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Seanad Éireann debate -
Thursday, 17 Dec 1981

Vol. 96 No. 16

Developments in the European Communities—Eighteenth Report: Motion.

I move:

That Seanad Éireann takes note of the Report: Developments in the European Communities — Eighteenth Report.

The report before the House today is the 18th Report on Developments in the European Communities, which covers activities in the Communities during the first six months of this year.

Senators will be aware that reports on developments in the European Communities are required by section 5 of the European Communities Act, 1972, which provides that the Government shall make such a report twice yearly to each House of the Oireachtas.

I should like, therefore, to introduce this debate by giving a brief resumé of recent major developments in Community activity. I shall, of course, be happy to respond to any queries raised by Senators during the course of the debate.

The Community at present are going through a further process of enlargement. On 1 January of this year Greece became the tenth member state of the Community and negotiations for the accession of Spain and Portugal are proceeding satisfactorily. Ireland, along with the other member states, welcomed the decision of the democratic Governments of both these countries to apply for membership of the Community, seeing their application as an element in their return to democracy. While we appreciate the difficulties for the Community posed by the applications of Spain and Portugal, we are anxious along with our Community colleagues to bring about a speedy and successful conclusion to these negotiations. Moreover, Senators will be aware that the European Council at its most recent meeting adopted conclusions emphasising the Community's determination to bring the accession negotiations to a successful conclusion.

Turning to institutional matters, I am sure that the House is aware of the debate which is currently under way, on ways in which relations between the different Community institutions can be developed and, in particular, ways in which the Parliament could be given an enhanced role in Community affairs. Fresh consideration of these matters was stimulated by the Report on European Institutions presented by the Committee of Three to the European Council of 1 and 2 December 1980. The Parliament subsequently addressed itself to the matter with a number of recent resolutions and reports. An aspect of the debate we may expect to hear more of will be the improvement of relations between the European Parliament and national legislative bodies. All aspects of the matter will be considered fully on the basis of Commission proposals expected shortly.

The so called ‘Mandate of 30 May 1980' has already been referred to in a number of earlier reports to this House and Senators will be aware of the background to that problem. However since this issue is the main item currently on the Community agenda I should like to just briefly recall the main issues involved.

The British Government have for some time now insisted that the level of their net contribution to the EEC budget is unacceptable. In an attempt to meet these concerns, the Foreign Affairs Council on 30 May 1980 agreed to a scheme whereby for the years 1980 and 1981, Britain would be reimbursed a proportion of their contribution through an adapted financial mechanism, together with special measures involving extra expenditure of EEC funds in the UK. As part of this agreement, the Community pledged itself to resolve the problem by means of structural changes. In this context, the Commission was given the task of preparing a report concerning the development of Community policies. This 30 May mandate laid down some very specific limitations for the Commission report. It was not to call into question the Community's common financial responsibility for the funding of Community policies, nor the basic principles of the common agriculture policy — namely a unified market based on Community preference and funded from the Community budget. The purpose of this Commission study was to attempt to prevent the recurrence of unacceptable situations for any member state. On 24 June 1981, the Commission issued its report and discussion and negotiations among the member states began shortly afterwards.

It would perhaps be useful if I took this opportunity to outline the major elements underlying the Irish approach in these negotiations. We accepted the acquis of the Community when we joined. Senators will be aware that we use the word "acquis" as a code word to describe Community achievements which are accepted by all and no longer negotiable and are embodied in the Treaties and the legislation derived therefrom. Some elements of this acquis operate to our advantage and others operate to our disadvantage. The decision to join the Community was based on our assessment of the balance of advantages and disadvantages of membership. Any attempt to undermine the acquis in one area will inevitably upset this balance for member states, with consequent negative effects across the entire range of Community policies.

We are fully committed to the acquis both as regards the own resources system and as regards the basic principles of the CAP. The Community's own resources consist of duties collected from the common customs tariff, agricultural levies and that proportion of the VAT receipts of the member states needed to finance Community policies up to a maximum limit of 1 per cent. These resources belong to the Community and not to the individual member states. To discuss the issue in terms of net budgetary gains and losses is misleading and wrong in principle and could reverse the process of European intergration.

The basic principles of the common agricultural policy are non-negotiable. We will not accept any deviation from these principles. There has been a lot of criticism recently of the operation of the CAP — much of it misleading and inaccurate. In the first place, the cost of the CAP is overstated in the Community budget, where such items as food aid etc. are included in the agriculture section, rather than the development co-operation section of the budget. In the second place, without a common Community agriculture policy, national Governments would incur even greater expenditure in the support of agriculture. The real cost of the CAP amounts to no more than ½ per cent of the GDP of the Community. Many of the critics of CAP often fail to mention its achievements, both in terms of ensuring an adequate supply of food to the consumer and in terms of its support of farm incomes. We can, of course, accept the need for prudent management in the operation of the CAP and, in this context, we have agreed in the past to limited measures of co-responsibility on a product by product basis, as the situation has demanded.

Our main concern must be to ensure that the Community will use this opportunity to move forward, both through the development of new policies in such fields as energy, industry, transport etc. and through the adoption of concrete measures to promote the convergence of the living standards as between the various member states. The preamble to the Rome Treaty sets out as an objective of the Community, the reduction of the differences existing between the various regions and the backwardness of the less-favoured regions. However, the Community has had little success in the promotion of this objective. Irish per capita income as a percentage of the Community average continues to decline. The recent National Economic and Social Council report highlighted the fact that whereas in 1973 the level of income per head in Ireland as a percentage of the EEC average stood at 65 per cent, by 1979 this had declined to only 61 per cent. Thus the gap in living standards widened, despite the fact that aggregate Irish GDP increased at a faster rate than that of other EEC states during the same period. The National Economic and Social Council concluded rightly that regional policy is "an essential complementary measure to the effects of free competition" and that without it, "economic integration would lead to increased concentration of economic activity in the more industrialised centre".

The present size of the Community budget, amounting as it does to only 2.6 per cent of the national budgets of the member states, cannot make any real impact on the problem of convergence. With the further enlargement of the Community, this problem will become even more acute. If the Community wishes to move forward at all, there will have to be an increase in the present ceiling of own resources. In our view, such an increase cannot be long delayed. The alternative is stagnation and retrogression for the Community.

Recent meetings, notably the London European Council of 26 and 27 November and the recent meeting of Foreign Ministers devoted considerable attention to the issues raised by the 30 May mandate. Although there is now a greater degree of national understanding of the various views of member states and a degree of progress on some points, the really major areas of concern to us in this debate remain unresolved. These include future arrangements for agriculture, particularly in the milk sector and the so-called problem of net budgetary contributions.

As Senators will be aware, another meeting of Foreign Ministers on these important issues has been arranged for mid-January. The Irish position at that meeting will of course continue to be based on the principles I have outlined. There is of course no hiding the fact that in these negotiations the pressure to limit the Community's agricultural spending still further is very great. My prime concern therefore, has been and still continues to be to see that no new obstacles are placed in the way of Irish farmers in the endeavour to improve their incomes and productivity.

On the so-called British budget problem, we shall continue to express our view that the benefits and costs of Community membership cannot be argued in budgetary terms alone and that the Community resources belong to the Community and not to individual member states. Any problem of this kind is therefore essentially political and temporary in character and the solution to it must correspondingly be temporary and political in character.

On the external front, the severe difficulties facing the international economy continue to affect the Community's external relations. These difficulties have led to an intensification of the pressures on the Governments of the industrialised world for a reaction along protectionist lines. It is our view, however, as a small open economy, that the benefits of any such approach would be illusory and would inevitably hinder the effective, operation of the international trading system. We were, therefore, greatly encouraged by the declaration of the Ottawa Summit in July which expressed the determination of the Community and the major industrialised countries to maintain and strengthen the liberal trading system and to resist protectionism. The Summit also welcomed the decision to convene a ministerial meeting in 1982 under the auspices of the General agreement on Tariffs and Trade in order to consider the overall condition of the world trading system.

Over the past year the Council of Ministers has devoted a great deal of attention to the Community's unhealthy trading balance with Japan. There are signs that the Community's expression of concern on the matter has elicted a helpful response from the Japanese. In June, the Prime Minister of Japan, Mr. Suzuki, visited a number of Community capitals for discussions on all aspects of his country's relations with the Community. While Ireland was not included in his itinerary, I am pleased to report that the follow-up mission from the Keidanren, the organisation representing the most important Japanese business groupings, visited Dublin in October of this year as part of a European tour. The delegation was received by the President and the Taoiseach and had talks with Ministers and representatives of industry.

We regard this mission as having been very important for the further development of relations with Japan. The delegation had a brief from the Prime Minister to discuss EEC-Japan relations at Government level. We hope to have impressed its members with the opportunities for increasing the already high level of Japanese investment in this country and with the wide range of Irish products available for export to the Japanese market.

The Community has continued its discussion with the US administration on a number of bilateral trading problems and on the general trends in the international economy. On the question of cheap imports of US chemicals and synthetic textiles, Senators will be aware of the welcome given to the administration's decision to decontrol US oil prices. However, the Community is maintaining pressure for similar action with regard to natural gas.

The period covered by this report witnessed an important development in the Community's efforts to expand trade with the People's Republic of China. In the spring of this year the Commission organised an EEC-China business week in Brussels which provided an opportunity for the coming together of a delegation of 100 Chinese officials and up to 700 European businessmen. We hope that the meetings and discussions held on this occasion will contribute to a greater awareness on both sides of the trading opportunities opened up by the conclusion of the EEC-China trade agreement in 1978.

On 1 January this year the Second ACP-EEC Convention of Lomé came into effect. Senators will be aware that this convention governs relations in trade, aid and other areas of co-operation between the European Community and certain African, Caribbean and Pacific States and is considered a unique instrument of co-operation between developed and developing countries. The sixtieth nation to join the ACP group was the Republic of Vanuatu, formerly the Anglo-French Condominium of the New Hebrides which formally acceded to the convention on 18 March 1981. Zimbabwe is expected to become the sixty-first ACP state after the completion of formal ratification procedures.

The ACP-EEC Council of Ministers held its sixth meeting in Luxembourg on 9-10 April 1981. It adopted a number of decisions regarding the implementation of the new Lomé Convention, notable among which were those concerning the delegation of certain powers to the committee of ambassadors, the composition and rules of operation of the committee on industrial co-operation and the establishment of an ACP-EEC committee set up under the convention to study measures for improving financial and technical co-operation.

The Joint Committee of the ACP-EEC Consultative Assembly held its tenth meeting in Freetown, Sierre Leone, from 23 to 27 February 1981. The joint committee is made up of half the membership of the joint consultative assembly and convenes between meetings of the assembly to review developments under the convention. At the end of its meeting the joint committee adopted a final declaration which referred to global development policy, enlargement of the European Community, ACP, sugar exports, the position of the least developed landlocked and island countries, as well as reviewing the progress achieved under the various types of co-operation covered by the convention.

On 16 December 1980 the Council of Ministers adopted a completely revised generalised system of preferences for 1981 which will form the basis of the system for the next ten years. Ceilings and quotas in all sections were increased by 2 per cent to take account of Greek accession to the Community. In the case of industrial products there were significant revisions in the scheme to ensure that the major benefits are accorded to the least developed countries. The 1981 list of beneficiary countries includes Zimbabwe, bringing the number to 123.

On the raw materials front the Council of the European Communities took a significant policy decision during the period covered by this report relating to its competence in negotiations arising under the UNCTAD integrated programme for commodities. Council agreed that, on the part of the Community, these negotiations would be conducted on the basis of a common position enunciated by a single spokesman, normally the Commission. Resulting agreements would, however, be signed both on behalf of the Community and on behalf of the member states.

There have been quite significant developments with regard to specific commodity agreements. Negotiations on the third international cocoa agreement were concluded in November 1980 and the Community and member states signed the agreement on 31 March 1981. Negotiations for a sixth international tin agreement were concluded on 26 June 1981. Pending completion of ratification procedures, the operation of the fifth international tin agreement has been extended to 30 June 1982. Negotiations are also in progress for an international jute agreement.

As Senators will be aware, the common fund for commodities is to serve as a key instrument in attaining the objectives of the intergrated programme for commodities. The preparatory commission established to bring the common fund into operation is continuing its work. The agreement establishing the common fund was signed by Ireland on 24 February 1981. The necessary steps are in hand to enable Ireland to ratify the agreement before 31 March 1982. The International Common Fund for Commodities Bill, 1981, has been circulated. On 1 December the Minister for Finance moved that the Second Stage be taken on 8 December subject to agreement. As this was not possible in the present session I hope that the Second Stage and all subsequent Stages can be taken early in the new session.

Requests from Poland to the Community for emergency food aid, in December 1980, led to a decision by the Foreign Affairs Council to allow Poland to buy food products from intervention stocks at prices 10 per cent to 15 per cent below world market prices. The quantities of food to be supplied were allocated among the member states. Ireland was asked to provide 4,000 tonnes of beef. The Polish authorities then applied to individual member states for credits to enable them to purchase these supplies and we, in common with the majority of our Community partners, agreed to extend such a credit. In April 1981 the Government decided to provide a credit of IR£4.2 million to Poland so that they could buy 4,000 tonnes of beef from Irish intervention stocks. This food has since been delivered to Poland.

As Senators are aware, a special session of the United Nations General Assembly on International Co-operation for Development was held in New York in August-September of last year. Agreement was reached at the session on the text of a new international development strategy for the eighties and this was later formally adopted by the 35th Regular Session of the General Assembly. The text of the strategy is wide ranging and it will serve to guide and influence developments in the field of economic co-operation between the industrialised countries and the countries of the Third World over the next decade.

The special session did not, however, succeed in launching the proposed new round of global negotiations on economic co-operation for development, although a text on procedures and a time frame for them was agreed by all delegations except three — the United States, the United Kingdom and the Federal Republic of Germany. Discussions continued on the proposed negotiations at the regular session of the General Assembly and were resumed on an informal basis in January of this year under the auspices of the President of the General Assembly. Full agreement was not reached, however, mainly due to the position of the United States, which has been conducting a major review of its overall approach to relations with the developing countries since the new administration came into office in January 1981.

Meanwhile, the European Councils held this year have discussed the future of the North-South dialogue, with particular reference to the global negotiations. Following the Maastricht Council on 23 and 24 March, a series of Commission proposals on various aspects of Community policy regarding international economic co-operation for development were examined by the relevant expert bodies and approved by the Foreign Affairs Council for submission to the European Council at the end of June. The latter approved the report and said that: "co-operation with developing countries and the intensification of international economic relations serve the interests of all concerned and are necessary, not only in order to strengthen the economies of the developing countries, but also to promote the recovery of the world economy".

The Council also called for the completion of preparations for global negotiations "as soon as possible" and emphasised the importance of the Summit meetings in Ottawa and Cancun, Mexico in this context.

Senators will know that the Ottawa Summit helped to give a positive impetus to the search for a new way forward in relations between developed and developing countries. The major Summit meeting held at Cancun on October 22-23 attempted to advance this process further, by relaunching the dialogue at the United Nations in the form of preparations for the proposed round of global negotiations. Discussions on this matter have resumed in New York during the current session of the General Assembly but the latest information I have to hand is that final agreement in the launching of the proposed round of global negotiations has not yet been reached.

I should like to turn now to agriculture and say a few words about this sector, which is of such vital importance to this country. The prices agreement reached in early April provided for an overall average price increase of 9 per cent which, together with the green £ rate adjustment of 4 per cent, gave a total increase of 13 per cent. Included in the agreement were a number of measures concerning agricultural structures, one part of which was a package of special aid measures for Irish agriculture, making provision in particular for aid to the livestock sector. In October 1980, the new sheepmeat market organisation, which is of considerable interest to Ireland, came into effect. Agreement was also reached on the new sugar market organisation, which came into operation on 1 July, while another feature of note was the reduction in the New Zealand butter import entitlements to 94,000 tonnes for 1981 and 92,000 tonnes for 1982. In the agri-monetary sector by the end of the period, monetary compensatory amounts only applied in Germany, Italy and the UK.

Following a commitment in the prices package to consider further action for Ireland, the July Council approved an extension of the west of Ireland drainage programme by an additional 50,000 hectares field drainage, as well as extra funds for arterial drainage and a 5 per cent interest rate subsidy for development farmers under the farm modernisation directive. The drainage measure provides FEOGA aid estimated at 30 million ECU, while the interest rate subsidy is for two years and covers new as well as outstanding loans.

Discussions are still continuing among EEC Ministers for Fisheries with a view to reaching agreement on a revised common fisheries policy. While progress was achieved during 1980 on certain aspects of a new policy, the momentum was not maintained during the first half of 1981, despite the political impetus given by the Heads of Government meeting at Maastricht on 23 and 24 March, which urged a speedy resolution of the fisheries discussions. The main outstanding areas for resolution include the difficult problem of the amounts of total allowable catches and within this, the quota to be allowed to each member state for each particular species.

Linked to the question of quotas is the thorny political problem of access for member states to coastal zones after 1982. Ireland has held many bilateral and multilateral discussions with interested parties, in particular the British, the French and the Commission on these subjects. Despite the obvious difficulties, we are hopeful that the political will exists among members states to reach agreement on an overall policy, if not by the end of this year at least early next year. The substantial progress registered on certain important aspects of a new policy at the September Council of Fisheries Ministers, namely marketing and temporary structure arrangements, both very important for Ireland, together with agreements with certain third countries, leads us to hope that this momentum will be maintained in an effort to reach agreement on the outstanding aspects of the fisheries package. We are under no illusion that the solution to the access problem will be easy, but the Government remain committed to negotiate for a 12-mile coastal zone and certain areas beyond for our own fishermen.

The major topic for discussion in the regional policy area in 1981 has been, and continues to be, the forthcoming review of the regional fund, scheduled to take place by next April. Ireland has for long called for the development of a comprehensive Community regional policy which could make a genuine contribution to lessening disparties between regions and it is intended to press for this in the review. Approvals for regional fund operations for Ireland in 1981 will amount to IR£53.5 million.

Concern about the high rate of unemployment in the Community dominated social policy discussions in the period under review and a Joint Council of Economics, Finance and Social Affairs Ministers took place in Luxembourg in June of this year where it was agreed that there was a need for action at Community level to complement member states own policies. The Commission has now put forward proposals concerning job creation and it is expected that these will be discussed by the Council in the coming months. Social fund approvals for 1981 operations in Ireland are expected to total IR £71.1 million.

On energy matters I am glad to say that, despite the relaxation of tension in the oil market, the Community has not grown complacent about future energy prospects. Conservation and the fall in demand due to the world-wide recession has fortunately prevented the Iran-Iraqi war from provoking a third oil crisis. Only time will tell, however, whether this fall in demand throughout the OECD regions is just a temporary setback to an accelerating and insatiable demand for oil supplies, or whether it represents a real structural change, with industralised countries switching to other traditional or new and renewable forms of energy. What is certain is, that this period of relative tranquility on the oil market, should be used by the Community to maximum advantage, to consolidate systems of emergency oil-sharing, to develop indigenous and alternative forms of energy, and encourage conservation. Events in the Community within the period covered by this report confirm that it has the will and the ability to make progress in all of these areas.

As has been the practice in previous reports, the 18th Report contains a summary review of developments in European Political Co-operation over the period under review. Among the matters which have been the subject of co-ordination of views among the Ten in political co-operation during this period are Afghanistan, Poland, the Arab-Israeli conflict, Lebanon, Kampuchea, Southern Africa, the Madrid CSCE meeting and the Euro-Arab dialogue. Developments on these and other matters are described in the report and I need not go over this ground again in my opening statement.

What I would like to focus on today is the process of political co-operation itself, which over the years has assumed a growing importance in relations among the Ten member states of the Community. This importance is recognised by the Government and is reflected in the commitment set out in the Government's programme to arrange time for a Dáil debate twice a year on developments in European Political Co-operation. It is proposed to implement this commitment by including developments in European Political Co-operation in the debate on the regular motion, introduced every six months both in the Dáil and in the Seanad, noting the Report on Developments in the European Communities. It is also proposed to ensure that future reports will contain an expanded account of developments in political co-operation, in a separate chapter of the report, so that Deputies and Senators will have the fullest possible opportunity to comment on this important aspect of our membership of the Community.

As Senators will be aware, the Foreign Ministers of the Ten at their meeting in London on 13 October 1981 adopted a report containing improvements to the machinery and procedures of European Political Co-operation. A copy of the London report has been laid before the House and placed in the Library for the convenience of Senators. Before taking up the ideas that are in that report, it would, I believe, be useful to set out the main features of our present participation in EPC.

The preamble to the Treaty of Rome states that the objective of the Community shall be to establish an ever closer union among the peoples of Europe. The precise form of such a European union, wisely, has never been defined. It certainly seems more prudent that the member states should establish gradually the structures, forms and pace of evolution towards European union rather than seek to impose an abstract and, most likely unrealistic, blueprint at the beginning. When we acceded to the Community in 1973 the position was that we not only accepted the acquis communautaire established by the various treaties, we also undertook a political commitment in the context of progress towards European union, to consult and co-ordinate with our partners on foreign policy in the non-treaty intergovernmental framework of European Political Co-operation. The main features of political co-operation as established by the Luxemburg (1970) and Copenhagen (1973) reports are:

—The objectives of political co-operation are mutual information and consultation among the member states on all important questions of foreign policy. Whenever possible and desirable, the member states will seek to co-ordinate their views, take on a common position or undertake joint action.

—Political co-operation does not have a treaty basis; rather it is a voluntary intergovernmental process and the member states are bound by decisions only to the extent they all agree. Thus the rule of consensus applies, and this requires the unanimous agreement of all of the member states.

—Foreign Ministers meet at least four times a year in the EPC framework — in practice more frequently — to discuss a wide range of foreign policy questions. Senior officials also meet regularly to consider the latest development and report to the Ministers. A communications system links each of the Foreign Ministries of the Ten so that member states can exchange views rapidly in the intervals between meetings.

—Political co-operation is essentially outward-looking, being concerned primarily with the Ten's collective relations with the rest of the world. Consequently its field of application is primarily external.

—The means of action available to the Ten are essentially the normal instruments of diplomacy. These include joint representations to other governments, common statements of position, public declarations, concerted negotiation and co-ordination of voting positions in international bodies. From time to time, an agreed view reached within political co-operation will influence the economic action of the Community in the field of external relations.

Ireland, in common with other member states, has been satisfied with the way political co-operation has developed within this framework. It has been possible to reach a high degree of agreement on a wide range of subjects, for example, issues arising in the CSCE process and the Middle East conflict. Within the United Nations, the Ten have managed to co-ordinate their views so that they now hold common positions on the majority of the issues arising at the General Assembly. Of course, there are some issues where positions still diverge and this is how one would expect it to be, given the varying interests and traditions of the member states and the essential flexibility and pragmatism of the way political co-operation works. Notwithstanding such divergences, the experience of all of the Ten, including Ireland, has been that to the extent the views of the Ten coincide, we have opportunities to play a far more significant and influential role and serve our interests more effectively on many issues, acting together with our partners in the Ten, than we would have as individual states acting alone.

In recent years, the deteriorating international environment together with the success of political co-operation in projecting a European presence in the world at large, have prompted suggestions that political co-operation be further strengthened and expanded. Some of these suggestions focus on improvements in the way that political co-operation works in the practical sense and as such are eminently sensible. Here I am thinking of the innovations introduced in the London Report on European Political Co-operation adopted on 13 October last such as a rotating support team to assist the Presidency, arrangements to enable the Ten to react to major crises and ways of involving the European Parliament more fully with political co-operation.

The first introductory part of the London report reiterates the political commitment of the member states to consult on foreign policy questions. An important element is the recognition that the report gives to the importance of the treaties as the basis for further integration, and the maintenance and development of Community policies in accordance with the treaties, before further steps can be taken to strengthen political co-operation.

As Senators will be aware, much has been made of the reference to security in the London report. I would like to make matters clear. Political co-operation is concerned with co-ordination of foreign policy. Within that context discussion has taken place from an early stage in political co-operation of foreign policy matters which have a security dimension. For example, the member states of the Community have consulted together on questions arising at the Conference on Security and Co-operation in Europe (CSCE) and on disarmament issues. This has not presented a problem for Ireland. In common with all of the 35 CSCE participating states and the members of the UN, we have to address these issues in any case, and to the extent that Ireland's position is shared by our Community partners, we can together have a greater influence on discussion in these areas by co-ordinating our positions within the Ten.

That is a situation that has been recognised by successive Governments since we first began to participate in European Political Co-operation upon our accession to the Community. It is regrettable that our participation in EPC has been represented in some quarters in such a way that could give rise to misunderstanding and ambiguity. For this reason, I think it is useful and important that the London report makes clear that the scope of political co-operation on security matters is confined to political aspects of security and that defence or military issues as such are excluded. The relevant paragraph in the report is, therefore, an explicit re-statement, in a form acceptable to Ireland, of the practice established under successive Irish Governments.

To return to broader issues, in the course of the recent debate on the development of political co-operation and parallel to that debate, other suggestions have been put forward in recent months, which raise more fundamental questions about the nature of the Community and the direction in which it is headed. In this connection Senators may be aware that the Federal German and Italian Governments recently communicated to their Community partners proposals aimed at establishing a framework for evolution to European union. These proposals envisage placing both the Community and EPC under the single institutional aegis of the European Council and extending co-operation to cover security policy, culture and legal harmonisation. The recent meeting of the European Council, which met in London on 26-27 November, took note of these proposals without going into their substance. It took a procedural decision to refer them to the Foreign Ministers who were asked to examine and clarify them and to report to a future meeting of the European Council. No doubt in the course of that work these ideas will be elaborated on further and I hope to report to the House fully on the outcome in due course.

It is right and appropriate that we should discuss these proposals on their own merits. While the discussion has not yet reached a sufficient degree of maturity to enable me to go into detail, some fundamental points must be kept in mind in so far as political co-operation is concerned:

This debate on political development is taking place at a time when the treaty framework of the Community is also facing important decisions both on budgetary matters and on the future of existing and new Community policies. For us, the relationship between the two debates is particularly significant.

In our view, the commitment to political co-operation is based upon, and indeed, flows from the commitment to economic integration set out in the treaties establishing the Community. For this reason, both debates must be considered together.

Political co-operation on foreign policy is not simply an arrangement of convenience but a means of expressing our growing common interests as a member of the Community, in the wider world. Moreover, it is hard to see how political co-operation can respond effectively to external problems unless internal cohesion and common interest within the Community are first of all increased and developed.

I have attempted in this introduction to give a brief summary of the major developments in the Community in the period covered by these reports. I will, of course, try to reply to any questions raised during the course of what I am sure will be a very useful and constructive debate.

I wish to make a few brief remarks on this report. In the first page of the report mention has been made of the entry of Greece. Portugal and Spain into the EEC. While we welcome other countries into the EEC, at the same time I hope that their entry will not affect Ireland in any way as far as finances are concerned because we all know that if the cake has to be shared by others it means we get less. I sincerely hope that that is not going to happen. If all European countries join the EEC then in my opinion we are just going to be as we were before we ever entered it. It is not going to be of any great advantage to any country.

I was pleased to note that as far as agriculture was concerned we got a fair increase last year. Nevertheless, it was not sufficient, especially as regards the milk sector. I hope that in the coming year dairy farmers in particular will get a much bigger increase than they have been getting in the past. I sincerely hope that those threats we have heard from time to time of levies and such things will not materialise. Certainly Ireland is not responsible for over-production in any form of agriculture and I do not think we should be penalised in any way.

Drainage was also mentioned in the report. It has been said that more money has been made available for drainage in the west of Ireland and we all welcome that. As far as arterial drainage is concerned, I feel that the amount of money we are getting is not sufficient. We have a number of rivers which should have been drained 20 or 30 years ago. The river nearest my home is the River Suir and I would say it was about 30 years ago that a deputation first went to the then Department of Local Government to ask that it be drained. We were told when the arterial drainage scheme was drawn up that the Suir would be number ten or eleven on the list. We thought the Suir would be drained 20 years ago. We know that lack of money is the cause of the delay and we consider that more money should be made available from the EEC for this purpose. We have not got the funds ourselves.

The same could be said about roads. Our roads are no longer able to take the traffic that is now on them and much of this is due to the fact that we have entered the EEC. Travelling about the country one occasionally sees a sign here and there to say that moneys for this purpose have been granted by the European fund though I have never seen one such sign in my own county, Tipperary. I cannot understand why we in Tipperary do not get some of this money because our roads are as bad as those anywhere else. If we are not getting enough money, and we appear not be to getting it, some pressure should be put on the EEC.

Mention was made of Japan and trade with that country. This is something I can never understand. One sees products from Japan, Korea and other countries selling here at cheaper rates than the Irish products. I know it has been said that we must help developing countries. Well, I would not consider Japan a developing country: she is way ahead of anyone else. The unfair thing about it is that those countries are producing goods but the wages they pay are much lower than the wages paid in this and some other countries. I suppose you could never describe them as slave wages and we have to compete against them. At present when unemployment is so high in all the EEC countries there should be some limit set in allowing goods in from Japan and other non-European countries. This would go a long way towards solving our unemployment crisis at the moment. We have no say about those goods coming into this country, but when we decided some time ago to have a "Buy Irish" campaign we were told that it was illegal, that we were not supposed to ask people to buy Irish goods only. I see nothing wrong with that.

The aid to Poland by supplying that country with goods and also the loan of money for purchases is a very good idea. I hope that this country will play its full part in helping Poland in every way possible. I was very pleased to hear also as regards security that the recent talks did not involve Ireland in any agreement with NATO or anyone else.

I welcome the opportunity to address myself to this debate on the Eighteenth Report on Developments in the European Communities. I would like to congratulate the Minister, Deputy O'Keeffe, on his very comprehensive introduction to this debate.

We are talking about our involvement in the EEC at present against a background of what is described as the mandate, the mandate being the attempt by some of the larger EEC countries to change some of the fundamental policies within the European Economic Community, these being, as far as Ireland is concerned, principally the common agricultural policy, the development of Community policies and the structure of the budget. It is obviously vital in the interests of this country that the Taoiseach, the Minister for Foreign Affairs and Minister for Agriculture continue to stress within the councils of Europe that this country is absolutely committed and that there is a consensus throughout this country across the political divide to defend the common agricultural policy. Already through this mandate last year and through the British pressures, the British were successful in reducing very substantially their input into Community funds but there has to be a limit to this. It would not, in fact, be a Community if each member state could precisely state that what it puts in it must get out in some form or other because if that happens the concept of a Community goes out the door. If there is to be a Community in which there is regard for less well-off people living in less prosperous regions, there has to be a certain generosity of spirit.

The agricultural policy has to be maintained and there is a very strong case for it where this country is concerned. Agriculture accounts for about 20 per cent of employment in the country and is 14 per cent of GNP. This is against a background in the farming community where, despite benefits that have existed in the context of the EEC and subsidisation, since 1978 farm incomes have declined by about 50 per cent in real terms. Against that kind of background if there was any question of collapse of the common agricultural policy, in the rural community of this country it would lead to a revolution. The case has to be maintained.

There are those who would argue that agriculture is taking too much of the element of subsidisation from the Community funds. It is interesting to note that the proportion of the Community budget taken by agriculture declined from 74 per cent in 1977 to 63 per cent in 1981. The position has been substantially eroded in the past six to seven year. It is important to note, as the Minister pointed out, that in so far as the gross domestic product of the European Community is concerned, only 0.5 per cent of that gross domestic product is going into the agricultural sector. Against that background there is a strong case to be made. Apart from aspects of subsidisation of the small farmer, which some in the Community are against, there are the very positive benefits that flow to the Community through a support for farm income. These achievements have to be pointed out.

One of the achievements has been the securing of adequate food supplies. The second achievement is the provision of these adequate food supplies in a domestic context. In World War II problems were created in the shipping lanes of the world and there was a crisis in the provision of food in all countries in Europe, even those not in the war such as our own. The boosting of a domestic source of supply of food has all kinds of benefits that relate to security and social needs. As well there is the inherent support of farm incomes through the common agricultural policy. As bad as things are in Irish agriculture at the moment, had there not been the element of support which there has been from the European Economic Community that huge section of the population of this country would be in dire straits. For that reason I want to congratulate the Taoiseach and the Ministers for Foreign Affairs and Agriculture on their recent activities and the initiatives they have been taking at these meetings to maintain this policy.

It is very important as well that the Taoiseach recently took the initiative in visiting President Mitterrand in France. Fundamental to the retention of this Community policy is an alliance between Ireland and France because France's basic interests also equate to a support policy for agriculture. There may have been suggestions that President Mitter-and might have different views on that subject. I am quite certain that the Taoiseach's visit to Paris has been of immense benefit to this country and I want to congratulate him for taking that initiative.

I noted in the recent Dáil debate the Taoiseach's statement and the response by the Leader of the Opposition. The Leader of the Opposition was suggesting that the extent of the failure at the recent Council meeting was the fact that there was no agreed statement. That may have been a measure of the success of the last meeting of the Council because the move within that Council of Heads of State was to introduce this mandate and to scrap the common agricultural policy. Any question of there being no agreed statement means that the status quo has been maintained and continuity exists. It is much better that there be no statement than a statement of a new initiative on a new policy which would be detrimental to the interests of this country.

I am glad to see that the regional policy is under review. A fundamental review of regional policy is expected around April. We joined the EEC with a massive vote of confidence in a referendum but this confidence has been eroded to a degree since then because of matters such as the erosion of farm incomes and other matters. Regional policy is also a part of all this. The recent NESC report proved that Irish incomes as a proportion of Community income are slipping rather than benefiting. Membership of the EEC was supposed to be all about a regional policy, with a policy to help the periphery, a policy to reduce supports to the centre and to attempt to level out incomes. Instead of that policy moving in the direction to which it aspired, matters through the market are moving in the opposite direction. In 1973, it is interesting to note from the NESC report, Irish income per head as a percentage of the EEC average was running at about 65 per cent whereas in 1979, only six years later, Irish income as a percentage of the EEC average went down from 65 per cent to about 60 per cent. In relative terms we are slipping and in this context a review of regional policy in April is very welcome.

I speak especially as a Senator from the west of Ireland. The statistics show that the province by any standards is the poorest in the Community along with the Mezzogiorno in Southern Italy. We expected this fundamental commitment to a regional policy which could set up infrastructural development. Without making a political point, successive Governments in this country of both parties simply did not have the resources to do these things. It was a great disappointment in the west that the regional policy did not come up to expectations. Again it may have been useful strategy nationally to declare all of this country a region. This apparently was the strategy adopted, which one can appreciate, to the increase the total cake which Ireland could get. The problem with declaring the entire nation as eligible meant that the part of this country which is the worst off in Europe did not really get proportionately what it required to take it out of the backward state it has been in. In addition there was a move within the Community to introduce a policy under which some element of subsidisation from the regional fund would occur on the basis of projects assessed within the EEC, looking at the Community as a region and at regions, such as the west of Ireland and the south of Italy, and would arbitrarily support projects in such regions without them necessarily being supported by national governments. That has not happened. In every case at present in the dispensing of regional policy the support will project from a list sent by the Department here to Brussels and the regional people can choose only within those parameters. There is the possibility that the Community from Brussels and from its own institutions, will give its direct aid to projects which it considers to be of merit in the peripheral regions. I am talking now about the west of Ireland.

There is a problem in the west. In recent years when we have complained to people in EEC institutions about the low level of regional policy the classic retort was usually to suggest that while we might not be getting it out of the regional fund, Ireland is getting immense benefits from the common agricultural policy. Of course we have been getting immense benefit from the common agricultural policy, but the west of Ireland as a region has not got the proportion of benefits from the common agricultural policy that other regions have, and that has to do with the small size of farm and, until recently, the lesser level of concentration on dairying activities when such a huge proportion of EEC funds for the common agricultural policy are coming into the dairying sector. An example is the huge dairying output from the Munster counties. Of course, we do not begrudge them that income and it is marvellous that this is happening, but proportionately the west has not got this major benefit of the common agricultural policy nor has it been getting it from the regional fund. Obviously a review of regional policy and the regional fund would be welcome.

I tend to agree with Senator William Ryan. There are reasons to have reservations about the accession of three new countries to the Community. Along with him I welcome the accession of Greece and the forthcoming accession of Spain and Portugal.

Some years ago Deputy Garret FitzGerald when Minister for Foreign Affairs assured us in debates that the accession of these countries would not be to the detriment of the funding of projects for countries such as ours. There are immense benefits to western Europe in the accession, apart from the benefits to the new member Greece and the applicants, Spain and Portugal. These benefits are not economic. They relate to security and defence matters and the fragile condition of democracy in Greece, Spain and Portugal. They include the possibility on their accession in the Community of bolstering inherent democracy within those countries their inclusion within Europe and the decreasing likelihood of losing them to other blocks in Europe or elsewhere. Obviously accession whilst beneficial to larger nations of Western Europe must carry a price with it. If for these political reasons it is important that these other countries become part of the Community, then the tab must be picked up because with the emphasis on the need for an agricultural policy and a regional policy unless there is an increase in the funding of the budget within the Community, Ireland will end up in direct competition with Spain, Portugal and Greece for a smaller slice of the cake. That point must be stressed just as much as the necessity of retaining the common agricultural policy. The case can be made that the Community budget, about which we hear so much from some of the larger European countries, really amounts to only 2.6 per cent of the total national budget of the Community.

I am glad that we were able to help Poland in their problems. We supplied them with about 4,000 tonnes of beef and their credits were involved. That country has had immense difficulty lately. I am glad to see Ireland playing its part within the whole structure of the Community in helping Poland.

We had debates in this House recently and around the country on issues concerning Northern Ireland, the question of the unity of this country, the problems which reunification will cause and matters relating to that. One important aspect concerning the North has not been mentioned at all in this debate. One of the tragedies in recent years of the division of this island has been that in the broadest terms since we joined the EEC we as a country have benefited enormously from this membership, not just in crude, financial terms, not just in financial support coming in to our farmers or to our industrial workers through the social fund or regional policy, but in so many other areas. However, politics in this country had by nature been introspective, taking the reasons for the original divisions between the two main parties as an example.

The introspection of the political debate did not help this country and opportunities to be outgoing were few. The involvement in Europe has been psychologically immensly beneficial to the country, giving those in the Oireachtas, the civil service and the Government the opportunity to get into a much wider political field. It was not just a question of lobbying in Europe for more grants for our farmers but also taking part in the great world debates through participation in Europe. The benefit has been immense in the sense that in a community of ten countries we have a population of only three million people in a total of over two hundred million, yet at all of these forums we have effectively a voice in ten. The Taoiseach sits with the Council of Heads of State, the Minister for Foreign Affairs with the Council of Foreign Ministers and so on right down the line. This percolates through Oireachtas participation on committees, through the civil service and through participation by vocational groups, such as the Irish Farmers' Association, the chambers of commerce, the trade unions and other parallel vocational groups within the EEC. This has been incalculably beneficial to us.

The Minister has to leave the House for a division in the Dáil. The Senator may continue to speak if he desires to do so.

We have been speaking in this debate in the broad political arena, but on the economic front Northern Ireland have been having problems because of their fundamental dependence on agriculture. They are part of the British entity and British attitudes and views have always been influenced by the fact that only 5 per cent of the British people are in the farming community. Northern Ireland are part of a political group the views of which were diametrically opposed to those of the farming community in Northern Ireland. Over the years there have been close links between the Ulster community and the Farmers Union and Ministers of Agriculture have always represented Northern interests in the farming area. I welcome that.

I am glad to note from the Minister's speech the extension of the drainage programme in the west of Ireland by 120,000 acres which in financial terms amounts to FEOGA aid of about 30 million EUA.

I am glad to note also that the statement regarding political co-operation and security is confined to the political aspect as far as Ireland is concerned and that excluded from this are issues related precisely to defence and military issues. I would like to hear the views of Senator Murphy on this.

I welcome the recent visit to Dublin of the President of the European Investment Bank. We had a debate recently in the House concerning the bank. We have derived immense benefit in that had their sources and funds not been available in recent years the development which has taken place would have been much less.

I welcome within the EEC funding the Ortoli Facility in which money has been coming in at subsidised interest rates. It is significant that since 1973 loans from the EIB from this fund have amounted to £795 million which is a massive injection of long-term funds. This has been a boost in the productive area as distinct from areas to do with consumption.

Unlike Senator Staunton, I prefer to wait if I may for the Minister's return.

Sitting suspended at 7.10 p.m. and resumed at 7.20 p.m.

I have been reading through the eighteenth report or, to be more precise, I was browsing through it. I cannot say that I took any pleasure in it, but that is no credit to me because I was not even tempted to take pleasure in it. If we stand back after eight years and consider how much the Community has been involved in details of our economy, regulations and so on it is quite extraordinary how little enthusiasm there is at large for the European ideal. If there was any in 1973 it has diminished certainly since then.

The European ideal, in fact, interests only those who are directly involved in the rather precious world of Community negotiations. I am not surprised that a sturdy nationalist like Senator Willie Ryan should be worried about the developments in the EEC. He drew attention to the Brussels stricture on our "Buy Irish" campaign. Three or four years ago, very early in the life of the last Seanad I was derided for suggesting that the whole "Buy Irish" concept was at odds with the philosophy of the Community. I am not surprised that Senator Ryan should have misgivings about that aspect and about the possible consequences of the accession of the new members, but even in such a starry-eyed Europhile as Senator Myles Staunton I could detect some signs of disenchantment. I would suggest that the level of enchantment with the Community is at an all-time low. The drafters of such documents as the Minister's speech — I respect the Minister too much to accuse him of writing it—and of the eighteenth report take refuge from all these uncomfortable realities in cliches——

I do not want to interrupt the Senator, but the Minister is completely responsible for the speech.

——I am sorry to hear it. The drafters of these documents take refuge in cliches relieved by jargon and bland phraseology. The Minister's speech, to give him his due, is a little more forthright and meaningful than the eighteenth report itself. All the difficulties facing the Community are not even mentioned in that report. There is no sign, for example, of such salient aspects of the Community affairs as the naked self-interest of France, the reluctant membership of the United Kingdom and so on. There are references to youth employment and to what the Taoiseach called in his report to the Dáil, which is incorporated in this report, the high and fluctuating level of interest, as examples of the difficulties which the Community is facing. The speech is a little inaccurate in suggesting that these difficulties have been experienced, as the Taoiseach said, by all countries of the industrialised world. He might have qualified that more accurately by saying all countries of the capitalist industrialised world. Nowhere is there a suggestion that the Taoiseach or anyone else has any idea how to lower the high level of interest rates or how to stabilise the fluctuation in interest rates, for the simple reason that in the Community no more than in the national economy have they any hope of controlling credit and interest which are in other and more powerful hands.

I found a note of bland unreality in both the report and the Minister's speech. I am glad that the Minister directed our attention to the uncomfortable fact that the Irish standard of living has declined, as the National Economic and Social Council report told us a few months ago. It also gave us a whole lot more distressing data such as that we have the lowest this and the highest that in the Community, the worst housing, the highest dependency rate and so on. The record is pretty grim.

However, on this occasion I want to make a few points about the section of the report which interested me most, and that was the political section. Senator Ryan and Senator Staunton said they were glad that the Community was extending economic help to Poland in its present troubles. So am I, and why not? However, it is different entirely to see the Community pontificating about the political state of Poland. That does not make me so happy as knowing that the Community and ourselves are giving economic aid to Poland. I would be quite uneasy about a Community in which West Germany is a prominent if not the dominant partner making political statements about Poland's affairs which, after all, are her internal affairs, let us not forget. The pessimistic hawks amongst us had been predicting Soviet intervention for the last 18 months since the crisis began but, in strict terms, Poland's affairs are her own affairs at the moment. It seems that Community pronouncements on what is happening in Poland politically are extremely unhelpful, given the fact that West Germany is dominant and given the fact that in a sense, the Community is really an elaborate framework to "respectabilise" West Germany. That is one way of looking at the Community.

There is a reference in the report, as well, to the Euro-Arab dialogue and I am rather uneasy about that, also. After all, everything the Community does in the foreign policy field is now a matter of concern to all of us. All Members are aware of how the protagonists in the Middle East conflict flood us daily with propaganda. No sooner do you get a propaganda sheet from the PLO, than you get one from the Israeli Press Office and so on. There is no firm position to be taken in the Middle East. What I mean is that there is something to be said for the entrenched position of both Arab and Israeli. It is a chronically difficult problem.

What worries me, again, is that I can see the Community for its own material reasons leaning in the direction of the Arabs and let me say more than leaning in the direction of the Palestinian Liberation Organisation. I would like to hear from the Minister what exactly is the attitude of our Department of Foreign Affairs to the PLO at present. I know that under the last administration the PLO was discouraged from setting up an office in Dublin. I hope that position remains the same, because the PLO is, in my book, a terrorist organisation. Its avowed intention is the destruction of the State of Israel by physical force and I would no more like to do business with the PLO than I would with the Provisional IRA.

The Eighteenth Report pays quite a lot of attention to the relations within the Community and Africa and the attitude of the Community to South Africa. I would be happier about this if I thought that forces within the EEC were moderating their economic ambitions, so to speak, in the African Continent, but the evidence is that some of our partners are economically very much interested in South Africa, for example, the Germans, French and other nationalities. The interests in South Africa, the economy there and the connections between the Community and the South African economy are such that we must raise a question mark about the sincerity of their concern for the black African States.

All of these points can be subsumed in a general point and that is the doubt many of us have about the harmonisation of foreign policy, about European political co-operation.

There is a vote in the other House and I am sure the Minister would like to vote.

If the Senator in possession would like to continue, I certainly would have no objection. We should allow the Senator in possession to decide that.

I do not wish to continue until the Minister returns.

I move that we suspend the sitting for 15 minutes.

Sitting suspended at 7.35 and resumed at 7.50 p.m.

I was saying that, having had my doubts about individual aspects of Community foreign policy, I would question the whole idea of the validity of that foreign policy, or the validity of the idea that we have a laudable and significant role to play in it. At the time of the referendum debates in 1972, in so far as this matter was adverted to at all, which, let us face it, was very little, what we emphasised was the economic advantages of membership. A Government pamphlet at the time rejected the idea that Ireland would lose its sovereignty and said there would be rather a pooling of sovereignty. In a pooling of sovereignty, where there is one small member on the periphery, the idea that that small member can make an equal input into that pool is illusory. The same applies to what was later called harmonisation of policy, which is the basic idea behind the European political co-operation.

An Leas-Chathaoirleach

There is another division in the other House.

It is very inappropriate for the Upper House to be interrupted so often in this way.

I would like to support the sentiments expressed by Senator Kennedy. It is disgraceful the way this House is being treated, with Ministers having to be called away at every hand's turn.

An Leas-Chathaoirleach

We finish the normal business of the Seanad at 8 o'clock. We fix the date for the reassembly of the House and then go on to the matter on the Adjournment.

I will convey the views expressed in the House to the Government and will contact the Opposition whip. I offer my apologies for having had to leave the House three times.

Sitting suspended at 7.55 and resumed at 8.05 p.m.

An Leas-Chathaoirleach

Could the Leader of the House tell us when the Seanad will sit again?

At 10.30 a.m. tomorrow.

Debate adjourned.