I move:
That Seanad Éireann takes note of Developments in the European Communities—Thirteenth, Fourteenth, Fifteenth and Sixteenth Reports.
Developments in the European Communities — Thirteenth, Fourteenth, Fifteenth and Sixteenth Reports: Motion
As Senators will be aware, these reports are required by section 5 of the European Communities Act, 1972 which provides that the Government shall make a report twice yearly to each House of the Oireachtas on developments in the European Communities.
The reports which are the subject of the motion we are taking today cover the period from July 1978 to July 1980, and since the Fifteenth Report deals with developments in the period of Ireland's Presidency of the Council and of European Political Co-operation, it is I think, of special interest.
I would like to refer briefly to some of the major developments in the various areas of Community activity during the period of the reports. Senators may wish to advert to other matters not covered in my introduction to this debate and indeed to more recent developments in the Communities. I will be happy to deal with these matters in my reply.
The established format has been followed in these reports; reviews of meetings of the European Council held during the period are included, lists of ministerial regulations made under the European Communities Act, 1972 are given as annexes, as are tables showing subsidies, grants and loans received by Ireland.
At the outset, I would like to mention the fact that during the period under review the negotiations for the accession of Greece to the European Communities were concluded. Senators will be aware that Ireland ratified the Treaty of Accession last December and now that all member states and Greece have completed their ratification procedures, Greece will become the tenth member state of the Community on 1 January 1981. As regards Portugal and Spain, accession negotiations are continuing. We in Ireland have at all times expressed our support for the process of enlargement, but it must be said that institutional reform and the provision of adequate resources to cater for the needs of an enlarged Community are in our view necessary prerequisites if this new phase of enlargement is to be carried out successfully.
I would like to emphasise that our concerns are in no way aimed at the applicant states. They are matters which must be resolved by the existing Community and indeed they would have to be tackled regardless of the enlargement context. I will return to the institutional and budgetary questions at a later stage.
First of all, I would like to deal with European political co-operation. A significant aspect of our Community membership is the agreement of the member states to consult together on world political issues and, where possible and desirable, to work out common positions and policies. This commitment forms the basis of European political co-operation and entails the regular holding of consultations at ministerial and official level which aim towards the co-ordination of Nine attitudes on international issues. In recent years, the European Council has tended to play an increasingly active role in the final formulation of Nine policy on matters of international concern, for example, the Venice Declaration on the Nine's Middle East policy.
Through the activities of political co-operation and also through the Community's external relations activities, the Europe of the Nine is increasingly regarded by the external world as a coherent entity in world affairs. Issues such as the Middle East situation, Afghanistan and Southern Africa continue to be of concern to the Nine in the political co-operation framework, and the positions adopted by the Nine are outlined in these four reports. In addition, the reports illustrate the way in which Ireland along with the other member states co-ordinate its position in multilateral fora, such as the Conference on Security and Co-operation in Europe (CSCE) and in the United Nations. At a time of increased East/West tensions and danger of wider involvement in local conflicts such as that in the Gulf region, foreign policy co-ordination among the Nine has proved its value. For Ireland it has offered the opportunity to increase our weight in international affairs and to contribute to the resolution of outstanding problems in a more effective manner than would have been possible otherwise.
Both before and during the 34th Session of the United Nations General Assembly, which took place in New York from approximately mid-September to the end of December 1979, the Nine continued their now established practice of seeking to concert their views on matters before the Assembly and of adopting common voting positions whenever possible. As the country holding the Presidency during this period, Ireland had the task of assuring co-ordination among the Nine—both in New York and among the capitals of the Nine—on issues before the General Assembly and of presenting agreed Nine views to the Assembly - whether in plenary or in one of the seven main committees. An indication of the extent of this co-operation is given by the fact that 26 common statements, 54 common explanations of votes and two statements on resolutions were delivered at the Assembly on behalf of the Nine by the Presidency.
A general statement on major world issues on behalf of the Nine was delivered at the General Assembly by the previous Minister for Foreign Affairs, Deputy Michael O'Kennedy, on 25 September 1979. This appears as Annex VIII (eight) of the Fifteenth Report.
As the period which we are discussing also includes the 1978 session of the Assembly I would just mention at this point two matters which had a particular relevance for the Nine during that session. Firstly, the Nine initiated a resolution aimed at strengthening the peacekeeping ability of the United Nations - a matter in which Ireland has a special interest. This resolution was adopted by a large majority. Secondly, the Nine made a detailed statement on human rights on the occasion of the 30th anniversary of the Declaration of Human Rights during a special commemorative meeting of the Assembly to mark this anniversary. In that statement the Nine reiterated their commitment to the promotion of human rights throughout the world. I might add that following our election to the Security Council on Monday last Ireland will be involved in a special way in the work of the United Nations over the next two years.
The Second Review Meeting of the Conference on Security and Co-operation in Europe is scheduled to begin in Madrid on 11 November. A preparatory meeting is currently taking place. The Nine are continuing their detailed preparations for the Madrid meeting and are consulting closely on all developments in the CSCE process. The three expert meetings agreed at the Belgrade review meeting have now taken place. The most recent of these was the scientific forum held in Hamburg last February.
The Madrid meeting will obviously be affected by the international climate at the time. The present situation arising out of the Soviet military intervention in Afghanistan and the extent to which human rights and related matters are observed in the participating states will be of particular importance in this respect.
The Nine attach the highest importance to the full implementation of all the provisions of the Helsinki Final Act. The degree to which these provisions have been put into effect by the participating states will continue to be the most important yardstick of the Nine in measuring the achievements of the CSCE process. The Nine will strive for a successful and balanced outcome to the Madrid meeting. Among the proposals which the meeting is expected to consider is the French initiative for a conference on disarmament in Europe. The Nine will also make a number of proposals in all the other fields covered by the Final Act.
The signing of the Egypt-Israel peace treaty on 26 March 1979 ended the state of belligerency which had existed between those two countries for over 30 years. In a statement issued on the same day, the Nine stated that they considered the treaty to be a correct application of the principles of Security Council Resolution 242 in so far as relations between Egypt and Israel were concerned but that a difficult road had still to be travelled before that resolution was implemented in all its parts. As a result of the treaty, Israel had withdrawn from a large part of the Sinai peninsula and full diplomatic relations have been established between Egypt and Israel. Negotiations to grant automony to the Palestinians living in the West Bank and Gaza have, however, made little progress despite the target date of May of this year for their conclusion.
In a statement on 18 June 1979, the Foreign Ministers of the Nine recalled the basic principles on which they believed a comprehensive settlement should be based. They expressed their opposition to the Israeli Government's policy of establishing settlements in occupied territories in contravention of international law and they rejected Israel's claims to sovereignty over occupied territories since this would be incompatible with Resolution 242.
The speech made by the previous Minister for Foreign Affairs, Deputy O'Kennedy, to the United Nations on 25 September 1979 and the statement issued by the European Council in Venice, 13 June 1980, marked important advances in the Nine position. The principles which, in the view of the Nine, are fundamental to a just and lasting peace were reaffirmed. These are, in particular, the right to existence and security of all states in the region, including Israel, and justice for all its peoples, which implies recognition of the legitimate rights of the Palestinian people, who must be put in a position to exercise fully their right to self-determination. The Nine have made clear that the achievement of these objectives requires the involvement and support of all the parties concerned and that the principles set down apply to all and thus to the Palestinian people and to the PLO, who must be associated with the negotiations.
The tragic situation in Lebanon has continued to pose a serious threat to the stability of the Middle East region as a whole. In their statement of 18 June 1979, the Foreign Ministers of the Nine reaffirmed their support for the independence, sovereignty and territorial integrity of Lebanon. They expressed deep concern at the difficulties being encountered by UNIFIL in the implementation of the mandate and called on all parties to respect the decisions of the Security Council. This position was repeated with greater emphasis in the statement issued by the Nine Foreign Ministers in Dublin on 11 September 1979.
Following the tragic death of three Irish soldiers serving with the UNIFIL force in Southern Lebanon, last April, both the Nine Foreign Ministers and the European Council denounced the acts of violence committed against UNIFIL and demanded that the force be permitted to carry out its mandate in full.
Since the taking hostage of the American Embassy personnel in Tehran on 4 November 1979, the Nine have been deeply concerned at this flagrant breach of international law and have made repeated calls for the immediate release of the hostages. Statements to this effect were issued by the Nine Foreign Ministers on 20 November 1979 and by the European Council both on 30 November 1979 and 28 April 1980. The Foreign Ministers at their meeting of 17-18 May in Naples decided to impose limited economic sanctions on Iran in accordance with the UN Security Council draft resolution of 10 January 1980 which has been vetoed by the USSR.
The Nine have continued to follow developments in Africa with great interest, and they have devoted particular attention to the situation in Southern Africa, which remains the focus of international attention. The Nine have reiterated their condemnation of apartheid in South Africa and indicated their determination to exert every pressure which would bring the South African Government to abandon that system. In his address to the United Nations General Assembly on behalf of the Nine in September 1979, the then Minister for Foreign Affairs, Deputy O'Kennedy reaffirmed the commitment of the Nine to use the collective weight of the European Community to influence South Africa towards the establishment of a society with freedom and justice for all. During the period under review, the Nine made a démarche to the South African Government appealing for the release of all those imprisoned or restricted because of their political beliefs and also a humanitarian démarche on behalf of Mr. Solomon Mahlangu who was awaiting execution.
On 29 September 1978, the United Nations Security Council in Resolution 435 authorised the Secretary General to take steps to implement proposals which were intended to ensure the early independence of Namibia through free and fair elections under the supervision and control of the United Nations. The Nine supported these proposals and indicated that they would regard the results of the internal elections held by South Africa in Namibia in December 1978 as null and void. The Nine continue to support the efforts of the UN Secretary General, the Front Line States and the Five to implement the plan for Namibia and to reject unreservedly all efforts to impose an "internal settlement" in Namibia. The Nine have expressed their grave concern at the lack of progress in implementng the United Nations plan and have urgently requested the South African Government to accept fully its implementation without any further delay.
The Nine supported the efforts of all the parties to reach a negotiated settlement in order to bring Zimbabwe to legal independence on the basis of majority rule. The Nine lifted economic sanctions following the successful completion of the Lancaster House Conference and sent observers to the subsequent election in Zimbabwe. On Independence Day April 18, the Nine, in a statement, welcomed the new independent State of Zimbabwe into the international community and expressed appreciation for the constructive role played by the British Government and the neighbouring African states. The Nine have followed with close interest the development of closer economic co-operation among the states of the region, including Zimbabwe, in the framework of the Southern African development co-ordination conferences.
Since the Soviet intervention in Afghanistan at the end of last year, the Nine have closely co-ordinated their positions. At the UN Emergency Special Session in January, the Nine jointly called for full respect for the sovereignty, independence and territorial integrity of Afghanistan and supported the resolution adopted at that session calling for the immediate withdrawal of all foreign troops. Since then the Nine have proposed, as a basis for a solution in keeping with the UN resolution, a neutral and non-aligned Afghanistan which would be outside competition among the powers. They have also supported the efforts of the Islamic Conference to achieve a comprehensive solution to the crisis.
However, despite the various proposals advanced, the people of Afghanistan are still not in a position to decide on their own Government. Foreign forces are still present in Afghanistan and the Afghan people continue to suffer the effects of war and exile. The Nine continue to believe that an acceptable solution must be found which will provide for a withdrawal of foreign troops and an opportunity for the people of Afghanistan to determine their own future. The Nine are willing to support any meaningful initiative to that end.
Also in Asia, the Nine have, over the past year, intensified their consultations on the tragic consequences of the unrest and conflict in Indo-China, particularly in relation to the problem of the Vietnamese refugees and the famine in Cambodia. At the UN meeting on the refugee problem in Geneva in July last year, which came about partly on the initiative of the Nine and which secured a significant reduction in the flow of refugees, the Irish Presidency undertook close co-ordination of the positions of the Nine. At the height of the famine in Cambodia, the Community, under the Irish Presidency, made an immediate response to the appeals for the international relief effort. While in recent months the situation in Cambodia has improved, the Nine are continuing to monitor the situation closely and the Community is continuing to contribute to the relief effort. However we believe that a permanent solution to Cambodia's crisis can only be achieved in the context of an overall political settlement in the country.
Together with our partners in the Nine, we have frequently stated our view that such a settlement must be based on an independent and neutral Cambodia, with a genuinely representative Government and free from all foreign military presence, maintaining friendly relations with all the countries of the region and having the benefit of international assistance for reconstruction. We remain hopeful that these conditions can be achieved in the near future.
I am glad to say that during the past year relations with the countries of the Association of South East Asian Nations (ASEAN) have been given particular priority. The previous Minister for Foreign Affairs, Deputy O'Kennedy, travelled to Indonesia at the beginning of the Irish Presidency to attend a meeting of ASEAN Foreign Ministers. In March of this year I attended, together with my colleagues of the Nine, the signing of the co-operation agreement between the EC and ASEAN in Kuala Lumpur.
I might mention here, that during the period of the reports, an agreement concerning the application of the European Convention on the Suppression of Terrorism among the member states of the European Communities was formally opened for signature in Dublin on 4 December 1979 and was signed, subject to ratification, on behalf of all the member states on that day. I understand that preparations are under way in all of the member states with a view to ratification of this Convention. Also during the period discussions continued on a draft Convention on Co-operation in Criminal Matters which is being negotiated in the context of proposals for the creation of an Espace Judiciare Europeén.
The most significant development in relation to the institutions of the Communities in the period under review was the holding of direct elections to the European Parliament in June 1979 when over 175 million voters in the nine member States elected the 410 members of the new European Parliament. Ireland had been one of the most consistent advocates of the early achievement by means of direct elections of an increased democratic legitimacy in the decision-making process of the Community. We knew that a directly-elected Parliament would probably be more assertive in its role than the nominated Parliament had been.
There is ample evidence that this is in fact the case, particularly in regard to the Parliament's budgetary powers. As a result of this the working relationship between the Parliament and the Council has become somewhat strained at present. However, it is perhaps understandable that in the period preceding the evolution of a settled working relationship there should be problems. Politicians must find ways to resolve the problems which emerge in such situations by seeking compromise within the institutional framework in which they operate. Such compromise must be directed towards the achievement of the fundamental objective—the well-being of all of the members of our Community—whilst at the same time respecting the role of each constituent part of the institutions. I am confident that the directly elected Parliament, the Council and the Commission can work out a modus vivendi which will allow each to pursue its functions as envisaged in the Treaties.
Perhaps one of the factors which makes it more difficult to evolve an easy system of co-existence is the fact that the Community's institutional structure has become both more complex and somewhat less efficient. This is the conclusion of the Report of the Committee of Wise Men on the adaptations necessary to the mechanisms and procedures of the institutions in the context of enlargement.
Senators will be aware that the Report was asked for by the European Council at Brussels in December 1978 and was presented to the Dublin European Council. The report contains a series of recommendations which the Committee considers could improve the functioning of the institutions. These recommendations are being considered by the Council at present.
The debate on Convergence and Budgetary Questions was initiated in the period under review, and as the House will be aware, was pursued at the highest level in the Community for a very long time. I think that the agreement to which the member states have recently come gives a measure of satisfaction to all those involved, and I am pleased that the Taoiseach and Irish Ministers have been able to contribute to this outcome.
The concerns of the UK in regard to her net contribution to the Community budget have been met, for the time being and this has enabled the Community to come to an agreement on agricultural prices and related measures which, while far from ideal, contrasts very favourably with what was originally proposed by the Commission. The proposal to introduce the so-called "super-levy" on milk which would have directly penalised those farmers who were increasing their milk yields has been dropped, as has the suggested suspension of intervention buying of beef in the summer months.
We would have liked to see the overall agricultural price rise at a substantially higher level than the 5 per cent which has been agreed; however, when this rise is taken in conjunction with the agreements on milk and beef to which I have referred, and is compared with the Commission's proposal of 2.4 per cent, I think we have some reason to be satisfied with the outcome.
The text on fisheries, too, which was recently agreed by the Council of Foreign Ministers is a cause of satisfaction: it commits the Council to adopt a common fisheries policy, at the latest by the beginning of next year, and it lays down guidelines on which that policy should be based. These guidelines include a commitment to develop a common fisheries policy in conformity with Annex VII of the Hague Resolution of 1976 which contains a specific declaration of intent to secure the continued and progressive development of the Irish fishing industry. The guidelines also make special mention of the particular needs of regions where the local populations are especially dependent upon fishing.
Our deepest satisfaction must, however, be with the fact that the recent agreements on the budgetary and related problems have shown that the European Community continues to have the ability to resolve serious and substantial differences of opinion among its member states; that, however severe the strains which the fabric of European integration is asked to bear, it is capable of withstanding them, and of reaching an accommodation within itself, and adjusting to changing conditions and serious problems.
It would be idle at the same time to pretend that the accommodation just reached leaves us free from worry for the future or that the budgetary problem is settled for all time. What we in the Community have secured, I think, is a breathing space which we can use to enable us to adopt well considered and wise responses to the problem which we shall almost certainly face in 1982 at the latest, when Community expenditure is expected to reach the fixed ceiling of 1 per cent of value-added tax. This 1 per cent ceiling must be seen as a pragmatic benchmark fixed in the past, at a time when Community spending was at a relatively low level, and when economic conditions were very different from what they are today. I believe that it would be a major error if the Community were now to allow this arbitrary limit to dominate its thinking or to stunt the development of major Community policies such as the common agricultural policy or the regional and social funds.
We all recognise that there is a need to do something about agricultural surpluses; but what is done should be done in an organic controlled and gradual way, in a way which in particular does not strike directly at those Community farmers who are making major efforts to improve their productivity and efficiency. Simple insistence on the maintenance of the 1 per cent VAT limit would not be an organic or reasoned approach to surplus management; it would be a blunt instrument applied to the most vulnerable sections of the Community population. I, for one, could not be a party to that.
Turning now to the economic situation in the Nine, Community GDP is estimated to have risen in 1979, as in 1978 by over 3 per cent. Likewise, average unemployment was the same in both years at five and a half per cent. Consumer prices in the Community increased by 9 per cent in 1979, reflecting increased oil prices, compared with 6.8 per cent in 1978. On the trade side the Community performance was poorer than we would have liked, and the balance of trade has moved from a surplus in 1978 to a deficit in 1979.
There has been a further weakening of economic growth in the Community in 1980 and it is now expected to amount to some 1.5 per cent. The further oil price increases announced last December have exacerbated an already difficult situation, and have had adverse effects on the Community's prospects for growth.
Given the reduced economic prospects for the international economy it will be important for the Community in its response to this common problem to avoid a policy stance which is too restrictive in the face of the deflationary impact of oil price increases. It will accordingly be important for the Community to agree on, and to abide by, a common policy response to this common difficulty and to avoid the temptation to become excessively preoccupied with individual national problems.
In Ireland, heavily dependent as we are on international trade, we must make every effort to protect our export markets in a situation where external demand is stagnant. If we are to succeed in this, costs will have to be kept down, and in this regard excessive income increase must be avoided.
While we are experiencing a slowdown in our economic growth in 1980 due to external factors outside our control, there still remains much we can influence internally. Our success ultimately depends on ourselves, and I am convinced that with the right approach we can perform relatively well even in the face of a stagnant world economy.
The period under review saw the European Council, at its meeting of 4-5 December 1978, adopt the formal resolution on the adoption of the European Monetary System. Although our attitude to the EMS has never been other than positive, our participation in the system, because of our less prosperous status, was conditional on the provision of an adequate level of resource transfers. The subsidised loans being provided within the EMS are being used to good effect to strengthen this country's economy. The new Community Financing Instrument, the so-called "Ortoli Facility" which is being administered by the European Investment Bank, is now proving an important and useful channel for these loans.
Without doubt, the establishment of the EMS was a significant step forward in the development of the Community. That it was possible successfully to embark on such a progressive venture as the EMS, in an economic climate which was less than favourable to common action of such magnitude, must augur well for the future unity and development of the Community.
The EMS continues to function satisfactorily and, although some limited realignments were necessary in September and November of last year, exchange rates have remained fairly stable overall. By reacting quickly to changes made necessary as a result of tension on the foreign exchange markets arising from the movements of currencies not participating in the EMS, the countries participating in the EMS demonstrated the inherent flexibility of the system, a vital factor in regard to its successful operation.
The European Council, held here in Dublin last November, reaffirmed the objective of moving to the next stage by establishing the European Monetary Fund and requested the Economics and Finance Council to pursue agreement on the details of the fund. Discussions are continuing on the technical details of the fund in the Monetary Committee and in the Committee of Central Bank Governors.
As regards competition policy, the main development, from the national point of view, was the announcement on 20 December 1978 by the Minister for Industry, Commerce and Energy that exports sales relief would be replaced from 1 January 1981 by an alternative incentive scheme based on a low rate of corporation tax of 10 per cent for all manufacturing industry.
The new system of co-ordination of regional aids to take effect from 1 January 1979 for an initial period of three years was adopted by the Commission on 21 December 1978. It was provided, however, that the new arrangements would not apply to export sales relief until 1 Janurary 1981. Under the new arrangements Ireland, together with Northern Ireland, the Mezzogiorno, West Berlin and the French Overseas territories, was allowed to retain the highest level of regional aid in the Community.
On the industrial side, the Community in the period under review continued to apply the anti-crisis measures for the steel industry. The measures, covering both internal production and restructuring, as well as imports from Third Countries, have greatly helped to alleviate the difficulties in this troubled sector. In December 1979 the Council took a decision as part of these anti-crisis measures on aids to the steel industry setting out the criteria for such aids. However, there have been a number of indications recently that the existing voluntary arrangements are no longer working effectively and, because of reduced demand in the steel consuming sectors, a price war is developing among the major European producers. The Commission has now proposed action under Article 58 of the ECSC Treaty imposing mandatory national production quotas. This proposal is at present under discussion in Council.
Ireland's contention has always been that Community policy must be widened to take account of the situation of industries in the least developed regions of the Community. This is not to say, however, that we do not agree entirely that Community action is required to combat the difficulties in the sectors I have just mentioned, and in, say, the man-made fibres sector. A draft regulation on industrial conversion and restructuring activities, aimed mainly at the shipbuilding and man-made fibres sectors, is before the Council. Pending agreement to adopt this regulation, the Council in December 1979 adopted a proposal whereby part of the relevant 1978 budget appropriations would be used on an ad hoc basis for restructuring and conversion operations in the man-made fibres sector. We will continue to persevere in our efforts to have the Community develop a broad based industrial policy which fully takes account of the particular industrial problems of the least developed regions of the Community such as Ireland.
Turning to the Community's external relations, recent trends in the international economy have put severe pressure on the trading strength of all the major industrialised countries. It is important for the Community, and for Ireland in particular, that the response to these economic difficulties does not involve a resurgence of protectionist policies which would undermine the principle of the open international trading system.
For this reason, we have been especially satisfied with the successful conclusion of the Tokyo Round of the GATT Multilateral Trade Negotiations. Intensive negotiations led on 12 April 1979 to the initialling by the main industrialised participants of texts containing the substantive agreements achieved. After formal Council approval was given at its meeting last November to conclude the negotiations, the agreements were signed by the Community and by the other major industrialised participants on 17 December 1979. It is to the credit of the participants that the difficult economic conditions since the 1973 oil crisis were not permitted to deflect the negotiations from their ultimate goal, which was the further liberalisation of international trade. The Irish Presidency played a significant role in ensuring that they were completed before the deadline at the end of last year. The European Council on 22-23 June 1980 endorsed the conclusion of the MTN and resolved to strengthen the open world trading system and to resist pressures for protectionist action.
The Community's relations with its major trading partners have been influenced by the Tokyo Round negotiations, Difficulties persist with regard to the Community's adverse trading balance with Japan but, nevertheless, it was recognised by the European Council on 21-22 June 1979 that the Community is aware of the many common interests shared with Japan in the economic sphere.
Relations with Australia have for a number of years been dominated by the Australian efforts to gain improved access to the Community market for their agricultural products. While the results of the MTN went some way towards reconciling the positions of the two sides they did not, nor, indeed could they have been expected to, result in a full resolution of the problem.
The conclusion of the MTN was made possible by consistently close co-operation between the Community and the United States. This year, however, has seen a deterioration in the Community's trading relations with the US, particularly in the areas of steel and synthetic fibres. The danger exists that, in a period of international economic difficulty, these problems could be allowed to result in a slide towards a trade war between the two partners. It would indeed be unfortunate if such problems were to erode to any degree the significant progress made in the past year towards the liberalisation of world trade.
In the context of its development co-operation policy the Community has continued to introduce greater coherence into its overall policies in trade, agriculture and other fields.
The first ACP-EEC Convention of Lomé, which expired on 29 February 1980, was a unique model of relations between developed and developing countries and represented the most comprehensive expression of the Community's co-operation policy so far. A successor to this convention was signed in October 1979 during the Irish Presidency of the Council of the European Communities, and is expected to come into force later this year.
The new convention consolidates and improves upon its predecessor. The principal improvements include the introduction of a scheme to compensate ACP states for losses in earnings from the export of certain important mineral products and provision to help develop the mining potential of the ACP states.
Increased emphasis is laid on agricultural development, and toward this end a centre for agricultural development is to be established. Improved provisions have been made for the least-developed, landlocked and island states. The funds available for expenditure on ACP-EEC co-operation have been increased by 62 per cent and amount to nearly £3.8 billion, of which Ireland's share will be £18.6 million, payable over a period of eight years.
In addition to these improvements, there has been a significant increase in the membership of the ACP group of states since 1 February 1975 when 46 ACP nations signed the first Lomé Convention. At present 59 ACP states are party to the new convention, and negotiations have recently been concluded on the accession of Zimbabwe. Applications from Vanuatu and the Cook Islands are also under consideration.
In the context of its global Mediterranean policy the Community has negotiated a new Co-operation Agreement with Yugoslavia. In February 1979 the Council of Foreign Ministers approved a mandate for the negotiation of the agreement which was envisaged as a wide ranging one, recognising Yugoslavia's special position as a non-aligned developing country and an important trading partner of the Community. Negotiations concluded in February and the agreement was signed in Belgrade in April 1980. The agreement will reinforce, strengthen and diversify relations between the Community and Yugoslavia.
At its meeting in June 1980, the EEC-Turkey Association Council agreed upon a number of measures designed to revitalise the association between the two sides. The measures covered four main areas: agriculture, social affairs, economic and technical co-operation, and finance. The measures decided upon take into account the special nature of the association links between Turkey and the Community.
The Community has been seeking to extend its relations with other regional groupings in recent years, particularly with the countries of the Association of South East Asian Nations (ASEAN). The first EEC-ASEAN Ministerial Meeting in November 1978 agreed, inter alia, that it would be desirable to place relations between the two groupings on a more formal footing. Discussions on a possible co-operation agreement between the two sides began in December 1978 and continued through the first half of 1979. Under the Irish Presidency detailed negotiations on the agreement took place. The December 1979 Foreign Affairs Council approved the text, and signature took place in Kuala Lumpur on 7 March 1980. The Community views ASEAN as an important regional grouping and a force for peace and stability in the region.
At the European Council on 6-7 July 1978 the need for a strong and coherent Community regional policy was once more emphasised. The conclusions of this Council specifically acknowledged that the envisaged common approach in economic policy should embrace the reduction of regional disparities.
However, the most significant development in the field of regional policy was the establishment in the regional fund of a non-quota section, representing 5 per cent of the commitment appropriations from the fund, which will finance specific Community regional development measures, In October 1979 the Commission submitted to the Council proposals for use of the non-quota section for assistance to five areas in the Community including Irish Border areas. I am glad to state that, although adoption of the regulations was held up pending resolution of the British budgetary problem, they were adopted at Council on 7 October 1980. The measures for the border regions concern five counties directly adjoining the border on the southern side and eight district Councils adjoining on the northern side, and are aimed at economic activities in the fields of tourist accommodation, tourist-linked infrastructure, communications and artisan enterprises. The financial allocation will be £10.7 million for the southern side and £5.3 million for northern areas over the period 1980-84.
With regard to approvals from the fund during the period under review, Ireland received a total of £23.62 million in approvals in 1978 and this increased to £41.73 million in 1979. It is expected that approvals for 1980 will amount to approximately £48 million.
The employment situation in the Community during this time remained difficult, and priority was given to it both in discussions with the social partners and in the Council. In December 1978 the Foreign Affairs Council introduced a regulation which makes available certain job creation measures for young people under 25 years of age in the private and public sectors, excluding central government administrations. It is hoped that this relatively new aid will help deal with the inflow of young people in the labour market which accentuates the already serious difficulties existing there. In November 1979 the Council agreed to the adoption of a Resolution on the reorganisation of working time which deals with work-sharing measures including restrictions on systematic overtime, flexible retirement, part-time work, temporary work, shift work and annual hours of work.
The area of industrial health and safety has also received attention. The terms of a directive on the protection of workers from harmful exposure to chemical, physical and biological agents at work were agreed by the Social Affairs Council in June 1980. This directive lays down framework measures for the prevention of risks and the protection of exposed workers in relation to all agents.
In the field of social security, the question of equal treatment was also discussed. In November 1978 Council approved a directive on the progressive implementation of equal treatment for men and women in matters of social security. This directive is designed to eliminate from social security schemes by 1984 all discrimination based on sex either directly or indirectly by reference in particular to marital or family status.
Social Fund approvals for Ireland amounted to £29 million in 1978 and £38.7 million in 1979. It is expected that approvals for 1980 will amount to approximately £56 million.
Despite the fact that the Treaty of Rome has specific provisions for a common transport policy, progress in this area has been slow, partly because the field is so wide.
In the area of road freight transport, the November 1978 Council agreed to a 10 per cent increase in the Community quota for road vehicle licences for 1979. The December 1979 Transport Council granted a further 20 per cent increase. This increased Ireland's quota to 76 authorisations. This increase in the quota, which is a welcome development from Ireland's point of view, was agreed as part of a package of measures on the road freight transport area. This compromise package was drawn up by the Irish Presidency when it appeared that none of the four items in this area would be agreed if treated separately.
The package also included a provision that will allow member States to convert up to 10 per cent of the allocation of annual Community authorisations into short-term authorisations, each annual authorisation to be divisible into 12 authorisations valid for 30 days each. This scheme will be of benefit to the developing Irish haulage industry.
Also in the area of road transport, the Minister for Labour made regulations during 1979 setting up the system of enforcement of the EEC regulations relating to driving hours and rest periods for road transport workers and the introduction of tachographs in road haulage vehicles. The regulations relating to driving hours and rest periods are being introduced on a phased basis and will be fully effective from 1 January 1981. The Commission has agreed that the use of tachographs in domestic transport operations will be deferred until 1 December 1981.
Two further significant developments in the transport area were the publication by the Commission of discussion documents entitled "The role of the Community in the Developments of Transport Infrastructure" and "Contribution of the European Communities to the Developments of Air Transport Services". Both documents were discussed in a preliminary way at the Council of Ministers' meeting on 6 December 1979. The former document mentions certain projects of Community interest which might be suitable for Community financial aid. In an Irish context, the report mentions rail and road links between Dublin-Belfast-Derry and Dublin-Cork-Galway. Ireland welcomed the Memorandum on Air Transport as a useful basis for discussion, but advised caution on further disruption to international civil aviation.
The Transport Council on 24 June 1980 took two important steps in the area of harmonisation when agreement was reached on the directive on summertime arrangements and on the directive relating to driving licences. The former ensures for the first time that summertime will begin at the same time in 1981 and 1982 in each member state, a great boon for travellers as well as international business. The latter provides for reciprocal exchange of driving licences from 1 January 1983 without the necessity of undergoing a driving test when licence holders change country of residence within the Community and for the use of a single Community model licence.
Since the end of 1978, the dramatic deterioration of the world energy supply situation has brought about a reorientation of the Community's efforts in this field.
At the European Council meeting at Strasbourg in June 1979 it was considered necessary to take measures to reduce Community oil consumption by up to 5 per cent. It was also agreed that the Community's annual imports up to 1985 should not exceed those of 1978. This laid the foundation for the Tokyo Summit Agreement which set specific national targets for certain industrialised countries in the same time frame. This constituted an important stage in halting the growth of oil imports and reducing our dependence on them.
Under the Irish Presidency, efforts to limit oil consumption within the Community were pursued. After difficult negotiations, individual national targets were agreed upon by each member state for 1980 and 1985 and, in the case of 1980, these were converted into fixed ceilings.
In the spring of 1980 the Commission put forward a significant paper on energy policy and investment. This was examined by the European Council in April. This Council invited the Council of Energy Ministers to consider, as a matter of urgency, the steps proposed in the paper. The Energy Council examined the Commission paper, and it will be studied further by the next Energy Council in November.
The energy crisis continued to be given considerable attention by the European Council in June 1980, and the decision of the Energy Ministers on 13 May to reduce the ratio between the growth of GNP and increased energy consumption by 1990 was noted with satisfaction.
The present conflict in the Gulf Region is, of course, of concern to us all, with its implications for oil supplies. However, this situation is being monitored closely by ourselves in conjunction with our Community partners, so that appropriate precautions can be taken as and when necessary.
In the agricultural sector the major developments in the period covered by the reports concerned the changes necessary to take account of the European Monetary System and the agreement on agricultural prices for the 1979-80 and 1980-81 marketing years. In December 1978 the Council had considered a proposal aimed at neutralising the impact of the European Monetary System on the Common Agricultural Policy. France linked their agreement to this proposal with progress on elimination of monetary compensatory amounts. Following lengthy discussion on these issues during which the coming into force of the EMS was delayed, the member states, with the exception of the UK, finally agreed in March on the elimination of new MCAs arising during the first two years of EMS. At the same time, the Council declared its determination to reduce progressively existing MCAs.
The Commission submitted its proposals on agricultural prices for the 1979-80 marketing year to the Council in February 1979, and agreement on an overall increase of 1.5 per cent for all products other than milk—for which there was a price freeze—was eventually reached in June 1979. While the price increase was relatively modest, the agreement also included a number of measures of benefit to Ireland which added up to a satisfactory package for us.
During the period of the Irish Presidency of the EEC—the second half of 1979—progress was made in a number of areas in agriculture. Most notable was the agreement on important changes in the wine sector designed to bring about a better balance between production and consumption of wine in the Community.
The major development in agriculture during the first half of 1980 from the Community viewpoint was of course the prices agreement for 1980-81. Considering the tight budgetary situation and the pressures which are being exerted against the Common Agricultural Policy, this price package was quite frankly favourable to Ireland and represented a substantial advance on what was first proposed. The overall price increase of 5 per cent was twice the original proposed, and of major significance for us was the agreement on a set of structural measures for the West of Ireland which will mean investment of £300 million over a tenyear period; 50 per cent of the money for these measures will come from Community funds. Other positive elements in the package of importance to Ireland were the agreement on a common sheepmeat policy which came into operation on 20 October and Community subsidies for beef suckler herds.
Of major significance to Ireland also was the fact that none of the main anti-surplus measures proposed by the Commission will apply this year. This means no super levy, no cuts in sugar quotas and no suspension of beef intervention.
The reports outline the difficulties in reaching agreement on a common fisheries policy which would govern fishing in the 200 mile zone which the member states established as from 1 January 1977. It has proved very difficult to reconcile the positions of the member states on the basic question of quotas, conservation policy and access. However, during the periods covered by the reports, several important measures designed to help the development of the Irish fishing industry were adopted. A sum of 46 million units of account—approximately IR£30 million—was allocated to Ireland for the five-year period, 1977 to 1982 to build up our fishery protection and surveillance capability. The Council also adopted a regulation providing for investment aid amounting to five million EUA's in the period under review for restructuring the inshore fishing industry. This measure especially assists Ireland by a grant of up to 50 per cent of the cost of new fishing vessels of specified length, and aid also for mariculture projects.
At the Council in December 1979 a significant breakthrough was achieved when Ministers undertook to decide early in the New Year on Community measures for conservation and management of fishery resources for 1980. Agreement in principle on total allowable catches and a common system of recording and notification of catches was reached on 29 January, and progress was also made in regard to agreements with third countries. The next step will be to attempt to settle national quotas.
A major impetus towards settlement of the fisheries question was given by the declaration of the Council of Foreign Ministers on 29 May 1980 which laid down guidelines for the establishment of a common fisheries policy before 1 January 1981.
Senators will appreciate that the range of developments covered by these Reports is very wide. I have attempted to deal with the major topics but, as I said at the beginning, I will be glad to respond in my reply to points made during the debate.
The task of the Seanad this afternoon is to take note of developments in the European Communities, that is to take note of 530 printed pages consisting of 73 chapters in four documents which, strangely enough, are sold at prices that tend to fall as we approach the latter part of 1980. At the beginning of 1980 we could exact £1.95 for this report, in July we could afford to sell it for £1.50. To assist our deliberations on this matter, to enable us to take note of 530 printed pages, or 73 chapters, we have had a 37 page speech from the Minister. I do not know whether the Minister found it as tiring to read it as I found it to listen to.
I wonder about a matter of procedure. I know the Minister in the role he is playing today, and he will understand that what I am saying does not in any way relate to him or, indeed, to the personality which looms behind him and who is not here, the Minister for Foreign Affairs. The Leader of the House has served this House with very great satisfaction to all its Members. I think everyone would confirm that. It is an impossible task for us to take note of more than one of these reports at a time. If I may speak through the Chair to the Minister and the Minister for Foreign Affairs, when we have the benefit of Reports as adequate as these reports are, and as informative as they are, it would aid the debate in this House if the Minister's speech did not try to cover as much as he did cover, but direct the attention of the House to the matters he would like the House to debate and to give its attention to. Then we might be in a different position.
We are, as it is, like a dozen motor cars all travelling separately to arrive at different places with a different message to deliver. I do not know if what I am going to say will be remotely connected to what anyone else may say. I only know that I start off with the knowledge that what I am going to say has got very little to do with what the Minister has said. I want to ask the Minister half a dozen questions. Six questions are a modest number in the circumstances of the amount of information in which I have refused to be drowned. I do not know whether these questions are all pertinent to the matter of the European Economic Community. I do not think all of them have been adequately dealt with in the Minister's speech.
There are a couple of references in the speech to deepest satisfaction with the recent agreements on the budgetary and related problem and the various developments which have taken place, indicating a breakthrough and an improvement. The solid fact of the matter is that the Commumity is in a state of great crisis at the moment, a crisis which was fore-shadowed—not that that took a great deal of pre-vision—in a debate which took place in the House in November last, that is the budgetary crisis. The position, as I understand it, is that the Commission submitted a draft budget involving the use of almost the limit of value added own resource, being only .05 short of that limit, and leaving only that .05 for the obligatory payments which would arise if any agricultural price increases had taken place.
The fact that the proposals were within .05 of the limit is enough to indicate the critical position the Commission was in. but the Council cut back that, and cut it back in the following areas, all of them of great importance to this member state which joined the Community as recently as it did, receiving all the confirmation that it did with regard to the preamble of the Treaty of Rome. The Council cut back the Regional Fund substantially—and I take note of the commitment allocations—by 200 million units of account. It cut back the Social Fund in the midst of an unemployment crisis by 77 million units of account. It halved the expenditure on the Third World—its commitments of 100 million units of account. It reduced the energy expenditure commitment to at least half of last year's spending—this in the middle of an oil crisis.
The Commission dissociated itself from the Council's decision and said of that decision that it was not a suitable basis for Community activity, that it no longer reflected adequately the priorities of the Community and that—and these are the Commission's words—the Council had destroyed the balance between the need for strict economy in the light of the approaching exhaustion of own resources, the economic situation of the Community and the policy requirement, which I find inadequately referred to in the Minister's speech. The Minister changed it in some fashion. I do not know how many more changes we are to be faced with before the debate is ended.
According to Agence Europe of 25 September, Italy voted against the draft budget as a whole and, according to that newspaper, was alone in doing so. What did our Government do? Did they do the same? Would the Minister answer my question? If this member state did vote against these cuts which the Commission said destroyed the balance between the need for strict economy in the light of the approaching exhaustion of own resources, the economic situation of the Community and the policy requirement, does that mean that Ireland finds them broadly acceptable? It would be useful for this House to know what is Government policy on this matter. I should be appreciative if whichever Minister is named to respond to this debate would answer that question. That is my first question, and I have others.
On the regional fund the Commission in its proposal to the Council proposed a reduction of our share of the quota section from 6.46 per cent to 5.87 per cent on the accession of Greece. The Commission envisaged no diminution in the absolute values of the national quotas but, as I have informed the House, and no doubt Members and Ministers already know, they cut the appropriation to the Regional Fund by £200 million in commitments and £270 million in payments. I should like the Minister to tell the House how this cut is understood by the Government who, apparently, did not vote against this decision by the Council. How will this affect the receipts of this member state which, through its Minister, is so complacent about the situation in the Community? Will the Minister tell us if the undertaking obtained by the predecessor of the Minister for Foreign Affairs, Deputy Garret FitzGerald, that enlargement of the Nine, which, incidentally, was the continuous description of the Community shortly before its ceasing to be Nine, would not result in any diminution of the benefits this country will receive from that fund still stands?
There is a third question not perhaps of the same importance which relates to fisheries. It is my impression that in this admittedly difficult area there have been signs of a break in the deadlock preventing the adoption of a common structural policy. Indeed, any such signs are very welcome, as the resulting uncertainty is not good. Would the Minister answer a preliminary question in regard to this? Does he anticipate an early agreement on this common structural policy? As everyone knows, with regard to fisheries there have been serious marketing problems. I think it is known that the Commission are contemplating a new marketing regime and have sent a paper to the Council. What urgency do the Government attach to this? What action is expected by the Community to counter the depression caused by the dumping of cheap imports into the area and among the people I am most concerned about?
My fourth question relates to a matter which is more prominent now than soccer results in the newspapers, the EMS, whose daily gyrations for some reason seem to fascinate the media and about which we get constant reports. It seems that within the system we have done reasonably well. I would be interested to get the views of other Members of the House on this matter of our joining the EMS. My impression is that it has been good for us not to have been tied to sterling. It has been good for us during the time since that break that we have not been living with an over-valued pound. I would be interested to know whether my own impression of that is correct, that we have done reasonably well, that it was well we were in the EMS in that we were out of the link with sterling and we have had all the support involved in our membership there.
It seems to me absolutely certain, although I would be grateful if some Minister will tell me, that there is a Second stage of the European Monetary System, namely, the setting up of the European Monetary Fund that will not be implemented by next spring. Why do we waffle about that if that be so? That was originally planned. We move from the stage of blaming everything on oil to the stage of wondering can we blame everything on the Iran-Iraq war. It is not a question of oil or even necessarily enormous unexpected international economic developments. It is a matter of political will within the Community. It is because of the operation of the institutions or the way in which they are being permitted to operate that there has not been the convergence of economic policies between the Community and the policies of the member states. Without the convergence of these policies and without—if I understand the economic propositions involved—the processes of transfer of significant resources from where these resources are to where they are not we cannot go on to the next stage. I would be interested to know what is the attitude of the Government and if the matter will be discussed in the next meeting of the Council.
In the past few days the Finance Council agreed to negotiate a loan of £4½ billion from the OPEC countries for re-lending to member states with balance of payment problems attributable to oil. I thought all our problems were more or less attributable to oil in the context of the general view pouring out of mini-Whitehall, Merrion Street. If there was ever a case where a government were reconciling their external performance with their internal utterances they would be saying "All our balance of payments problems are caused by oil and, therefore, let us have some of this loot on the terms", but apparently Ireland is not doing this. The Government have not shown any shyness about foreign borrowing. At least this will be agreed. It may be defensible, attackable, but there is little doubt about that fact.
The Minister for Finance has suggested that he did not like the conditions on which the loans to be recycled from OPEC were to be available. Does this mean that he did not think we could comply with criteria? Does this mean that long before the International Monetary Fund arrives here there are already intelligent critics among the lenders suggesting appropriate conditions that the Government are not prepared to accept? The answer to that question is important. It would be useful to know what were the conditions that were not acceptable. Are the Government prepared to say what effect, or are they prepared to say that there has been no effect, on the external value of our currency because of the lack of discipline in the management of our own finances, a discipline which was nervously threatened in December, spuriously maintained and then apparently abandoned, whether finally or only for a period of three weeks, we will know in about a month.
I would like to put on the record so that there will be no doubt about it the opinion that what was nervously threatened ought to have been maintained and more formally articulated in a manner where it was possible to seek everyone's support. If there is a move towards a proper imposition of control in the matter of cutting expenditure, raising taxation or any other matter that is intelligent and right in our circumstances it would have my support. In the absence of that control—and this is my question—what is the Government's view on the currency enjoying its present support?
I come to my sixth question and I am surprised that I have to put the question. I would have thought the position of the Irish farmer would have burnt itself through every Government agency on to every Government file and that no Minister would have dared to come into either House and express satisfaction with deals that have been negotiated which relate to the position of the Irish farmers of the moment. No less a person than Peter Walker—he may spend his holidays here, I do not know, but otherwise he is not known to me as being highly briefed in our interest—is reported as having said on 15 October that the drop in farmers' incomes in the Community has varied between 10 per cent to 33 per cent in Ireland.
I must ask the Minister who replies to tell us in what way our interest and the interests of these farmers are going to be secured by the policy pursued by the Government. I would like to think that in the different files that relate to the Common Market two or three articles have been highlighted so that they never forgot the language used in them. After all, the objective of the Community after the various determinations, resolutions, reaffirmings and recognisings which are contained in the preamble, are reasonably lucidly expressed in documents that are rare enough for their lucidity. They state that:
the Community shall have as its task ... by establishing a Common Market and progressively approximating the economic policies of member states to promote throughout the Community a harmonious development of economic activity, a continuous and balanced expansion, an increase in stability, an accelerated raising of the standard of living and closer relations between the States belonging to it.
The Common Market was one of the methods specified in Article 38 relating to the objectives of the Treaty. The Common Market was the method to be used to establish harmonious development and so on. Article 38 says:
The Common Market shall extend to agriculture and trade in agricultural products.
Then it continues in language which is unusual and that tells us much about the historical background to the document.
The operation and development of the Common Market for agricultural products must be accompanied by the establishment of a common agricultural policy among the Member States.
Article 39 says:
The objectives of the Common Market shall be to increase agricultural productivity .... thus to ensure a fair standard of living for the agricultural community, in particular by increasing the individual earnings of persons engaged in agriculture.
The Irish Government must take a very strong stand on their position as a member state, who signed a Treaty with objectives stated in language that was very clear, in a treaty of accession in which we affirmed all that is desirable for us and with a protocol which recognised our special position. But if there are member states of great riches—and there are—they are in terms of political voting the same as Ireland at the Council. This House is entitled to ask what is our policy on this. I would accept that it is not necessarily the best policy for whichever Minister is going to reply in this debate to stand up and make a thundering speech denouncing Germany, France, Italy, England or the other member states. That is not necessarily the right thing to do, but we ought to satisfy ourselves that we have a strategy with regard to this. We are in a situation where the own resources are clearly going to be exhausted. The Minister in his speech referred to the pressure on the common agricultural policy. Let us have some very strong pressure for it. Let us have some very realistic talk about our rights as distinct from any claims we may have in relation to this. Let us be unashamed of our position with regard to it and not be prepared to accept whatever happens to be laid down.
I will end by repeating what that last set of observations has been about. What initiative have the Government taken to alleviate the position of the Irish farmers? I would like to fit all that I have said up to this moment and these questions too in the context of the overall view that I take of the worthwhile nature of the Community, of the good purposes that it was created and designed to serve, of the large extent to which it has achieved these good purposes and of the ideals which are set forth in a rather muted way in the preamble to the document. These have my support. I would not wish the House to misunderstand my position with regard to that.
Part of the problem that is facing the West, the European part of the West, may be the very emphasis which is placed by the language appropriate to the Common Market on the material productivity side of man's activities. There is a great deal more nobility, for example, in the American Constitution than there is in the treaty. That is a weakness as a matter of inspiring the member states. No doubt it was caused by the circumstances in which the ancient quarrels were brought to an end by the formation of the Community. It made it difficult to get language that would express what was the best for man.
There have been other voices in this House that have from time to time made sneering references, or voices which gave expression in a sneering kind of way to criticisms of the Community. Taken beside that awful tyranny that lies beside it, contrasting the conditions of life on this side of Europe with the conditions of life on the other side of the Iron Curtain, who can doubt that any criticisms we make in conditions of free institutions must always be understood as being part of a great act of gratitude and praise for the fact that we have these free institutions, that we have these free conditions of life and that we should be having as one of our purposes the pursuit of human rights everywhere, not merely in our own society, but indeed fearlessly in the eastern world as well?
As the Minister said in his introductory updating speech, these four reports and his own survey cover a very broad range of developments over quite a considerable period. I am going to be very selective, starting with the subject with which the Minister who presented the survey this afternoon is most familiar—fisheries. He assured us that, following guidelines evolved last May, the Community is now on the way towards a common fisheries policy. It is scheduled for the beginning of 1981. I would like a little more information on what we desire the shape of that policy to be and what it is likely to be in the outcome. We are assured that behind the guidelines there is a commitment to the continued progress and development of the Irish industry. But what form will that take in the future?
The Minister referred to means which have already been made available to us through extra money from the Community to build up our protection capability and to restructure the fishing fleet. Is it along these lines that we shall be moving in the future? Will there be anything left of the old protection which we have enjoyed up to now, of an exclusive right within a certain fixed mileage of our coast? I also wonder whether an exclusive or preferential right is going to be pressed for or is it likely to continue? I ask this particularly because of the implications for the salmon fishing industry and for conservation of salmon stocks. The Minister present knows very well that the exploitation of salmon at sea, even by the Irish fishermen to whom it has been virtually confined up to now, has been so severe as to threaten the survival of salmon, which of course is a luxury fish in the Community. What will happen when that competition is intensified by the granting of access to coastal waters to, no doubt, equally greedy fishermen from other parts of the Community? I am really seeking some reassurance that the apprehensions that are felt not only in Ireland but elsewhere about the survival of the Atlantic salmon in these conditions can be allayed.
To come to a matter more within my own province—finance—I would like to support what Senator FitzGerald has said about the need for Ireland to keep pressing for adequate independent financial resources for the Community—in other words, for the extension of the 1 per cent VAT limit which is now on the point of exhaustion. The prospect is that it will not in 1982 be capable of even financing a restricted budget of the Community.
This limitation in relation to independent financial resources poses a great threat, as has already been emphasised in this House and elsewhere, not only to the Common Agricultural Policy and the significant benefits we derive from that but also to all other transfer mechanisms of the Community—to the regional fund and the social fund. Because it affects these important elements it has also a bearing on our future position in the EMS. Perhaps the Minister could say how events are likely to evolve in relation to this limitation on the financial resources of the Community? Perhaps he could say also whether, leaving aside this financial threat, there is any comfort to be drawn from the diminished political threat to the Common Agricultural Policy because of the recent electoral decision in Germany?
As Senator FitzGerald said, the condition of the farming community here at present is a matter of great concern. I would like to think that we ourselves here, and the public generally, understood better just how far we can rectify that position by devices such as devaluation and green £ devaluation which are publicised as if they were magic wands. Indeed, given the extent of the drop in farm incomes, how far is it possible to rectify it at all, as distinct from alleviating it, by any transfers within our own community ... I am inclined to share the view expressed by Senator FitzGerald that much more of our effort at rectification should be directed towards the EEC. Of course, prices have gone up but not as much as inflation has raised costs here. Senator FitzGerald was right in pointing to the quite unequivocal commitment of the Community in its general Treaty, and also in its Protocol with Ireland, about redressing imbalances and approximating the economic condition of all the member states, including in particular, in the case of agriculture, improving real incomes.
A straightforward devaluation within the EMS would have the most profound implications not just for farmers but for industry and the whole community. It therefore should not be bandied about as something that would painlessly rectify the farming position. A devaluation of the green £ as I understand it, under present regulations, would be limited to a very small percentage—less than 1½ and that could not do a great deal. But, as distinct from a devaluation pure and simple of the Irish £ within the EMS, a green £ devaluation, I must admit, could bring some extra real benefit to the community at large as distinct from farmers alone. It is not, I think, just a question of transferring income within the Irish community. There is an element of that in it, through the increased prices for agricultural products which would follow, but there is also a substantial element in a green £ devaluation of a transfer of real benefit to the country as a whole from the EEC.
All this needs to be teased out and the public need to understand it. I am not sure if it is understood generally even in the rural community, but I must qualify that by saying that I have always been impressed at the speed with which very complex issues are understood in rural Ireland when they affect the livelihood of the community there.
Coming to the EMS, it is ironic now to reflect that in the lead up to all this in the 1974, 1975 and 1976 period we were being advised to cut the link with sterling because sterling was a sinking ship. We were being promised by economists as well as by politicians that the immediate consequence would be an appreciation of the Irish £ in relation to sterling. When we cut the link in 1979, we waited quite a while before the Irish £ one day soared one penny in relation to sterling. The situation since then has not been quite so satisfactory. I am not saying that I regret the change.
It is also ironic that one of the consequences of the devaluation of the Irish pound in relation to sterling is, in a way, to run against the whole motivation of our joining the EEC. Most people who, for political and for economic reasons, wanted to join the EEC hoped that it would greatly reduce our dependence on the British market, whereas the Irish pound's rather heavy depreciation — caused, of course, by sterling's artificial gain in value due to the oil surpluses Britain disposes of—has had the effect of making exports to Britain more attractive or, at least, less unattractive, than to other places in the Community.
We are in a rather difficult position in the EMS because we are a small economy, less advanced than the other member states in the EMS, and with an exceptionally high proportion of our total financial transactions being conducted in currencies that are not in the EMS — sterling, dollars and so on. Probably 70 per cent of our total transactions are conducted in these currencies, which are not protected by the stabilising mechanism of the EMS.
In so far as Senator FitzGerald might have been looking to me for confirmation that we have not done too badly in the EMS and that we might have fared much worse had we stayed aloft with sterling, I would have to agree, although I am not too enthusiastic about the situation in which we find ourselves. All our inflationary troubles are not due to oil. I know Senator FitzGerald did not imply that. We have contributed quite a great deal on our own account. There will be another occasion no doubt, of specifying what factors these are for which we are more responsible.
It has often occurred to me that small countries should perhaps have a more active policy about the course of oil prices in the future. I am not saying that we will be able to influence it directly. The world has suffered a great deal over the last seven or eight years because there was no policy contemplating progressive oil price increases. Major powers thought that in the end they could break the power of OPEC, or creep up on the adverse terms of trade and turn them again in their own favour, as they did for a while. In consequence, we have had these sudden and very disruptive increases in oil prices on the part of OPEC in order to regain lost ground. I should have thought it much better for the whole world economy, and particularly for smaller countries, if we supported the principle of maintaining the real purchasing power of oil in terms of other commodities. We would then have to face inevitably from year to year a progressive, steady increase to which we would be much better able to adjust both in terms of finding new energy supplies and encouraging them to come into being and also encouraging conservation of energy.
One final comment about the EMS. The difficult position we occupy within it is another reason why we must keep on insisting that there be adequate funds for transfer of resources within the Community. We would never have any business linking ourselves up in any fixed way with currencies like the Deutschmark unless we had the assurance that there would be adequate transfers from the richer centres of the Community to Ireland in order to make good that commitment of the Treaty of Rome about progressive reduction of imbalances and convergence of economic conditions in all the member states.
At the outset, may I briefly say how pleased I was that Ireland was this week elected to the Security Council of the UN. I was pleased for two reasons. Obviously, it acknowledges the hard work of all concerned, the permanent representation in New York and indeed the Department of Foreign Affairs as a whole. It underlines the esteem in which the membership of the UN hold the Irish representation and acknowledge the work of successive Ministers. I hold the view that our small country and indeed our people, whose thought and reasoning is certainly influenced by our traditions and culture, have a special role to play in international fora such as the United Nations or the ACPEC Assembly. I am glad that this will continue.
I also hold the view—I hope I will be forgiven if I mention it—that there ought to be a parliamentary input to these assemblies in addition to the Minister of the day. As the Minister knows, many of our colleagues on the Political Affairs Committee of the EP attend the General Assembly—members from Belgium, Germany, Netherlands and so on. At least a small delegation should be included to cover the shadow spokesman for foreign affairs and indeed some of the people who closely follow this area in this House. It could be of benefit and it would enhance the continuation of administration in this country.
I welcome the debate today on the four reports on developments in the European Community. It is worth repeating that section 5 of the 1972 European Communities Act provides that the Government shall make a report twice yearly to each House of the Oireachtas on developments in the European Communities. We have the Thirteenth Report for July 1978 and this is October 1980. We have the other six monthly reports as well. It is unfortunate that it was not possible for the Minister or his 29 colleagues to find time to take these reports when they are topical.
The Minister gave us a very comprehensive resumé of the various areas. Nevertheless since the spring of 1978 this House has been absolutely ignored as far as development in the EEC is concerned. As far as the foreign policy is concerned. the Seanad has not been given the opportunity or the benefit of discussing any of the Council meetings, the Council in Bremen in July of 1978, Paris in March of 1979, Dublin in November of last year and Luxembourg earlier this year. I hope that the Minister does not feel that the membership of the Seanad has nothing to contribute that would be helpful to him or the Government in the execution of his duties in the negotiations or that we are not capable of giving a feedback from the people we represent. The Seanad must be given its statutory right to have the opportunity to comment on the day to day operations of the Community, and it should not be two and a half years behind the dates that these reports cover. It is not unreasonable that we should ask that. After all the Community plays an ever-increasing role in the lives of every individual in the State and it is only by the Government and the Ministers listening to the feedback from the general public, who are affected, that they will be able to deal with the problems that are mentioned.
The Thirteenth Report deals in page 23 with the textile problem. Each of the four reports has a paragraph on that particular problem. I am quite sure that the Minister is aware that there is a problem in the textile industry, that there has been a problem in it and yet there is no mention whatever of the Government taking any action. There is no action in these reports and no account of where the Government seek to conserve jobs or to protect an industry from dumping from Third World countries.
In my own country, in Rathdowney, there is a textile industry with a loss of 200 jobs because of dumping from Mexico. These situations can go completely unchallenged although the machinery to deal with them is there in the Community. Perhaps it is a fear of offending the Mexicans but I do not know what excuse the Minister can have for not using the Treaty of Rome and the provisions that are there for the protection of our workers. This is one of the reasons that the Community is continually being looked upon from a negative stance. People only see the areas in it that they particularly want to. We should be able to avail of the protection of the Treaty and, at least when there is provision made to protect native industry, it should be availed of to the full by the Government.
Similarly in the timber processing areas, practically all our timber processing industry, the four factories that were there for many years have, if they have not gone to the wall altogether, certainly been reduced to a very minute percentage of the workforce that was there a year ago. This again has been as a result of dumping from Third World countries on to the UK and the Irish market. Again the Government choose to ignore this. They certainly have not availed of the legislation and the provisions that are there to counteract unfair dumping, which is coming from state trading countries as well, from the East European countries. Does the Minister intend to move under Article 91 to protect the livelihood of workers in the textile industry and, in particular, the textile industry in Rathdowney, County Laois, which is affected by dumping from Mexico? The limited agreement with Mexico expires next month. Perhaps the Minister would have a look at that and see if the situation can be redressed.
The Minister's speech dealt at length with the west of Ireland, west of the Shannon and the less favoured areas. Have the Government taken any decision on including the west of Offaly, the eastern bank of the River Shannon, in the designated less favoured areas? It is absolutely outrageous that the people who are affected by flooding from October to May of every year in the Shannon valley and in the valley of the Little Brosna, are not treated with the same concessions or are not given the benefit of the less favoured areas scheme as the people on the other bank of the river enjoy. This goes for grants and quite a number of benefits. It is certainly discrimination against the people on the east bank. It is not good enough to say that the Community are providing these services when we have both sides of a river flooded for about six months of the year but only the residents on one bank of the river get any sort of aid or relief.
The position is similar in the area roughly from Castlecomer in north Kilkenny towards Athy in Carlow and Abbeyleix, a hilly district with the very same soil as is common in County Leitrim. This is a very poor farming area, but it has not been included in the less favoured areas. I want to remind the Minister that, with the exception of Donegal, County Laois enjoys at the present time the distinction of having the second lowest income per head of the population, so that overall, with a 7 per cent labour force it is poorer than Leitrim, Longford or all of countries west of the Shannon. They have not got a fair crack of the whip here. People who looked towards this country as part of the Community had hopes of a better standard of living and a better chance of survival in the Community. This has not materialised because of the inept way that the various Departments are administering many of these schemes that are worthwhile and which are funded by the EEC. I hope that the Minister will, in conjunction with his colleague, the Minister for Agriculture, avail of the earliest opportunity to re-examine the possibility of including the area I mentioned in Laois and in the Offaly part of the Shannon Valley as designated areas for the purposes of grants in the less favoured areas.
In listening to the Minister's speech one would never get the idea that there was anything amiss in the country. While the comments on various world affairs and all the different troubled spots in the world were interesting and a lot of work went into the preparation of the speech, for which I compliment the Minister, nevertheless, it would give a listener from outer space the impression that everything was rosy and we were living in the garden of Eden.
It is not possible to glean from the Minister's speech that the agricultural sector has suffered a 30 per cent loss in income since the Thirteenth Report of July 1978. It does not give the impression, even though it deals with the monetary problems, that the IR£ especially if one is holidaying on the Donegal coast at the present time, is worth only about 82p compared with 100p during the period the first couple of reports deal with. I do not suggest that the reports are misleading; nevertheless, they evade some of the issues because these reports should keep the population in touch with the developments in the Community. They should be able to explain in very simple language the pros and cons for the various schemes. The format of the reports could be broken down somewhat. It would be, no harm, if it were possible, to say in some of the tables, for instance, in relation to the subsidies on milk powder for animal feed, the kind of industries that are eligible for this type of subsidy.
By our standards the amount of funds available and committed to this country are quite generous. One notes, when reading through the reports, that for the FEOGA grants and for the regional fund grant the commitments are all taken up, but unfortunately when one turns to the actual payments one sees that they fall far short in many of the years under review of what was sanctioned for this country in that particular year.
The Minister has an obligation to get after those private sector industries that apply for grant aid, either through FEOGA or the regional funds or whatever, and do not get on with the work. This country over the last number of years has lost out on a considerable amount through indolence, or perhaps slowness on the part of the Irish applicants for these grants, in completing the work to the standards laid down for the work in the first instance. This is unpardonable. I was told recently by one of the directors in the FEOGA section that there was only one co-op in the Republic that had any sort of good record in actually drawing the amounts of grants earmarked for them.
Despite the fact that there have been millions spent here since we joined the Community, the regional policy has made absolutely no impact on this country, good, bad or indifferent. It is true that on most of the major roads you will see signposts saying that these works are being grant-aided by the regional fund, but all you see are red and white tar barrels for several hundred yards of the road and absolutely no work going on, no work completed and a lot of potholes. That is not a snide remark. Regional fund money is an extra and it ought to be looked upon as the icing on the cake. Motorists going over potholes should not be misled by signs saying "This is a Regional Fund Development". It gives the wrong impression.
I am being very serious when I say that county councils, or whoever are responsible for the administration of the fund, should be told that when they start a job which is aided by the regional fund the job should be finished; they should not try to drag it out and keep it in a state such that it needs tar barrels for a year or a year-and-a-half. This brings the whole concept of the Community aiding the development and the improvement of our infrastructures into disrepute. Considerable resources have been allocated to us and at the same time they have made absolutely no impact on the public, mainly because of administrative matters and the method in which the moneys have been spent.
On the section dealing with air transport, I would like to say that the cost of air travel presently is absolutely excessive. The IATA price fixing is something that the Community ought appropriately tackle. It certainly does not comply with free trading under the Treaty. When one considers that it is now more expensive to fly on an ordinary scheduled flight to Amsterdam, which takes an hour and ten minutes, than it is to New York or any of the major cities in the United States, it is obvious that there is something wrong. It is time that the consumer, the ordinary citizen in this country, was allowed to benefit from free competition if people like Freddie Laker feel that they can compete with the IATA carriers. The Government should come out strongly on the side of the ordinary citizen in this regard.
During the course of the Minister's speech he said that there was no super-levy this year, no cuts in sugar quotas and no suspension of the beef intervention. I am certainly glad that that is so. At the same time it might help the Minister, when he is negotiating on our behalf and, indeed, when his colleagues are negotiating on our behalf, to remind his colleagues in the Council that we are still the only country where farmers have to pay rates on land in addition to income tax. We are the only State in the Community who are burdened with resources tax and we have lost more in the agricultural sector where incomes have dropped in excess of 30 per cent in the period under review in the four reports. It is unfortunate that we did not have the opportunity of dealing with the reports when they were closer to the period they were reporting on.
Too many people still look upon the European Economic Community from a negative angle. The people who have the responsibility of administering European funds here should use them to add that little extra to the ordinary funds. If we are to improve our infrastructure and if we want to build up our country on a par with other European countries, we need that extra encouragement and those extra resources. I have a suspicion that some of the European funds over the past two years have been used, not in addition to but in substitution for, home resources, and if it is correct it is lamentable.
Senator Whitaker dealt with the ceiling of the 1 per cent of our resources in the Community. This is a very important point. The cost of the budget has increased dramatically over the past two years. In 1977 it was less than .6 of 1 per cent. When people criticise the common agricultural policy they should be asked what are they criticising, because the only thing against the common agricultural policy, from whatever angle you look at it, is that it creates a surplus of food and it is quality controlled in a world where four out of every ten people are undernourished. It is the only agricultural policy in the free world and in not so free Russia where the economy is not able to feed its own population. The Russian Minister for Agriculture is not able to feed the population and the East European countries are operating a system of rationing cards for food. In Asia and in many parts of Africa there is famine and yet people here decry the fact that the common agricultural policy seems to work.
What we need is not just to take funds from the common agricultural policy but, by increasing independence through an increase in the own resources of the Community, to be able to build up other policies on a par with the common agricultural policy. Let us tackle unemployment by a crash programme. Let us have for the poor countries in the community, the Mediterranean countries, this country, Scotland and Italy a mini-Marshall aid type approach to getting on top of the problem of developing infrastructures and bringing the entire Community to an acceptable standard. This will be a very determined challenge to the Community to continue to forge ahead. With the expansion of the Community next year and a further expansion two years after that, unless the Council are able to take a dynamic approach to an expansion of the social fund and the regional fund and finance them in a determined way, and not just depend on lip service to keep the people in the poor regions happy, I do not think the Community will survive. If you take the last ten years in the Community, the ratio between the rich areas and the poor areas has not decreased and this is an indictment of the failure of successive Councils to tackle the day to day problems of the Community in such a way as to achieve the desired success. The Treaty of Rome gives ample opportunity and ample scope if there is a political will to implement the decisions that are necessary for the continued expansion of the Community.
Perhaps the Minister in his concluding remarks will make a new year resolution and agree to discuss the Seventeenth Report within a month of it being published.
There is one advantage in this debate in regard to the delay about which Senator McDonald is complaining, and I agree with him and that is that it gives one the opportunity of talking about the Community development over a longer period although I agree that a six-monthly interval would be preferable.
It is true that the European Community and the Council of Ministers are not living up to the commitments of the Treaty. I do not see any reason for not saying that. I am aware from questions that I put as far back as two years ago that it was impossible to get any reply to the question "How are the additional costs following the entry of Greece to be paid?" There was no reply to it. There appeared to be no commitment or any preparation made to raise the additional funds necessary for expanding membership. One has to face the reality that the wealthier member states of the Community are not in a position to extract the additional taxation from their electorate to effect a transfer of resources any more than we are to extract additional taxation here. The ideal is a very good one but I do not see progress being made in relation to that ideal. That may be a pessimistic approach but it is realistic. We have seen over the past two years a reluctance on the part of certain member states to agree to an expansion in the regional fund. We have also seen a very obvious reluctance to do anything about the 1 per cent to which Senator Whitaker referred. I do not see how the 1 per cent can be dealt with because I understand to increase the 1 per cent, which is the obvious thing to do, requires unanimous agreement. Apart from the reluctance of some of the wealthier member states, there is the obstruction of our nearest neighbour, Britain, in relation to the common agricultural policy and I presume also in relation to any effort whatsoever to increase the value-added tax. There are benefits we should not deny.
The Minister alluded to the progressive increase in the existing regional fund which he said had moved from £41 million last year to £48 million this year. The size of the regional fund is not going to affect the transfer of resources that we have been talking about but at least we are benefiting. Similarly, the social fund is moving up to £56 million this year. So far our experience in the EMS has, on balance, been beneficial. I am not an expert but it seems we are being subjected to too many media views of a short-term situation. In the long term, adherence to the EMS should be to our benefit. We need to have some independent research thinking on this subject. The Community has been subjected to too many exciting news bulletins following one another about the strength of the pound and the fall of the punt. The real position is that, although our currency has weakened to a degree, it has not weakened in relation to the European currency. What has happened, as everybody who has any understanding of the subject knows is that sterling has become too strong, probably to the detriment of Britain. But that is a problem for the British.
Despite the drawbacks, I believe that the Community in its original concept and in its development will prove to be a major advantage and a positive factor in world affairs. We cannot introduce taxation here in the east of Ireland to promote the west. That is what we are looking for. In the sense of transferring resources, the Industrial Development Authority has done more in promoting and establishing industries in the west of Ireland than has the European Community in its regional approach. But that has been done by us. The problem is there. Nevertheless, the European Community is proving to be an oasis of stability in a dangerous world. Despite the drawbacks, the limitations and our own criticisms, I believe that it is something to which we should continue to give our full support.
I would like, also, to make a plea to the educational authorities to increase the input to our educational system of an understanding of Europe, not just the European Community but the concept of a European Movement, of an integration of European nations. In the public mind the EEC tends to relate almost exclusively to economic development, to tariffs, to agricultural prices and so on and far less to the basic idealism which brought the Community into existence. Quite a lot could be done if we could generate through the schools' curricula a consciousness of Europe. I am not suggesting changes in the curricula. This could be done through the teaching of history, geography and civics. It is essential that our young people should be given, at the stage where their minds are perhaps more open than many of our minds are, a consciousness of the importance of Europe to the world and the importance of our contributions to Europe.
I confess to not being as enthusiastic about the European Economic Community as I was some years ago. That is not to say that I do not accept membership of it. If one has to accept membership of something with less than enthusiasm, then one must be forced to admit that there is a certain question mark about the whole structure itself. I am quite certain that I am not only speaking for myself but for many of the public who were quite enthusiastic in 1971 and 1972 about our entry into the EEC. I do not think the public would be quite as enthusiastic now although they may feel they accept membership as we have really no alternative at present.
Being a member of something with less than genuine enthusiasm for it might not be such a good thing. What concerns me a little about the EEC is the increasing political emphasis that it is showing. This is something which was not present at all in the early seventies. In the past two years particularly, this report calls it political co-operation. This political emphasis throws up a question: does it not bring certain economic implications with it which might not be to the good of the EEC itself and its original objectives? Take our dabbling in the problems of the Middle East, the Palestine problem, or Iran with its implications in the oil affair, even in our dabbling in the Olympics issue this year. All of these matters can mean that when we come to talk economics with non-EEC countries we are bringing in a political element, or we may have brought a political element into the whole matter of economic negotiations. It can have retrograde effects for achievement of the original economic objectives of the EEC. I am not, as I said, happy about our increasing political involvement. It did not seem to be there at all some years ago.
Has direct election to the European Parliament done us any good? We have direct representatives, if one can call them that, in the European Parliament. We even have an increasing number of Ministers of State who are appointed to relieve the work burden of the Ministers who had to attend Brussels and Luxembourg. The experience of Ministers in the previous Government was that the pressures and strains of involvement in Brussels and Luxembourg was harmful, and the present Government appointed quite a large number of Ministers of State to take that workload from the Ministers who had to attend in Europe. Has it all led to increased benefits for this country, even to an increased input from this country into the objectives of the EEC? I do not think so. Our Government seems to be bogged down in the bureaucratic tangle that is Brussels and was Brussels and will be Brussels as long as the EEC is there.
If one looks at what we obtained from funds like the Regional Development Fund, CAP in recent years, one has to express not only disappointment but a certain doubt regarding the efficacy of our Government representation in Brussels and even the benefit of direct elections to the European Parliament. I know the direct election to the European Parliament is one aspect of the democratic system, and it may well be that the structure of the European Parliament itself is at fault. If it is apparent to the Government that there is a structural defect there, surely they should be trying to do something to remedy it. It is now almost two years since we had direct elections to the European Parliament. Out of the tangle that is Brussels, out of all the confusion the public has in its mind regarding the worthwhileness of being in the EEC after eight or nine years, it is up to the Government of the day, irrespective of what parties represent that Government, to try and inject some new enthusiasm into the whole concept of the European Economic Community. Failing that, I am afraid we might well go along with a system which is breeding within itself its own demise. If one had enthusiasm eight or nine years ago, surely there is a case to be answered by the people who represent us in Brussels, the Government and the Members of Parliament, to remedy any defects there may be, to ensure that the enthusiasm which was there a decade ago returns.
The newest concept of the EEC in regard to development aid is the non-quota section under the Development Fund. Here again there have been very sad delays. Worse still, there seems to have been a complete disregard by the Government and by Brussels as regards what the people most directly involved in benefiting from this non-quota fund would be interested in, as regards what structures within the regions, namely the counties and the district councils in Northern Ireland and the counties south of the border would like the funds directed to, to create both amenity and environmental structures which would help. Tourism has a lot to gain from such a fund. There seems to be disregard by both Brussels and the Government to let the bodies concerned, the county councils on this side, the district councils on the northern side of the border, know what is in the pipeline to benefit them. They have not been very active either in eliciting from these bodies recommendations or suggestions. This is sad, because it again points to what the public experience from a civil service structure in any country, namely, this bureaucratic mess that seems to be there, a morass from which it seems very difficult to extract information and specifics when one seeks them. It is the work of the Government to do something to make the public more enthusiastic about the EEC. This does not mean getting funds from it all the time or getting money which is not really ours but which is a collective sum of money. It does not mean that at all. It means making people more aware of the EEC, what it means on the broad front and putting an input into the EEC structures at a time when there is nothing to be gained from them moneywise. If we do not do that we could well be creating within the very structure of the European Economic Community something which will generate less and less enthusiasm as time goes on instead of more. That, plainly and simply, is what I am afraid of, and unless we correct the matter now we might well be on a downward path regarding the future of the European Community.
I must apologise for not being here to make the opening speech. I had another meeting—a rather important one. I am sorry I could not be here. I have had notes taken and I know what was said. Naturally I know what my colleague said on my behalf. I would like to go straight away to some of the main aspects of the debate as they have emerged.
I feel that there should be an attitude of reality towards our membership of the European Community. We are one of nine countries, shortly to be joined by another. We have to fight our corner within that Community and, at the same time, we have to play the game according to certain Community rules. We are in a community and we cannot have it all our own way or get all that we desire all the time over many areas of policy. It is essentially a community that works on compromise and consensus.
There is one very serious matter facing the Community at present and that is the whole budgetary structure of the Community and the increasing conservatism of certain national governments within the Community, both in regard to their internal national budgetary policies and in regard to their budgetary attitude towards Community finances. It is this aspect I am talking about that has placed very considerable strain on the whole operation of the Community in the past 12 months in particular. This has meant that, because of the attitude of certain Community countries who were major contributors towards the Community budget because of their strict budgetary approach over the past 12 to 24 months, particularly in the last 12 months and likely to be a continuing attitude, there has not been, quite candidly, the transfer of resources and the supplies to other regions throughout the Community to which the less favoured regions within the Community should be entitled. That is a fact. This matter is going to come into very real focus over the next 12 months because the major financing mechanism for the Community at present is through the VAT system applicable right through the Community which will, in the coming 12 months, reach the ceiling of 1 per cent which has been fixed in respect of it and which can only be changed by unanimous Council decision and approval of national parliaments—can only be exceeded, in other words. That is the only practical change involved.
Relevant to this is the fact that some countries within the Community are seeking to erode—that is a mild way of describing it—CAP, and are using the amount of money which is spent on CAP and the convergence of CAP expenditure with a ceiling now about to be reached in regard to the VAT 1 per cent limitation, to make a strong budgetary case that the Community can make the required cuts in financial spending by minimising expenditure under the common agricultural policy. That is the real challenge and difficulty facing us at present and over the next 12 months. Our position as a State is that we maintain very strongly, and will go to a very serious extent to establish, the continuation of the common agricultural policy as it stands written into the Treaty of Rome and, in particular, in relation to the guarantee section of the common agricultural policy which enshrines the price mechanisms under which Ireland derives the major transfer of resources in financial terms.
This fact needs to be emphasised because we often talk, and rightly so, about other aspects of the Community policies, the social fund, the regional fund, the EMS, various grants and moneys made available under other headings. This is only right and proper in a major debate of this kind. But just to put the matter into perspective and to show the extent of transfer resources involved in the guarantee section of FEOGA, last year, in 1979, of the total transfer of resources to Ireland, £536 million, £401 million came from the guarantee section of the common agricultural policy, that is, £401 million out of £536 million. That is likely to be extended further when we get the final figures for this year referred to in the table in Annex 2, page 77 of the 16th Report.
That puts the matter into focus. It emphasises that this is the important point as far as this country is concerned. It is not just a matter of farmers benefiting. People do not realise that these are all concerned with payments which, until we became a member of the EEC were discharged out of the Exchequer. There is one Senator present who had to deal with these Exchequer payments and advise on them. These moneys, at a far lower rate than at present, were payments out of our Exchequer towards the farming community. This money is not just a transfer to the farming community. It is in lieu of what would otherwise under our tax system be a payment from our taxpayer, in particular the PAYE taxpayer, to the farming community as operated prior to our membership of the Community.
I will stay with the financial elements for the time being before I go on to political aspects. I do not have to emphasise the total financial benefit to us of our membership of the Community. We are the major beneficiary from the Community in percentage terms of any of the Nine members. In addition to the total of £536 million of direct transfers, money transferred to us from the Community in 1979, the loan facilities made available through the European Investment Bank, through the new instrument, the Ortoli Facility, as a result of our joining EMS and from the European Coal and Steel Community, in 1979 came to £243 million. That is, in addition to the £536 million in direct grant transfers there was a £243 million direct loan facility at subsidised interest rates.
That was all for a contribution in 1979 of £66 million. I do not think the case needs to be made in regard to the financial benefits of membership. I refer back again to the cautionary remarks I made earlier on, that we have a very severe fight on our hands to hold the advantaged position we have. It will be caused by people who are seeking to erode the common agricultural policy and to use this VAT financial ceiling of a 1 per cent contribution towards Community financing which will be reached inside the next 12 months or almost reached inside the next 12 months.
Senator FitzGerald raised a number of specific points. He made a point in regard to the Greek accession. Greece is becoming a member on 1 January next year. We, as a country getting the sort of benefits I mentioned, could not in any way oppose Greek accession. Senator FitzGerald raised a point about putting down preconditions in regard to adequate resources. I mentioned the reason earlier on why we could not push that in the sort of budgetary climate that existed in countries like Germany and France towards the end of last year and early this year, the sort of budgetary climate that is continuing within these two countries nationally and in their attitude towards Community financing as well.
In spite of that, and while agreeing that the transfer of resources under both the regional and social funds, particularly under the regional fund, is not anything like what we feel should be given under a proper regional fund transfer system, like every other one of the Nine Community countries we have had to have our percentage quota in regard to the regional fund reduced. It is reduced much less in Ireland's case compared with any other case, and there is a real increase in the overall amounts. If there is a slight decrease in percentage terms, there is an overall increase in the actual amount in the regional fund as proposed. I am talking about it as it now stands and is proposed by the Commission for 1981.
Could I ask a question? Am I misinformed in understanding that before the Minister's period in office when this general question of enlargement came before the Council of Ministers Ireland agreed to it in circumstances in which it was "minuted", that the enlargement would not lead to a diminution in the absolute value of the benefits which Ireland would get from the regional fund? Am I misinformed on that? I accept that the percentage of the fund must in some way be varied but in a manner which would not lead to any absolute diminution.
There is no absolute diminution. That is the point. No absolute diminution is proposed.
Was there not a minute made in the Council of Ministers of Ireland's agreement to the enlargement on the basis that there would be no diminution in the allocation to Ireland resulting from the enlargement? I just want to know am I misinformed. I am so informed, I must say.
No decision of that kind was made. No final decision of the Council of Ministers was made. That was our point of view as expressed.
Was it not recorded? Are there not matters which are not recorded, and it is understood why they are not recorded, and matters which are not decided and which are recorded, and matters which are specifically noted? Was this not in the category of being specifically noted? Do the Council's records not contain a note of this as being what was agreed to?
There was no question of what the Senator is suggesting being agreed to as a term.
Is it recorded, not as a decision? Was it given the status of being recorded, an important status, I think the Minister will agree, if it were so given? I am interested to know has the stance of the Government moved. I am not making party political points.
A statement was made at the opening of the discussions on the accession of Greece. I will check on the records. I would expect that we would take that stance and try to fight as best we could along those lines. The regional fund is being severely curtailed. We are the country least affected by the addition of Greece in regard to the curtailment of funds in percentage terms. The amount in terms of European units of account, as far as Ireland is concerned has gone up from 71.51 million units of account last year to the proposal for this year of 89.22 million units of account. There is a substantial increase in Ireland's case both in real terms and in percentage terms. But, in relation to the overall fund which has had to be increased by reason of Greece's accession, every country in the Community has had to take a diminution, and ours is the lowest reduction. What the Senator referred to was the statement made by the Council of Ministers in regard to Greece's accession. It never got any further than that. It is there on record.
Would the Chair permit me to make one comment?
An Leas-Chathaoirleach
The Minister is in possession. A brief question may be allowed at the end.
I will leave it at that if the Minister will have a look at the record. Was our position specially recorded? Did the Irish representative distinguish Ireland's position from that of the other members?
It was part of the statement made at the time of opening negotiations. It is to our benefit, if one looks at it in the right way, that there is an extra country, like Greece, in with us, which has the same problems, and will be seeking to get a transfer of resources to Greece. This is of positive advantage to us. Unless there are more people fighting very positively within the Community for a transfer of resources, the Community are in very serious danger of degenerating into a two-tier Community, composed of the inner countries with a high standard of income and the outer countries with not the same standard of income. That would be very serious from our point of view.
Our main interest is to be involved as part of the Community's institutional system. Our main national interest must be to participate fully in Community policy making, and Community decisions, and to have the Commission favourably inclined towards us as a region fully entitled on Community criteria to a more substantial transfer of resources, which we are getting by reason of the fact that we do not measure up to the same level of prosperity as the more wealthy regions. We have a number of Community criteria on our side. It is important, in order to secure the implementation of these criteria in our favour, that we have the Commission functioning in a favourable way towards us, and that we have like-minded countries, such as Greece, within the Community, who will have the same requirements as we have.
It is wrong to look at it in the narrow sense that Greece will be another country seeking to get the same moneys as we are getting from the social fund and the regional fund. The proper way to look at it is that for the first time there will be another country in. Hopefully when Portugal comes in, the same criteria will apply. They will have a strong case for the implementation of a real regional policy. There is not a real regional policy within the Community at present. There is a very minimal transfer of resources taking place.
Senator Markey raised the point about the non-quota allocation. I want to emphasise that it was only in the past month, at the last Council meeting, that we finally got that money allocated for expenditure on the trans-Border projects which we have in mind for Donegal, Fermanagh, Tyrone, Monaghan, Armagh and Louth. These projects have been fully prepared and ready to go. It is only in the past month that the money was cleared. It is part of a wider issue because the British Government refused to release these funds, refused to withdraw their objections to those funds being paid out until they got their budgetary contribution matter settled, which was settled in the past few months only. This is the sort of continuing Community entanglement in which we are involved by reason of major differences, such as the British contribution difference, which arose and occupied most of the time of the Council meetings in the past nine months.
This particular aspect of the British row was the cause in practical terms of the allocation of funds being held up. It is only in the past month we have secured the release of the moneys for the non-quota section which were specifically allocated to Ireland for cross-Border projects. The money has now been allocated. We have submitted our projects to the Commission. When I was in London last Monday week I pressed the British Government to expedite the presentation of their proposals for the other side of the Border. Some of them mesh in with ours and some do not. That is an additional fund. It is a fairly modest proportion and will involve about £31 million between the grants from the two Governments and the grants from the EEC. It is in addition to our existing share from the regional fund.
Certain questions were raised both by Senator FitzGerald and Senator Whitaker concerning the European Monetary System. I want to emphasise that our membership has been a very positive one. It was an important decision which has justified itself. That is not to deny the difficulties involved. We would be in a far more difficult position at present if we had not taken the decision, last December 12 months, to join the EMS. One reason is that the monetarist policy pursued by the British Government since we joined the EMS would have been disastrous for us if we were tied to it and, in particular, if our exporters on the British market were linked into the same exchange system. The performance of the IR£ within the system has been satisfactory. It has been on the same basis as the other EEC currencies linked into the EMS.
Unfortunately public attention has been focused on the relationship between the IR£ and the £ sterling. This is not a reflection on the IR£. It is a reflection on the rise in the value of the £ sterling in relation to all European currencies within the EMS, and not a reflection of any weakness in our currency or, indeed, any weakness in the other EMS currencies. It is a reflection of the fact that the British Government have pursued a policy in which the £, to many thinking people who know their financial facts and figures, would appear to be very seriously overvalued.
That is in pursuance of a conscious policy. It is not my business to reflect on British financial policy. It has been a conscious policy in Britain to pursue that type of what is called monetarist policy with a concentration on increasing the value of the £. It is now valued to an extent that it is well above its real value. I will not hazard a figure. If that is British policy, that is British policy. As financial matters often do, it has a contrariwise benefit to us in that undoubtedly it has been a very real benefit to Irish exporters within the British market since we joined the EMS. One of our real problems in coming to a decision in regard to joining the EMS—and I remember our discussions very well in the Government of the time—was the very real prospect that the situation might be the reverse, and we might have difficulty in facing into a British market in which the reverse would apply to sterling. However, that did not happen and, to that extent, there has been a bonus as far as we are concerned.
It is obviously an undesirable situation that the present imbalance between sterling and the other EMS currencies should continue. In the long-term interest both of Britain and of the Community it is obvious that all currencies, including sterling, should be within the one basket within an EMS framework. That is in the interests of everybody. I do not think it is in the interests of any country in the Community that the present situation should continue. I gather that is the view of eight of the nine countries within the Community at the moment. It is also the view of a substantial body of financial opinion of Britain that at this stage it should be done. However, that is a matter for another Government and I do not propose to comment any further on it.
Some questions were raised by Senator Whitaker about the common fisheries policy. The Community have fixed a target of having a common agricultural policy put into effect by 1 January 1981, and I hope it will happen. The actual progress on the ground has been very slow heretofore in regard to the implementation of a common fisheries policy. We are protected by reason of substantial quotas based on a doubling of the Irish catch between 1976 and 1979, and we have been allowed to carry that into an assessment of catch quotas for the future. The other aspect about which we are very concerned is that there should be a structural policy as far as our near water fishermen are concerned. To that extent what we are seeking to achieve, as is Britain, is that there should be a reserved 12 mile zone for home fishermen within which structural aids from the Community can be allocated as a supplement to national aids. That is our policy approach to the matter, but I can see the Fisheries Ministers having many long nights before matters are worked out. At least there is agreement now in principle, and the British have dropped their rather negative attitude in this whole area and are agreeable to sit around and work out something practicable.
Senator FitzGerald raised the question of agriculture and expressed concern about the Irish agricultural position. I share his concern. All we can do, as I said initially, is to continue to fight for the CAP. We are lucky in that other countries in the Community feel strongly about the common agricultural policy, particularly France which has been a very strong ally in that area. The figure the Senator mentioned in regard to the drop in agricultural incomes is pretty accurate. There has been a drop in agricultural incomes, but the attitude being taken towards this matter is one that we regard with some concern at present. Referring back to what I said initially, we regard this as the most serious matter within the Community at the moment. If there is not sufficient recognition of the importance of this area, which involves the only real transfer of resources to us, then it raises very important issues as far as we are concerned within the Community.
Senator McDonald raised certain matters concerning the textile industry which is a continuing problem, as he knows himself, with regard to imports from third countries, and a continuing source of pressure within the Community by member countries. While a certain amount has been done by the Community at large in this respect. I would warn against any pursuance here of national protectionist attitudes. As a small trading country, we benefit from being in this market. Difficult as the Community problems are, one thing which has not emerged is any pressure for the pursuance of protectionist policies by any member state in the Community. If any member state starts doing that, or going into the realm of national aids in regard to agriculture, that spells the end of the Community. The Community clearly survives on two basic philosophies. It survives basically on the free trade market philosophy within the Community as a whole, and on the common agricultural policy as far as the farming community are concerned.
There are other policies, but they are peripheral to that. If any country starts a protectionist policy in regard to its industrial area, and if another country starts on a policy of allowing the common agricultural policy to be eroded and brings in national aids as a substitute for the common agricultural policy, you are on the slippery slope towards the disintegration of the Community if any trends of that kind are allowed to develop.
It is of benefit to a country like Ireland to ensure that Community integration is maintained and that the Community institutions are strengthened. A small country benefits best in a Community framework by reason of its attachment to Community principles and policies. If the larger states are allowed to pursue protectionist attitudes in regard to industry or agriculture, obviously it is very serious for all small countries within the Community and particularly ourselves.
On the political aspect to which Senator Markey and Senator FitzGerald referred, I feel very strongly that we should play our part within the Community. Again going back to the point I was making about having a degree of Community solidarity, that is also part of it, and you cannot have your cake and eat it. We cannot get the sort of transfer of resources that up to now we have got from the common agricultural policy, and that we get to some extent, although not to the full extent, from the regional and social funds, and so on, we cannot get these economic transfers of resources, we cannot expect to be held in any regard within the Community, unless we play a part in the political obligations of the Community as well.
These are important because, in the last analysis, there will be no Community solidarity from which we can gain benefit arising out of agricultural, industrial and social regional policies unless there is political solidarity. Unless there is political will the other economic and social benefits will be eroded, That is the one thing that I would be afraid of in regard to the Community. The political will should be able to operate as the cement to ensure a strong and progressive Community that, hopefully, when present budgetary difficulties ease, will embark on a real policy of transfer of resources to the less prosperous areas. This real transfer of resources will not take place unless the areas to whom the resources are being transferred are trusted politically. That is the basic and fundamental attitude within a Community such as this; there must be an exchange of political trust, political credibility and political regard.
While I respect much of what Senator Markey says, that is also a fact that must be taken care of in the equation, because in the last analysis the Community is very important as far as this country is concerned. We are a small country within a Community of this kind, we have derived enormous strength from it, a strength that we would certainly not have to anything like the same degree if we were isolated and apart from it—and that argument was debated and won years ago. At the moment in terms of economic and social development, the biggest single factor that is sustaining us at the present time with the unfortunate job losses that are taking place in traditional industries, is the big job increase situation arising from the activities of the Industrial Development Authority where we are creating over 20,000 new jobs each year. It is some offset, though not a full offset, to job losses in traditional industry. That would not be possible if we were not in the EEC. There is no question about the fact that the biggest single card the IDA have to play at the moment in attracting investment, be it Japanese investment or North American investment, is our presence within the European Community. That is the major factor in helping to sustain us through a very difficult economic and social period.
I am sorry for keeping the Seanad so late this evening. I am very thankful for an excellent debate and am sorry I was not here at the start. I would like to emphasise one point in exculpation. It is the Whips of the political parties who are to blame for the delay in getting these reports to the Houses of the Oireachtas. We have had this report ready and I made it plain I was willing to come here to move the reports. I will seek to use what influence I have on the office of the Fianna Fáil Whip to ensure that there is expedition the next time in regard to discussion of this matter. I think it is wrong that we should be here discussing four of the reports in one debate. It is not good enough. I will make a positive effort, if other people will make a similar effort, to ensure that there is a more expeditious debate on these reports as they arise.
I raised this point and I did not blame the Minister. I suggested that the Leader of the House might activate himself to prevent this happening again. What I did suggest was that the Minister's speech might direct the House's attention to a smaller number of targets than the speech that we had delivered on the Minister's behalf.
Question put and agreed to.
The Seanad adjourned at 8.05sine die.