challenged, it is greeted with con tempt. When the people of Sweden challenged the euro, the reaction of the EU establishment should have been studied. Why is there a major fear of openness and transparency? Why did we not have a referendum on the euro and a proper debate for our people?

The euro's purpose is essentially political. One of its objectives is to make people feel members of this so-called country called Europe. This political purpose is probably more important than the economic one. In 1998, the Spanish Prime Minister, Filipé González, said "We need this united Europe. We must never forget that the euro is an instrument of this project." The EU Commission President, Romano Prodi, said in the Financial Times that the two pillars of the nation state are the sword and the currency, and we changed that. How many Irish people are aware of these comments? How many Irish people realise that the Republic of Ireland does two-thirds of its trade outside the euro zone? The rigidity of “one size fits all” interest rates inside the euro zone does not suit Ireland or other small economies. The European Central Bank, which decides interest rates in the euro zone, is not subject to democratic controls. These are aspects about which the Irish people should be made aware.

On defence and foreign policy, most Irish citizens have strong concerns about the drift towards a common foreign policy. I certainly do not want a common policy with nuclear blocs in the EU. I do not share the same foreign policy views as, for example, Tony Blair, particularly on Iraq and the undermining yesterday of General John de Chastelain. Let us also challenge the myth that the great saviours in the EU have brought peace to the world and all of a sudden prevented wars. There is no evidence for this. A common currency is no guarantee of national cohesion or peace. The USSR and Yugoslavia broke apart despite having had common currencies in the rouble and dinar. There are still conflicts in Chechnya, Kosova and Macedonia.

When Czechoslovakia divided, a common currency was kept for some time. It did not work, however, and two currencies were instituted in the Czech and Slovak Republics respectively. In 1999, the year the euro was introduced, 25 wars were being waged in the world, 24 in countries with a common currency. Between 1998 and 1999, there were 108 armed conflicts in the world, 101 within states that had a common currency. Three quarters of these conflicts took place within democratic states, or states with democratic forms such as India, Algeria, Morocco, Ireland, Spain and Turkey regarding Kurdistan. The euro did not bring an end to the war in Europe. Have they even heard of civil wars? If we are interested in national peace and preventing conflicts let us reform and strengthen the United Nations. That is the way forward. Developing gun clubs in the EU is a thing of the past.

We have also to challenge the nuclear powers and their possession of weapons of mass destruction. Why are we not facing up to these issues in the EU debate? Why do we ignore the economic cost of these weapons of mass destruction? This is public money that should be spent on poverty, housing, health and education. This is my vision of Europe. It is the Government's responsibility to listen to that view. If it claims to be inclusive and democratic it will allow the Irish people debate and vote on issues of national sovereignty. Failure to do so could lead to conflict. We should learn from history.

Mr. Sargent:

I pay tribute to my colleague, Deputy Gormley, who has worked hard at the Convention and to Deputy Boyle and my MEP colleagues and fellow Deputies and councillors who attended and contributed to various meetings organised by Senator Maurice Hayes at what is often called Senator Hayes's roadshow around the country. It was beneficial to have that debate.

It is important to keep the bigger picture in mind as the constitution is wide ranging. It is clearly set out and is the result of greater consultation than we have had previously. I recall a UK Government official telling me about the closing stages of the negotiations on the Treaty of Nice over a weekend where the deal was being hammered out, that were it not for the fact that he had taken his laptop with him he did not reckon there would be a deal. If things like that were hanging on a thread we can only imagine what was happening behind closed doors. It is important to bear in mind that it is not just a case of an enlargement of the EU, from 15 to 25 countries or whatever, but there is an increase in population of 28%. It is interesting that there is also an average income reduction within that enlarged Europe of 18%. That aspect of where we go in the EU will need to be seriously taken on board.

Tá naoi dteanga oifigiúil nua le theacht isteach agus chuir sé ionadh orm nuair a léigh mé iFoinse an t-alt “Deis stadas san AE ligthe le sruth”. Tá díoma orm nach bhfuil an Rialtas ag iarraidh go mbeidh an Ghaeilge mar theanga oifigiúil san Aontas. It is strange that some of the new languages have a smaller population base than the number who speak Irish, yet the Irish Government appears uninterested in having the Irish language included as a teanga oifigiúil.

Throughout the development of the EU the social agenda has been subservient to the economic agenda. There is a need for that to be tackled if the larger European Union is to be workable and cohesive. Sustainability has also not been taken seriously. It is acknowledged in the Amsterdam treaty but is still secondary. As transportation is set to increase enormously, with the increasing size of the European Union, it is clear we will face even greater problems. That is an issue about which the Government is aware, hav ing been taken to court so many times for failing to comply with European environmental law – the ozone layer laws being the latest in a long list which involve us facing court action. There is a serious implication for Ireland because our spend on social expenditure is the lowest in the European Union and we have the widest gap between rich and poor in the EU. The reality should inform our debate on such aspects as a charter of fundamental rights, which is welcome in so far as it goes as it includes socio-economic rights, unlike Bunreacht na hÉireann, but it does not address issues such as income adequacy. We are again left with the social agenda taking second place.

It is clear this constitution represents a victory for those who want further militarisation of the European Union – the establishment of a European armaments research and military capabilities agency. With armaments policy to assist the Council of Ministers in evaluating the improvement of military capabilities, it is a victory for those who make their money out of selling weapons of mass destruction and other weapons of terror around the world. That has to be challenged by the Government if it is serious about a United Nations based common foreign policy rather than an EU common foreign policy. The solidarity clause is another issue of concern where the threat of terrorism worldwide is allowed to be a reason for going to war. That suggests another type of Iraq policy which would not be in line with the wishes of the Irish people.

There is a democratic deficit in the EU. I share the concern of others that we are allowing the European Commission to further worsen that democratic deficit. If there are 30 members sitting around the table there should be 30 votes. If people can contribute to a debate I cannot understand why they should not vote in a debate, unless the large states are trying to keep out the views of the smaller states. That is a fear we have heard expressed previously.

I am glad the Greens succeeded in not having the EURATOM Treaty tagged on as a protocol. We still want a sunset clause, perhaps Deputy Bruton has a role in this area in the Praesidium, and to use the environmental laws of the EU to clean up the nuclear industry rather than allow it develop under EURATOM. Ultimately the constitution on the future of Europe will be decided by the Green Party by way of a special convention of our members. I hope that level of consultation and decision making will form part of other parties' decision making process in order to improve as much as possible on the democratic voice within this country.

Aengus Ó Snodaigh:

These negotiations are crucial for Ireland's future. It is not good enough that Irish representatives agree to proposals, essentially because they are already in previous treaties. We have an opportunity to change Europe for the better. The Irish people are extremely concerned about safeguarding our neutrality but they also see the increasing militaris ation of Europe and the escalation of belligerence on an international level. They believed Ireland should have played a leadership role in negotiating the new EU treaty in stopping this madness.

So far the Taoiseach and the Minister for Foreign Affairs have refused to be explicit about their position on a series of common defence provisions which have serious implications for Ireland and the future of international relationships. The people must be left in no doubt as to what the Government is willing to accept. It should be stated as clearly as the Government's position in regard to unanimity on taxation. The Government should fight as hard to protect Irish neutrality as Spain or Portugal fought to protect their favourable voting rights in the Council. Article 142 provides that EU defence policies shall not prejudice NATO states, and shall be compatible with NATO. However, the special rights and responsibilities of military neutral states are not explicitly acknowledged and are not specifically exempt from common defence requirements.

It is the duty of the Irish Intergovernmental Conference negotiators to protect Irish independence in defence policy and specifically the traditional policies of military neutrality and UN primacy. This can be done by securing a specific article which recognises the rights and duties of neutral states within the Union and the rights of states which require a UN mandate for military operations. I urge the Government, even at this late stage, to instruct the negotiators to oppose the article as drafted and insist that the rights and duty of neutral states be given the same weight of recognition as accorded to the obligations of NATO states. That is the minimum Ireland should expect from fellow member states and it represents a reasonable compromise.

Last week, the Minister for Foreign Affairs, Deputy Cowen, sought to reassure the House that Irish neutrality is protected by the draft constitutional proposals as there is nothing in the draft that directly and immediately commits Irish troops to a European Union army. That is true as far as it goes. However, what has emerged from the latest Intergovernmental Conference meeting in Brussels is that the agreement will draw Ireland into participation in common defence by virtue of being a member of the European Union Council which will be vested with control over all future European Union military activity. As the State is constitutionally committed to resolution of conflicts by peaceful means this represents something which may be unconstitutional.

Mr. Quinn:

I suggest that the Minister reply to some of the questions asked.

An Ceann Comhairle:

Is that agreed? Perhaps if Deputy Mitchell has a brief question he should ask it first.

Mr. G. Mitchell:

With regard to the Government's position, will it be necessary to have a ref erendum before Ireland joins European Union common defence? Does the Government intend putting to the people the case for and against joining such a defence or how does it expect the people to make such a decision without having information put before them?

Mr. Cowen:

It may be helpful if I make some points arising from what has been stated regarding the question of the security and defence provisions in the draft treaty. I am here to give account of last week's European Union Council meeting.

Defence issues were discussed by Heads of State and Government over dinner on the first evening. I will leave it to Mr. Blair to speak for the United Kingdom. During the discussions the Taoiseach made clear our view that any new security and defence arrangements should be open, inclusive and accountable to all member states. Many of the partners share that view. The Taoiseach also made clear our position on common defence. It was agreed by all that the defence articles need to be redrafted. The Government is working with partners to ensure that this is done in a way acceptable to the people. Basically, the position arising from the defence working group, on which Deputy Gormley is our representative, is that there was not a full discussion on those matters at the convention. There has been little discussion on the draft treaty at Heads of State level. The Italian Presidency, taking account of the discussion between the Heads of State over dinner, at which the Taoiseach contributed, setting out the broad principles we would wish to see in the defence and security provisions, has agreed to come back with amended proposals. The debate rests there until we see the amended proposals.

With regard to Deputy Mitchell's question on the prospect of a referendum, it is clear in terms of the scope and ambition of this treaty that a referendum will be required, based on legal advice in respect of previous treaties with less scope than this one. Irish constitutional law will dictate the debate on how we put both sides of the argument. This covers the defence issues also.

Some speakers have raised the issue of the growth initiative. We welcome the growth initiative under the Italian Presidency as a mechanism to assist in improving our infrastructure in the interests of growth and competitiveness. It would not be correct to state that we favour investment in research and development over infrastructure. Investment in both areas is important.

The Van Miert report on the trans-European networks proposes new priority areas and includes two projects which would benefit Ireland, the Belfast-Cork road link and the motorway of the sea link which would improve sea connections between Irish waters and the Iberian peninsula. We are currently working with the Commission to include that in order that we achieve progress on these priority projects.

There was no discussion on the Stability and Growth Pact at the European Council. As the Deputy is aware, this issue is primarily a matter for ECOFIN and the Minister for Finance. However, we share the concern as to the importance of the pact being respected. The Italian Presidency communicated a draft action plan, entitled A European Action for Growth to ECOFIN, on 9 June. The plan proposes revitalising the European economy by increasing investment in the TENs, trans-European networks programme, and in research and development. It is important to point out that the amount of money under the research and development directorate is almost €15,000 million. It is greater than the social fund. Given our particular position in terms of national development it is clear from studies here and internationally that the issue of promoting innovation and enterprise is a critical factor in maintaining the progress we have made economically in the past decade. This is, therefore, an important aspect of Europe's work and one in which we are very interested.

This proposal by the Italian Presidency was developed further by the Commission and the European Investment Bank. The ECOFIN council examined the proposals and submitted an interim report to the European Council. A final report will be prepared for ECOFIN in November and for the European Council in December.

The European Council concluded that maintaining sound macro-economic policies, accelerating structural reform and promoting investment in infrastructure and human capital were key priorities for developing the European Union's economic potential. It also noted that building modern efficient transport infrastructures to ensure easier and better access between all member states would have a two-fold positive effect boosting growth both directly and by maximising the benefits of the internal market.

In respect of the growth initiative, we would support measures that would facilitate higher levels of investment in infrastructure and research and development and are, therefore, positive about the initiative. We are also anxious to ensure that the initiative in its final form should have due regard to measures to address infrastructural deficits. Financial and legislative proposals arising from the initiative, including the TENs financing proposals, would have to be critically scrutinised by reference to identifiable concrete advantages to Ireland and the European Union generally.

The European Investment Bank has confirmed the availability of €100 billion for lending to the relevant sectors within its existing resources and banking policies up to 2010. The Commission's proposals aim to boost private investment in support of the trans-European network and knowledge by setting the appropriate community regulatory framework and refocusing public and community expenditure. However, it has also suggested improvements in community financial aid for some aspects of the TENs.

Another issue raised was migration policy. This is receiving top priority as part of European Union business. The European Council emphasised the importance of the implementation of the plan for the management of the Union's external borders and welcomed the concept of a border management agency which will enhance operational co-operation for the management of external borders. We believe that to achieve the full implementation of an external border management plan the best strategy is to focus on practical co-operation which is best achieved on a multilateral basis with the assistance of the common unit of external border practitioners for planning development and co-ordination of projects.

The European Council, at Seville in June 2002, endorsed the plan for the management of the external borders of member states which would help in the fight against illegal immigration. The plan envisages common operational coordination and co-operation between member states, including mutual technical assistance between member states' border control services, exchange programmes and training and pilot projects. The Seville European Council also called for the introduction of a common unit of external border practitioners which is composed of the heads of the border control services of the member states and co-ordinates the measures contained in the plan.

While draft proposals have yet to be published, it is envisaged that there may be a role for an agency type structure to co-ordinate community initiatives on the external borders of the European Union. The agency would not have a direct operational remit or a policy formation role. It would instead co-ordinate the joint activities under the plan for the management of the external borders and manage the work of the various specialist project centres around the EU, for example the risk analysis centre in Finland, the land border centre in Germany, etc., and provide training and intelligence to member states and national border services.

Mr. Quinn:

On the last matter the Minister has just described, is it the case that the concern is with an effective border maintenance programme across an enlarged European Union, rather than the deeper and fundamental issue of how Europe is going to deal with the reality that we are a very rich pole in an impoverished world, and that so long as that continues we will inevitably attract large numbers of people? Was the whole question of migration into Europe and the way in which such migrants are integrated into European society any part of the discussion or is that for another place and time?

Mr. Cowen:

On the issue of migration, the Council reaffirms its commitment to a balanced approach between, on the one hand, the urgent need to stop illegal migration and to fight against the trafficking of human beings, and on the other the reception and integration of legal migrants. We have a flexible labour market, with the demand for foreign labour being market-driven. The Council conclusions note the Commission's initiation of a study into the relationship between legal and illegal immigration. It is understood this will include an examination of the use of quota systems. In this study, Ireland would like to see a broad analysis of admission procedures and this could include a feasibility study of a European quota system. The analysis should examine the benefits and costs of quota systems generally, based on the experience of those states that operated them in the past, whether it has the potential for success on a Europe-wide level and what the requirements are for an effective quota regime.

From Ireland's perspective the concept of quotas needs to be carefully evaluated before any proposals are put to the Council. We support the Community efforts to negotiate the admission agreements with countries of origin. We would like to see a focus on countries which are a significant source of illegal entrance to the European Union and we would also wish to ensure that the re-admission obligations in the Cotonou agreement are effective.

Mr. Sargent:

Will the Minister say if in the Charter of Fundamental Rights, the Government has taken a view on the issue of income adequacy throughout the European Union, given the reduction in average income, as I have mentioned, with the new member states and the likelihood of considerable hardship with the neoliberal policies in some of the eastern countries? What progress has been made in regard to maintaining representation for each country on the European Commission? I know the Government has taken a position on it, but will the Minister say how strongly it is arguing its position? There has been a statement from Dublin Castle where the Taoiseach has been vowing there will be a referendum on an EU defence pact. Will the Minister clarify that is treating the referendum on the constitution by way of a referendum on such a pact or is this to be a second referendum? I was not at Dublin Castle. Will the Minister clarify it because when one reads the constitution, it does suggest that common defence is part of the deal.

Aengus Ó Snodaigh:

On a different issue of the nuclear arsenal held by NATO states and other countries such as North Korea and Iran, would the Taoiseach be in favour of taking up the challenge set out by positive neutrality in action and using the opportunity of negotiations to try and get a treaty article designating the European Union as a nuclear weapons free zone? Will he also take the opportunity presented by the EU Presidency to further push this issue so that we have a safer world?

Mr. Cowen:

Again I would point out to Deputies that the question of respecting the specific character of the security and defence policy of certain member states is recognised in the specific provisions for implementing the common security and defence policy under the present draft articles and that will remain a common feature. Article 40, paragraph 2, states that the policy of the Union shall not prejudice the specific character of the security and defence policy of certain member states and "shall respect the obligations" of certain member states, etc., which see their common defence realised in NATO, under the North Atlantic treaty and shall be compatible with the common security and defence policy established within that framework.

In the same way, those who have obligations under NATO are expressly referred to. I think the Deputy should quote the full paragraph which confirms that the specific national character of the policy of all member states' security and defence policy is not prejudiced in terms of formulating and developing ESDP in the European Union.

The EURATOM treaties are not part of this treaty's remit. That was decided at the time. We have a long history under successive Governments and a distinctive contribution made by Ireland over the years as regards non-proliferation and disarmament issues at UN and other multilateral fora. That will continue and we remain part of the new agenda coalition in that respect.

Deputy Sargent's reference to the Taoiseach is simply a reiteration of what the present constitutional position is, which is that Ireland cannot adopt a common defence under the aegis of the EU without the prior approval of the people in a referendum. He is simply reiterating what emerged from the constitutional provision in the second Nice referendum.

The charter relates to EU institutions. It does not bring competences into the national framework. As regards the question of income adequacy, I do not believe a policy issue like that is a matter for insertion into a constitutional treaty. One will see from the objectives and values of the Union that it makes clear we are talking about growth, prosperity, the social market, environmental protection and sustainability. The European model of growth is enshrined in the new constitutional draft and is consistent with trying to encourage and promote cohesion throughout the European Union, which has brought, as we have seen in enlargements to date, improved standards and quality of life for all members of the Union.

Mr. G. Mitchell:

Will the Minister agree that decisions taken by the Chancellor of the Exchequer in London on interest and exchange rates and those taken by the Bundesbank in Germany would not have left us the sort of sovereignty we have now, whereby we participate in the European system of central banks and the European Central Bank? Will he agree that nothing like 40% of Irish people would like to see us leaving the eurozone, that they are quite happy with the euro and see it in terms of a trans parency in pricing and a convenience in travel within the European Union which is confirmed by the research that has been done?

Mr. Cowen:

There is absolutely no question, it is indisputable that for many reputable economists as well as the social partners and others, the integration of the European economy has brought huge benefits to the Irish economy. The continuing integration of the European economy means that we are strong supporters of the single currency, together with the sharing and pooling of sovereignty in these areas in an era of interdependence. The best way of utilising sovereignty has been pooling and sharing it with others in common values and objectives – in common institutions, working to common objectives and action. These last few months as a member of the EU troika, as we prepare for the Presidency, I have met both at the UN and other fora, many organisations throughout the world who look to the European Union as an obvious model to be adapted by them to their own circumstances.

Issues that affect us in everyday life are transnational in character and require co-operation among states. In some cases, like ours, they require a unique model of intergovernmental and integrated action which allows us, through the objectives of the Lisbon agenda, to consider becoming the most competitive economy in the world by 2010. Other parts of the world, learning from the European experience, are trying to develop similar mechanisms, whether in Latin America, Africa under the African Union, NEPAD, Central America—

Mr. Howlin:

ASEAN.

Mr. Cowen:

ASEAN. Everyone is trying to adopt the European approach and those who started to adopt this approach after one of the greatest conflicts mankind has known show that by co-operation and common action we can best ensure we utilise our sovereignty meaningfully for those generations we serve. Having common policies which are not uniform in all respects but whereby agreement and consensus can emerge has enabled us to make a contribution on the world stage which we could never have done on our own. Any suggestion that we can on our own make a major contribution to world affairs is living in cloud cuckoo land.