I will deal first with the Greenland proposal. My colleague, Denis Maher, will deal with the autonomous tariff quotas proposal. I have prepared a short slide and will try to get through it as quickly as possible. In shorthand, what the title of the proposal says is that the Commission has proposed a change in the existing Greenland agreement 2001-06. It is half way through its implementation and the idea is to change it. I will give some background to the proposal, the main elements, the sticking points and where we think the proposal is going to go in the weeks and months ahead.
Prior to 1979, Greenland was part of Denmark and consequently within the European Community. In 1979 it achieved home rule from Denmark. Three years later it voted in a referendum to secede from the European Community. In 1985, it formally withdrew and the fisheries agreement with the EC commenced at that time. This proposal must be looked at within that overall framework. There were always two elements to the EC's relationship with Greenland, from that point. There was the fisheries angle - which is essentially what is being dealt with here - and the broader development angle. The latter stipulated in the agreement as outlined how Greenland was to secede from the European Community. There was a wish on the EC's part to ensure that Greenland did not suffer in a developmental way. That was provided for as part of the overall picture.
There were four fisheries protocols to the agreement since 1985. These are 1985, 1990, 1995 and the current one, 2001. They each run for approximately five to six years. The current proposal is the fourth, as the committee will have seen from the title. It is essentially half way through its implementation. There was a clause in the protocol which required a mid-term review by the end of June last year.
Four issues were involved in the mid-term review and they are all linked. Concern was expressed by the EU Court of Auditors and also the European Parliament that the agreement and arrangements set in place in 1985 - and renewed a number of times since - were not sufficiently transparent. The fisheries angle or the amount paid for fishing opportunities was not clearly specified and there was concern over "paper fish", that is where the Community was paying for fish that existed on paper but not in the sea - essentially not catchable. One of the issues that has driven the EC's assessment of this agreement is a large-scale under-utilisation of quota. The committee will note that this was of the order of 21% in 2003.
Negotiations on the mid-term review were held between February and June last year. There was tentative agreement between the parties, the European Commission and the Greenland home rule government. This was signed in June last year and that is what is currently before the European institutions and the Council. We want to revise the protocol. The new protocol will run from the beginning of this year.
The key elements of the protocol include the elimination of "paper fish" in the new quotas. Blue whiting, some cod and a number of other species have been removed. The opportunities now in place should be more real than apparent as has been the case up to now. In response to the point made by the Court of Auditors a clear separation has been made between the amount of compensation payable for fish and the amount the EU gives to Greenland for developmental purposes.
There is the issue of the introduction of licence fees for vessel owners. Up to now vessel owners could enter in here and there were no licence fees. Essentially this proposal says that for every tonne of fish one takes out a licence fee of 3% will be paid.
The main species dealt with is redfish - 25,000 tonnes, Greenland halibut - 10,500 tonnes and shrimp - 9,675 tonnes. The latter is by far the most important for the Greenland economy. Fish accounts for more than 90% of the country's total exports and the main species is shrimp.
The main players are Germany, the United Kingdom and Denmark. This is based on relative stability, which is the established track record. If one fished there in the past, rights were generated that persist up to the present. There are no Irish participant vessels and we can return to that and explain why this is the case.
The overall level of compensation will not be changed as a result of this agreement and is approximately €43 million per annum. That is what the EU will pay to the Government of Greenland. It is extremely important for the Government's finances. Approximately 75% of this sum is for the fishing possibilities which Greenland gives to European Union vessels and the remaining 25% is for developmental and budgetary support for the Greenland fisheries sector.
We turn next to the question of current issues. The main difficulty comes from the Commission, which has proposed a mechanism whereby quotas which are only utilised by a particular country, mainly Germany, the UK and Denmark, could be allocated to other states and that the Commission could have a role in this allocation to other member states. This creates difficulties. It might seem an attractive proposition at first but the existing quota holders would be rather troubled by this. Quotas are jealously guarded. Recently, bilateral quota swops were agreed between Germany, which is the main stake-holder in these stocks, and other member states. These were agreed without any involvement by the Commission. To some extent, this will address the issue of under-utilisation for 2004.
Discussions are currently under way in Brussels and elsewhere to resolve the outstanding issues. There are two of these - the issue of what role, if any, the Commission should have in the reallocation of quotas in this case and the question of licence fees. In reality, this proposal has been delayed somewhat by some of the difficulties that I have mentioned. Perhaps it is the case that the licence fees may not be introduced as quickly as was implied in this proposal and that there may be some phasing arrangements. The opinion of the European Parliament is due in March and the issue of a compromise solution in May or June of this year is a likely timescale.
We would be interested to hear the views of the committee on how to proceed with this issue. Essentially, there are two schools of thought in the EU on it. At one level, there are the existing quota holders which may not want to fish in a given year. Then, there are countries which want access to the quotas instantaneously. We will seek some way forward between now and May or June. We hope and expect that the proposal will be adopted during the Irish Presidency.