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Seanad Éireann debate -
Wednesday, 26 Jun 1985

Vol. 108 No. 10

Dooge Committee Report on European Union: Statements.

In reporting to the Dáil on 24 April last on the meeting of the European Council held in Brussels on 29 and 30 March 1985, I said that the Government proposed to arrange for a discussion in the Dáil, before the Milan meeting of the European Council, on the report of the Dooge Committee, on European Union, and on European developments generally. The discussion today in the Dáil and here in this House is on foot of that commitment and in response to other requests. Senators will be aware that the meeting in Milan is to take place on Friday and Saturday next.

I had originally envisaged that this discussion might have taken place at an earlier date but developments over the past two months did not, however, lead to the emergence of any clear scenario as to the likely or desired follow-up by the Community on the report submitted by an Ad Hoc Committee for Institutional Affairs chaired by Senator Dooge. Indeed, on the eve of the Milan meeting, the position is still not as clear as one would wish although after discussions with a number of heads of Government within the past week I am now in a better position to direct the attention of the House to the issues that are most likely to arise for possible decision.

I think, however, that I should first recall briefly some of the historical background. The primary community to which Ireland acceded on 1 January 1973, following an 83 per cent "Yes" vote in a referendum in which voter turnout was 70 per cent, is entitled the European Economic Community. The Treaty of Rome on which this community is based is largely concerned with economic, commercial and related social matters. Much of the impulse for the establishment of the Community was economic in nature: this is true today in regard to the motivation for new steps towards European union. Much of it comes also from economic motivation. And yet, from the outset, the founding fathers of the communities were motivated by aspirations that went beyond purely economic, trade or social matters. This commitment is seen in the Preamble to the Treaty of Paris, establishing the Coal and Steel Community, which provided for the safeguarding of peace by creative efforts and laying the foundations of a broader and deeper community among people long divided by bloody conflicts. Similarly, the Preamble to the Treaty of Rome sets down the commitment to an ever closer union among the peoples of Europe and their resolve to strengthen the safeguards of peace and liberty.

From the outset, also, these political aspirations were well understood in Ireland. What I have just said about the Treaties is closely based on paragraph 6.1 of the White Paper, "The Accession of Ireland to the European Communities", published by the then Government in January 1972, before our people voted in the referendum on accession. Earlier references could also be quoted. Not only was there understanding of the Community's ultimate political goal: from as far back as 1962, each successive Government declared their commitment to the achievement of European Union. On 18 January, 1962, the then Taoiseach, Mr. Seán Lemass, addressing the Ministers of the member states, said:

It is natural that we in Ireland should regard with keen and sympathetic interest every genuine attempt to bring the peoples of Europe closer together. ... We were happy at the development of a strong movement towards closer European Union. ... In the Bonn Declaration the Member States reaffirmed their resolve to develop their political co-operation with a view to the union of their peoples and set in motion procedures designed to give statutory form to this union. I desire to emphasise that the political aims of the Community are aims to which the Irish Government and people are ready to subscribe and in the realisation of which they wish to take an active part.

In applying for membership of the Communities, the then Irish Government declared their acceptance of the treaties, of the decisions taken in their implementation and of their political objectives and indicated their readiness to join in working towards the goal of political unification in Europe. These commitments were reaffirmed when negotiations opened in 1970 on Ireland's reactivated application.

Similar sentiments have been expressed by successive Taoisigh — Deputy Lynch, Deputy Cosgrave, and the Leader of the Opposition who, when he held office as Taoiseach, said in Dáil Éireann on 11 March 1981, at column 1396, Volume 327, of the Official Report:

We could not, and would not wish to opt out of the obligations and aims inherent in the achievement of the ideal of European unity.

European Union is not a precise concept. Over the years, many different views have been advanced as to what the content of such a union should be and on forms which the political unification to be eventually achieved in Europe should take, having regard, in particular, to the much greater diversity of Europe, as compared, say, with the United States. Various attempts had been made up to 1983 either to map out a blueprint for progress towards European Union or to recommend particular substantive or procedural steps to expedite progress along the road. All failed to lead to a decisive step or breakthrough. Time does not permit for any extensive analysis of the reasons for this failure but one important cause was the faulty working of the Community's institutional system. I shall touch on this later in my remarks.

In all European circles, a realisation had been growing that there was an urgent need to address the state of crisis in the Community, exemplified, on the one hand, by the delay in decision making and paralysis of the institutional system and, on the other, quite dramatically by Europe's economic decline relative to the United States and Japan, seen in terms of wide gaps in performance on economic growth, job creation and tackling unemployment and in the fields of entrepreneurship, innovation and technology. With the settlement, at least for a time, of the budgetary and other problems which had deeply divided the Community, the European Council, at Fontainebleau, turned its attention back towards restoring momentum to the Community and relaunching it along the path of European integration envisaged by its founders. It was decided to establish a high level committee of personal representatives of heads of state or Government to report on the steps to be taken to that end.

The Government fully supported this decision and were glad to assume the responsibility, during the Irish Presidency, of establishing this committee under a distinguished Irish chairman. Within a very brief period, the Dooge Committee produced a substantive interim report in time for the European Council meeting in Dublin last December. The European Council decided that the final report of the committee would be the main subject for discussion at the meeting in Milan this month.

Before referring to the report of the Dooge Committee, let me take some time to refer to the parallel initiative of the European Parliament which led to its adoption of a Draft Treaty on European Union in February 1984, a document which is the subject of Report No. 14 of the Oireachtas Joint Committee on the Secondary Legislation of the European Communities. The adoption of the draft treaty by the European Parliament represented the culmination of a process initiated back in 1980 by the indomitable Italian MEP, Altiero Spinelli, whose European commitment dates back to the Italian Resistance and to a conviction formed and expressed before the guns of World War II had ceased to sound in Europe. It is very largely to the lead given by him and his co-workers and to the sustained follow through by the European Parliament that we owe the revitalisation of the debate on the future of the Community. In taking this major initiative, the intent and inspiration of which the Government can broadly support, the Parliament placed the onus on the governments of the member states to advance the integration process envisaged by the draft treaty.

The latter is unlikely to be fully acceptable, in its present form, to all member states, but its broad thrust is probably shared by most, if not all the governments of the Twelve. However, the main focus of current activity is centred more on the report of the Dooge Committee. This has been laid before both Houses of the Oireachtas. I shall not therefore attempt to summarise it. It does not take the form of a new draft treaty in legal form. It sets out the objectives, policies and institutional reforms which it believes are necessary and for these purposes contains recommendations in the following areas: creation of a genuine political entity, creation of a homogeneous internal economic area, the promotion of the common values of civilisation, the expression of an external identity and the operation of efficient and democratic institutions. Senators will have had an opportunity by now to review the specific recommendations. Later in my statement, I will be setting out views on some of the major issues raised by the report.

For the present, I simply note that Senator Dooge was able to agree with the majority consensus on all issues, except two. He did not agree to the inclusion of the section on security and defence and, though in agreement with the principle underlying the text favoured by the majority of the committee in regard to principles of voting in the Council, he was unable to support the actual text because, though not excluding the pleading in exceptional circumstances of a vital interest, it did not include any explicit reference to the protection of vital national interests in exceptional circumstances. I should also say that despite Senator Dooge's efforts the section on the promotion of economic convergence is very weak and is far from providing a satisfactory basis for progress towards European Union. The fact that there was not as much support as there might have been for his views and our views on that subject is itself somewhat disturbing.

The meeting of the European Council in Brussels last March decided that detailed examination of the proposals would continue over the following months by means of bilateral contacts, in order to enable the European Council to arrive at final conclusions at its June meeting. Widespread bilateral contacts have been taking place and, as I undertook last March, I have ensured full Irish participation in this process. Mr. Ferri, personal representative of Prime Minister Craxi, came to Dublin for discussions with senior Irish officials. I discussed the matter in Lisbon with Commission President Delors, the British Foreign Secretary and the Prime Minister of Portugal, and, briefly and informally in Madrid with Prime Minister Gonzalez. Last week in Rome, I met Prime Minister Craxi and, separately, Christian Democrat members of the governments of five member states, including the Federal German Chancellor and the Luxembourg Prime Minister, the Ministers from Italy, The Netherlands and Belgium, as well as Commissioner Andriessen. Subsequently, I had discussions with President Mitterand in Paris and on Saturday last with Vice-President Narjes of the European Commission in Dublin. There have also been preparatory discussions at formal and informal meetings of the General Affairs Council while the Italian Presidency circulated some time ago a draft mandate for an intergovernmental conference, as proposed in the Dooge report which has prompted reactions and proposals from other member states. Nevertheless, despite all this activity the situation is rather fluid and the likely course of events is not easy to predict.

Before going in more detail into the actual issues that may arise in Milan, and the Government's approach to these issues, I want to review the impact of Community membership on this country, so that the significance to us of our participation in the Community, and of its successful future development may be apparent.

We are substantial net beneficiaries in a number of different ways. In financial terms our gross contributions of £208 million in 1984 were exceeded four times over by payments from the Community of £851 million, plus loans of £126 million on advantageous terms from the European Investment Bank. The net transfers of grants represented last year 10.8 per cent of our current budget receipts, and reduced by that amount the level of taxation required to provide current services and support farm incomes. In the absence of this net payment we should either have had to increase the present VAT rates of 0, 0, and 23 per cent to rates which would be of the order of 8.5, 18 and 27 per cent respectively; or else have had to increase by 30 per cent the average tax bill of the average income taxpayer — or have affected some combination of such tax increases.

Over the period since we joined, the accumulated net inflow of non-repayable moneys has added up to £3.8 billion, which expressed in 1985 money terms amounts to no less than £6.8 billion.

Access for our farm sector to EC markets has meant that the price levels obtainable have been far higher than they would have been had we remained outside the Community. If in 1984 we had been obliged to market all our agricultural exports at world prices the returns from those exports would have been some £700 million, or around 45 per cent below what they actually were. This would obviously have had an absolutely disastrous effect on farm incomes. Indeed, given the over-supplied state of world markets for many products, it is quite possible that we could not have sold some of the production at all. In such a situation, it would have been totally uneconomic for our farmers to produce anything near their present output levels and agricultural production would have effectively collapsed. Given that the dependence of our economy on agriculture is still relatively heavy, our GNP would have been a great deal lower were we not within the EC. The impact would not, of course, have been confined to agriculture as the effects of lower farm incomes, and consequently reduced purchasing power, would have been felt throughout the entire economy.

On the industrial side, as over two-thirds of the sales of the new industries are directed towards EC countries, and as location within the EC was the prime motivation of the vast majority of firms who came here after 1972, and of some who came immediately before that in anticipation of our entry, it is clear that a majority of the 70,000 relatively highly-paid jobs in these industries would not have come into existence but for EC membership. Together with the loss of jobs in services dependent upon direct purchasing from these industries, or upon the spending of the purchasing power generated here by the industries that would have been lost and by agriculture operating at a much lower level of activity than it does in the Community, the total loss of employment would have been enormous. This sharply reduced and poorer labour force would have had to find the massive sums now made available to us through net payments from the EC out of higher taxation.

That simply could not have been borne. The level of public and social services would, therefore, by now have been at a level that would have been totally unacceptable to our people, or indeed to any other northern European people.

The compensating gains by staying out and producing a certain range of high cost goods in small and inefficient industries for the home market behind high protective barriers — if that were the preferred alternative — would have been absolutely minimal by comparison.

It is as well that these facts, which are rarely stated clearly and quantified, should be put forward at the outset of this debate, so that the debate may take place in an atmosphere of reality. Those who urge that we would be better to be outside the Community, alleging a threat to our neutrality — which I shall later demonstrate is not put in jeopardy by membership — ought to reflect upon these facts.

The Community could, however, benefit us and other member states much more than it does at present. For example, if the barriers to technological industry that now exist within the Community were removed, we should have more industries and more jobs here. Because at present some major countries continue to try, contrary to the Community competition rules, to seal off some of their markets in favour of firms locating within their borders, we have lost a number of high-tech firms that would have come here.

Again, if the Community's total resources were not limited by the application of the unanimity rule to the raising of the limits on the share of VAT to be levied by the Community as own resources, a better-financed Community would extend its activities in ways from which, as at present, we should benefit significantly. These resources are in any event far below the minimum levels necessary to create a Community with a power to pursue policies capable of influencing significantly its own future evolution. I shall return to this point later in the context of the proposals for European Union.

In many other ways, too, the present faulty operation of the decision making system is damaging the interests of Ireland, as of other member states and of the Community generally. This is because in cases where the Treaty provides for decision making by qualified majority, even where countries do not invoke the veto aspect of the Luxembourg compromise or even overtly hint that they may do so, a vote is not called because of the realisation that if it were to be called, the veto would be invoked. Thus a decision is postponed again and again, often on relatively minor issues.

Similar delays and blockages occur in the quite separate cases where the Treaty itself requires unanimity. For example, proposals to harmonise national safety requirements or standards in the interests of free movement of goods, are made under Article 100 of the Rome Treaty which requires unanimity for a Council decision. The result has been that action on many such proposals has been blocked for up to 20 years in some cases. This has perpetuated fragmentation of European markets and prevented the exploitation of economies of scale allowing non-European firms to gain an unnecessary marked advantage. All of us in the Community are the losers.

Ireland is the most significant beneficiary of EC membership in terms of net measurable transfers. I realise that other member states gain substantial advantages, for example, from the Customs Union, advantages which cannot so easily be segregated but if we limit ourselves— because we have to — to net measurable transfers, those to Ireland are ten times greater than to — or from — most other member states, amounting to 3.9 per cent of our GDP in 1983, compared with 0.19 per cent to Italy, 0.2 per cent to The Netherlands, 0.4 per cent to Denmark and net transfers the other way from Germany, France and the UK amounting to 0.4 per cent, 0.04 per cent and 0.19 per cent, respectively of GDP.

It is, therefore, vital for us that obstacles to the taking of decisions in the Community be eliminated. Of course there will be some cases where we would be the losers rather than the gainers, and we shall have to be prepared to take a little of the rough with a lot of the smooth. Thus if more rapid movement towards a genuine single internal market — which would be of immense benefit to sectors here which at present lose out because of continuing barriers to trade — were to be made possible by applying majority voting in respect of such matters, we could be adversely as well as favourably affected in areas like transport, and would face problems in the insurance area, for which we might need and have to seek some temporary provision. But overall we should be the net gainers if in respect of the internal market decisions could be blocked only by a country which does in fact have an objectively verifiable vital national interest — a situation which it is now generally recognised will have to be provided for by some solemn procedure of invocation that will discourage its use except in cases where there really is a vital national interest.

I would venture to comment that in the past 12 years we have had to defend very few vital national interests — our milk production and our fish resources, being two. Both were recognised by our partners as being vital national interests, and were treated accordingly, giving us the exceptional right in each case to continue increasing output when all other member states were forced to cut back. In the event, we did not need to invoke the Luxembourg compromise in these two cases and have in fact not sought to do so in other cases, although like everyone else we have at times dragged our feet about matters that would be inconvenient, or that would have involved using some of the substantial net financial benefits of membership to finance adjustments to Community standards.

Thus our position on decision making is clear — we want to free up the present system, removing the abuses while retaining a provision to deal with genuine issues of vital national interest, to be advanced and proved objectively by formal procedures that no country would embark upon unless the issue were a really grave one.

Within this general area of decision making one must distinguish between two aspects — the need to restrain the abuse of the Luxembourg compromise in cases where the existing Treaties provide for qualified majority voting, while retaining procedures to deal with genuine cases of vital national interest; and the quite different question as to whether the existing provisions in respect of unanimity voting cover the correct range of cases, namely, those in which there is a genuine need for unanimity.

There may be cases where a move from unanimity to qualified majority voting might be desirable, for example, in relation to decisions concerning movement towards a genuine single market, which is particularly important to us as a small country which often finds itself frustrated by non-tariff trade barriers placed in its way sometimes by larger and more powerful countries. But because of the wide differences between overall expenditure and tax levels in member states, and especially because of the very big differences between internal taxes on such articles as spirits and tobacco, which reflect differences in national attitudes towards the consumption of these goods that have serious health implications, there would have to be provisions to accommodate our particular circumstances. The economic, social and health consequences of the drastic changes in tax levels that would be necessitated by harmonisation, because of the enormous differences between internal taxes on some of these items at present, are such that they would be clearly unacceptable.

There are also institutional reforms which as a country with a powerful interest in the success of the Community, we favour, as do most other member states.

Thus the erosion of the power of the Commission, and in particular of its exclusive right of initiative in respect of new proposals, has been damaging to the Community, and to our interests as a small country. Increasingly as the years have passed, successive Commissions have been less inclined to play the kind of political role as prime movers of new policies which the Treaty requires them to do. Their proposals have become more and more timid, as they sought to anticipate and take account of the likely objections of member states before formulating their proposals. This has been because bitter experience has taught them if they do not in effect accommodate in their proposals objections of the larger countries, one or other of these will object, and the proposal will get nowhere. In my personal view this trend has become even more marked since the establishment of thrice-yearly European Councils of Heads of State and Government decided upon at the Paris Summit at the end of 1974, for at European Council meetings, the Commission appears especially tentative about putting forward proposals, and as a result the initiative has, I feel, tended to pass back from the Commission to the major member states, quite contrary to the provisions of the Treaty.

We favour the full restoration of the Commission's Treaty powers as the best way of protecting the interests of small countries. We also as a Government favour — and have done so since we put forward the proposal at the Rome European Council in December 1975 — the investiture of the President of the Commission by heads of Government and by the European Parliament. We also believe that he should himself play an important role in the choice of the national Commissioners, so that he may get together around him a coherent team of high calibre people.

It has been suggested also that the Commission's management powers, in respect of the implementation of Council decisions, should be extended. Worthwhile steps in this direction also seem necessary to avoid overload on the Council structures in a Community of Twelve but in some instances this might, of course, require a fairly precise initial mandate from the Council indicating in a fair amount of detail how the Council wishes the policy to be implemented, and what interests would need to be safeguarded in this process.

The strengthening of the powers of the European Parliament is also essential. Although it seems that in the neighbouring island, and perhaps in Denmark, there is resistance to this because of an illusion that what is at stake would be a transfer of power from national parliaments to the European Parliament, this is, of course, not the case. There is no such proposal. The problem is to secure some kind of democratic control over the decision making powers of the Council of Ministers, which at present in effect rules by decree. The absence of an adequate role for the European Parliament outside the budgetary area, for example, in relation to the ratification of Community treaties and the enactment of Community legislation, is a grave defect in the democratic structures of the existing Community.

It also encourages the Parliament to act with less responsibility than might otherwise be the case in the only area where it has effective power, namely the budget. It would be helpful in this connection if it also had some function in relation to the raising of some part of Community revenue.

It has to be recognised, of course, that any movement towards co-decision between Council and Parliament must be so structured as not to introduce significant delay into the decision making process, and that there must be a system of mediation through which a decision can be reached reasonably rapidly where there is disagreement. The views of Senators on how this process might best be undertaken would be welcome.

Other issues that could arise in relation to the movement towards a European Union include the development of the EMS; the closely associated issues of economic convergence of member states which at present have widely different levels of per capita income and living standards and the concentration of short term economic policies, technically known as conjunctural policies; the extension of the Community's competences to new areas; and the expansion of own resources, as well, of course, as developments in relation to political co-operation.

We favour the development of the EMS. We should like to see our neighbour Britain become a full member of the system. This would reduce to a very narrow range fluctuations between the Irish pound and sterling, which have created many problems for us since 1979. Moreover, the inclusion of sterling would strengthen the system itself. We should like to see a greater movement towards use of the ECU both for public and private purposes.

I am convinced that progress towards the economic, and therefore the social goals of the Community, and in particular towards the reduction of unemployment, will remain slow and uncertain until and unless the economic space of the Community is treated as a unit for short term economic policy purposes. The policies of individual member countries should be co-ordinated through the Commission so as to achieve the kind of coherent result that emerges from central policy making in countries like the United States or Japan. So long as some larger countries in the Community retain the illusion that they can successfully operate autonomous short term economic policies, and fail to grasp that their power to do so under modern conditions is very restricted, just so long will the Community remain a sleeping economic giant, unable to pursue its own economic interests coherently in relation to the rest of the world.

Another economic issue that for us— and I believe also for Italy and Greece, as well as the new members, Spain and Portugal — is vital is the pursuit of the objective set out in the Preamble to the Rome Treaty which recites that its signatories were "anxious to strengthen the unity of their economies and to ensure their harmonious development by reducing the differences existing between the various regions and the backwardness of the less-favoured regions". This fundamental principle of the Treaty has not hitherto been given the importance that is its due. Countries like Italy, and later Ireland and Greece, and most recently Spain and Portugal have been significantly influenced in joining the Community by the presence of this commitment in the Treaty, and it has at times been disturbing to remark a tendency to downplay or ignore this principle.

The achievement of the objective that the Community is now setting itself, namely, a genuine European Union — implies clearly a scale of funding far beyond anything currently available.

It has long been argued by Irish Governments, and has also been widely accepted within the Community, that closer economic and monetary integration involving the transfer to Community level of the control over the major instruments of economic policy, would need to be paralleled by substantial re-inforcement of Community action in favour of the less prosperous regions of the Community, including arrangements for transfers of resources on a significant scale. These would be required in order to offset the potential centripetal efforts of integration on less-developed areas or to help these areas adjust to any external shocks affecting their economies.

This whole area was studied by the MacDougall Group, the Study Group on the Role of Public Finance in European Integration, and it was dealt with along the lines I have just sketched in their 1977 report. They concluded that substantial increases in spending that would help to reduce inequalities in living standards would be necessary, even in a period of pre-federal integration and that measures that would bring the Community budget up from 2 per cent to 2.5 per cent of Community GNP would only begin to be economically significant in reducing inequalities and facilitating integration. Even this, they decided, would be of extremely limited significance in regard to the possible use of the Community budget for the purpose of stabilising the economy of the Community and of its component parts in the face of cyclical fluctuation in economic activity. A previous study in 1975, by the Study Group, Economic and Monetary Union, 1980, the Marjolin Group, had concluded that the minimum quantitative basis for European public finance would be 5 per cent of GNP.

By comparison with these assessments of what as a minimum would be needed by way of Community resources in order to give real effect to the commitments and objectives of the Rome Treaty, the actual resources available to the Community are very restricted indeed. The recent increase in own resources enables it to supplement the proceeds of Community import duties and levies by 1.4 per cent of the Community's VAT base, instead of 1 per cent as hitherto. But next year, the very first year in which this extension of powers comes into effect, the needs of the Community are now estimated by the Commission to require own resources amounting to 1.35 per cent of GNP in addition to the import duties and levies. In other words, the new margin to be introduced at last after such long and bitter arguments is likely to be used up almost completely at the very outset — thus starting once again next year the wrangle about raising the level from 1.4 per cent to 1.6 per cent by the action of national Parliaments. The figure of 1.6 per cent is itself only a fraction of that needed to make a European Union a reality. Here the gap between the willing of the end and the willing of the means remains wide.

Another major issue for discussion at Milan is the French proposal for European co-operation in advanced technological research for civilian purposes. This has great merit, coming as it does at a time when the American SDI initiative — leaving aside for the moment its military implications — threatens to dominate and absorb European research capacities unless a countervailing initiative of a civilian character is launched in Europe. At this moment there are many distinguished scientists in many European countries who are awaiting the outcome of Milan before deciding whether to sign on to participate in SDI. I believe some of them have tentatively signed on already and will come to a final decision after Milan. This could thus involve a massive, and in terms of future technological progress, possibly fatal, brain-drain for our Continent. It is of vital importance to all of us in Europe, therefore, that Milan succeeds in taking a clear decision on Eureka, involving a firm commitment to go ahead at once with research in a number of key fields, supplementing private resources where necessary with Community funds.

This project has aroused intense interest throughout Western Europe, not alone in Community countries but in Norway and in the three neutral countries of Switzerland, Austria and Sweden. The structures of Eureka should be such as to ensure that, while centred on the Community, these other non-EC countries will also be given a full opportunity to take part, so that their important scientific resources may be available to this European project, rather than be drawn away into the American orbit.

We are willing and anxious to play our part in this project. Our resources in this area are limited, but not negligible, and in a couple of sectors we have significant scientific skills to offer. What is less clear is whether we have Irish firms capable of participating in the development stage of this research. If these do not exist, then we shall have to bring them into being — a process in which it might be necessary for the National Development Corporation to play a role.

We would be anxious that this project should develop along lines similar to ESPRIT, the Community-based European Strategic Programme for Research in Information Technology, within which provision is made that 10 per cent of the specific projects will be small projects for which small firms and consortia could hope to tender successfully. The importance of this from our point of view is clear. In the absence of major Irish technological enterprises, our ability to benefit from development spending and from the industrial application of this research is likely to depend upon firms in Ireland, most of them small by international standards, securing a share of the funding, to which we as a member country will be subscribing.

We would also be interested in discussing with our partners whether there could be any application of the principle of a Community intellectual property in the results of this research — admittedly a novel concept and one which could be difficult to apply in practice.

The other matter that will arise at Milan is that of developing further the process of Political Co-operation, that's the attempted co-ordination of the foreign policies of member states of the Community. Great practical progress has been made in this area since 1973 when we joined the Community. Policies which we have traditionally espoused, for example, recognition of the rights of Palestinians to self-determination in parallel with the right of Israel and other States in the area to having secure and guaranteed borders; support for human rights in Latin America vis-a-vis authoritarian regimes which have generally — although not invariably — been right-wing dictatorships; support in the late seventies for a solution to the problems of Rhodesia, as it then was, based not on the so-called “internal settlement” but on the involvement in negotiations of the Patriotic Front; support for genuine independence for Namibia; opposition to apartheid in South Africa.

All these and other policies to which Irish people have been attached have at various times since 1973 gained increasing support from other members of the Community through the process of Political Co-operation. Moreover, Ireland has played a constructive role in this area, for example, through my own visit to Portugal in June 1975 as President of the Council of Ministers, which opened the way towards Community co-operation with the process of development of Portugal into a pluralist democracy, and away from becoming a near-Communist State and possibly a Soviet satellite and more recently, in our 1984 Presidency, by organising and presiding over the San José meeting of the Ten, as well as Spain and Portugal, with the five Central American countries and the four Contradora countries which are seeking to establish peace in the region.

Political Co-operation has from the outset been concentrated on seeking, and often finding, by consensus, common positions on matters of foreign policy, and on discussing the interests we have in common with our partners in the political and economic aspects of security, excluding military or defence questions with which, as a non-member of any military alliance, we are not involved.

As such, Political Co-operation has worked well, and we would be happy to see it evolve constructively. There now is a widespread view that the effectiveness of the work of European Political Co-operation could be enhanced if it possessed a secretariat — many countries would say "a light secretariat"— with administrative functions and the task of preparing papers for Ministers in conjunction with national officials. For my own part I find that the present system, with the secretariat effectively provided by the country holding the Presidency, sometimes aided on what is called a "troika" basis by the preceding and following Presidencies has worked quite well.

However, with the additional administrative burdens that enlargement will bring in its train, a small secretariat providing administrative assistance to the Presidency might well be warranted. Some countries propose that the ad hoc structures of European Political Co-operation should be given formal recognition by putting them on a Treaty basis, although it is not entirely clear what the benefit of this would be, given that the system must in our view continue to operate by consensus, namely, no action to be taken against the wishes of an individual member state. This matter may come up for discussion at Milan.

The UK Government have in fact proposed a Draft Treaty, parts of which, however, we would not be prepared to accept; in particular a provision that would require that no member country could co-sponsor a resolution at the UN if any member state opposed it. This seems a somewhat rational approach in so far as it would be very hard to know who is opposing it until the vote comes. The other way round might make more sense. This seems to us neither desirable nor practicable.

In the discussion of these matters Ireland finds itself in a different position from its partners, all of whom are members of the North Atlantic Alliance, while Ireland is neutral. It should be made clear that no other Government have put any pressure at any time on us on this issue of neutrality. Persistent reports to the contrary are quite simply inventions. No one should allow themselves to be fooled by this propaganda.

As I pointed out earlier, Senator Dooge disagreed with this section on security and defence in the report because it contains proposals that seek to go beyond the existing guidelines on Political Co-operation. These provide only for co-ordination, in the area of foreign policy, on the political and economic aspects of security. The section contains suggestions that, in the view of the Government, are more appropriate to military alliance frameworks. On this issue, Senator Dooge was reflecting the position of the Government. Irish policy in this regard is both understood and accepted by our partners. In discussion of the report's proposals, we will continue to take the line that there are subsisting and valid distinctions between these aspects of security that are appropriate to political co-operation and those, such as operational defence questions, that are appropriate to alliance frameworks.

The fact is that our country's position in this matter is known to and understood by our partners and no question arises in this context, of any change in the Government's commitment to maintain Ireland's neutral position of non-membership of military alliances.

It is clearly in our interest to distinguish most clearly between our insistence on our neutral position on the one hand, even if this be seen by some as making tidy arrangements between different institutions more difficult to put together, and on the other hand our positive stance on the further development of the Community. It would be very damaging, indeed, to our interests if we were to add to any problems that our position on neutrality might be felt by some of our partners to pose for them, but which they are willing to accommodate, an intransigent position on other aspects of the process of European Union.

Fortunately we have no interest in creating other problems, and every interest in solving them. As a result both in the preparation of the Dooge report — and this House will, I am sure wish to pay a warm tribute to Senator Dooge for his skill and patience in securing agreement of the representatives of Heads of Government of nine other member states to so much of its contents — and in seeking with our partners to put into effect its proposals, we are glad to be able to be positive, and to be joined with the original six Community members in seeking to move ahead together in as many ways as possible. The goodwill which we have always enjoyed in the Community — and which I should say has brought us many tangible benefits — has been enhanced by our positive stance on so many of these issues.

It is in this positive spirit that we view the proposal, first put forward in the Dooge report that an intergovernmental conference be convened to negotiate a draft European Union Treaty. It is difficult to gauge the degree of support that now exists for this approach or even for holding a conference designed to agree on further steps in the integration process, not necessarily enshrined in a new treaty. Some member states are opposed to the proposal and there have been signs that others are now less confident of the merits of this approach. On the other hand, the Declaration on European Union adopted at the meeting of European Christian Democrats in Rome last week, at which the Governments of six member states were represented by Heads of Government or Cabinet Ministers, came out in favour of a conference with a precise mandate to achieve the objectives set out in that declaration which raise no problems for Ireland and whose achievement would bring significant benefits to us.

Against this background the Government will support calling a conference, if it enjoys a reasonable prospect of success, and we have conveyed this attitude to the Italian Presidency. Equally, we will support whatever procedure is best calculated to secure meaningful progress, on a balanced basis, towards an entity that would be worthy of the title "European Union", with economic and political integration proceeding broadly in parallel. That is of fundamental importance.

I look forward to the comments of other speakers on the matters I have mentioned during the course of this speech, and on any other aspects of the Dooge Report or the Spinelli Report that they may wish to advert to. I am sure that the debate will be a constructive one, and that it will help myself and the Minister for Foreign Affairs to play a constructive and positive role at Milan.

May I before concluding, add a few words by way of general comment. Both at the time when we debated joining the Community and since we have been members of it, there has been a tendency in this country to look at our membership almost exclusively in terms of the material benefits we have secured from membership — and to look no further. In part this reflects the fact that these benefits have, as I said at the outset, been immense — and, in so far as they can be readily identified and measured, far greater in relation to our economy than in relation to any other.

But the construction of Europe is much more than a matter of pounds and pence received. The Community is the guarantee for us and for our descendants that this western part of the European Continent will never again be the site of conflicts between its peoples. The era of war within western Europe is dead and, apart from occasional acts of terrorism, many of them emanating from outside western Europe, one of the only two remaining sources of significant violence within this area of 320 million people is, tragically, to be found in our own country, in Northern Ireland. I hope and believe that the conflict in Northern Ireland can also be brought to an end, and I know that our European partners, conscious that this alone remains as an area of significant violence in western Europe, would wish to help us along this road if the opportunity arose for them to do so.

I would add one further consideration. Western Europe is today in a new and very difficult phase of its history. Technologically it is being outpaced by the United States and Japan. Its economy is sluggish. Its arteries of economic activity have become blocked by a kind of sclerosis, which if it is not cured, will lead to a decline that would affect all of us — is already affecting us to some degree — in our daily lives. We find ourselves part of a Continent which, having for centuries led in innovation, is now lagging behind, one in which, while unemployment falls in America and Japan, the numbers out of work continue to rise.

We in Ireland are suffering from this more than most. With such a young population, and a birth rate that was rising steadily till the beginning of this decade, we more than any other European country, need — and will, until the end of the century, continue to need — rapid economic growth in the countries around us, to which our economy is tied by geographical reality.

It is therefore in our interest more than in that of any other country that Europe, through a mingling of its cultures and a sharing of its scientific and entrepreneurial resources, and through concerted changes in institutions, laws and practices that inhibit growth and the expansion of employment, break out of its long period of torpor and resume its earlier world leadership in innovation and enterprise. That can happen only through the invigorating effects of the removal of the barriers that, despite all the best efforts to date of those who founded the Community, continue to prevent it from functioning effectively as a single economic unit and a single market. Europe for us is not merely a matter of national interest, it is also an ideal, and an imperative.

I welcome the opportunity to speak this afternoon on a matter which might appear at first sight to some observers of the European scene to be a matter of great urgency and a matter of grave national importance. The debate on the report of the Dooge Committee on European Union and European developments in general will not lead to any conclusions which will have either a direct or indirect bearing on the short term problems facing this country and indeed facing the majority of European countries. To the majority of the Irish people there have been too many failures in the European Community scene to get excited or enthusiastic about proposed changes which would make for a unified political economic and military union in Europe. There is no doubt that financial support for Irish agriculture, since we went into the European Community, has been substantial and that through the European Regional Development Fund, the European Social Fund and through inter-subsidies we have benefited enormously through the years. We fully acknowledge the fact that grants and subsidies between 1973 and 1983 amounted to £4,200,773,000 against total contributions of £689,835,000.

Entry to the Community has not been without major costs in terms of lost employment in traditional industries through lower tariff barriers and indeed it is sad to consider on a day when we are discussing Europe that another major traditional Irish industry, Irish Leathers, has been put into receivership with a possible job loss of 370 people in small towns like Portlaw, Carrick-on-Suir and Dungarvan and that these job losses can be directly attributed to our accession to Europe. When we look at these towns, and in particular the towns of Portlaw, Carrick-on-Suir and Dungarvan, I think it is significant that we should consider our attitude to a European Economic Union.

One of the main failures of the European Community has been its total failure to bring about economic convergence between countries like Ireland, on the periphery of Europe, and the rich countries of the central region of the European Community. The accession of Spain and Portugal will create further problems for us and will exacerbate our difficulties with other countries in maintaining the Common Agricultural Policy benefits to Ireland. We are going to see further pressure from these countries to get away from what have been the traditional beneficiary countries in terms of CAP because of their problems with citrus fruits and other items that they grow in their areas, which are areas of economic problems. It is suggested that the adoption of this treaty will get rid of the malaise which is stifling European growth. But I agree with the Joint Committee report which states that “monetary union should be preceded by adequate economic union, particularly by economic convergence between the poor and the rich regions... political union should follow economic and monetary union” and “that there is no way that political union can exclude the Irish policy of neutrality”.

In relation to the draft and the Irish position, the Dooge Report nowhere acknowledges the existence of Irish neutrality. The interim report states:

Similarly, in the case of defence, although the aim of the European Union is indeed the cohesiveness and solidarity of the countries of Europe within the larger framework of the Atlantic alliance, it will be only possible to achieve that Aim in a series of steps and by paying special attention to the differing situations of the two nuclear powers which are members and of certain member countries facing specific security problems.

In that there is a suggestion that Britain and France, the two nuclear powers mentioned, could have a separate type of situation within the union and that their situation would be taken into account. It is a shocking exclusion that there is no mention of Irish neutrality.

The Dooge report proposes joint EC discussions on external threats and on the joint production of weapon systems. These are activities clearly appropriate to a military alliance rather than to a political or an economic Community. Implementation of the proposals clearly represents a step towards the creation of a European defence community and these particular proposals are being strongly promoted by certain Governments within the EC. It is quite clear that neither Senator Dooge nor the other members of the ad hoc committee made sufficient efforts to consider the position taken up by Ireland through the years even though there is a notation that Senator Dooge did not agree with the inclusion of the section on security and defence.

Our position on neutrality is a respectable one, one of which we can be proud and one which we should support totally in any forum which is available to us to do so. The advantages of neutrality as a small nation are very significant. If the policy of neutrality was not kept up by us I wonder would we, as a nation, be consulted before any of the major power blocs decided to have "a go" at another power bloc or, even if we were consulted, how far would we, as a very small nation, be able to stop the forcible entry by one country into another. We would not, as a small nation, be consulted about the necessity of the war and, significantly, we would not have any say in a peace settlement which might arise as a result of the war. In today's world it is horrific to think what might happen if the larger power blocs are not contained. I do not mind which of the power blocs anybody talks about here, I can see no great advantage in being supportive of an eastern power bloc as against a western power bloc. I have no trust in any of these power blocs. The situation, as was said by Napolean, is that the only advantage that you have in time of war is to be in the right place at the right time with more troops and more arms than the other side.

The power blocs are attempting to build up their arms throughout the world, not to the benefit of small countries like Ireland, which are trying to remain neutral and which are trying to help to spread the word "peace" throughout the world. The power blocs are working for their own ends. There is no guarantee that members states of a military power bloc might not attempt to coerce the small nation to join the military bloc. This is one of the main reasons why we must not look at the section on security and defence in isolation from the rest of the report.

Section 82 of the report would give credence to my worry as it provides for the draft treaty to be open for ratification by all member states of the Community. It allows for the possibility of it entering into force among a majority of member states provided they represent two-thirds of the population of the Community. This is where the real difficulty in the treaty arises as it allows those member states who wish to move ahead and create a European Union, even if not all the member states of the Community are interested, to do so.

Implicit in this section is an assumption that either all member states will wish to move from the Community to the union or that those who do not will agree to dissolve the Community and set up some form of association with the union. Legally, a non-contracting state could insist on the maintenance of the Community with Community provisions governing those areas mentioned in the existing treaties. However, it is doubtful whether any state would be happy with the Community in such a situation in which the union states would presumably act as a bloc and with the costly institutional duplication that this would entail it would not be a proper Community or union. We would enter then the two-tier type of Community which I fear, where the stronger nations would have their union, their military alliance, would have the control of the monetary end of the Community and the smaller states like Ireland would be out in the cold without the benefit of the market-place that has been building up.

The Community in the past few years has lost its vibrancy and has not addressed itself to the major problem of the EC. That problem is, of course, the problem of unemployment. Although we have heard from successive European Commissioners and Presidents that the highest priority would be given to the problems, social and economic, associated with unemployment there is still no coherent policy emerging which would give us hope for any major improvement in employment prospects for our young people.

The Taoiseach mentioned that after Fontainebleau there was a need for a revitalisation of the EC. He also mentioned that Europe had fallen back in economic terms, when comparing our economies with Japan and the United States. The Taoiseach mentioned the revitalisation of debate on the future. Of course, one of the setbacks towards economic growth is that there have been too many debates in the EC and not enough action has been taken as a result of these debates. Many of the debates are held in some of the very finest hotels, in some of the nicest countries in the world. This has been happening for years and still employment prospects in the Community are not getting any better. In Ireland we see a continuous increase in unemployment.

When we entered the EC most people felt that we were entering a real economic Community but, of course, that Community has not emerged. Many industries were attracted to Ireland as it was suggested that they would have reasonable access to European markets but, because of decisions made at national level and at Community level, there is not direct access to cross-borders within Europe. There are different taxation levels, different VAT levels, different costs, totally different levels of inflation and, because of all these different trading and manufacturing costs, we do not have a homogenous market-place but one which is fragmented and which has allowed for much faster rates of development in Japan and the United States. Because of this lack of a homogenous market the high technology industries have been using Europe to a large degree for the manufacturing of the bits and pieces, the crumbs of assembly. The research and development has taken place, generally speaking, in Japan and the United States. Unless the EC wakes up we will find ourselves without even the crumbs.

We must have a proper policy of ensuring that research and development take place within the market-place. We must ensure that goods can cross borders without the interminable delays that take place at borders. We must make certain that right throughout the Community transport costs are equalised in some way. We must develop transport systems which will be able to get our goods across from country to country the same as they are, basically, in the United States where even though you have thousands upon thousands of miles of different states, a huge market-place, there is total freedom in crossing from state to state and in two and a half days you can go from California to New York with your fruit and back again from the east coast to the west coast with your manufactured goods without any problem in the wide, earthly world.

This is one of the major problems that we have in the development of the European Community and it is one that should be gone into in Milan in much more detail than discussing at any great length, at this stage, the development of an Economic Union or a political union. We must attempt to get the European Community moving as a trading group, for which it was set up in the first place. Everything else will follow afterwards.

The question of the national veto is of more than passing importance to Ireland. It is vital that it is retained so that smaller member states are not overrun by the larger states where matters of national and vital importance are concerned. Without the veto we stand to lose ultimate control of what is decided on our behalf in Europe.

I am glad that developing the process of political co-operation in an attempt at co-ordination of foreign policies of member states of the Community will be discussed in Milan. Any discussion on foreign policy must take into account the foreign policy requirements of the Irish people.

The proposal to set up a permanent secretariat to assist the Presidency seems, on the face of it, to be a sensible one, one which could ease the burden carried by the Presidency. However, it is essential that as a neutral country and as a non-member of NATO, we retain our right to conduct an independent foreign policy. A common foreign policy is incompatible with our neutrality and would prevent us from taking a distinctive line at the United Nations on disarmament and on issues arising from the colonial past. Whenever possible we will seek a European consensus but we should not, as a small country, allow ourselves to be bound down by rules that will not be observed by the larger member states in a crisis situation.

The Dooge committee seek to formalise consultation procedures and has the same purpose as the proposal to phase out the veto, to constrain the freedom of action of the smaller member states. When we speak of the European consensus on foreign policy we have seen in the past that the consensus which emerges is weak, particularly in connection with the Middle East. The Taoiseach mentioned that they have traditionally espoused recognition of the rights of Palestinians to self-determination in parallel with the right of Israel and other states in the area to having secure and guaranteed borders. That has been a policy that Ireland has espoused and has tried to get across to some of our European neighbours who would not be as strong as the Irish people in terms of attempting a peaceful settlement in the Middle East.

At present, because of the major problems in the Middle Eastern area, we suggest that in Milan the European Community should publicly declare its willingness to receive a joint Jordanian-Palestinian delegation. To take such an action would not exclude but rather reinforce contacts between such a delegation and individual European countries.

The European Community should encourage the American administration to receive the joint Jordanian-Palestinian delegation without imposing conditions. The essential, however, is to maintain the impetus towards negotiations. Western Europe still has a certain credibility in the Arab world which the United States has begun to forfeit. We hope that the European Council meeting in Milan will resist the temptation to take refuge in generalities and make it clear that Europe is prepared, by receiving a joint Jordanian-Palestinian delegation, to take an important initiative in the search for peace in the Middle East.

The Taoiseach's consistent attitude in this discussion document suggests that the problems of the Community are still there. The document does not give, essentially, any answer to these problems. The Dooge document will not stand up to any great analysis which would be of benefit to Ireland unless the economic problems of the EC are solved before any position is taken up by Ireland on agreeing to a European Union in which there are guarantees of neutrality and also guarantees which were given when we went into Europe, that there would be a reasonable transfer of funding from the richer states to the poorer states, whether that is through the Common Agricultural Policy, the Regional Policy or whatever other means by which a transfer of resources could take place. I urge the Taoiseach to try to ensure in Milan that, as a smaller country, we get a reasonable share of what is on offer. If he does that there will be a reasonable hope that the dreadful unemployment situation we have in Ireland might be addressed with more urgency by the other member states of the EC.

I would like to thank the Taoiseach for coming into the House to make his statement on this very important subject of European Union. That statement gives the other members of political parties an opportunity to respond and to put their own parties' points of view on the record of the House. I hope the Taoiseach and the Minister for Foreign Affairs will have benefited from this debate for their meeting in Milan.

I join with the Taoiseach in complimenting my colleague, Senator Dooge, for the excellent way he has chaired this very important and very difficult committee, taking into account the importance of any developments in Europe from an Irish point of view and the meticulous way he did it. One need only address oneself to the report, read his reservations on various caveats throughout the document, to realise that at all times he had the Irish question uppermost in his mind.

I welcome this opportunity to debate the important issues raised in the Dooge Report about the future of the European Community. The Spinelli Report, under the auspices of the European Parliament, rekindled interest in the subject of European Union and the many deficiencies in existing performances and structures. The absence of policy development in vital areas and the crisis of unemployment have led to a new questioning of the role and potential of the EC.

I would like to recall certain aspects of debates in the past on the subject of Ireland and the European Community. In the referendum campaign of 1972 the Labour Party opposed full membership of the EC at that time on the terms negotiated. Those favouring entry at the time used a mixture of idealistic and pragmatic arguments. There was the reality, on the one hand, that entry to the EC would lessen our dependence on Britain in trade generally while at the same time the fact of imminent British entry was a powerful motivation for us to follow the same route. The ultimate pragmatic argument then was, "if Britain goes in, we must on economic grounds do the same thing".

My party, in 1972, queried the benefits of full membership for Ireland on a variety of grounds. We favoured a more gradual evolution by way of an association agreement and warned of the various economic costs and dislocations that would ensure, while the proponents for immediate full membership concentrated on the estimated benefits and the supposed political advantages. In the event, there have been both costs and benefits to the Irish economy. Over the years we have heard a lot about the apparent benefits with quantifications of transfers in agriculture, social and regional funds and new foreign industries geared to EC markets locating here but not so much about the difficulties and losses associated with existing firms and whole industries closing down.

Senator Lanigan adverted to some of those industries. In most of our constituencies many of the existing industries have faced difficulties since entry into Europe. These, somehow, tend to be played down. From the point of view of the Labour Party these have been a cost of accession and full membership to the European Community. Indeed, while in the accession period up to 1978, large agricultural price rises provided a bonanza for many Irish farmers events since then have made us examine more soberly the agricultural benefit. The advocates of EC membership in the early seventies did not foresee measures restricting severely annual price increases and widespread co-responsibility levies such as we have had with the super-levy on milk and all the other restrictions there are now on agricultural production. Initially, very few people ever saw that problem arising from an over-production in these areas.

In those debates the Labour Party were concerned about the neutrality issue and about the extent to which Irish sovereignty, including the capacity to formulate and implement economic and social policy necessary for our national development, would be affected by full membership. We pointed out at that time, and we were laughed out of court, that the debate that we are having now was likely to arise and that somehow, for the cost of joining an Economic Community the question of our neutrality might eventually be raised.

In the referendum in 1972 the people voted to accede to the Community on terms negotiated by the then Fianna Fáil Government. The people voted overwhelmingly, by a majority of 83 per cent to 17 per cent, to accept the terms. The Labour Party as a democratic party fully accepted that democratic verdict and have always advocated full participation in the activities and institutions of the Community. That acceptance by the Labour Party was on the basis of the subject matter and scope of the treaties as developed at that time. The Labour Party have welcomed the accession of Greece, Spain and Portugal as democratic countries to the Community. However, there is no way in which we would interpret the decisions of the people in 1973 as indicating assent to a new treaty embracing political union.

In the preface to their report the Ad Hoc Committee for Institutional Affairs, chaired by Senator Dooge, placed themselves firmly on the political level, without purporting to draft a new treaty in legal terms. The report states that "it is not enough to draw up a simple catalogue of measures to be taken" and refers to the necessity for a qualitative leap. At the end of the day the common political will of the members would be expressed by the formulation of a genuine political entity among European states, in other words, a European Union. I can respect that aspiration. In this speech, however, I will refer to certain practical implications and to the substantial issues that would arise on the way to realising such an aspiration.

I will deal at first with the general political questions relating to our neutrality, defence and security issues and European political co-operation. The Dooge report proposes the strengthening of political co-operation structures, including the creation of a permanent political co-operation secretariat. We must recognise however, that the exercise of European political co-operation has no basis in the treaties establishing the European Communities and has been developed since 1969 on a voluntary basis by means of a series of studies and inter-governmental decisions. Following the Paris Summit in 1974 it was decided to form the European Council and to give more ambitious goals to European political co-operation directed towards the gradual adoption of common positions and co-ordinated diplomatic actions in world events. EPC essentially amounts to an effort to coordinate the foreign policies of ten independent, sovereign states.

Given the Labour Party's approach to the issue of neutrality, it is clear that unless considerable care is taken the operation of EPC would be a threat to our neutrality. A series of problems associated with EPC have been identified in the party's published policy statement. These include the inherent secrecy of the EPC process, the lack of direct political control and democratic accountability and the possibility that attempts to define common co-ordinated positions at the United Nations can lead to a weakening of the stance taken on such essential issues as South Africa.

In the Labour Party's view, the EPC process must be clearly and accurately defined, its limit set and respected and the system made more transparent and subject to questioning and analysis with more accountability to political forces both within the Community through the European Parliament and in the Oireachtas. EPC should not be allowed to lead to the compromising of Irish principles of foreign policy at the UN or elsewhere and Ireland should insist that no discussion on military or NATO-related issues is permitted at any level of the Community institutions. Guided by these considerations we should support practical measures of political co-operation in the context of the Community's institutions.

I am glad to support Senator Dooge's decision not to agree to the inclusion of the section in the report dealing with security and defence. This section makes a direct reference to security and defence questions in the context and states:

that account will have to be taken of the frameworks which already exist (which obviously includes NATO).

In addition there are references to consultations involving discussions of the nature of external threats to the security of the union and:

to the stepping up of efforts to draw up and adopt common standards for weapon systems and equipment, taking account of the work being done in the relevant bodies.

We in the Labour Party have stated our position on neutrality in very many policy statements over the years. For us, as the oldest political party in this country, neutrality is not to be defined solely in negative terms, that is as involving nonmembership of a military alliance. Neutrality is neither a slogan nor a convenience; rather it is a political stance and a national commitment which can give meaning, dignity and influence to Ireland's will for peace and justice in the world. As our policy statement puts it:

Above all, our neutrality must be recognised as a matter of principle and as an active political philosophy.

The Tánaiste, Deputy Spring, stated our party's position on this matter in a speech recently at a meeting of the European Socialist Group in Madrid. At that meeting the Tánaiste said:

Ireland's neutrality is one of the most fundamental principles of our foreign policy and of Labour's overall political stance. Our stance on neutrality goes back to the period of the outbreak of the First World War and it has always been stated in terms of a positive political approach. It is not negotiable in any way or in any setting. The unique contribution which an actively neutral Ireland can make to the reduction of international tensions and to the promotion of world peace must be recognised and respected.

The Tánaiste then said that he wished to recall what he said on this subject at the Party Leaders' Conference of the Confederation just before the European elections. I, myself was part of the process of agreeing at European level, with our Socialist colleagues, a common manifesto for the European elections in which our sister parties, the Socialist Group in Europe, not alone recognised our neutrality but respected it. Anybody who wants to confirm that can see it in a reference to the agreed manifesto by the Socialist Group in the European elections. Our Party leader addressing the conference before the elections said:

We must work together to make our Community a factor for peace and justice in the world. Part of the Community which has this world responsibility is a neutral Ireland. Our neutrality is a positive thing—an assertion of our independence and of our determination to work for true and peaceful development in the world on the basis of clear principles and political openness outside any form of entanglements in military alliances. Our neutrality is not conditional, nor is it a convenience—it is fundamental to our whole political stance.

The Tánaiste continued:

Our position must be made clear. Our view of neutrality implies a particular view of institutional and decision-making development. It is our view that the political complexion of the Community cannot be viewed as a variable along with which we would be expected to move in policy terms. It would be quite intolerable to envisage our country being forced, or voted, into a particular view of developments in South Africa, of weapon deployment, of participation in some madness such as Star Wars, or of moves against the legitimate interests of the Third World. Our neutrality is a matter of principle. I believe, and my party believes, that a neutral Ireland within the future Europe can be a positive force for peace and development.

In the areas of economic and social policies, I find many of the objectives and proposed measures in the Dooge report commendable. I commend Senator Dooge for steering that committee along those lines. The aim of creating a homogeneous internal economic area by bringing about the fully integrated internal market envisaged in the Treaty is acceptable, but only if certain conditions are realised. These mainly relate to the necessity to take full account of regional disparities in the Community and of varying economic and social needs of different regions. A Common Market—the one the people of Ireland joined—founded on market forces and market forces alone to us in the Labour Party is unacceptable in principle and in practice since it works against the interests of regions which have suffered, and suffer now in this period of recession, from disadvantages of geography and infrastructure, from lack of resources and from past exploitation. While the goal of realisation of the Community's internal market is understandable and logical, it does contain the treat that unfettered market forces will exacerbate the already great and still increasing differences between the developed and the less developed regions in the Community. Our experience in the Community since 1973 makes this a matter of painful experience. It is no longer theoretical, as it was at the time of the referendum in the seventies. It is now a matter of bitter experience for all of us.

There is a reference in the report to the importance of increased competitiveness of the European economy. This is relevant only in the context of other measures. Europe's, or indeed, the world's economic problems will not be solved by everybody becoming more competitive at the expense of everybody else. As well, the promotion of economic convergence must be underpinned by substantial policy measures if it is to have any real meaning at any reasonable level. Right Wing slogans from Britain and West Germany are not the answer to our problem. The document from the Irish Congress of Trade Unions. "Confronting the Jobs Crisis," made an important point in this respect. It is stated in the document:

All European economies are now closely linked and the margin of manoeuvre open to individual countries in tackling problems has decreased. The Government must press at the European level for a co-ordinated response to the jobs crisis.

Obviously, Chairman, from your knowledge of Europe you will know that Europe has not confronted the jobs crisis, nor has it been addressed. There are 13½ million people unemployed in Europe in spite of the bonanza for all of us as we thought on accession. They have not addressed that crisis and we cannot address our crisis without assistance from the strong members in the European Community. That is what socialism is all about. The document goes on to state:

The EEC is large enough to initiate a reflation of demand. Concerted action to increase public investment in a number of countries at the same time would ensure that the overall effect upon output and employment would be larger than a single country taking action alone.

I think it is fair to suggest that regional policies have been seen as little more than a form of social welfare, with all due respect to the Minister of State for Social Welfare. That is exactly the kind of assistance we have been receiving from Europe. A dynamic new policy is needed in which regional development and convergence will be an integral element and a commitment.

The agreement with Greece's socialist government on the integrated Mediterranean programme is to be welcomed as a move in the proper direction. Progress towards any ultimate achievement of a European Union is conditional on the creation of a similar style of programme to deal with the regional problems in the whole island of Ireland and Scotland and Wales. Only a resource transfer of this kind can create any economic balance between the disadvantaged periphery and the developed centre. We all know the problems of the Golden Triangle and the European Community and those of us on the periphery stretching out our hands begging for any thing that the major states can deem to let us have for our very membership of the Community. It is a pity if nowadays they would put a price on our membership and that that price would in some way compromise our neutrality.

From the Labour Party's point of view a common Community strategy must concentrate upon three main lines of action launched together and carried forward together. One of these would be the selective recovery of economic growth through state action and a full and participating involvement of the National Development Corporation, which has been the Labour Party policy for as long as I can remember, for the restructuring of the economic economies based on technological advances and for the redistribution of work and wealth along radical lines. In all of this, for us the next decade in Europe will be crucial. Unless a new sense of direction is found and a new strategy implemented, the proposals for us, a small nation, are grim.

We would accept that the report is correct in stressing the importance of technological development and of co-operation among European firms in this area. However, whether in the context of a Community sponsored initiative or, as the Taoiseach said, the French "Eureka" proposals, we must draw a careful distinction between civil and military research, innovation and development.

In my view, involvement in military projects would be totally unacceptable. Also, we must seek to ensure that schemes for technological co-operation, whether at national or enterprise level, are not all at such an advanced or costly level that the role for Irish interests would be in practice a limited one.

The Dooge report refers to the importance of efficient and democratic institutions in the development of the Community. It is tempting to attribute too much of the malaise in the Community to the ineffective operation of the institutions rather than focusing on the absence of a common political will to overcome existing difficulties and initiate a new phase of major development. In this context much attention has been given to the proposals for easier decision making procedures in the Council, particularly on the modification of the so-called veto option. We have come to recognise here the realities of how business gets done at present in the Community. I suggest that the larger countries can, in effect, block or delay both minor or important proposals at many stages, even early on in the process of their formulation and development. It may be necessary for them only rarely to plead a special national interest and exercise a veto in the final well publicised stages of debate on any particular issue. There is an urgent need to improve the system and to introduce a more flexible element into decision making.

I note, however, that Senator Dooge, while expressing agreement with the principle underlying the text concerning the principles of voting, was unable to support the text as it did not include any explicit reference to the protection of vital national interests in exceptional circumstances. I commend him for that because it is vital to us. In any rationalisation of the veto voting process there should be a specific inclusion of a section that allows any nation, particularly a small nation, to express a national interest and implement the Luxembourg compromise. Senator Dooge was correct to say that he could not be associated with that. I wish the Taoiseach and the Minister for Foreign Affairs luck when they debate this with other nations who are much more powerful that we are. It is important that we enter that caveat.

The Labour Party's position on this issue was spelt out by the Tánaiste in April in Madrid when he said:

Economic policy within the Community — like every other aspect of policy — is dependent upon the proper working of the institutions and decision-making systems. My Party believes that the institutions of the Community must be developed and further democratised. We welcome the new sense of urgency in this regard which now seems to exist. But I must here sound a word of warning. Given the concerns which I have just indicated about the regional issues, you will recognise that it is of profound and vital interest to Ireland and the Labour Party that any reform of institutions will ensure that in no circumstances and in no area of concern will the legitimate and vital interests of any member state be over-ridden by temporary, cobbled majorities.

There are many other aspects of the Dooge Report which are of importance, for example, proposals for strengthening the Commission and enhancing the role of the European Parliament in a number of areas. The Taoiseach has referred to the strengthening of the European Monetary System and I would also welcome a decision by Britain to go into the EMS. All these issues, and other items, in a most comprehensive and valuable report will need careful consideration by us in the months ahead. The more that we as a nation are prepared to participate in substantive discussion and dialogue with a Community orientation the more other member states are likely to understand in any evolution of the Community our vital concerns in Ireland in the areas of neutrality, employment policy, regional policy and other areas.

We cannot bury our heads in the sand and stand apart from what is going on elsewhere. The fight for jobs is our absolute priority in the Labour Party. Lasting employment will be created only by higher growth. At the same time, we know that the future must see a redefinition of work and a redistribution of work and wealth across our economies. We believe that only a Community which can give reality to the aspirations of its people for jobs, for social justice and peace can guarantee democracy within its member states and lasting peace within Europe. We in the Labour Party will play our full part in working for those objectives.

I welcome the opportunity to hear Senator Ferris elaborate yet again the position of the Labour Party on the European Community and, indeed, on the future progress of the Community. It has been to the great credit of the Labour Party that alone of the three major parties at the time — I am not sure if we have three or four major parties at this stage or not — they took a position vis-a-vis the EC which in my view was correct and which now is even more emphatically so. There is a considerable amount of rhetoric about the EC and let me put on record what my view was in 1973 on our membership of the European Economic Community, a view which, far from being diminished by time, has been reinforced by our experience.

The EC is essentially a device to enable a larger market to function as a market under a market economy analysis with the minimum of constraint and the maximum of freedom as defined by a market economy. To the extent that it has achieved all that one would associate with it, the concentration of resources in the hands of those most in a position to take advantage of the large markets — for example, those who were already well off when the proposal was initiated — and the diminution of resources on those on the periphery, in particular ourselves, initially by the threat to Irish industry and, subsequently, in more recent times by the obvious threat to our agriculture.

Let it be said now, and let it be said clearly, that no matter how many fantastic, efficient, effective rearguard actions are fought by successive Irish Ministers for Agriculture, given the state of Europe, given the objectives that many of the large countries have now set themselves, given the political insignificance of agriculture in many of the larger countries of the EC, the CAP is finished. There is no way in which increasing expenditure on agriculture will be sustained without limitation within Europe.

It was perfectly obvious 12 years ago when we had a referendum on the EC that whatever the short term benefits of membership for agriculture there was no long term future for Irish agriculture. One of the ironies of our membership of the EC and one of the continuing ironies for me is that in regard to two large parties here, who have vigorously committed themselves to the market economy and all the glorious rhetoric that goes with that, glorious individualism, enterprise based on initiative, on the rewards for people who identify markets and produce the goods and about the need for people in work places not to seek wage increases that exceed their capacity to produce, is turned on its head when it comes to agriculture and they support the idea of price increases totally unrelated to people's production, price increases based simply on the need to increase prices, the idea of selling products which are produced uneconomically because, first of all, there might be some benefit from producing those goods because of world food shortages and, secondly, because of the consequences for large sections of the Community of the destruction of the agricultural industry.

It happens to be a good socialist position that there are good cases for substantial intervention in areas of the economy where the consequence of non-intervention by the State would have major human consequences. That is a socialist position. It is not the position of those who advocate the development of the European Community as a free market with all that that implies in terms of leaving market forces to determine who shall survive and who shall fail. There is an inherent contradiction in the philosophy of those who advocate the liberalising of trade within Europe, the maximisation of the impact of the market, the freeing-up of the market to allow the maximum growth and, at the same time, consistent support for a Common Agricultural Policy which is the antithesis of that.

I support the Common Agricultural Policy because I believe in State intervention. I believe that a market economy is inherently inhuman. I believe that a market economy eventually drags down many of those who may benefit from it in the short term because of its inherent instability, its continuously being subjected to cyclical forces and so on. However, that happens to be a position which is not that of the two major parties in this country; neither is it the position of the majority of the governments of Europe at present. Therefore, I stand over my criticism of our membership of the EC.

I stand over the idea that somehow there was a bonanza beyond the English Channel which we had to attach ourselves to and all sorts of miraculous things were going to happen. What has happened, in fact, is that large areas of indigenous Irish industry have collapsed. They have, in the short term, been replaced immediately by large tracts of multinational industry, but the contribution of those new industries to our economy is far less than that from indigenous industries because the levels of taxation on their profits are far less than they would have been in those days of indigenous Irish industry, and secondly, because of their freedom under EC rules, and also under our own industrial incentives, to transfer their profits out of this country and back to the parent country. Both of those meant that we have had a large number of jobs, somewhere around 70,000, created because of our membership of the EC but the price of those jobs has been a loss of revenue in terms of the retention of the wealth created here and also the collapse of large areas of indigenous industry. What has been singularly absent has been any capacity by native Irish entrepreneurs to respond to the scale of the large market. It was only in the last three months that the sectoral committee on marketing produced a most devastating report on the quality of Irish manufacturing marketing, particularly of indigenous producers to market and sell their products, on the export market particularly. It was a most devastating critique of the quality of Irish marketing activities. That is after 12 years of the alleged benefit of being part of a large industrial market.

We have not responded to that market because we did not have the basic capital resources, the basic intellectual equipment and the basic experience to do it. We are now holding on to something and we are restrained from taking necessary protective measures while at the same time we are forced to accept all the bitter consequences of free trade. We were not developed sufficiently to join the EC and, notwithstanding the superficial benefits in the short term, we still are not developed sufficiently. That was my view in 1973. Any of the short term benefits are now beginning to disappear. Very shortly, as inflation races ahead of farm price increases, the agricultural community will find themselves back very close in real terms to where they were before we joined the EC.

The concept of the EC has been rolled up in an enormous amount of benign imagery, glorious images of the historical enemies in Europe, France and Germany, joining together in closer and closer links and historical conflicts being dissolved as if that was the real benefit as perceived by many of those in positions of influence in those communities. In fact, the reality is that Europe was a necessary expansion for free market economies that could no longer expand within their own boundaries. It was the logical development of the capitalist economy to give itself a larger and larger market and also to begin to draw in increasing areas which were, perhaps, even necessary for reasons of strategy or stability. But it had nothing to do with the benign philosophy which many people attribute to Europe and which is a pleasant consequence in the short term of European membership.

Unlike Senator O'Leary, I do not let rhetoric distract me from the basic fact that European enterprise and European industry has benefited far more than individual members of the European Community or individual citizens have benefited from membership of Europe. The 13 million unemployed who, perhaps, escaped Senator O'Leary's concern would be among those. It is interesting that Norway, which declined to join the EC 12 years ago, has shown no inclination to change its mind since, notwithstanding the large range of benefits we are all supposed to have gained from it.

Norway has its own oil.

(Interruptions).

I am sorry I have upset people so much.

Senator O'Leary will address his remarks through the Chair.

I am addressing my remarks through the Chair.

Is Senator O'Leary finished? That was by way of introduction to what I want to say on the issue we are discussing. As I have said, essentially Europe — notwithstanding the glorious rhetoric, notwithstanding the occasional other issue — is dedicated to creating a large market with the maximum freedom of movement for capital and labour. Freedom of movement for labour for a country like ours means mass emigration to the industrial heartland of Europe. That is what it will mean, given a free market and the natural forces that a free market will generate.

It is interesting to note that Europe built its prosperity in the good days on the basis of the shameful exploitation of migrant workers who became dispensable once things began to go wrong and who were encouraged to go home in large numbers and, on the basis of what I have read, under very dubious circumstances. It is also interesting that Europe, as it developed, was based on an enormous amount of rhetoric about justice in the world and so on. An examination of the increasing European investment in South Africa in the last seven or eight years would give the lie to that commitment. Notwithstanding the rhetoric about justice and development, European investment in South Africa has been increasing rapidly in recent years. That is the reality of Europe. It is a market economy based on the maximisation of profit from investment wherever there is an investment opportunity. Given the stability displayed in Southern Africa until recently, and which is now fortunately beginning to be replaced by a hopeful future instability which will lead to justice, Southern Africa was particularly attractive as a centre of investment. It was also attractive as a centre of stability and a possibly useful ally in a future world conflict.

Free market does not work. It has destroyed large areas of Irish industry. It has prevented us from developing our fisheries and in the long term will do nothing for Irish agriculture. It is not easy to quantify the benefits we are alleged to have had. Something the Taoiseach said today astonished me and it should astonish Senator Dooge as well, as a good engineer. The Taoiseach was talking about Ireland being the most significant beneficiary in terms of net measurable transfers. He said:

I realise that other member states gain substantial advantages, for example, from the customs union, advantages which cannot so easily be segregated but if we limit ourselves — because we have to — to net measurable transfers, those to Ireland are ten times greater than to — or from — most other member states...

To say that you can define a problem as it suits you because the other information is not available is ludicrous. If I, or Senator Dooge as an engineer, was to make a decision about what was an appropriate form of investment or an appropriate form of design or development on the basis that we have to do so because that is all that is available irrespective of the dubious nature of those figures, neither of us would be in our other jobs for very long. It is ridiculous to try to quantify benefits from Europe in terms of what is measurable and to ignore something else because it is not measurable. If it is important it should be measured or else the attempt to justify something should be qualified by that.

I come now to a more pertinent matter. Again because of this benign image of this benign Community seeking the best for everyone with enlightened programmes in all sorts of areas, in an abbreviated copy of the programme of the Commission for 1985 which I received, courtesy of the President of the Commission, and having an interest in social affairs — as many of this House have — I thumbed through it to find only one page of it referring to the social programme of the EC. This is supposed to be the benign operation which is going to create wealth and then distribute it to all the areas and groups in need. Yet in its programme for 1985, with well over 12 million people unemployed, with increasing problems of housing as various right wing Governments reduce their expenditure on public housing, with increasing restraints on public spending very often brought about by the idiotic defence policies of many of the countries of western Europe, with all those things the European Commission's programme for 1985 makes a passing reference to all those marginalised groups which are part of the experience of Europe in the last 12 years. I wrote to the President and got back an unsatisfactory reply which said, basically, that there were many things they would like to do but could not afford to. Whether you can afford something or not is not a question of some sort of absolute ceiling of expenditure. It is much more a question of whether there is a political will be take resources from one area and give them to another. Therefore, I found the Commission's programme for 1985 singularly unacceptable.

Similarly, it is interesting that non-EC countries like, for instance, the Scandinavian countries have an equal if not better record in the area of development of aid and a less questionable willingness to attach political conditions to aid the many members of the European Community. I cannot understand the lethargy and slowness about the development of aid to developing countries.

I read the Dooge report with great interest. Without any attempt at irony — in the light of my earlier remarks — I congratulate him for his efforts. I have one small gripe which is the persistence of the Irish media in giving him his academic rather than his political title when they refer to him in this context. I believe it is his Seanad hat rather than his professional hat which is responsible for him being chairman of that committee. I regret that many people seem to believe that an academic qualification is more appropriate. In this case I do not believe so.

There are many fine ideas in the report but the basic idea of a liberalised market without restraint or inhibition is at variance with many of the objectives that Senator Dooge's committee have set themselves. Other issues are being raised on the question of improving European unity, one of which is the British proposal that Europe should begin to develop its own armaments industry. I do not think there are words sufficiently strong to denounce the idea of developing another major armaments industry in this world. If the world is awash in a surplus — and something in excess of surplus to the extent of being almost buried at this stage by the surplus — it is in the case of armaments. The upsurge of terrorism, I think, is connected with the availability in enormous quantities of last-generation weapons, for example, weapons that are three or four years old, given the scale of development of armaments. The idea that we should now develop an armaments industry beyond the already excessively large armaments industry that exists in Europe is obscene, and it reflects a set of political priorities on the part of one of the major countries in Europe which does not seem to be much different from that of France or Germany. This raises the question of what are we doing there and if we are there what are we doing there about our future in a community of that nature? We must carefully and strongly assert our rights to be distanced from that.

The Taoiseach has, on a few occasions with a vehemence and a lack of charity which is not usually characteristic of him, dismissed those of us who see a threat to Irish neutrality in the future proposals for Europe. He talked about less nonsense on our own local radio in Cork on one occasion but he said things even in his address here which raise some questions. He insists that there is no pressure on us to abandon our neutrality. I know that words have to be read carefully, particularly when a Taoiseach makes a statement. I know that our present Taoiseach would not dream of saying something that was not true. I know what he said is true as it was said, but for a politician to define the term "pressure" or to notice that he is under pressure, or to accept that he is being pressured is in itself a major issue.

It is easy to say that no pressure has been exerted; that is not to say that people have not raised the issue informally or in discussions. I accept there has been no pressure on him but there is a slight suggestion that if it is not pressure, something happened when the Taoiseach says later, when referring to a separate issue: "... if we were to add to any problems that our position on neutrality might be felt by some of our partners to pose for them ...". How does the Taoiseach know that some of our partners feel that our position on neutrality might pose a problem if there is not a pressure being brought on? I accept he is here telling us the truth that there is no pressure but obviously somebody somewhere, according to his own words, has indicated to our Taoiseach that our position on neutrality might present and pose some problems for them.

If that is the case then we have a problem because we are the smallest, the weakest and the most vulnerable member of the EC. We are also the only nonmember of NATO in the EC. If some of our Community colleagues have suggested that our position on neutrality has posed problems for them then it may not constitute "pressure" in a precise definition but it is also an indication that they see something as a problem. I do not believe it is Spain, Portugal, Greece or Denmark who are telling us that there is a problem about our neutrality. I accept, on its merits, what the Taoiseach has said about our neutrality and I accept fully that nobody has come up and said: "You must begin to do something about neutrality; you will have to do something about neutrality". I accept fully that the rather idiotic statement that an alleged senior official of the EC was reported to have made that our position on neutrality could cost us our benefits from the CAP was nothing more than his slightly hysterical response to what he saw as our position. But I do not accept that our neutrality is not discussed, not a problem and not an issue and I do not accept that that is going to continue to be the case. The Taoiseach has indicated that there are some members of the EC who see our neutrality as a problem.

Let us not dismiss our neutrality as something of no value. The media are inclined to dismiss it as being undefined, as something vague, a kind of a sacred cow to which nobody attaches much credence. Ireland's position on a number of issues in the recent past — our capacity to act independently, to think independently — has not only been to the benefit of this country but to the benefit of the EC. We have contributed considerably to an EC position on Central America which is very far from that which some of President Reagan's closer allies would like to have.

Our position on the Falklands, or the Malvinas, was a considerable assertion of our right to think differently when other people were being carried away on war hysteria and misguided sense of loyalty to European partners. What the Irish Government did on the Falklands was not only beneficial to this country but it was also morally right and justified. Those two issues indicate that whatever the abstract definition of our neutrality may be and whatever the position in the past may have been there is a position for a country like ours for the future on neutrality and it is a position which I hope will be asserted and defended. There is no economic price that is high enough to justify our abandoning something which should be the basic plank of our foreign policy which, I hope, is a matter of common agreement between all the political parties in this country.

One of my fears about the movement towards greater European integration at this time is the political complexion of Europe. The European Community and particularly those who are most influential in Britain, Germany and, notwithstanding the position of Senor Craxi, in Italy, since the war, parties of the right are in influential and dominant positions. The sort of media terminology used to dismiss probably the most actively left wing government leader in Europe, the Prime Minister of Greece, as something close to a crackpot because he questioned some of the assumptions on which many of the European members based their future policies is very interesting. Because the right is in the ascendant in Europe at present, because the right is in the ascendant in terms of so-called defence policy, the policy of escalating the level of nuclear weapons in Europe, the policy of increasing confrontation, the extraordinary selective approach to sanctions which suggests that sanctions against Poland for abuses of human rights are right, sanctions against South Africa for massacres on a large scale are wrong; the policy which in the European Parliament declined to condemn the dreadful barbaric sanctions the United States is using in Nicaragua but at the same time supports — rightly — sanctions against Poland for what are by Central American and South African standards less significant abuses of human rights — it is that sort of right wing thinking which is in the ascendant in Europe, the adulation which a number of European governments give to President Reagan's economic policy, the widespread, almost consensus agreement about the basic correctness of his economic policy of reducing public expenditure, of loosening up the economy or what is romantically described as deregulation but which in the United States has meant a 98 per cent reduction in expenditure in public housing during President Reagan's period of office. That romantic, right wing, healthy individualism sort of philosophy is very popular in Europe at present. There is a considerable difficulty, given the political complexion of the major countries of Europe, that integration of Europe at this stage will involve the institutionalisation of a right wing philosophy within the very structures of Europe, which will be very, very difficult to deal with if it is not avoided at this stage.

I am concerned, as I said, about the right-wing attitude to what is called defence but which is effectively a philosophy of a future assured destruction — not mutual but future assured destruction. The idea of market, as I said, the dismissal of social issues, the extraordinary resistance still being put up by some countries in Europe to the resumption of the European Poverty Programme and, above all, the world view that a number of European leaders now have in terms of their vision of a conflict between right and wrong, that is, between the so-called free world, which of course includes South Africa, ironically enough, and the allegedly expansionist, hundred per cent evil Soviet Union and its allies — that particular world view, that particular philosophy, that particular economic position is liable to be institutionalised if we have integration at this stage.

I do not support future integration of the European Community. I believe Europe is based on essentially false premises about humanity, about the nature of humanity, about the role of economic forces vis-a-vis human needs, about the way in which humanity should develop its control over economic forces and, above all, about the basic philosophy of the relationship between the wealthy, powerful and essentially oppressing western world and the poor, powerless and essentially degraded remainder of the world. Europe has had anything but a healthy record in dealing with some of the issues of world justice. Europe has developed a very fine rhetoric about itself but until the political questions and basic economic questions are addressed in terms of human needs rather than some sort of mythological free market we should shy off very carefully and very definitely from any increase in integration of Europe.

This report rightly identifies the main challenges facing the European Community at present and I want to preface my statement on this report by expressing my satisfaction at the decision of the Fontainebleau Council a year ago to set up an ad hoc committee to review and make representations for the improvement of the institutions of the European Community.

First of all I would like to compliment the Taoiseach, who was President of the Council, on having the foresight to appoint our distinguished colleague and Leader of this House, Senator James Dooge, to chair this important committee or task force and to be the representative of the Taoiseach and the Government on it. I should like to say, at the outset that I am convinced that the Community requires a new impetus. The decision making process should be more efficient and the distribution of powers between the institutions as laid down by the treaty, I believe, must be respected. In addition, people must be encouraged to look at the progress or lack of progress of the Community in a more positive way. We have the problem of unemployment in the Community and I submit that it is being tackled by a variety of measures. Unemployment is indeed only a problem in the countries which operate social policies and provide for unemployment benefit or assistance from State-sponsored taxation. In other countries, they do not count or enumerate unemployment. I believe that the governments of Europe are making great progress in providing for their populations at present.

The previous speaker displayed an anti-Community bias that over-simplifies the situation. Of course there is an unemployment problem in the Community. There are, as Senator Ryan said, 13 million people unemployed in the Community as a whole and over 200,000 of those unemployed in this country. The previous speaker seemed to be completely dissatisfied with the Community and, as he said, "the rhetoric". What does the Community replace? In the first half of this century, I would submit, there was not a great unemployment problem, mainly because the countries of Europe sought to solve their differences and problems by means of war. As soon as the population rose they picked a fight. In the last world war over 40 million people died. So, if we had, as history shows that we have had, practically every 25 or 30 years, a major war right back through the centuries, it certainly, if it did nothing else, eliminated the problem of unemployment.

At present, the governments in the European Community and through the great inspiration of the post-war European leaders, de Gaspari, Schumann, Adenauer and the others who came together to ensure that war could never be used to resolve differences again are trying to cope with the problem. Having regard to the way that the Community is solving that problem, I believe that great progress is being made.

Similarly, I believe in the European effort in the Third World of which again the previous speaker has a rather limited view. Never before in the history of the world has any group of countries made such a very definite contribution to the development of the under-developed countries. If you take the 75 ACP countries, the European Community policies have transferred massive financial assistance and technological aid to them as well as providing education. The Community have provided the governments of those countries with preferential markets for their exports and encouraged the development of the markets for them. That is a great transfer of resources. It comes directly after the colonial policy, as Senator Ryan so rightly pointed out, the policy up to perhaps the earlier part of this century, when so many of those countries had colonies in the Third World and bled them. It is a complete change of policy on their part and it has to be welcomed. I believe also that people should look at the problems that the politicians and governments face in implementing that great change, that great democratic and Christian change of approach to the problems and the lives of so many.

The Taoiseach, in his very enlightening and detailed statement this afternoon gave the House a very clear picture of the benefits that this country and our people have received over the past 12 years since we joined the European Community. Those facts can certainly not be refuted. Under the Common Agricultural Policy we have the benefit of guaranteed prices; we have had the benefit of grant-aid under the guidance section and we have had considerable benefits to thousands of farmers, large and small, who were lucky enough to be residing and working in areas designated as "disadvantaged" under the Common Agricultural Policy. Similarly, in the case of the Regional Policy. The Regional Policy in the original Treaty of Rome embodies the fondest aspirations of the founding fathers who, in that Treaty and by that Treaty strove to bring about a greater equality by the transfer of resources and wealth from the richer and more prosperous regions of the Community to the poor regions. We as a nation, and as a country, look to that policy for the benefits and the help and the assistance that is guaranteed by the Treaty of Rome.

Also the Social Fund, with which the previous speaker was not too happy either, has conferred tremendous benefits on this country over the past 12 years. Were it not for the Social Fund the vast majority of our special schools would not be offering and providing the splendid service they are giving today for both the physically and mentally handicapped people. It is due to help of the Social Fund and the generosity of so many voluntary organisations that the services for those less fortunate groups of people are, I venture to say, ahead of the service obtainable in any other country in the world.

Also through the Social Fund the Government, the Minister for Labour and the Minister for Education are able to offer a variety of six or seven schemes specifically designed to help and encourage youth employment and to assist people to get into private enterprise and provide for themselves. This would not be possible without the assistance that this State has received from the Social Fund. Perhaps if we were to go down through all the 12 or 13 policies of the Community we are bound to be able to find ones that do not contribute as significantly to our economy as perhaps those that I have mentioned.

One of the great disappointments in the Community, of course, has been the failure of the transport policy to materialise and to provide the kind of assistance that we, as a peripheral nation, as a peripheral member of the Community, look forward to. If we are to accept the Treaty of Rome we should also feel that it should not be more expensive to export production from our country to the more profitable markets in Europe than for the producers in any other country to do that. This is the one area where the Council of Transport Ministers have not been able to make progress; they have not been able to reach an understanding for the simple reason that the decision making process that was laid down in the Treaty has been side-tracked by the introduction of the veto. This, I am glad to say, is something to which the Dooge Committee have given a lot of consideration and let us hope that there will be progress as a result of their recommendation and as a result of their close and in-depth examination of that problem, in identifying the areas and the points of policy that have frustrated to a great extent the development of the Community to its full potential.

There is nothing more frustrating for the Ministers or for the Commission than to have the veto invoked for minor issues, as was done by some of the Governments over the past couple of years for purely selfish, national political interests. The Joint Committee of the Houses of the Oireachtas dealt in great detail and at great length with the Spinelli report. The document that the committee produced with the report, while it purported to be a substitute for or a new version of the Treaties of Rome was very detailed and I am glad that the Dooge Committee did not endeavour to produce a new or amended Treaty. I believe that if you were to have a detailed Treaty like that the discussions would go on, not just for months but for years and we would never make progress. That is another reason why I compliment the ad hoc committee for the concise report they have produced, which will certainly enable the Council of Ministers to tackle this specific problem and to be able to make the kind of progress that the Community really needs.

The problems in this and every other country are ones that sometimes one feels are insurmountable. Not only are the problems of the various governments changing but the attitudes of the population certainly reflect the changing times that we live in. Faced with these challenges Europe must recover faith in itself and launch itself on a new common venture. I believe that the establishment of a political entity based on clearly defined priority objectives coupled with the means of achieving them is of the utmost importance. I hope that this week the Council in Milan will get down to producing yet a further task for Senator Dooge's committee. I think that at least one or two of the chapters that the report set out could be further developed so as to take the greater evolvement of Europe a step further. The only way that we can reach greater European union is to take it step by step, tackling each problem as it arises, because there is absolutely no way that we who believe in a peace loving society and in democratic systems and structures can allow the momentum of the Community to halt because when that day comes the system will go backwards. Therefore, I would hope that the Milan Council would set a new task for the Dooge Committee to follow through so that the recommendations that they have come up with may, perhaps, in a year's time be put, to some extent, into action.

Finally, institutional reform should reflect the existence of significant possibilities for improving decision making within the framework of the Treaties. I believe that if we could have direct implementation of the Treaties on regional policy and on agricultural policy it would certainly make a significant contribution to the economy of this country and to the lives that those policies are designed to assist.

I welcome the Dooge Report, not because I agree with everything in it but because I think it is high time that some new initiatives, some new actions, were taken to revitalise and to stimulate further growth in Europe as a whole. There is a desperation developing at the scale of the problems in Europe. Unemployment has now reached almost 14 million and the existing policies over recent times have done very little to try to solve that problem. When we are looking for a new initiative we are obviously going to have to base our demands on what has been the performance up to now. We can readily recall our own accession to the European Community. Let us face it, some of the planks on which we asked the Irish people to support our accession to the European Community were based on the transfer of resources from the centre of the Community to the peripheral and poorer areas. Since that time, despite the fact that some fairly substantial progress has been made in some areas, and I will deal with those in a few minutes, all of the reports that are available to us — including a NESC report in 1981 — clearly show that the imbalance which existed between Ireland and other peripheral and poorer countries and the centre mainland of Europe in the early seventies not only still exists but has worsened. I want to ask Senator Dooge and his committee where is there in existing policies in the Community any substantial evidence to show that if national governments were to make further concessions in terms of national powers or otherwise what has not happened up to now would happen following further developments in the near future. I am very much afraid it would not. We have seen evidence of this. Take, for instance, the Common Agricultural Policy. The Taoiseach outlined the millions of pounds that were transferred in Europe and how we have been net beneficiaries arising from this policy. There is no argument about that, but while that was happening these same benefits were available to the farmers in Europe and not only since then but for almost 20 years prior to that time. Their development had so far outstripped ours that when the limitations came on milk productions, now on cereals and practically on beef also, once again the existing Six, prior to 1972, had gained a market foothold, had developed their holdings and had their output per acre so substantially increased that they could afford to take a reduction, whereas we in Ireland, because of our slow rate of development, our size of farms and every other problem, were unable to capitalise on our accession to the degree to which we might have.

We now find ourselves once again very strictly limited. One can argue that in the price negotiations last year we did obtain certain concessions in this regard, in that we were allowed to continue to increase production while other countries were not. But the fundamental fact remains, that the disadvantages we had, compared with what was available in Europe prior to our accession, and since then, have placed us at a disadvantage. Our geographical location in Europe, our cost of transport, our low consumer population, all of these natural disadvantages leave us in a position in which whenever any concessions are made it is crucially important that our vital interests are protected. I am not happy that it is possible to do that with some of the proposals in relation to the internal market. We would have to make drastic changes in our own internal tax situation. We would probably have to introduce taxes on items on which there is no tax at present. Despite the fact that I am consciously aware of the necessity for a new impetus, I am afraid that much of this will ultimately lead to a continuity of the disparity which presently exists between Ireland and the rest of the Community. We have continued to strangle ourselves with increased bureaucracy in Brussels. The pace at which decisions are made is incredibly slow. We have a paralysis which is incapable of being penetrated. All of this is leading to frustration and, out of it should come new initiatives. For that reason any consideration of Senator Dooge's committee's report which will lead to changes in these areas will be welcomed provided they have the safeguards which protect a country with our geographical and other problems.

In relation to our neutrality I have a strange feeling — there are people in the country who differ from me on this — that we are being quietly lulled into situations where if we were to accept a different position on neutrality there would be other benefits accruing to us and that greater integration on all of these policies would be taken into account. I have just one question to ask. Up to now any benefits which came to this country by virtue of our accession to the European Community — as far as I can determine — were readily available to all of the other countries and, in some instances, available to countries that decided to remain outside the EC. I want to be totally convinced that where any further concessions were made the blueprint was laid down where preferential treatment would be given to our own country. That is not to be interpreted as a cap-in-hand type of policy but rather to acknowledge that the existing benefits within the Community prior to our country's accession, and since then, have driven a wider block between the standard of living here and the standard of living in Central Europe. One has only to look at the hassle and the continual wrangling in relation to even minor policy questions. I am not talking about serious matters like neutrality for us, which, is a fundamental principle of our foreign policy, and something which, more than anything else, in the middle of this century, gave us a national identity we did not have previously. I am trying to emphasise that whatever diplomatic efforts are being made by the leaders of the more powerful countries or, indeed, even their threat that the original Six are going to race ahead and leave the rest of us behind, I am not buying any of that because it is quite clear from any study of the Development of Europe that the original Six have benefited quite considerably from the wider market arrangements and have not handicapped themselves in the European Community to anything like the degree that they present the position. Therefore, we have to be able to see very clearly — not just an acknowledgement, but clearly stated — what these advantages in a new situation would be for us.

The argument has been made over the years that it is impossible to do anything about the regional imbalances in social policies because of lack of funds. At the same time as the powerful countries within Europe refuse consistently to increase own resources, they seem to have available to them vast resources in the armaments field and in pursuance of policies which we do not see as leading and helping towards European integration. I acknowledge that the European personality in total terms is a diverse thing. It has been drawn from very different historical and cultural backgrounds and in terms of competing with America and Japan we have a difficulty. It is a long way down the road from where it was in the last World War. There is so much agreement on so many areas. There is a frustration particularly among those who hold the views of the founding fathers and others who see tremendous potential for Europe if we could overcome the problems which exist, particularly the problem of unemployment. It is an embarrassment to all of the European countries that the failure to solve the economic problems in Europe, considering all of the advantages, the population and so on, is very pronounced vis-a-vis what has been possible in America and other countries. Therefore, we have to be open-minded and look to whatever the possibilities are and not be a stick in the mud in terms of making changes. Overall, we have to be careful and be convinced that what we are told will happen, will happen, unlike on the occasion when we joined Europe and things have consistently not happened. We have to be extremely sure about the safeguards on this occasion.

Senator Brendan Ryan tried to have it both ways. He argued against our accession to the European Community and pointed out all the disadvantages that have arisen since accession but ignored what the choices were at the time and what would have happened had we not joined. One has only to take a quick look at what our position was prior to then. In 1972 61 per cent of our trade was with the United Kingdom. This figure has been reduced to under 30 per cent. Their cheap food policy meant that our agriculture was more or less strangled for a very long time. Doors were opened and new possibilities were introduced and considerable progress was made despite difficulties. One has only to travel through rural Ireland to see the proof of this. There is no point in ignoring it and trying to have it both ways.

Despite the tragic losses in the industrial world, and in some indigenous industries here, the world is becoming a smaller place: mobility, news, television, communications — everything has changed dramatically. If anybody believes that we could have shut the doors of this island ten years ago and prevented world market forces from penetrating they are closing their eyes to reality. I am acknowledging the problems that are there. There are 250 new EC-based companies here which were not located here prior to our accession. We must build on these advantages. Rather than having pie in the sky deliberations on the question of what would happen or what advantages would accrue to us outside of the Community. There has been fairly measurable progress, not as much as we had wanted but considerably more than would have accrued to this country had we decided to remain outside the Community.

In relation to the deliberation on the veto, there are great difficulties and problems. It would be wonderful if everybody could agree and we could have a consensus. It is extraordinary that, at the time when we are talking about removing the veto, some of the stronger countries and in particular Germany who has been arguing over the years about the necessity to do away with the veto, on cereal prices negotiations this year this was the mechanism which was almost used by the strongest country. It outlines the difficulties there are in the Community if the strongest country uses the strongest weapon. I would assume that the veto mechanism was introduced to protect the weaker rather than to protect the stronger.

The more recent development exemplifies the difficulties that exist in trying to reach a consensus which would move the Community forward and which would stretch out and match some of the remaining and outstanding problems that have to be resolved. I have not got the answer to it. It is difficult to move a Community forward when one member can hold up everything. Nevertheless, if one's own vital interests were at stake, especially as a small country, one would like to have some mechanism in order to protect one's national interests. All of us have examples and I will not digress very far except to say that in some of our own communities in endeavouring to get small community projects going — drainage is one area — unless schemes are operated by the Office of Public Works, in the normal farm modernisation schemes and others, one farmer can hold up 20 or 30 others on a scheme which would benefit the whole community. It is in this sense that I see the reason for some limitation on the use of the veto, as it can be detrimental to the wider interests, and at the same time having a mechanism for protecting oneself, which is very necessary.

I should like to emphasise again that any support which the Dooge Committee or, indeed, the Government might expect from this side of the House will be clearly based on seeing from Europe an acknowledgment of our specific problems and some concrete examples to show that some of the mistakes made in the last 12 years will be corrected and that we can be assured that efforts will be made to remedy the disparity between Ireland and other poor countries and the centre of Europe.

To go blindfolded into any agreement or any change would mark a very serious and detrimental stage in our history. All of us need to be very watchful at this time and to be careful that the suggestions that are coming from high places in Europe are properly teased out and that here in our own community we have the widest possible discussion on further European integration and that any measures that will be ultimately considered will have the widest possible support and that all of us will be satisfied that any major initiative, necessary though it is, has the proper safeguards as far as our own country is concerned.

An Leas-Chathaoirleach

Senator Dooge, I am just looking at the time.

I would suggest we adjourn until 6.30 p.m.

Sitting suspended at 5.25 p.m. and resumed at 6.30 p.m.

I welcome the opportunity of contributing to this debate in my capacity as international affairs spokesman for the Labour Party. I would like at the outset to reiterate a few fundamental points made by Senator Ferris in his contribution. The approach of the Labour Party to the discussion taking place not only in the Seanad but in the media and among the general public in Ireland is one of respecting the complexity of the issues involved. In saying that, I would like to make it absolutely clear that one respects the complexity of an issue. You do not automatically divest yourself of moral positions or fundamental principles. It is important that the full range of issues raised by, for example, proposals for European Union, be discussed with the thoroughness that they deserve.

In the Labour Party discussions on the issue so far there have been a number of dimensions isolated as important. The first of these has been the adequacy of a strengthened or revived Europe, as even its closest friends suggest, such as Professor David Coombs of the National Institute of Higher Education, Limerick, would choose to call it. Such an extended or revived Europe must in its economic character be a different kind of Europe than the Europe that exists at present.

Other speakers, particularly Senator Brendan Ryan, came close too to a similar viewpoint, pointing for example to the economic structures of Europe today and the large volume of unemployment which had been produced. There is nothing accidental in this. I would like, initially, just to expand for a moment on the first of these fundamental planks in the Labour Party's approach.

Looking back at the experience of the European Community since we joined and trying now to place this debate, which is taking place in some kind of contrast or comparison with the debate which preceded Irish entry, which the Taoiseach this afternoon referred to, as having received the overwhelming assent of the Irish people, one is struck by a few points. The Taoiseach in speaking to the House today, stressed our benefits from Community membership in a very long and thorough speech such as we have come to expect from him. Close to half, more than one-third, is indeed devoted to economic benefits from the European Community in one way or the other, which seems to me, perhaps in my old fashioned view of logic, to contradict one of the concluding points that he makes, again I am sure with both conviction and passion, that Europe is much more than an economic matter, that it is a matter of political and moral concern and so forth. Yet perhaps in a Freudian way economic realities prevailed even in his speech.

In reviewing the debate prior to our accession we are now in a position to assess the promise and the reality. It would be inappropriate in this debate to say too much about that, except to say that the model we were presented with was one of a market which would have as a check to its consequences, significant regional and social policies. The suggestion in favour of the Taoiseach's consistency, in 1972 and 1985, is that the case was made for access to a larger market and guaranteed prices and, therefore, to a net increase, particularly in Irish farm incomes. I recall the Taoiseach telling me that our consumer index would not increase by more than 1 per cent. We will leave these little old quibbles aside. The fact is that the case was made in terms of access to a market, the size of the market and particularly the opportunities that market offered for Irish exports and, in turn, the enhanced incomes which would accrue from that. There were a number of other assumptions, including the multiplier affecting increased agricultural incomes and so forth.

In relation to the view which was offered to those of us who were critics at the time, it was suggested that significant income imbalances in the Community would be redressed to some extent by social and regional funds. It would be inaccurate if I said that on its own. It was also suggested, more or less in the philosophy of the rising tide raising all boats, that when the dynamic of growth was released in the Community, through the enlargements that we were speaking about, at that stage you could anticipate everybody benefiting. If the market did not do that you were left with the residual instruments of regional and social policy. The reality today is that we are viewing a Community in which the gaps have grown between both areas and regions and between significant groups of people.

The first fundamental, if I may elaborate, in the Labour Party's approach to this discussion is that you must reject a residual role for regional or social policy and you must depart from those assumptions you made as to the automatic capacity of a market to deliver higher incomes in areas where there are very significant gaps. Any discussion of European political union or union of any comprehensive size, even before we speak about any institutional impasse and otherwise, must deal with this fundamental and it is a capacity in an enlarged European Union from which we would release further powers. I hesitate to use the word “sovereignty” because it is a long discussion in itself as to what is meant by sovereignty now in international political relations, given the way in which international capital and investment now function.

The question must be asked, could you be happy with even a residual model — if you take it that it is even rather like the appropriate analogy of social welfare, where you rely on the residual model of social welfare is where you rely on the market and the family to look after everybody and where they grossly fail, you allow a lower version for the State to step in — a redistribution model is where the State decides to change income, another would be in relation to participating members of an economy, you would allow them in an insurance way to take out what they put in but the fact is that, to move that analogy to Europe, we were badly served by what the instruments were. The first principle is will there be a new economic organisation able to go beyond something that failed? The evidence is very slight for that. I will come back to what the Christian Democratic role and presence in Europe has contributed to that. I argue that we see more evidence of isolationism in economic thinking and our backwardness in relation to economic market thinking than ever before. That matter is one in which we can see instant difficulties.

It is important that we have respect for positions taken with integrity. I agree that Senator Dooge's reservations, for example, in relation to security and defence are stated. It is very wrong of people not to read these and note that Senator Dooge has stated them. Certainly I not only recognise them but acknowledge them and the motivation that lay behind the securing of them. There is the question, therefore, of our involvement in issues of security and defence and hanging over that is the fundamental question of neutrality on which I will elaborate in a moment.

A third issue is the issue of vital interests and the whole mechanisms ignoring the starkness of the exercise of the veto that might exist for the protection of Irish vital interests. These are the main perspectives from which the Labour Party begin to look at this issue. Therefore, it is wrong to say that the Labour Party have a simple view that merely describes it, that they have some tribalistic view of neutrality. The fact is that we are the only party to publish a separate policy document on neutrality as a coherent framework for foreign policy. We have spelt out that. I will turn to it in a few minutes. We are saying that we are putting neutrality into context in this debate. People who are suggesting a revival and an expansion are speaking of recapturing the philosophical essence of those people who wanted to build peace after the last world war. They are saying that this is what they wish to recapture but can they recapture that when the Community has widened gaps between regions, classes and groups?

To build on these few principles there are a few points that I want to make. I should comment on the Taoiseach's speech in which he stated:

The founding fathers of the Communities were motivated by aspirations that went beyond purely economic, trade or social matters.

The Taoiseach went on to speak about how Ireland has been served economically by membership of the European Community. There is a tacit suggestion in that that realism in the Irish foreign policy approach to this question is, in a curious way, being defined as a concentration on economic benefits. Scribes other than the Taoiseach are much more direct about this matter. One asked can we afford to be coy? Another asked what are the prices of our raising questions and so forth. As spokesman on foreign affairs, I am concerned about this because if you speak about pragmatism and realism in foreign policy today at global level, you are speaking about the necessary reduction of nuclear weapons, the building of peace, the widening of a space between the super powers and the use of your foreign policy influence on creating peace and building participatory societies. In Ireland there has been the evolution of a series of positions in foreign policy separate from a political framework. We have paid, to some extent, a price for that. That is why words like "realism" and "pragmatics" become entirely economic in the content given to them. Equally, I fundamentally disagree with the reference made to fisheries. The question there is that we were able to secure a consideration of our position without having to go to the extent of using the Luxembourg formula that had been agreed. The fact is that our entry to the Community was badly flawed by the failure to seek and secure a protocol to defend our fisheries interest. I clearly recall during my days as a Labour Party member of the Joint Committee on the Secondary Legislation of the EC discussing the fisheries issue. New fishing fleets had come into existence which had put stocks in Europe perilously at risk. We were left with large stocks. We lacked a domestic fishing policy with elements of development, conservation and employment creation. This is not to say we should throw up our hands in gratitude at being allowed to have our fishing stocks raped less quickly that they would have been originally by people with no regard whatsoever for the fishing stocks of Europe. You are speaking to someone who is a jaundiced cynic when you speak about the lack of necessity to invoke extreme measures in relation to defending our fisheries interests. Quite frankly, this argument about economics could distort or twist the entire picture.

We must come back again to this question of our different elements and the desirability of an expanded European Union. I am worried about the confusion caused by phrases such as "We are not ideologically neutral but we are militarily neutral". I worry about it in the sense that some people have decided that the con-joint views on foreign policy of a small number of western European states can be regarded as the automatic carrier of the concept of freedom and liberty. I reject that. I reject it profoundly on grounds of historical accuracy. It is untrue. I also think that it is quite dangerous to view yourself in this way.

This brings me to the question which is most often debated when we discuss this issue, that is, the issue of Irish neutrality. When we discussed this in the Labour Party and in some of our documents, we discussed three possible threats to Irish neutrality. One was the pressure that might be exerted by different NATO powers on us as a neutral nation; secondly the pressures that might arise from Anglo-Irish talks; and thirdly the pressures that might or might not arise in discussions on European political co-operation. We concluded that the last was the least of the three. I believe that we were correct because I see more evidence in recent discussion on Anglo-Irish relations of threats to Irish neutrality than I do in the other two.

I said this in my chairman's address to the Labour Party conference in Cork. I did so because it behoves those who are making a sacred principle of neutrality to clear the public mind in a number of areas. They say they are for it and that it is not for sale. I do not like that language. Is it unconditional? Is it unconditional, for example, in the sense that people would enter into a defence agreement with Britain to allow NATO installations in Northern Ireland? Would we then say that the unit of Ireland was worth the price of abandoning Irish neutrality?

Certainly the Fianna Fáil Party have to assure us in this regard. People outside the Fianna Fáil Party, now strong proponents of Irish neutrality have, I believe, considered defence arrangements which could be considered as an erosion of the position of unconditional neutrality. This is one sense in which it is unconditional.

You then move to another sense in which you ask is neutrality therefore going to be positive neutrality? Fashionable and sloppy discussion in some journals about Irish neutrality is like asking the question: is a gooseberry a fruit? You say: "It is not a strawberry; it is not an almond; it is not a pear; it is not an apple; therefore is it a fruit at all?". People usually begin with Swedish neutrality and suggest that it has a diplomatic and military dimension to it, but it has also a significant ability to defend itself against attack. Therefore, if Irish neutrality is not like Swedish neutrality the conclusion is that it is not really neutrality at all. This is the view articulated more than once by people like Carl O'Sullivan and others.

Another view is that your neutrality is, as in the case of Austria, externally imposed on you. Our neutrality is not externally imposed on us and, therefore, it differs from Austrian neutrality. People then raise other questions in relation to other neutral countries such as Switzerland, and so forth. The question then is: can we be neutral at all if we are not neutral in the Swiss sense or the Swedish sense in having a military capacity. Obviously, we differ from Austria.

This is a very confused form of debate. We have to ask how we came to be neutral. We cannot dispose of the current case for our neutrality by simply saying: "We did it in these circumstances and we were not entirely pure about our reasons". The fact is that we were neutral in different circumstances. My predecessor as chairman of the Labour Party, Michael Keyes, spelled out why the Labour Party were neutral in his day. He was speaking about a period before World War II. We need not take refuge on that side of things either.

We need now to be positive about what we can do with neutrality. We used the words "positive neutrality" in our document. We should discuss here whether it would be in our interests now to constitutionally affirm neutrality. Supposing we did that and sought external international recognition for our neutrality constitutionally expressed. There are people, and my good friend Professor David Coomes would be one of them, who would say this would be unhelpful of Ireland. I get the impression that people feel that if things are just a little confused, if we tell ourselves our position is not understood widely around the world or in Europe, that we are ideologically not neutral but militarily neutral and so on, we will not impede developments in other areas.

I want to contribute to some clarity in that at least in so far as the Labour Party are concerned. We believe that neutrality is not some old-fashioned piece of furniture; it is not an enormously inhibiting factor. We see it as providing a political framework within which we can take foreign policy initiatives. For example, in relation to international law, Professor Richard Fogg is but one of the people who has made a distinguished contribution on how neutrality should be exercised in a nuclear age. Should it, for example, be exercised as seeking first the illegality of nuclear weapons, then their reduction and, beyond that, the building of peace and different forms of dialogue and new codes of international law? That is a positive exercise in international fora on neutrality and it can be used like that.

It might be said: "I do not know why Senator Higgins spoke so much about neutrality because it is not under threat from anything we are discussing." I am raising it because it exists in the public mind and I want to articulate the Labour Party's position on it. We say that it is unconditional. We say that it is positive. We say that it should be affirmed. We also say that we are not being obstinate or obdurate in an old-fashioned way. We are not speaking about neutrality in any isolationist way. In fact, far more isolationist are those who keep on listing the benefits to every dairy farmer in every part of Ireland. That is true isolationism and true narrow-mindedness about Europe. To speak of neutrality in the way I speak of it, calling it a positive force for peace internationally and developing the space between the superpowers, is genuine internationalism. So let us dispose of that one.

There are four dimensions to what I have been saying. There is the question of the European Community, now enlarged by Spain and Portugal. I think of the States who are members of the Council of Europe. What does it represent at present? It represents something in which the predominance of the market-place has created an enormous pool of unemployed people. Equally so, when you criticise it for its high level of unemployment you then look at it by its own criteria as an efficient productive unit. The Taoiseach is correct in listing its very serious incapacities. These are incapacities in relation to technology, to creating a new basis of productivity to address the question of unemployment and so forth. It asks us, on trust, to say that the removal of institutional inhibitions to facilitate a series of freedoms within the liberal market mechanism will give it a new breath of life. We look back and see that when this argument was used before, even though you can say there are net benefits through the price and volume of milk, the gaps that grew between the regions are there to contradict you.

You move them and you say well, maybe we can speak about the removal of institutional impediments altogether. You can say that what we have is a bureaucracy whose obstacles can be removed. I think there is some merit in that and I am not one of those people who go around saying that there is some sinister plot afoot and that Senator Dooge's distinguished contribution on behalf of this country is anything less than what it is, a distinguished contribution. I have acknowledged what he has secured so far as it is extremely honest of him to list not only matters to which he objects on security and defence, their inclusion, matters on which he feels there was a failure in relation to vital interest and matters in relation to which there was a total insufficiency in relation to the structure of economic measures that would offer the human shape to the new Europe.

I am simply saying that there is no evidence on offer. If you wish to put things in order you must begin by bargaining for an entirely new set of economic arrangements in which inbuilt to the economy will be forms of redistribution. In other words, instead of regional and social policy being residual elements in a residual model, they will be structural parts of the economic activity. We should look for that no matter what your view of Europe is. My feeling is that it is not on offer because I see a regression in economic thinking at the level of the Community, particularly under the hegemony of different conservative governments.

In relation to the question of neutrality, rather than leaving it ill-defined and vague and removing it as a potential obstacle, it would be much better to bring it out front and use it as an opportunity to give a political framework to our foreign policy. It disappoints me that these people are not here listening to what I have to say but that is a disappointment I have experienced previously as much as I have enjoyed their presence on other occasions.

The other point I wanted to make was in relation to this issue which is sometimes raised into what would be a common position in relation to European foreign policy. I am worried about the position taken by some of the Christian Democratic Parties in Europe who are contributing in their own way to one side of a cold war mentality in international relations. The idea that one small group of people are the automatic carriers in the concept of freedom is not helpful. There are threats to democracy that I object to. I object to a totalitarian system but I think that what we can and should do is use our moral authority to develop independent positions.

We have in that a very significant set of experiences which are isolated successes that are not integrated by benefit of a political framework. I can think of many votes we have taken in the United Nations for which, by the way, we have been attacked in the Sunday Telegraph by Peregrine Wolstanhome who says that we are masters of guff and that we have an influence that goes way beyond our power, clout and so on. It is useful that we have this influence. It is a matter of what is the purpose of our foreign policy. I believe that small nations are entitled to take on moral targets such as the building of peace and that they need not leave it as some kind of pious aspirations but can do things such as restoring confidence in international fora, confidence that has been shattered month after month by the larger super powers. They can move towards a new respect for international law, towards positive approaches towards development as against armament. The whole notion of disarmament, the question of building positive structures towards peace should be developed. Let me say, once and for all, because we are small and because our economy is fragile and because we tend to benefit enormously from agricultural exports, I wish the people who believe that that economic dependency precludes us from a moral role in international relations would come up front and say so. That would be honest.

I have bundles of papers — I have not time to quote them — relating to the high cost of Irish considerations on different issues. There are people who suggest that we have already decided these matters. Are we now really saying that we can take the increased price of milk and the market for milk and at the same time be unwilling to follow the foreign policy of some of those to whom we are economically attached and from whom we have become economic beneficiaries? That is a very dangerous viewpoint. It is more dangerous by its tacit existence than anything else. What we should welcome in all of this is the opportunity for people who hold these views to come out front and come out of their economic closets and say so openly, and then we can debate it.

The Labour Party have been asked by different groups with whom we have fraternal and cordial relations will we not give guarantees of one kind or another. It is irritating to many of us in the Labour Party who have gone to the trouble of putting in print our viewpoint on positive neutrality and how we can develop and expand it internally and internationally, to be continually asked to re-state what the party have stated in every decade. It equally behoves those of us in the Labour Party to put considerations of neutrality as clearly as they have been put today by Senator Ferris and myself. We regard it as one part of the argument and we are interested in the unemployment and the slum economies of Europe as we are in neutrality. We are interested in breaking the institutional accuracy and we are interested in trying to create a Europe of peace.

My opening remark was that our position is not a simple one. It is a complex one built on principle. People who are suggesting conspiracies are not helping matters. People who reply to conspiracy suggestions by simply saying that these are mindless "lefty" arguments are not helping matters either. I welcome this debate and my one regret is that there would be such an emphasis put in some of the speeches on economic benefit. In the end we are not talking simply about economics, we are talking about what I believe to be a very speculative concept in relation to a further integrated Europe. It was given its body blow in the sense we joined by the development of the European Council when in total separation form the treaties and any moral legal content they might have a body that has no rights, no basis in the international legal construction of the treaties was brought into existence to represent effectively the Europe of the strong. When this debate gets at its most sordid stage we are blackmailed again by being asked if we want to be part of a first division Europe or if we want to lapse into a second division Europe. We do not have to accept that blackmail.

In discussing this matter of European Union I must start, as other Senators have done, by expressing appreciation of the part played by Senator Dooge, the Leader of the House, in the Committee for Institutional Affairs, in his chairmanship and in the way in which he expressed the interests of this country in the security field in particular but also throughout the development of the Committee. While in the course of my speech I have a number of comments to make on the report of the committee to the European Council, I would not like it to be taken that these comments are personal criticisms of Senator Dooge as chairman of the Committee. I feel that he himself would acknowledge and, indeed, has acknowledged, that everything was not necessarily perfect in the report. I want to deal with a little of what is said in the report and then comment on the matters of principle which have also been dealt with so eloquently by Senator Higgins.

The whole background to what this report is trying to do is set out at the beginning on page 11 where, in the preface, it is stated:

Furthermore, after 10 years of crisis, Europe unlike Japan and the United States, has not achieved a growth rate sufficient to reduce the disturbing figure of almost 14 million unemployed.

In this state of affairs Europe is faced with ever more important challenges both in the field of increasing industrial and technological competition from outside and in the struggle to maintain the position of political independence which historically it has held in the world.

Faced with these challenges, Europe must recover faith in itself and launch itself on a new common venture — the establishment of a political entity based on clearly defined priority objectives coupled with the means of achieving them.

This sounds splendid, but I wonder is there a logical connection between the two things? We are very much worried by the fact that Europe has not maintained and achieved sufficient economic growth to reduce the figure of 14 million unemployed of which we in this country are especially conscious having such a high level of unemployment among young people. This is one of the few countries in Europe which has a very large number of young people and a population which has more young people than old people. While we may admit this, I question whether the establishment of a political entity, will solve this position.

We talk in terms of the United States having achieved a growth rate. When one looks at what is happening in the United States, it is not the dynamic effect of having a huge single market that is improving the economy of the United States. I have not got the references here with me, but I have read them. I understand that the best growth in the economy of the United States is in small areas, in small firms, in small enterprises, with people employing few employees. I would call in question the concept of a great big single entity making economic progress while a split up economic entity or political entity does not make economic progress. It will not necessarily follow that if we go along the road towards a European political entity this will solve the enormous economic problems Europe has. On pages 13 and 14 the report goes on to talk about a genuine political entity and that such an entity would deal with political and social development, economic progress and security. The inclusion of security as a sort of automatic thing that goes along with economic progress gives rise to a certain amount of doubt, which was felt by Senator Dooge as well. On page 14 the report says:

The aim is to create a homogeneous internal economic area, by bringing about the fully integrated internal market envisaged in the Treaty of Rome... thus allowing Europeans to benefit from the dynamic effects of a single market with immense purchasing power. This would mean more jobs, more prosperity and faster growth and would thus make the Community a reality for its citizens.

"Yes" and "no" is all I can to that. In some ways it might well cause the benefits to have the dynamic effects of a single market with immense purchasing power, but it might also have the result that the stronger parts of the economy would benefit and the weaker parts might not. It is interesting to see that one of the comments by Mr. Papantoniou of Greece challenges this to some extent where he says:

The overall gains from economic integration are not only unevenly distributed, but may also disguise losses for the less prosperous regions. The creation, therefore, of an integrated market and a technological community needs to be supplemented by a very substantial effort to strengthen the Community's cohesion by promoting regional development and the convergence of living standards.

Mr. Papantoniou's emphasis here is perfectly right and it is one that we would do well to imitate. Very often the creation of this kind of dynamic large economic community may very well mean that it may it may be dynamic and helpful to the larger and stronger areas of the Community but not at all helpful to the weaker areas. We share with Greece the need to promote the regional development of the Community and ensure that such a political entity would not mean what Senator Higgins calls a Europe of the strong, a Europe of the strong economically as well as a Europe of the strong politically.

In our own economy we have seen that small is successful. We have often heard the phrase, "small is beautiful." Very often small is successful. To create a Community with everything on a big scale, on a supposedly highly competitive big scale, is questionable because very large enterprises are not necessarily the most efficient and not necessarily the most successful.

On page 33 Mr. Moller of Denmark comments on the report. He feels that the overall approach is not the right one He agrees that the Community needs a new impetus but feels that the requirements are different. He feels that the decision-making process should be more efficient, that the distribution of powers between the institutions, as laid down in the treaties, must be respected, and that the blurring of the powers should stop and be replaced by the clear logic of the treaties.

This is connected with what Senator Higgins said about the development of the European Council. The original idea of the institutions of the Community was to create a system of checks and balances and one of the major checks and balances was the need for unanimity on certain decisions. If in working towards what is described as a more efficient decision-making process we overweight the power given to the larger and stronger countries in the Community this spells out certain dangers for ourselves which have been appreciated by Denmark, a country in the same position as ourselves, a fairly small country, an agriculturally based country which must look at Europe from the same point of view as we do ourselves.

There are a number of other matters in the report to which I should like to refer — the promotion of common cultural values for instance. Senator Higgins referred to this as well. We talk about the culture of Europe from a certain political point of view, the western point of view, as it were. I would not particularly like to see the promotion of an overall common cultural value for Europe which would exclude the individual cultural values of the State, the individual cultural heritage in our own country and in the other countries of Europe.

The report talks about safeguarding the European cultural heritage. One wonders what is the European cultural heritage as opposed to the French cultural heritage, or the Italian cultural heritage, or the Irish cultural heritage. Sometimes one is tempted to think of the kind of language which is used in reports of international organisations which tends to be a sort of gobbledy-gook language, which is neither English, French, German nor anything else. It is a sort of international interpreter's language, and this sort of boiling down of culture into a common denominator may not be the best thing for Europe. I would be inclined to think that possibly a common cultural value is a euphemism for saying that we all belong to this sort of western group, that we have the right values and everyone else has the wrong values. That is not something that I feel we can accept on its face value.

It is quite clear, of course, from page 23, that Senator Dooge did not agree with the inclusion of the section on security and defence. I am glad the Government have made clear that they are determined not to participate in common security and defence which would mean the joining of military pacts. There has been no pressure on us up to now to partake in those pacts. I am glad this is so and I hope it continues. I would be inclined to fear that such pressure might arise in future. I find it hard to believe that no pressure whatever will be put on us. I certainly share Senator Higgin's feeling about the phrase that we are not ideologically neutral which is, in a way, a step towards saying that in heart and in mind we belong to the western alliance and we would belong to NATO were it not for partition.

I do not think that reflects Irish people's attitude to neutrality. Our neutrality has quite an element of ideology in it. To say that we are not ideologically neutral is not true. Our neutrality is a thought out position, a positive position. It cares about world peace and about anti-military pacts on either side. We cannot take up a black and white position which suggests that all the good is on the western side and all the evil is in the Warsaw pact bloc or in any other bloc. I would not go along with that at all. Naturally, I would not take the other side either. None of these groups offers anything that should attract us away from our neutrality. I would be wary to a great extent of a development in which security and defence were regarded by some member states as being an integral part of this whole report, its thrust, its aims, and so on.

The report goes on to deal with the means whereby we can meet the challenge to Europe, as it is described. Of course, it goes back to the usual claim that what we need is less bureaucracy. Well, I am sure we do need less bureaucracy. People always need less bureaucracy but, once you set up a bureaucracy in any institution, it is very difficult to get less. If you go on to create other institutions, the likelihood is that you will get more rather than less. I appreciate what they hope for, but I am not particularly optimistic about whether they will achieve it.

People talk about easier decision making. Is easier decision making just a way of rolling over people who disagree? Of course, it is easier decision making if two or three large countries together can over-rule the will of the smaller countries. That makes decision making easier, but it does not necessarily make things better for the smaller countries. When the report talks about the principles of voting and says that "unanimity will still be required in certain exceptional cases, which will have to be distinctly fewer in number in relation to the present Treaties, the list of such cases being restrictive", this is working towards a position where you get easier decision making at the expense of the interests of the minority in Europe or the less strong countries.

There is a saving paragraph which says that when a member state considers that its very important interests are at stake, the discussion should continue until a unanimous agreement is reached. This in a sense begs the question as to what its very important interests are and who, in fact, in the end will decide what its very important interests are. It is fairly clear from the footnote that it will not necessarily be the State itself which will make the end decision on what its very important interests are. When we are talking about the principles of voting, when we are talking about easier decision making, we need to be very careful that we are not saying decisions are made more easily because we are able to overrule the objections of people whose economic, political or security interests may be opposed to those of the stronger States in the European Community.

Finally, I should like to emphasise what was said by Senator Higgins about the position being taken up by some people that we cannot take the economic benefits of Europe without paying the political price. In other words, we are economic client people and, therefore, we must become political client people or security client people at the same time. I ask anybody who thinks that to look at the policies pursued, for instance, by Mrs. Thatcher, or by the French Government, or by any of the other Governments in the EC, particularly the stronger Governments. They are perfectly prepared to look for as much economic benefit as they can possibly get without necessarily giving up any political power, or without necessarily allowing other people to decide security questions for them. Although we are a small country, this should also be our position.

We joined the European Community because there were compelling economic reasons to do so. I remember the debate which went on at the time with considerable clarity. At the time there was little other choice open to us. To a certain extent we have gained economic benefits. We might have suffered a great deal more economic losses if we did not join. Nevertheless, we cannot allow this sort of economic input and output to and fro in the EC to influence us into saying that because we are involved in an economic situation we must, therefore, become part of a political situation and cannot make free political decisions on security and in quite a number of other areas in which Government exercise their own sovereign power. While I understand what is being aimed at in this report, our Government need to look at it with a fairly jaundiced eye and be very careful before taking any decision to go along with the type of political convergence being advocated.

This discussion here today has been a useful one. Though this topic is something I have been living with for some time now, I found the debate one to which I was able to listen with interest throughout the whole discussion. What I would like to do now in this final statement would be to emphasise some points in regard to the report of the ad hoc committee and to comment on some points that have been raised in our discussion here today.

Senator Brendan Ryan and Senator Michael Higgins mentioned that the Taoiseach devoted quite an amount of his statement to the question of the measureable benefits of membership. In fact this question was probably the topic that occupied most of our discussion here today. Is the European Community purely something materialistic, is it merely an arena in which the various countries fight on a material plane for their national interests? Perhaps people can be forgiven for taking this point of view if we look at what has been happening in Europe in recent years. One of the tragedies of the European Economic Community was that it had not achieved the degree of completion of the internal market, it had not achieved the degree of solidarity, it had not achieved a sufficient degree of sense of common interest so that the Community when faced with the recession of recent years could have used its common power to overcome these difficulties. I feel that what happened, faced with the severe international conditions in recent years, is that this economic recession gave rise to a recession into nationalism on behalf of all the members of the Community. We had not reached that point of no return in our coming together that we were able to go forward. If you ask me how do I look on the European Community, in the longer time context I think we must accept that it is something that is at once idealist and materialist.

I think Senator Brendan Ryan went too far in criticising that lack of idealism. particularly in regard to the foundation of the Community. I think his analysis was faulty. I think he was unjust to the founders of the whole European movement. They were motivated by a horror of war. Their first move was towards the unification of the coal industry and the steel industry of Europe to make war impossible. They looked first not at the question of a whole market for all purposes, they looked first at the sinews of war. I think in fact he was not just to the founders of Europe. I think Senator Michael Higgins in his contribution took the view that the idealism was there at the beginning, though I think the main tenor of his speech was that it had been largely lost in later years. I can only say, as somebody who has been interested in the question of Europe for a very long time, that I believe in as full as possible degree of Irish participation in moves towards European Union both from an idealist and from a materialist point of view. I believe it would be good for us, good for us spiritually as well as materially.

It is very hard to say what Europe means. I suppose it can be dismissed easily as a purely subjective concept. I believe that there is a reality behind this idealism. Senator McGuinness asked is there a European culture over and above the culture of France or Germany or Ireland. I think there is. I am now talking not of Europe of the ten or Europe of the 12 or Europe of the 21 on the Council of Europe. I am talking of all of Europe. Whether I walk the streets of Warsaw or Bratislava or Budapest, I feel there a sense of Europe that is beyond something national. I believe there is a unity in our cultural heritage that transcends not only the national boundaries of the countries of Western Europe but crosses indeed the awesome divide that now cuts Europe in two. I am very happy that in the very opening part, in the preface of this report, there is a recognition that Europe is not the 12 and I would just like to quote. On page 11 of the printed version of the final report it says:

The Community has not lost sight of the fact that it represents only a part of Europe. Resolved to advance together the member states remain aware of the civilisation which they share with the other countries of the Continent, in the firm belief that any progress in building the Community is in keeping with the interests of Europe as a whole.

We are not talking there about the material building of the Community, we are not talking there about capturing markets in the Third World as against the United States and Japan, we are talking of finding one another as Europeans. We are talking of making this sense of being European a reality. Of course there are other elements.

Of course there is a great element of the material. This has come up again and again in the debate. Senator Lanigan talked about the critical problem of unemployment. That is what this report in a sense is all about. It is a report on institutional reform but why do we want institutional reform? Not just to change things, not to make them look better on paper but because the institutions that we have at the moment have failed so miserably, because they have failed us economically, because they have failed us socially. As Senator Lanigan said, we have had the failure even in this country, the industries that we have gained have been defective in that they have not got an element of research and development. That is why I thought it was very interesting that the Taoiseach in his contribution pledged our support to the Eureka programme which is essentially an attempt to develop European research and development and not to depend on research and development in Japan or in the United States and in particular not to get mixed up with the militaristic aspects of the American programmes.

There are quite a number of points here and I would just like to pick up a few. Senator Brendan Ryan said Norway has done better by staying out than we did by going in. If we had the oil that Norway has had during the past ten years, the picture would be slightly different. Senator Ryan went on to say that I, as an engineer, would not approve of what the Taoiseach said when he said, "Let us look at the measurable because it is all we can measure". I think the Taoiseach is not that bad an engineer because he did what the engineer does when he is faced with the question of making a decision, a decision as to whether you do something or you do not. He gave the measurable in quantitative form and listed the non-commensurable items, which can also be taken into account.

A number of other speakers also had things to say on this topic. We can say that all that is here is pure market economy, all that is being done in a sense to create a vast market. But the position is that even from the point of view of Europe, if we could get rid of the market hindrances, the fact is that we would all of us in Europe be 4 per cent better off. That is just a question of completion of the market. But we look at the question of where would we be here in Ireland if we were now outside Europe, if we had taken the other decision in 1972. I think it would be vastly different from 4 per cent. In this country we are finding it impossible to live within our means. To have stayed outside Europe then, to fail to develop now, is understandable if we do not want to be part of Europe. This is not blackmail or anything like that if we are prepared to take the cuts in the standard of living that that involves. I do not want to push this argument, all I want to say is that if we had stayed out in 1972 our standard of living would be immensely different from what is is now. I think it would be very interesting if somebody would work out what would be the cost to Ireland, over the past ten years and over the next ten years, of not being part of Europe. That certainly would be very considerable.

Still on the question of economics, I think this question of convergence is tremendously important. It is a reality that there has not been economic convergency. It is an objective of the Treaty that the standards of the regions within the Community converge — let us have no wrapping up of this, the Community has failed miserably on this particular point.

There has been criticism that there was not enough in the report on the question of convergence but I would draw your attention to what is there. On page 15 of the printed version it says that one of the ways that we create a genuine internal market by the end of the decade on the precise timetable would involve:

The promotion of solidarity among the Member States aimed at reducing structural imbalances which prevent the convergence of living standards, through the strengthening of specific Community instruments and a judicious definition of Community policies.

I want to stress what we say here. We do not say "by the transfer of resources". That is the mistake that we have made, that is the mistake we made over the past ten years. We thought it was sufficient in regard to this question to have a transfer of resources from the stronger regions to the weaker regions. We have found in fact that that yellow meal was very soon consumed and we were left in the same position as before. Where we have failed as much as our partners is in taking the money rather than asking for the structural reform, in accepting a transfer of resources to us rather than asking that all policy should be aimed at convergence. In a sense, even though what the Taoiseach said today that the report did not go far enough with regard to convergence, I am very happy that this is an indication that the Taoiseach is going into the discussions in Milan very conscious of its importance, that this convergence of living standards is something that must be fully safeguarded in any discussions that take place. The position is that we do not have a Common Market in the real sense of the word. What is being proposed, therefore, is nothing more than has been proposed already in the Treaty.

I would like to refer to a point raised by Senator McGuinness. She said that she understood that in America a great deal of the development of America was not on the basis of huge enterprises but on small enterprises. This is true. The story of Silicon Valley near Stanford in California, is a story of development of small enterprises in a huge market. The market was there so that these enterprises started on a very small scale, therefore they had the complete freedom to develop and grow. This is the great hope which we would have. It was interesting to see the reference again in what the Taoiseach said today about the emphasis in the proposals for the Eureka programme, that a certain proportion will be reserved for small enterprises where we would be able to come into this particular programme with small enterprises with an access to a very large market.

Senator Lanigan mentioned that the really critical problem was unemployment and that we were not tackling that. As I have indicated before, the whole drift of this report is to try to alter the situation so that we can tackle these problems. We are not competitive with the United States and Japan. We are not competitive because we are not a European market. We still have enormous barriers to trade. I could go on on this particular aspect. It was referred to by a number of other Senators. Senator Smith also mentioned this problem but I would like to pass on to other points.

I would like to emphasise what this report was intended to do. It was an exercise that followed the preparation by the European Parliament of a draft treaty. The Ad Hoc Committee, setting down to what its business should be, did not follow the same lines as the European Parliament. We decided early on that we would not produce an alternative draft treaty or go through this parliamentary draft treaty and analyse it. We said that what was needed were political decisions and therefore what we had to do was produce the political document. That is what we endeavoured to, we endeavoured to produce a political document as quickly as we could and provide in that way the basis for a political decision by the heads of Government meeting as the European Council. We tried to make it a positive approach; we tried to make it a realistic approach. We could have sat down and we could have produced a manifesto for European unity along the lines which has been done before. This would probably have made all of the members of the committee, all of them committed Europeans, feel very happy that they had taken all the right attitudes. But I do not think it would have impressed the hard-headed heads of Government who are going to meet at Milan at the end of this week. On the other hand, if we had said, well, what we want to do is produce a report that is sure to produce action, we will endeavour to find what everyone is agreed on, then we would have got something that would have been so empty of content that it would not have made any real contribution towards solving Europe's problem. We endeavoured to take the realistic approach and put together what we though might be a package that would have the assent of a majority of the Heads of State and that there would be a fair chance that they could persuade the others. So, what we put forward is not a list from which items can be chosen, but rather a package for movement. What we have put forward is not a plan for a united states of Europe or indeed anything like it — that is very far down the road. What we have put forward is a proposal for a step towards European Union. It is a substantial step and an irreversible one, hopefully, but still only a step. Therefore, we put forward this as sharply as we could but we also made it flexible where possible. We put forward a number of objectives. The first objective was the completion of the Treaty.

I have already talked about the internal market, about our lack of competitiveness and the problem of convergence. There are two types of economic convergence that can be talked about in regard to the future of Europe: one is the convergence of economic policies and the other is the convergence of living standards. Sometimes it is very difficult in dialogue with representatives of some of the more advanced countries to be quite sure what type of convergence is being talked about, but if we were at the final stages of European Union, it would not matter because one would imply the other. One of the areas of debate on the way towards European Union is to which should we give predominance — the convergence of economic policies or the convergence of living standards. There is absolutely no doubt about what our attitude should be, the attitude of all the poorer regions and the attitude of all the peripheral countries, that it is absolutely essential that there be a marked emphasis on a convergence of living standards.

A point that did not come up in the discussion, to any extent except in passing, is the question of the importance of a technological community. Not only is our decision making within our expert groups and in the Council of Ministers deficient but our decision making in regard to technological innovation and technological development is deficient; our decision making within European industry is deficient. This has to be overcome. I hope it will be overcome, not only at the fundamental stage by the Eureka programme, but also that we will have harmonisation of standards. It is absolutely nonsense to think that we can challenge the United States and Japan in high technology industry when we do not have common standards throughout Europe in regard to high technology equipment and so on.

There must, of course, be movement in regard to the question of resources. Again, the Taoiseach was quite right to stress that it is nonsense to think that we can get any movement which will be worthwhile along the road to European Union, if we are going to dribble the proportion of GNP devoted to Community spending from 1.4 per cent up towards 2 per cent. We will have to think far more ahead than this.

I was happy that our report, even though it is dealing with institutional affairs, did talk of social, cultural and judicial matters. Although these matters have not come up to any great extent in the debate, I am sure that this is largely due to a lack of time rather than due to a lack of interest. I should like to return to the point raised by Senator McGuinness when she talked about the fact that there was a very real diversity of culture in Europe and to the points I mentioned earlier that besides this diversity there also is something above all this that is European culture. I should like to point out — and I am referring here to page 21 of the printed report — the language which we used. We talked about "an improvement in the level of knowledge about all the peoples of the Community in all their diversity and their different contributions to European culture." The committee were very conscious here that we were not talking about a homogeneous culture and still less about homogenising the people of Europe into a common mould. We have to recognise that there is no incompatibility between being better Europeans, being more sensitive about our being Europeans and being good Irishmen and Irishwomen. This is something rather important.

In regard to the questions that have arisen, not so much on the economic front, but on the political front: there are elements here, of course, of common action that do not have to do with European Political Co-operation. We have our common action in regard to commercial matters, in regard to GATT and also in regard to development. While it might be true to say that we are, as Senator Michael Higgins said, disappointed in regard to development because Europe as a whole, perhaps, does not wish to do as much, or to do it in such a disinterested fashion as we do in this country, nevertheless, I tend to agree with what Senator McDonald has said, that we should not under-value what has been achieved. There has been a substantial movement there. To me, personally, it is not all that I would like to see but, as I have stated, I do not think we should under-value what has been done.

Regarding the question of European Political Co-operation, Senator Lanigan indicated that we must at all costs maintain an independent foreign policy. Of course we must maintain the residual power to have an independent foreign policy. But where we can be part of a common foreign policy, which is in accordance with our own foreign policy, this does leave us in a much stronger position. Senator Lanigan raised the question of our attitudes to the Middle East. Our attitude in regard to the recognition of the right to self-determination of the Palestinian people has been, since the Venice Declaration, the policy of the Community. Without consultation procedure, this might not have been possible. Regarding the problems of Central and South America, I think the meeting of the Foreign Ministers of the Ten with the Contadora Group was a very substantial development and something that might not have happened if we had not had this process. I am sure that there were Community members who were more reluctant to approve that meeting than we were. Let us not forget the advantages that are there. Common positions have been reached.

Regarding the question of our neutrality, which inevitably has come up, the suggestion was made by Senator Lanigan that the report does not acknowledge Irish neutrality. I must deal with this point because I would have been remiss if this were strictly true, but it is not so. If we look at page 21 of the report which talks about the search for an external identity here, the language used is the language which has been used diplomatically down through the years to acknowledge our special position. For example, the very first sentence states:

Europe's external identity can be achieved only gradually within the framework of common action and European Political Co-operation (EPC) in accordance with the rules applicable to each of these.

That is a very important sentence because the rule that is applicable to European Political Co-operation is consensus and will remain so even if everything in this report were adopted. So there still is no compulsion on us in regard to these areas. Then in the next paragraph, talking about security, it talks about paying special attention to "the existing Alliances on the one hand, and the differing individual situations on the other..." I well remember from my time as Minister for Foreign Affairs that it was always essential to get that phrase of "differing individual situations" into every communique because that is the diplomatic language for the fact of Ireland's separate position of neutrality. So it is included there even if, perhaps, it is not immediately recognisable to all members.

Also, on page 23 where there is a section on security and defence, I made it quite clear at the beginning of the discussions of the committee that I felt there should be no such section. That meant, since I said the committee should not be discussing this point, should not be including it in its report, I was not able to control the wording and I took no part in the discussion of the wording of this section. But even though I took no part in its wording, it still makes reference to our position. For example, it says in the first paragraph not "the Member States" but "the relevant Member States", a recognition that this applies not to all member states but only to those member states who accept this particular position. While there is nothing in the report which says Ireland is neutral, and this must never be forgotten, there are clear references to our separate position.

In regard to the question of institutional reform itself and the question of the veto, I must say that I am appalled at the extent of paralysis of decision making in Europe. We in this country, and every other small country, suffer more from this lack of action than the larger countries do. If the Community were to act more as a community, then the smaller countries would be better off. Why do I say this? The big boys are able to look after themselves. It is the smaller countries who need rules; it is the smaller countries who need a referee to see that the rules are obeyed. The more there is common action, the more the Commission is proposing action, the Council is acting on these proposals, the more matters that are subject to the jurisdiction of the court, the better for the small countries.

Of course the ideal for every country would be that everyone would be able to say we should have a veto but nobody else should have a veto. That would be ideal. Let us get away from such simplistic hopes. I would put it seriously and I ask Senators to think that if everyone had a veto in the long run over the last ten years or for the next ten years, we will suffer more from the existence of that veto. Nevertheless, I could not subscribe to the final report because I felt that a time could come — it came on milk, it came on fish and it can come again — in which there would be a vital national interest for Ireland. While I am prepared to see the veto greatly reduced, ultimately perhaps to disappear, I did not believe we could let it go completely now.

In regard to the question of the Commission, I think that has been adequately dealt with but I should like to say that I consider that the role of the Parliament must be increased. The parliament is a directly elected parliament and there seems to be a fear that to give more powers to the parliament is to transfer more powers from Dáil Éireann and Seanad Éireann to the European Parliament. This is not so. What is under discussion is in regard to powers already transferred to the Community, what should be the balance between the Council of Ministers and the European Parliament. That is what is advocated here, not the transfer of further powers. In all of this we must be careful about what Senator McGuinness has said. We should not confuse earlier decision making with better decision making. Though I am inclined to think, when one looks at what has happened in the Council of Ministers with over 80 initiatives of the Commission still lying on the table, any sort of decision making would probably be better than what is going on at the moment.

The Taoiseach goes now to meet his peers at Milan, strengthened by the comments which have been made in the other House and here. I am sure everyone will join with me in wishing him well. It is an important meeting for the future of Europe. From what he said here and in the other House today, he has indicated that in regard to the critical point of our vital national interest on the question of convergence, on the question of being unequivocal on the question of Irish neutrality, that he is determined to defend our interests and I think the good wishes of all of us go with him.

Before proceeding to the matter on the Adjournment would the Leader of the House say when it is proposed to sit again?

It is proposed to adjourn until 10.30 a.m. tomorrow.

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