Seanad Éireann debate -
Thursday, 31 Oct 1985

Vol. 109 No. 9

Report of Joint Committee on the Secondary Legislation of the European Communities: Motion.

Mr. McDonald

I move:

That Seanad Éireann pursuant to the Order of the Seanad of 13th September, 1984 takes note of the Report of the Joint Committee on the Secondary Legislation of the European Communities on the European Parliament draft Treaty on the European Union which was laid before the Seanad on 20th March, 1985 and which contains a request for a debate thereon.

I should also like to speak on Motion No. 1 which is a summary of the activities of the Community since 1 January 1985. It is difficult in a fairly wide debate such as this to know exactly where to start but one point that I should like to make as early as possible is that when people think of the European Community and our involvement in it their thoughts are mainly negative. This is unfortunate because it deters our people from counting their blessings. People bemoan the fact that we jointed the EC and are inclined to attribute every imaginary disadvantage in this country to our becoming members of the Community in 1973.

I should like to ask those people with cynical views which grouping in the world would they prefer to be in. Would they like to be part of the Middle East where there is inflation of over 100 per cent this year? Would they like to be part of the South American sphere of influence where inflation is near to 1,000 per cent? If we look at the OECD report we see that we are classified as being the 24th or 25th wealthiest country in the world. This should give us something to think about. Having said that I do not think we should be complacent about it.

Membership of the Community and the nature of the Community itself should mean that there would be an ongoing procedure and an ongoing effort to improve the present regulations and the legislation in order at all times to be striving for greater equality and for an improvement in the structures so as to reflect in a positive way on the living and working conditions of all our people. We have one of the highest percentages of youth unemployment in the Community. If you look at the vast regions of the world they do not quantify an unemployment problem. They do not need to do that by virtue of the fact that they do not provide any unemployment benefit.

I mention these things to try to put into perspective the developments in the Community and the improvements which have been experienced in our economy over the past nine or ten months. If we look at the consumer price index of April to May of this year we see it rose by 0.4 per cent, the lowest rise this year for the Community as a whole. However, there were relatively high price rises in the United Kingdom, Greece, Denmark, Italy and France and it cancelled out the low rises of less than 0.1 per cent in Germany and the Benelux countries. So, taking the rise for the year ending last May, inflation in the Community as a whole is running at an annual rate of some 6 per cent and we would be about three-quarters way up the table in that, which is a record for this country. It reflects not only the benefits we have received from the Community but also the sound economic policies that the Government are operating at this time.

In dealing with the Community I wish to aim my remarks at the draft Treaty. Nevertheless, it is not appropriate to speak about the European Community in an Irish context without mentioning the on-going achievements in the agricultural sector. The Minister for Agriculture has worked extremely hard and successfully this year as far as negotiations were concerned. On 17 October at a Council meeting he secured agreement to a scheme providing for the transfer of 125,000 tonnes of grain from intervention stores in Ireland and the UK at reduced prices for farmers with fodder difficulties after the extremely bad summer here this year. The price reduction will be equal to a 25 per cent cut in the intervention price valid at the time when the products were placed on sale and the scheme will cost — apart from the cost to the EC — the Irish taxpayer some £14 million.

There were also some excellent developments in the milk sector regarding the continuing operation of the milk super-levy. The most important thing which emerged from the 1985-86 price fixing negotiations at the Council of Ministers was the resolution of Ireland's statistical problem for 1984-85 and 1985-86. The Community now has accepted that the actual output for 1983 milk deliveries in Ireland should be fully reflected in the total quantity of milk free of super-levy available to this country. It also means that for the three remaining years of the super-levy an important and compelling precedent has been very firmly established. The work of the Minister for Agriculture in this regard must be applauded as it must be a source of great relief to milk farmers and co-operative dairies.

Another plus for the Minister for Agriculture was his success in the negotiations through GATT with the Canadian Government who decided last year to impose specific quotas on beef imports and they allocated a very small quota, 2,500 tonnes of beef for the EC as a whole for the year 1985. I understand that EC exports have been increasing in recent years from about 1,700 tonnes in 1981 to 22,000 tonnes, which mainly came from this country, in 1984. The Canadian Government gave this as their reason for imposing quota restrictions so that the difficult negotiations which were carried out within the framework of GATT resulted in an agreement between Canada and the Community some months ago for this year's quota of 10,500 tonnes. The Canadian Government will administer the quota and priority will be given to Community operators with unfulfilled contracts at the time of the imposition of the quota.

At the March meeting of the Council of Agricultural Ministers a new agreement was reached on a new agricultural structure package for Community aid for farm investment, and I will quote from a press release issued by the Department of Agriculture on 13 March last:

The comparable income target is dropped. The development plan that operated under the old directives is being replaced by a simpler farm improvement plan aimed at increasing the farmer's income. These changes represent significant improvements as many development category farmers could attain the physical but not the income targets of plans under the Farm Modernisation Scheme. Subject to milk quota arrangements dairying will qualify for aid. Farmers will no longer be limited to one plan and after one is completed may take out another within a six year period provided they satisfy the criteria laid down.

At that Council meeting also there was some agreement on installation aid for young farmers. This facility, which is optional for national Governments, has hit the headlines recently. It is something that I thought would be of considerable advantage to our country and to our young farmers. People who have a responsibility of looking at the future of Irish agriculture must be aware of the improvement in educational facilities. This, of course, has been more or less supported by the decision of successive Governments to give the relief on stamp duty to young farmers taking over farms, which is an encouragement for early transfer of holdings.

The EC has been thinking about that problem for some time. The young farmers establishment aid proposed to give assistance in two parts, one a flat premium or grant of about £5,000 on the first installation and, secondly, an interest rate subsidy on loans up to about £5,000. This assistance is quite small. In relation to the cost of establishing somebody in an industrial position it is quite insignificant. If we look at the number of people going into agriculture for the first time each year we will see that the estimated cost to the Exchequer is somewhat less then £500,000. For that reason I hope the Government will look very closely at the advantages of supporting Irish agriculture at this time.

In farming they say that there is one bad year in five, but I think that since 1979 each year has been worse than the previous one. However, this year has put the tin hat on it altogether. This year was bad mainly because of the weather. There are many farmers in severe financial difficulty because their stocking rate has gone down. This morning a farmer telephoned me to say that one of the banks was taking out a court order against him. He said that in 1977 he borrowed £20,000 for a development project, he has paid back £42,000 and he still owes the bank £60,000. That is due to interest rates. When interest rates went up to 21 per cent people were not able to meet them, so now it is really compound interest on interest.

It is difficult to know what to do in a case like that. The whole country is full of unofficial bank clerks, working full time for the commercial banks. I appreciate that they have a profession and a trade. I believe that it would be in the interests of the agricultural economy if farmers who have, in many cases, lost hope, who have spent the better years of their lives working to build up their enterprises, were further encouraged to sign over their holdings to their sons. Even though the succession duty is waived for farmers under 35 years with the green certificates, that does not mean that the transfer of a holding does not cost anything. It certainly, depending on size, costs several thousand pounds.

I hope the Government will take a serious look at implementing this scheme which will be of considerable benefit at this time when agriculture is at a very low ebb, when the prospects for agricultural development appear to be very bleak. They are worse now than at any time, but, unfortunately, farming organisations since they were established have continually used the béal bocht, so that the people who are not involved in agriculture never know when they are 100 per cent on target. At the present time, in my own experience, the agricultural industry is at a fairly low point.

I know that this year the Government and taxpayers have been generous in coming to the rescue with the fodder situation but the grain people and the tillage farmers have not been offered any assistance. I hope the Government will not lose sight of that because these people are in intensive agriculture and have to spend a considerable amount of money in order to sow a crop. If it is not reaped or if the yield is not sufficient to make a profit they will continue to pay 2½ per cent per month interest on the cost of seed, fertiliser and diesel fuel to plough and cultivate so these people have a very difficult problem.

A decision was taken on 12 March last at the Council of Agriculture meeting on regulation No. EC 7977 of this year. Under Article 7 the Council granted support for installation aid for young farmers. As I said that is optional on national Governments. It would give a boost if it were implemented. I want to support this incentive for the practical reasons that I have stated. It will greatly encourage the transfer of more holdings to young farmers.

I would like very briefly to deal with the summary of the draft treaty. This initiative was taken by Mr. Spinelli, an Italian socialist. During the seventies he was a member of the Commission. He has worked extremely hard on this so that he is looking at the problem of the evolvement of Europe from quite an inside position. The treaty is now almost 30 years old and it is good that we should look very closely at its evolvement. If we have a situation where the laws or the regulations become static they cease to be 100 per cent effective in meeting the problems of the time.

The document is roughly divided into six parts, the union between the ten member states, the objectives, methods of action and the competence of the union, the institutional provisions, the policies of the union, the finances of the union and the general and final provisions. I believe very sincerely and very passionately that the Community has been a tremendous success. Irrespective of what people say or what the cynics say, there is no other grouping or no other economic entity in the world that has surplus products available. A big problem for half of Africa is that their economies are not able to feed them. There is a similar problem in India and in other regions as well. Here the Community is criticised for over-producing.

It would not be possible for the Community, as they decided at the last Dublin summit, to provide and allocate 1.2 million tonnes of grain for Ethiopia, Niger, Sudan and the other African countries, were it not that the Community have those stocks in hands. I was reading recently that the Commission in their latest report on the Dublin plan to ease the famine situation were able to state that 87 per cent of the 1.25 million tonnes of grain is currently being supplied and will be supplied 100 per cent before the end of next month. This has been fairly effective.

There are certainly more hopeful prospects for the next harvest in the affected countries, but nevertheless there is a deficit there still. If we complain about the surpluses that we have in the Community, it would not be possible to help the poor regions of the world without that. If we are criticising the policies of the Community we cannot have it both ways. We have to accept that we should feed our own people but we should cease to look at our country as the only place in the world, and we should be part of the entire community of man. The Community over the last 15 years have done more to improve the lot of countless millions of people throughout the underdeveloped world, especially through the ACP association, than any other grouping of people over the years.

The big problem of unemployment is very difficult. Nevertheless the number of Community-assisted and Community-aided projects that are available in this country which are aided or encouraged by this social action programme of the European Community, is worthwhile. We have lots of people complaining that the regulations are restrictive or that people of such an age do not qualify. Nevertheless if we look closely at what they are intended to do and the break they are intended to give to different people, in their own way they are all extremely helpful. I hope we will be able to continue to evolve that.

No other set of politicians have tried harder to deal with the problem of unemployment. If you look back at the early part of this century, or any other century since the world started, you will see that people were not looked after. You had the haves and the have-nots. Now there is great equality. At present we have the first generation of politicians ruling over Europe who are trying to solve the unemployment problem without taking the easy way out by picking a war with somebody and getting rid of 40 million or 50 million people in that fashion, as has happened in Europe on two separate occasions in this century. People who bellyache about the problems should look at the practical successes of the implementation of pure democracy in the union. That is why I particularly like the Spinelli report, not because I accept everything that is in it but because it is a very objective way of improving the present situation, of bringing, as the founding fathers said in the original Treaty of Rome, the peoples of Europe closer together.

The achievement of the aims, as set out in the report, may be either:

(i) by common action, which means all acts issued by the union itself or

(ii) co-operation, which means all the commitments which the Member States undertake within the European Council.

The report goes on:

Transfer from cooperation to common action is provided for but not the reverse procedure, except for foreign policy matters. The principle of subsidiarity, whereby the Union shall act only to carry out those tasks which may be undertaken more effectively in common than by Member States acting separately, governs the degree to which a matter is the competence of the Union.

The one weakness in the present European Union is the question of foreign policy. For our country it is particularly difficult, because many of the other states in Europe were at one time or another colonial powers. We do not fit into that category. Therefore, our views of foreign affairs and what the ordinary people would like do not always coincide. It is very difficult to find a common foreign policy which suits the interests of all the member states, who have such diverse backgrounds, such diverse histories and also varying and countering balances on their economies. This document goes a long way to introducing a new dimension into the international scene.

Another problem which has not been resolved yet, and to which the Spinelli report addressed itself, is the question of the veto. I have long held the view that the veto should go because it slows down decision-making to an extraordinary degree. I know that our various Ministers have threatened to invoke the veto but I cannot recall if they ever really invoked it. We would be better as a European Community if the decisions were taken faster and by a simple majority. The present faulty operation of the decision-making system is damaging to the interests of our country, as it is to those of the other member states. In cases where the Treaty provides for decision-making by the qualified majority system — even where countries do not invoke the veto aspect of the Luxembourg compromise or 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. Therefore, the decision is postponed again and again, very often as a result of minor irritants in the entire administration.

Perhaps we should have in the next short period a decision on whether the veto should go. It is interesting to note that the veto is not provided for in the Treaty of Rome itself. It was introduced at the Luxembourg compromise. If we could get back to a few small improvements like that, the Community would make a great leap forward.

This year we have had sustained attacks on the Common Agricultural Policy. With the enlargement of the Community on 1 January 1986 the CAP will come under great strain. There will be two more countries with fairly heavy agricultural economies who will be drawing on the guaranteed price system and the guidance section. The extension of the disadvantaged areas this year will mean considerable benefits for thousands of farmers in practically every county in the Republic.

In his document, Mr. Spinelli gives a great boost to the regional policy. The regional policy has not been as successful as it could have been. It is not perceived by the public to be very meaningful, apart from an effort made some years ago to put up some hoardings adjacent to towns where infrastructural schemes were in operation. We have a few of those which were put up and the work was never carried out. They were deferred for budgetary reasons or whatever. That makes a further laugh of the whole situation. Mr. Spinelli — and I agree with him 100 per cent — recommends that it should be possible for the regions to draw on the Regional Fund directly. In this country — I suppose other countries are much the same — the Department of Finance, which I am sure do a great job, have a stranglehold on every few bob which runs from the Community to here. If county councillors were able to apply directly to the Regional Fund and if they were able to fight their own cases, money would come faster. It would be appreciated more, because there would be a discussion at local level and people would see the benefit coming from that.

The Social Fund is very important to this country. It has given hope. There are a number of employment schemes such as the youth employment schemes, the incentive schemes, the social employment scheme. Some of these schemes are operating extremely well. The Teamwork scheme, which is very much oversubscribed, has done quite significant work throughout the country. It has given people the opportunity to do something. It has given people the experience of working in public, as well as allowing them to feel that they are gainfully employed. These schemes have done a great service to the youth, the unemployed and, in many cases, to the disadvantaged people in this country.

These are the main problems. Transport policy is very important to this country. There will not be a breakthrough on transportation in the foreseeable future because it accounts for such a high percentage of the total activity of the Community.

If we take 1984, progress in the Community has been significant and worthwhile. The new Commission appear to have started on their tasks fairly effectively. We can only wish them well. As far as this country is concerned, we continue to benefit significantly. I regret that we have not got an up-to-date report to hand on the activities of the Communities. It would have given us a clearer picture of what the figures were for the first six months of this year. We must fall back on the latest figures that are published for the calendar year 1984. In conclusion, I would like to look at the impact of Community membership on this country so that the significance of our participation in the Community and its successful future development may be very clear to everybody. We accept, of course, that we are net beneficiaries in practically every way. In financial terms our gross contributions for the year 1984 were something over £208 million. The benefits that we received from the Community were four times that figure. In other words, we paid in £208 million in various levies and taxes and we got back £851 million, plus £125 million in preferential loans from the European Investment Bank.

The net transfers of grants represent over 10 per cent of our current budget receipts in 1984, and reduce by that amount the level of taxation required to provide current services and support farm incomes. In the absence of this net payment we would either have had to increase our present VAT rates from zero, 10 per cent and 23 per cent to rates in the order of 8.5 per cent, 18 per cent and 27 per cent respectively, or else personal taxation would have had to be increased by almost 30 per cent on the average tax bill.

Over the period since we joined we have accumulated something in the region of £6,500 million. This is a fair contribution to the development of this country. A very large amount of that money has been extremely well spent and accounted for. There is now a concerted effort to look at the institutions and administration of the Community. The Spinelli report was adopted by the European Parliament. It is now a very extensive Parliament with 400 members and is being increased with the accession of Spain and Portugal. The Community is now on the move. I am confident that great economic benefit can accrue from our continued membership, working within the framework of the Community towards a more peaceful situation. Every other day one sees people taking pot shots at the Community, whether it is on development aid or whatever. Nevertheless, the excellent work that has been done and the actual food aid, either grain or milk powder — whichever has been allocated — must save countless millions of lives. It is only for the last year that people are conscious of starvation in Ethiopia. The Community are spending almost £3,000 million per year in aiding and assisting in the development of the ACP countries, which are mainly in Africa and the Caribbean. Nevertheless, the assistance that has been afforded to those countries, which in the main are new and only recently independent countries, has been given without any strings attached. I suppose most of them would classify themselves as democracies except in the main they have only one party in their government system. The Community do more than anyone else to assist their fellowmen.

I would hope that we will have a continuing opportunity to look at the work of Mr. Spinelli and the report on the development of the structures. They certainly warrant a considerable amount of thought. I am very happy that on the Order Paper we have eight or nine motions dealing with different aspects of the evolvement and development of the Community's structure. I look forward to continuing debates on narrower sectors of the work in Europe.

It is important that our Ministers, even though it is a very heavy physical drag for them, should continue to put their backs into the work of developing the Community so that the peoples of all the regions will have better living and working conditions. Perhaps there will be a greater distribution between the poorer and the richer regions of the Community. That is one part of the original Treaty of Rome that has not progressed. It was a first aspiration of the founding fathers but it has not progressed even by 1 per cent, 2 per cent or 3 per cent. As a matter of fact, taking the poorer regions, especially when the Community extends again, the relativity between the poorer and wealtheir regions will even suffer one or two percentage points from 1 January 1986. This, I think, after 30 years is not sufficiently good progress. It is a very narrow yardstick on which to assess the tremendous work the Community has accomplished over the past ten months.

Mr. Lanigan

Coming towards the end of an era I would suggest that it is very good that we are able to discuss what has happened in the EC during 1985. A number of things have happened during the year which would appear to be making changes in the structures and would appear to benefit the people of the Community; but, in fact, coming towards the end of the year we cannot see very much progress.

I am delighted that the Leader of the House is present. We must pay a compliment to him and the ad hoc committee for the work they did during the year in attempts to progress towards the actuality of the unity of Europe. It is interesting to know that the conclusions the ad hoc committee came up with were pretty close to those drawn up by the Spinelli report. However, if we look at what has happened in the EC during the last 12 months, what relevance it has had in the areas of economic and social convergence and what impact it has had on our unemployment problems, the relevance of Europe and its institutions to our younger people, we would have to say very little progress has been made. To the young people of this country the EC is not fulfilling the objectives for which it was set up. There has not been one iota of convergence of economics within Europe. There is no way that the social policies which were in the original Treaty are being implemented. The richer areas of Europe are getting richer and the poorer area are remaining poor. There has not been one iota of convergence between the poorer areas and the richer areas. With the accession shortly of the two new countries we will have a further widening of the gap between the richer areas and the poorer areas.

As Senator McDonald said, the CAP has been under pressure for the last 12 months. It will come under increasing pressure with the accession of the two new countries because of their very high dependence on the agricultural sector. The CAP will come under pressure also because of the type of agriculture that these countries are involved in. At present the CAP is mainly involved in grain and beef, and the protection of these sectors of the agricultural market. With the accession of countries which are basically fruit-growing and which produce various items which are not, generally speaking, in the EC at present the farmers of these countries are going to look for the same protection as we have at present. Therefore, there will be tremendous pressure on the CAP.

With regard to the situation during the year regarding the convergence in social matters, countries like Ireland are not getting the type of aid that we need to bring the standard of living here up to a standard of living that people have on mainland Europe. That does not mean that we are not getting benefits from Europe. When we look at the figures we find that for an input of £689 million into Europe over the last number of years we have got out £4,211 million. So we are getting benefits, but these benefits are not enough to bring a reasonable unity of standards of living throughout the Community.

There was a programme on television the other night called "The Green Begging Bowl", giving the impression that we are continuously looking for something from Europe and giving nothing back. The title of the programme was a misnomer. We should not allow ourselves to be considered to be people who have a begging bowl out the whole time. We have a lot to contribute to Europe. We have contributed a lot to Europe.

Professor Dooge

We could have a small industry making begging bowls.

Mr. Lanigan

Selling them or buying them? The situation in Europe vis-à-vis Ireland is not good. Mainland Europe has definitely progressed in its economy much faster than we have. The European Economic Community is a definite misnomer in the sense that there is no European Economic Community. We read in technological magazines and in economic magazines that the main reason for this is because of barriers within the Community. The barriers are set up against trading within the Community, and these are major barriers. We have the physical barrier first — and we have a major physical barrier. Apart from the physical barriers, there are too many differing rates of VAT and rates of import duties. The difficulty in exporting from Ireland to countries within the EC are major ones. In the United States there is no barrier except the physical barrier of transporting goods from one part of the United States to another part. That is a series of united states which are united economically, physically and politically. We cannot compete. We have not been able to compete in this so-called union of states because of the barriers that are still there between the states. Unless we break down these barriers we are not going to progress.

One of the big selling points for Ireland has been the fact that we have access to Europe. Unfortunately, the access we have is a fragmented access. We have access to certain markets, but we do not have access to all the markets on equal terms. Unless we can get to the stage where an exporter from Ireland can get to all markets within Europe with one tariff rate and one VAT rate, we will not progress. Europe will not progress. Europe will further lag behind the economies of the United States and in particular, the economies of countries like Japan.

One of the main features of driving from the country to Dublin, if one is coming from the south, is to come into Naas and see the continuing building of storage space for intervention products. This, surely, is not the way we should be going. Storage being built for agricultural products to be kept basically until they are dumped at a time when half the world is starving does not make sense. The situation where we have an excess of production over demand should surely be examined in more detail than has been done. There must be some way that we can market our excess products in areas of the world where there is a need for them. It need not be done in a totally monetary manner. It could be done by transferring some of these foodstuffs to countries which need them and they could be paid for by transfer of energy or products. There must be a way of getting out of this total build-up of foodstuffs in Europe at a time when there is a total lack of foodstuffs in other parts of the world.

The parties of the European Parliament throughout the past 12 months have become more self-centred than they have been in the past decade or so. This naturally has been caused by the run-down of a lot of the economies of Europe. As the economies run down, rather than trying to get into a unified situation with the other countries of Europe, each country is trying its own policies; retrenching, becoming more self-centred, and this is not a good omen for Europe. Neither is the fact that in America at present the Congress are trying to push through a retrenchment policy; they are trying to cut back on imports from outside; they are trying to encourage exports and they are trying to push down the value of the dollar so that their exports will not be as expensive as they have been for the past number of years. If the value of the dollar is pushed down this would have drastic consequences for a small open economy such as we have which is so geared to exports and particularly to exports to the United States.

Senator McDonald mentioned that he does not see the need for the veto in terms of the political situation in Europe. I think it is essential for a small country like Ireland that we have the veto provision in any union terms because, with the small number of MEP's and the small representation we have it is only through something like a veto that we could, at the end of the day, when our vital national interests would be at stake, protect ourselves and it is only at a time when vital national interests are at stake that the veto can be brought in.

The question of the Spinelli Report and its implementation has been in many people's minds during the past 12 months. There is no doubt that there is a need for a furtherance of practical unity within Europe. There is a need for political and economic unity. There is a danger though, and it is spelled out by the joint committee that, if this report were implemented, because of the fact that we will not get involved in any situation where an alliance of a military nature would have to be entered into, a two-tier Europe might emerge. It is suggested by Spinelli that if we do not get involved in a military union we will be left out of the mainstream of the EC, that there will be one EC for member states who are involved in a military alliance and a secondary EC for those who are not involved.

This would have major implications for us because it would mean that we would not be in the mainstream of European politics; we would not be in the mainstream of the EC and we could further lose out and we could be left further out on the periphery. It is essential that if and when the Spinelli Report is being adopted there should be no suggestion of a two-tier Europe and that countries such as Ireland who want to remain neutral outside alliances of any nature which are military, should be allowed to continue as full members of the European Economic Community.

In the past 12 months we have seen a number of things happen that might seem to be minor in nature but to a lot of people they are of major importance. The emergence of the European passport is something that many people do not want. We should be able to keep our own green passport, our own national passport. We should not have the European passport foisted on us under any circumstances. This green passport, to people living in Ireland, might not seem to be of great importance but, speaking to people carrying an Irish passport and living in Britain or the United States, you find that carrying an Irish passport means a lot to them. They are emphatic that they do not want the Irish green passport abolished. They are emphatic that they do not want to have a European passport. They want to retain their Irish passport. This is something to which we should address ourselves. I am not too sure exactly where we are in terms of passports, whether the European passport is now a fact of life or whether the Irish passport will not be available after a certain date. If it is going to be withdrawn and we are to have the European passport only, I would ask the Minister to ensure that if a person wants to carry an Irish passport he can do so. If he wants to have the European passport, so be it.

During the year we have had many discussions about ecology and about the problems that are associated with acid rain and pollution. We will have to take more cognisance of the great damage being done by pollution which is preventable. The situation in many countries of Europe regarding pollution has got out of control but nevertheless, we should look very carefully at emission controls before we spend a lot of money in eliminating what might not be a problem being caused by Irish emissions.

On the international scene we have seen during the past 12 months efforts being made to ensure that peace would come in the Middle East and in the past couple of weeks we have seen a number of occurrences which would suggest that peace will not come in the short term to that particular area. A lot of people have been working extremely hard to ensure a peaceful end to the problems that are associated with Middle East politics. Europe can play a major part in this area. At a time when people are extremely worried about a peaceful conclusion to the problems there, Europe can play and continue to play a more forceful part in trying to ensure that any efforts that are being made to bring people together in that area should be made.

There is an interesting parallel in that every time progress seems to be being made in the North of Ireland the extremists come out and statements are made by them which put back the cause of peace. We see the same thing happening in the Middle East; every time efforts seem to be proceeding towards a peaceful solution in that area, extremists on all sides emerge and put back the solution to the problem.

During the year we have seen efforts being made by Jordan and Arafat to bring a reasonable solution to the Palestinian problem. We have seen progress being made by the United States and suddenly, because of a number of isolated or seemingly isolated incidents, all these efforts seem to come to nil. At a time when the United States, Jordan and the PLO had decided that they could meet, suddenly the Israelis decided that they would not meet with two members of the seven-member delegation of Palestinians. Then we saw the bombing of Tunisia by the Israelis. There is no doubt that that bombing of Tunisia was well prepared and was not a response, as the Israelis said, to the killing of three people in Larnica. The killing of three people in Larnica might seem to be an isolated incident but it is suggested — and it is quite obvious that the three people killed in Larnica were not innocent tourists — that at least one of them had very close connections with the Mossad, that one of them had very close connections with an assassination in the Lebanon of a very high official of the Palestinians. Then we had — and it has been put down as a response again — the hijacking of the Achille Lauro. At a time when the Palestinians had world opinion on their side, because of the bombing of the PLO headquarters in Tunisia and at a time when even the Americans abstained for the first time on an issue such as this in the United Nations, the Palestinians are supposed to be stupid enough to have hijacked a ship and killed in cold blood an elderly handicapped person. It does not appear logical that at a time when public opinion was in favour of talks and when public opinion was on the side of the Palestinians, who are very adept in the political area, would they get involved in an atrocity such as the killing of Klinghoffer on that ship. It would appear that when a peaceful solution to the problems of the Middle East seem to be emerging, on both sides of the political spectrum there are people who do not want progress.

I would appeal to the Minister to continue the efforts he has been making in the European Community to get people talking in the Middle East, to ensure that the European Community puts its back behind all the efforts that are being made to ensure that peace comes to that area. If it does not come, we are a country close enough to that area to experience great suffering in that case.

From the Irish point of view the Minister and the members of the European Parliament and the institutions of Europe are going to have to work harder to try to solve the unemployment problem of this country. We have not yet got the updated booklet on the developments in the European Communities for this year, but every year we come in to this House it is stated that committies are being set up, talks are going on, efforts are being made to solve the drastic unemployment problem we have throughout Europe. Every time we come into this House unemployment in Europe has gone up. It is something, we are told, that can be tackled by the efforts of smaller communities, by local community effort, by people developing projects in their own areas, by the local authorities getting involved.

We are not getting from Europe the type of aid or leadership that is necessary to implement the policies which could combat unemployment. Unemployment in Europe is higher than in any other of the developed areas of the world and is growing at a faster rate than in any other developed area. This is possibly because of the fragmentation of policies throughout Europe and because of the basic political philosphies of the different countries. In the next 12 months I would hope that when we come back here to discuss what has happened in Europe we will see a greater effort being made to combat unemployment, a better economic union than there is at present, a convergence of rates of VAT and that there will not be different rates of importation duties between European countries. We hope that, except for the physical barriers that are there, we will have an economic union. If we do not have an economic union we might as well break up and go back into the individual states we had before the EEC. If that did happen it would have drastic consequences for our small economy.

Minister for Foreign Affairs (Mr. P. Barry)

First, I should refer to what Senator Lanigan said about passports just in case any other Members of the House are under a misapprehension about them. There is no European passport. It is still an Irish passport. A common form of passport is being issued in all the Member States of the Community since 1 January 1985, common in appearance and common in content. The Irish passport is in Irish; it is imprinted with the harp but most important, it is issued by the Minister for Foreign Affairs in Ireland just as the passport in all other capitals is issued by the Minister for Foreign Affairs there. Even though the appearance is different, it is an Irish passport. I would like to clear that point at the outset.

I am very glad to have the opportunity to speak to the Seanad about the period since 1 January 1985. During that period the Community has continued to approach the complex range of problems facing it with a combination of realism and imagination. Both of these qualities are necessary if the Community is to function satisfactorily and if it is to maintain its momentum along the path of European integration envisaged by its founders.

During the current year, the Community has demonstrated a degree of realism in dealing with the numerous day-to-day issues confronting it. At the same time, most notably at the European Council in Milan, there was evidence on many sides of the imagination necessary to continue the process of mapping out the next stage of European integration.

Since the European Council at Stuttgart in June 1983, the Member States have been committed to a relaunching of the European Community. This aim has been pursued along two parallel paths. On the one hand the Community has sought realistically to find practical solutions to the immediate problems with which it has long been confronted. On the other hand it has sought imaginatively to examine ways of restoring momentum towards the longer term goal, as the treaty puts it, of "ever closer union among the peoples of Europe".

The Irish Presidency, which immediately preceded the period under review and in the course of which I reported to you last November, saw substantial progress along both of the paths which I have outlined. The immediate problems facing the Community were dealt with successfully. A necessary supplementary budget was agreed, significant progress was made in the enlargement negotiations and negotiations for the Third Lome Convention were successfully concluded. At the same time, the two ad hoc committees established by the Fontainebleau European Council in June 1984 to examine ways of regaining momentum towards European integration, made interim reports to the European Council in Dublin in December.

The signature on 12 June of this year of the Treaty of Accession in respect of Spain and Portugal represented a further very important and very welcome development. The European Communities (Amendment) Bill 1985, which I introduced in the Dáil last Thursday and which this House will be considering in the near future, will permit Ireland to ratify the Treaty of Accession. As this House will be discussing in detail this latest enlargement of the Community when the Bill comes before it, I will confine myself here to a few general remarks.

We welcome old friends, Spain and Portugal, as new partners into the Community and look forward to their accession on 1 January 1986. The outcome of the enlargement negotiations was a fair and balanced one. In the key area of fisheries, the agreements reached are very positive in terms of the protection and further development of the Irish fishing industry. Furthermore, the abolition of quantitative restrictions from the date of accession and the progressive dismantling of industrial tariffs over seven years should be of considerable assistance to Irish exporters, some of whom have in the past encountered difficulties in gaining access to the highly-protected Spanish market. The opening of the Iberian markets will also provide opportunities for the development of our agricultural exports to those countries.

It is my intention today, in reporting on developments in the European Community since January 1985, to focus in particular on the work currently in progress at the Intergovernmental Conference, which was agreed at the European Council in Milan on 28-29 June.

For more than a decade now, various attempts have been made to draw up blueprints or more limited and specific proposals for progress towards European Union. The Solemn Declaration on European Union adopted at the Stuttgart Summit in June 1983, which followed the Genscher-Colombo initiative, appeared to represent some limited progress. The Draft Treaty on European Union adopted by the European Parliament in February 1984, helped to revitalise the debate on the future of the Community and to place the onus for advancing the integration process on the governments of the Member States.

In Ireland the report on the European Parliament's Draft Treaty drawn up by the Oireachtas Joint Committee on the Secondary Legislation of the European Communities has helped to stimulate informed public debate on the subject of European Union. I welcome in particular the insight of the joint committee that "of all the vital national interests that must be defended within the Community none is more vital than Ireland's continued membership itself".

In keeping with the Solemn Declaration at Stuttgart and in the spirit of the Parliament's Draft Treaty, the European Council at Fontainebleau in June 1984 decided to establish an ad-hoc Committee for Institutional Affairs. This committee was inaugurated during the Irish Presidency and became popularly known as the “Dooge Committee” after its distinguished Irish chairman.

The report produced by the Dooge Committee on 19 March of this year identified three priority objectives — a homogeneous internal economic area, the promotion of the common values of civilisation and the search for an external identity. As the means towards these objectives it identified the need for efficient and democratic institutions and, in particular easier decision-making in the Council, a strengthened Commission, and the European Parliament as a guarantor of democracy in the European system.

The Dooge Report constituted the principal basis of discussion at the European Council in Milan on 28 and 29 June. That European Council was the first one for a long time to be afforded the opportunity of an in-depth discussion on the way the Community is working, unencumbered by immediate and controversial topics.

The Milan Summit pronounced in favour of an Intergovernmental Conference on European Union. Senators will recall that at Milan this country was the only one of the newer member States of the Community to favour the convening of the Intergovernmental Conference.

The Intergovernmental Conference opened at Foreign Minister level on 9 September, 1985. The proceedings of the conference which relate to revision of the EC Treaty are being prepared by a preparatory group of senior officials, which is reporting to Ministers. As to the political co-operation aspects of the conference, the Ministers for Foreign Affairs of the Community, meeting on 22 July on foot of the conclusions of the Milan European Council, instructed the Political Committee to draw up the text of a draft Treaty on the basis in particular of the Franco-German and UK drafts concerning political co-operation with a view to a common foreign and security policy.

As regards revision of the EC Treaty, the conference has been dealing with a broad range of issues. Discussion to date has focused particularly on the following four areas which the Presidency has described as "the lynch-pins of the discussion": the completion of a single internal market and the use of qualified majority voting to make this possible; increasing the economic and social cohesion of the community; enhancing the role of the European Parliament; and increasing the executive and management powers of the Commission. The Commission has very recently made proposals regarding the further development of the European Monetary System. This area could also become a central one in the work of the conference.

Proposals have been submitted by the Commission and the different member states in several other areas also including: research and technological development; the environment; cultural co-operation; development aid policy; energy policy; employment policy; the question of incorporating a declaration on protection of fundamental rights in the Treaty; and the question of differentiated participation by member states in Community activity.

The Milan European Council endorsed the objective of achieving a single internal market in the Community by 1992. Consideration of how this objective might be attained has been a central element in the deliberations of the Intergovernmental Conference. The conference has been focusing mainly on a Commission proposal which would provide for a specific Treaty commitment to complete the internal market by 31 December 1992 and provide that this would be brought about by a move from unanimity to qualified majority voting under the Treaty Articles which the Commission considers relevant in this regard.

This country, which exports a very high proportion of its industrial output and has in consequence been particularly handicapped by the failure to remove all obstacles to trade, favours steps to bring about the achievement of the single internal market. The Government accept that there are a number of areas where the replacement of an existing unanimity requirement by qualified majority voting would help to bring about achievement of that goal. However, there are particular areas, such as the harmonisation of taxation, which are sensitive for this country. In respect of these we are seeking, together with others who share our concerns, to have a requirement for unanimous decisions retained.

In our approach to the Conference, we attach particular importance, as do some of our partners, to the need to give effective expression in a revised Treaty to the objective of increasing the economic cohesion of the Community, particularly through the reduction of differences in levels of regional development, and to providing for the necessary steps in this regard.

We have, therefore, tabled two complementary proposals in this area, one on regional policy and one on increasing the Community's economic and social cohesion. The proposal on Regional Policy is intended to fill a gap in the Treaty. Up to now, the legal basis for the development of the Regional Policy has been the Community's residual powers under Article 235 of the Treaty. Our proposal is designed to enhance the importance of Community Regional Policy by bringing Regional Policy into the body of the Treaty, by describing the objective of the policy and by providing for the adoption of measures in pursuit of the objective.

Our second, and related, proposal on increasing the Community's cohesion is designed to improve and strengthen a Commission proposal on the same subject put forward earlier at the Conference, by putting what we believe to be the necessary emphasis on the role of the Structural Funds and other financial instruments in promoting Community cohesion.

It is of course too early to predict the outcome of the Conference on this as on other issues. However, we have cause for some satisfaction at the fact that the objective of increasing the cohesion of the Community is now established as one of the main issues in discussions at the Conference. The Government will seek to ensure that this objective is kept well to the forefront in the work of the Conference.

We believe that there is a persuasive case for enhancing the role of the European Parliament. Positive proposals in this regard have been tabled at the Conference. These would give the Parliament stronger influence than at present on the substance of decisions taken by the Council in particular areas to be determined. They would also provide that in certain areas, including the creation of new Community own resources, and treaties to be concluded between the Community and third parties, the agreement of the Parliament would be required before the necessary decisions could be taken. The Government have a broadly positive attitude to these proposals. I should add, however that we, like the majority of our Community partners, would not wish to see the present institutional balance overturned. We, therefore, favour leaving the last word to the Council in most areas, as well as avoiding the introduction of new delays into a decision-making procedure which is already cumbersome. This country also generally favours a strengthening of the executive powers of the Commission and we are lending support to proposals at the Conference in this regard.

The Government also have a broadly positive approach to proposals which have been tabled at the Conference providing for Community policies in the areas of Research and Technological Development, and Environment, although we have reservations on some of the details and will seek to have these taken into account.

Discussions at the Intergovernmental Conference with a view to possible amendments to the EEC Treaty have to date focused principally on the areas which I have outlined. As will be clear from what I have said, this country is taking a very positive approach to the work of the Conference in general. We are doing so by tabling our own proposals, promoting amendments to proposals tabled by others, and by supporting proposals from others which meet our concerns.

As to the European Political Co-operation aspects of the Intergovernmental Conference, the political directors of the Ten, Spain and Portugal, together with the representative of the Commission have met on a number of occasions and are continuing to work on draft elements of a Treaty on European Political Co-operation. The aim is to present proposals to the European Council at its next meeting on 2-3 December.

Successive Irish Governments have accepted the political objectives entailed in the Community Treaties and have been prepared, in principle, to consider proposals aimed at furthering these objectives. Three elements of the work on an agreement on European Political Co-operation following the Milan Summit are of particular importance to this country.

First, it has always been our view that the interests, particularly of the smaller member states, are protected if the extent and nature of their commitments and their rights within the Community are clearly and precisely defined. Consequently, it is of advantage to us that the commitments, obligations and rights of member states with regard to the process of political co-operation should be incorporated and delimited in a juridically precise and binding form. This does not mean that we shall be forced to adopt positions against our will. Political co-operation will continue to proceed on the basis of consensus flowing from a genuine effort to identify the scope for common viewpoints and positions in foreign policy.

Second, the approach which the Government has adopted explicitly sets out important distinctions, to which I have referred repeatedly in the past. The most significant of these is the Government's insistence that consultation and co—operation on security matters other than their political economic aspects, that is to say matters with operational defence implications, should be placed firmly outside the framework of the proposed political co-operation arrangements. Such co-operation on security and defence matters will explicitly be the province of the Western European Union which Ireland has no intention of joining.

Third, Ireland has consistently argued that the further development of political co-operation must be firmly linked to developments in the Community framework. In this regard, the approach adopted is advantageous since it clearly implies that progress within European political co-operation will be part of an overall advance towards the creation of a genuine community of economic interests.

The Common Agricultural Policy continues, of course, to be of paramount importance to this country.

The concentration within the Community in recent months on institutional questions should not lead us to lose sight of the fact that the CAP remains the most developed common policy of the Community and the one which has brought the greatest benefit to Ireland. Recent debate on the reform of the CAP has been stimulated by the publication of the Commission's Green Paper. Extensive consultations are taking place between the Department of Agriculture and other interested parties in order to determine the appropriate Irish response to the various proposals contained in the Commission's document.

I think it is obvious, in the light of the economic and financial realities in which the Community now operates that farmers can no longer expect automatic yearly increases in guaranteed prices, nor be allowed to produce unlimited quantities for sale into intervention. The approach put forward in the Commission document is one which would give market prices a greater role in guiding supply and demand. Such an approach could result in a more restrictive price policy than we have experienced hitherto. The Government will be seeking to ensure that in any decisions arrived at following discussion of the Commission's Green Paper full account is taken of the level of dependence of this country on agriculture.

We are approaching the Commission's proposals in the light of certain considerations which, I feel, must be kept to the forefront. Chief among these is the importance of agriculture to the Community as a whole, and in particular to countries like Ireland where it is still at a developmental stage. We must seek to ensure a fair standard of living for farmers, market unity, financial solidarity and Community preference. Moreover, account must be taken of the need for the convergence of income levels between farmers in different parts of the community and for a reduction of the gap between farm and non-farm incomes. The approach which I have outlined also inevitably involves advancing the case for an increase in the Community's own resources since any unduly restrictive approach to the financing of the CAP would encourage a tendency towards national aids.

I should also like to recall that during the period under review the Agriculture Council on 16 May agreed to allocate 58,000 additional tonnes of milk to Ireland for super-levy exemption purposes in the 1984-85 and 1985-86 marketing years. This means that the quota figure for each of these years is based on the final production figures for 1983 and not on the figure used in March 1983. The agreement, which no more than recognised the justice of our case, established a compelling precedent for future years, thus putting an end, I hope, to the controversy that has surrounded the issue for some time.

At a time when there is perhaps a danger, because of enlargement, of regional disparities in the Community becoming even more pronounced, the Government will continue to press for more effective action by the Community to reduce regional imbalances. As I have already explained, we attach particular importance to the question of economic convergence at the Intergovernmental Conference and have put forward our own proposals on regional policy and cohesion. Indeed we were to the forefront at Milan in urging that the objectives of harmonious development and economic convergence should be given due weight in the pursuit of the Community objective of achieving a single internal market.

With a view to making progress towards genuine convergence the Government will continue to support calls for increased resources for the Structural Funds.

They will continue to exploit such possibilities as may exist for greater concertation of the economic policies of member states, notably to combat unemployment. They will continue to press the case for a further increase in the Community's own resources.

The 1985 Community budget was adopted, somewhat belatedly, in June of this year. It will be recalled that the original budget for this year was rejected by the Parliament last December on the grounds that it failed to provide in a sufficiently specific manner for the financing of the CAP.

The budget adopted for the current year included provisions for the CAP, the Regional Fund and the Social Fund which represented increases of 8.6 per cent, 14 per cent and 15.5 per cent respectively on the figures in last year's budget.

An urgent challenge facing the Community is whether it can avoid falling behind its main competitors in the field of technology, the United States and Japan. On the Community's ability to answer that question in the affirmative may depend to a considerable extent its economic future and its ability to deal with the economic problems with which it is confronted. If ever a challenge required both realism and imagination this is it. Hard-headed realism tells us that we must compete. Political and technological imagination are what can make that competition possible.

The US decision to pursue its so-called Strategic Defence Initiative threatened to siphon off European research capacities and faced the Community with a challenge which it has now begun to meet. The Milan European Council unanimously and enthusiastically supported a co-ordinated European approach in advanced technological research involving both the French EUREKA project (which unlike SDI, is a civil programme) and the Commission's proposals for strengthening technological co-operation in Europe. It also expressed the wish that the EUREKA project should be open to those non-Community countries, such as Austria, Sweden and Switzerland, which had already shown interest in taking part in it.

As befits the urgency and importance of this initiative, the follow-up action on the EUREKA project called for by the European Council began promptly with an ad hoc meeting composed of Foreign Affairs and Research Ministers which took place in Paris on 17 July. Ireland was represented by myself and by the Minister for Industry, Trade, Commerce and Tourism. Work is now continuing at official level in preparation for a further ministerial meeting in Hanover on 5 and 6 November which is expected to finalise a Declaration of Principles governing EUREKA.

In the development of a co-ordinated European approach to advanced technological research, there are two particular concerns to which the Government attach importance. First, we are anxious to ensure for the Community a real role in the development of European technological co-operation as called for by the Dooge Committee. We believe that a programme clearly linked to the Community framework would best serve the interests of smaller member states. Secondly, we wish to ensure an adequate role for Irish firms in EUREKA. We are pleased, therefore, that at a meeting earlier this month of high-level representatives in the EUREKA framework it was agreed, subject to confirmation by Ministers next week, the participation in Eureka should be open to small-and medium-sized firms.

I think it appropriate that I should mention developments of note in the period under review in the area of development co-operation. I have spoken today of the need to combine realism and imagination in the conduct of foreign policy. These aspects were married without question in the Live Aid "Feed the World" Concert appeal last June when the efforts of a single-minded Irishman, Bob Geldof, elicited a splendid generosity in response to the suffering of the famine victims. It was indeed heartening that in responding to the Live Aid appeal, the people of this country once again demonstrated both a remarkable sensitivity and a pragmatism in their generous donations. The Irish Government — inspired by this generous response — complemented the national donation with a special contribution of a quarter of a million pounds.

The European Council at Milan in June last noted that the objective agreed at the Dublin Summit the previous December has been achieved and that 1.2 million tonnes of cereals or their equivalent was well on the way to being mobilised by the Community and the member states to meet emergency requirements arising from famine in Africa. The European Council welcomed the Commission proposal for a special reserve allocation, and it considered that it was necessary to set up a general co-ordinated strategy against short and long term drought and also to support the African countries' policy redirection effort in the field of food security.

The Irish Government will continue to respond to developments with deep concern. We shall continue to give what aid we can bilaterally, devoting particular attention to the acute problems of transport in the areas affected, and we shall seek to ensure with our Community partners that the enormous difficulties posed by transport continue to receive the urgent attention they require.

I should like to refer to the contribution of the Community to cross-Border co-operation in this island. The Special Border Areas Programme, started in 1981, continues to provide funding for the development of tourism and the necessary infrastructures in the border region. It is estimated that, in the event of sufficient suitable projects being submitted, around four million pounds will be provided in 1985 towards the further development of tourism.

As Senators will probably be aware, a number of studies designed to promote the economic development of border areas have been undertaken. At present the Community is part-funding a study to prepare a development plan for the Lough Melvin catchment area, one of the less-developed areas of Ireland which traverses the border between Countries Leitrim and Fermanagh. It is anticipated that concrete recommendations for the future economic development of the area concerning action which can be taken in both private and public sectors will be made in the final report, due to be presented later this year.

Finally, I should like to deal with developments in the area of European political co-operation other than those which I have already described when reviewing the work of the Intergovernmental Conference.

When we view developments in the world around us we may sometimes feel tempted to despair. The arsenals of the superpowers continue to grow, as does military expenditure generally. We inhabit a world which has the nuclear firepower to destroy itself many times over but which apparently cannot feed those who are hungry. It is a world in which international anarchy threatens order, in which totalitarianism and terrorism threaten political dialogue, negotiation and compromise.

It is essential, therefore, in this wider context also, that we be realistic about the serious threats with which the world is faced, and at the same time imaginative in our attempts to contribute to a solution of these problems. Through the process of European political co-operation the Ten seek to contribute to international stability, to uphold the rule of law, to encourage co-operation and dialogue, and to promote respect for human rights.

The Government have welcomed the decision by President Reagan and General Secretary Gorbachev to hold a Summit meeting in Geneva in November. We hope that this meeting will open the way to reaching solid and lasting agreement on the range of issues under discussion at the Geneva space and nuclear weapons talks which commenced in March. We also hope that the Summit meeting will allow agreement on other bilateral issues affecting relations between the two superpowers. It has been Ireland's consistent belief that a process of realistic dialogue between the US and the Soviet Union is an essential prerequisite for more secure and more stable international relations.

Within the framework of the CSCE, a number of meetings have taken place this year at which the Ten have maintained their usual close contact and co-ordination. The Conference on Confidence and Security-Building Measures and Disarmament (CDE) has continued its deliberations in Stockholm. There was a meeting of experts on Human Rights in Ottawa in May-June. The 10th Anniversary of the signing of the Final Act was commemorated at the end of July and a CSCE Cultural Forum opened in Budapest this month.

At the Stockholm Conference progress in the negotiations continues to be slow. However there are now more hopeful indications of possibilities for agreement on measures to reduce the risks of military confrontation in Europe. In addition the conference has recently agreed new working structures which will facilitate an early transition to the drafting stage of the meeting.

Although the Ottawa meeting, the first in the CSCE framework devoted exclusively to human rights questions, did not succeed in reaching agreed conclusions, the Ten considered the meeting both necessary and useful. The Ten expressed the hope that the recommendations they had put forward at Ottawa would progressively secure recognition, particularly at other CSCE meetings. At the Ottawa meeting Ireland expressed the concerns voiced in this country, both in the Oireachtas and elsewhere, about human rights violations in CSCE participating States.

The tenth anniversary of the signature of the CSCE Final Act was commemorated in Helsinki from 30 July to 1 August. I and my colleagues in the Ten participated personally in the commemoration ceremonies. We availed of the opportunity to reaffirm our view of the central role which the CSCE process plays in East-West relations and the importance which we attach to respect for the principles of the Final Act and to full implementation of all its provisions.

The Budapest Cultural Forum brings together representatives of the arts from all 35 participating States. Its purpose is to promote contact and exchange in the cultural field with particular reference to the variety and diversity of our shared cultural heritage. For a country such as ours which has limited resources for cultural promotion abroad, it also offers an opportunity to project some aspects of our own cultural activitey before a wider international audience.

Ireland along with its Community partners, has continued to support the Contadora process in Central America. Last month the Foreign Ministers of the Ten called upon the countries of Central America, which have been discussing a revised Contadora Act of Peace and Co-operation, to come to an agreement which would allow for a peaceful, global and verifiable solution to the region's problems.

The second Conference at Foreign Minister level between the member states of the European Community and the Central American and Contadora States will take place in Luxembourg on 11/12 November. The first was held in Costa Rica last year under the Irish Presidency. The Luxembourg Meeting will mark a further step in the development of closer political and economic relations between the Community and Central America designed to contribute to improving economic, political and social conditions in the countries of the region as well as to peace and stability in the region as a whole. A framework Economic Co-operation Agreement between the European Community and the Central American States is due to be signed on the occasion of the meeting. This will be accompanied by a substantial increase in Community aid to the region.

Human rights abuse in parts of Central and South America remain of concern to the Government, and to our partners in the Ten. Ireland's deep concern on such matters is well known. We shall continue to take a close interest in the human rights situation in the whole of Latin America, and to support the many initiatives of the Ten in this regard.

In recent years, significant progress has been made towards democracy in much of South America. Chile, however, has so far been among those countries conspicuous in not registering such progress. Civil unrest, mass arrests and prolonged detentions continue in that country. The recent adoption by a broad cross-section of Chilean opinion of the document, "National Accord for the Transition to Full Democracy" may prove a significant development towards the promotion of national reconciliation. The Ten have publicly welcomed the Accord and called once again upon the Chilean authorities to respect human rights and, in accordance with the aspirations of the Chilean people, not to continue impeding the restoration of democracy.

The situation in Southern Africa remains a cause for serious concern. In Namibia the South African authorities continue to defy international law and public opinion by their occupation of that territory. The installation of a so-called "interim government" on 17 June can only be regarded as a further impediment to the attainment of Namibian independence in accordance with resolution 435 of the UN Security Council. The feelings of the Ten on the question of Namibia have been made known on several occasions. An attack by South African forces against Gaberone, capital of Botswana, on 14 June, a further act of international illegality, was the subject of a protest by the Ten.

Within South Africa itself the shooting of 19 mourners at Uitenhage in March attracted world wide protests including condemnation by the UN Security Council. The level of official violence has remained high. The Ten have expressed profound concern over the continuing human suffering caused by the apartheid system and again urged its abolition.

The imposition of a state of emergency in certain areas of South Africa in July was criticised by the Foreign Ministers of the Ten at their meeting of 22/23 July. The Foreign Ministers of Italy, Luxembourg and the Netherlands travelled to South Africa at the end of August where they held meetings with representatives of the South African government and opposition groups. Following their report to colleagues at an EPC Ministerial meeting on 10 September, the Ten Foreign Ministers agreed on a number of measures to be taken in common against South Africa. These included restrictive measures in the fields of trade in military materials and military co-operation, action in the cultural, scientific and sporting areas, a cessation of oil exports and of exports of sensitive equipment destined for the South African security forces and a prohibition of all new nuclear collaboration; positive measures to be taken to assist the victims of apartheid included the drafting of a new Community Code of Conduct, programmes of assistance in the field of education and to non-violent anti-apartheid organisations, and programmes to assist the SADCC and the Front Line States.

The refusal of the South African authorities to heed the widespread call for an act of elemency in the recent case of Mr. Benjamin Moloise demonstrates yet again a failure to understand the depth and strength of international feeling against apartheid.

It has always been the view of the Government that the apartheid system is, of its very nature, inherently unjust and immoral. The refusal in July of entry to several Irish citizens who have travelled to South Africa, far from concealing the abhorrent nature of the system, merely draws attention to it. Ireland is committed to act both at home and internationally to bring about the abolition of the apartheid system by peaceful means. The Government will continue its support for measures directed against apartheid both at the United Nation and within the European Community.

Elsewhere in Africa the accession of Angola and Mozambique to the Lomé Convention is viewed as an important step by the Community. An approach has also been received several months ago by the Ten, from President Nyerere of Tanzania, suggesting a meeting between the Ten and the Front Line States with a view to instituting a dialogue. The initial response of the Ten has been positive.

The rapidly evolving situation in the Middle East this year has been followed closely by the Ten. Ireland welcomed the signature of the PLO/Jordanian Accord in February 1985 which set out a common platform for progress towards a peaceful and just settlement, as indicative of a desire for peace to be achieved through negotiations. In common with our partners in the Ten we have indicated our willingness to contribute to the process and to encourage a positive response from other parties to the conflict. In this connection, Ireland together with our partners in the Ten, vigorously condemned the bombing by the Israeli airforce of the PLO headquarters in Tunis. It is our profound hope that this and other manifestations of violence will not compromise the current efforts to achieve a peaceful solution to the Arab-Israeli conflict.

The situation in Lebanon continued to deteriorate in 1985. The withdrawal of Israeli troops, with the exception of military advisers in the so-called security zone, was completed in early June. Ireland has consistently called for the withdrawal of all foreign forces from Lebanon which are not there at the request of the Lebanese Government. We believe that Israel should dismantle the security zone it has created in South Lebanon, permit UNIFIL fully to implement its mandate and should complete its withdrawal from Lebanon without delay.

Elsewhere in Lebanon, the massacres in the Palestinian refugee camps and the TWA hijacking and the continued intercommunal strife demonstrate once again the urgent need for political progress in that country. It is our hope that the indications of tentative movement towards national reconciliation in recent weeks will bear fruit.

This year witnessed an escalation and intensification of the Iran-Iraq war to an unprecedented level. Ireland, while maintaining strict neutrality in the conflict, joined with our partners in calling on both Iran and Iraq to refrain, on humanitarian grounds, from attacks on civilian centres. We have emphasised that the Geneva Convention, and other rules of international law, must be fully and unconditionally respected.

On 22 July 1985 Ireland and its partners in the Ten expressed again their concern about the situation in Afghanistan. They condemmed the repeated bombings of the territory of Pakistan, which by receiving three million refugees is already bearing the heavy consequences of a foreign war.

The Ten once again called for the termination of the Soviet intervention which is at the origin of the conflict. Only a political settlement which conforms to the principles laid down by the international community in the resolutions of the General Assembly of the United Nations can re-establish peace. The Ten support to this end the mediation by the Secretary General.

My aim in these remarks has been to review developments in the European Community and in European Political Co-operation since January 1985 and, in particular, to inform Senators of the current position in regard to the work of the Intergovernmental Conference. If I may end on the note on which I began, the Government's approach to the Conference, and indeed to the work of the European Community in general, will continue to be positive and will lack neither realism nor imagination.

Sitting suspended at 12.35 p.m. and resumed at 2 p.m.

Mr. Ferris

In seconding motions Nos. 1 and 2 dealing specifically with developments in the European Community and dealing with legislation in the EC I want to put a few remarks on the record relating to our attitude to what has been happening in the Community over the period mentioned in the motions. I would like to itemise these under unemployment and agriculture in relation to the restrictions in agricultural production. I want to refer to the Spinelli report and the question of a new treaty as a possible outcome of the discussions going on now. I want to deal briefly with the accession of Spain and Portugal and the implications for Ireland. I would like to comment favourably on areas of legislation that have arisen arising out of our membership of the Community particularly in the area of women's rights, equality in the employment place, workers' rights regarding redundancy following bankruptcy and other financial conditions which some companies get into and the legislation here arising out of that directive.

Under those headings the debate could be very broad and detailed. I presume all other contributors will want to deal with specific areas. It would be remiss of me, in my opening remarks if I did not comment on the unemployment situation that is continuing to fester within the Community. Since our accession to the Community, which we all believed would be a bonanza for this country, the level of unemployment has continued to rise. It now stands between 12 and 13 million people and we in percentage rates make a major contribution to the problem.

There is no doubt that unemployment is the single most important factor facing the whole Community. This arises from some of the policies that have been followed by member states in the Community. It has now got to the stage that the Community as a whole is about to address itself to the levels of unemployment. The EC Commission in its Economic Report for 1984-85 section 2.3, admits that unemployment rises still and employment stagnates. Any institution that looks at itself and admits both those situations, must be admitting a failure in this area. In the European Community as a whole the growth of unemployment has slowed down somewhat in the last year, which is a welcome sign, but not quite to the point of stopping. Until unemployment stops and employment starts to rise it must be a cause of concern for all of us.

The report states:

For the short term, it seems that the GDP growth rate would have to rise from just over 2 per cent to 2.5 per cent for unemployment to stabilise.

In other words, we are looking for a growth rate of 2.5 per cent in the Community as a whole before we can look for an easing of this problem. The report also states that over the course of the last cycle, from the peak of 1978 to the present time, the total rate of unemployment has doubled from 5.4 per cent to 11.1 per cent. The Commission's forecasts for 1985 indicate at best a stabilisation or slight decline in a few countries, for example, the United Kingdom, Holland and Denmark and there will be a rise in unemployment elsewhere.

Recently the Minister for Labour put on record that in spite of our best efforts in this country as a member of the Community we will obviously be faced over the next two or three years with a continuing unemployment problem. There is no doubt — I have stated it publicly on numerous occasions — that we cannot tackle the unemployment situation on our own. As a member of the Community subjected to all the trading conditions, opening our frontiers for trading and otherwise, it is obvious that accession to Europe would bring a challenge to Irish industry. As the Minister for Foreign Affairs said this morning, agriculture has been the main beneficiary and all of us would concede that point. We must also agree that there was a price and the price of accession has happened in the area of unemployment particularly in industry because we had not changed our marketing and manufacturing techniques and had not got into the area of technology in the way we are now doing. We had not done that in the earlier days of our membership and because of that we have been subjected to extraordinary pressures under those headings. That same Community report on page 26, states:

The Community should aim collectively at creating the conditions that would permit significantly higher actual and potential growth rates and low or lower inflation rates.

I would like to compliment the Government on the major step forward they have made in the area of inflation rates. They have come down to single figures for the first time in 16 or 17 years. That is a major step forward and has a direct bearing on the creation of an environment in which employment can be seen to improve. The report continues:

As points of reference for discussion, a potential growth rate of 2.5 per cent to 3 per cent is suggested, and, for a temporary period of cyclical catch-up, a somewhat higher actual growth rate of 3.5 per cent to 4 per cent but only on condition that potential output were simultaneously improved.

It is important that output will also improve if we are to improve the economy as a whole. The output figures for this country are welcome over the past 12 months. The report states:

To succeed along these lines necessarily means a powerful set of actions to improve supply conditions in all markets — goods, services, labour and capital — or else the faster demand and output growth would soon encounter capacity or inflation constraints.

With the current high levels of unemployment problem, it is necessary not only to seek higher growth rates, but also ensure that each point of growth yields more in the way of employment. As pointed out above in section 2.4, there is no simple or fixed relationship between the growth of output and that of employment; nor is there any reason to believe that the low propensity to create employment which has been witnessed in recent years cannot be improved.

The Community report goes on in further areas addressing itself to these problems and talks about the advantage of creating tax incentives, lowering tax rates and a stimulus generally to people to work harder or for people to put in investment without being penalised. Apparently the German government, as part of the Community, have gone down this road and have pinned up in 1986 that they intend to make changes in these areas. I am glad that in the Government's programme, the national plan, it is also indicated that over the next few years there will be changes in emphasis on areas of taxation as a stimulus. The most recent announcement by the Taoiseach on 23 October, when the Dáil reconvened, was an indication that by putting money by way of incentives into various areas of employment particularly in the building industry this will reap rewards by stimulating employment, improving the housing stock in the economy, and generally speaking, we will be tackling the problem as we see it. The £5,000 grant, the additional house building grants, the Housing Finance Agency, all these together in the last seven to eight months have lifted the whole area of the economy in that sector and have made people aware of what they can do for themselves. The benefits will accrue to us in the long term. It will take time to change the ship around. There is no doubt that the steps the Government have taken — many of us may feel they should have taken them sooner — will make an impact on the area of employment.

The Community are taking steps to bring about areas of legislation and assistance through the Department of Labour and the Department of Education that will stimulate the employment of young people. Our Youth Employment Agency, AnCO and all the various agencies associated with it, which benefit from Community funds, can make a major impact in this area. I am dissatisfied with the progress on this unemployment area throughout the Community. We are no exception. In future the area of taxation and unemployment will have to be primary areas of targeting by any Government if the economy is to be protected within the Community framework.

The Minister commented on the importance of the agricultural sector in the Community. They have been main beneficiaries since accession and are continuing to be beneficiaries under it. Changes have also taken place in that area, particularly in the attitude of the Community to member states capabilities to produce.

In this area the whole concept of the milk levy created many problems for us. The objectives of the Treaty of Rome initially were that they were to increase agricultural production, to ensure a fair standard of living for the agricultural community, to stabilise markets, to ensure reasonable prices and guarantee regular supplies to the consumer. Possibly those objectives are very pious and probably it is difficult to achieve one without interfering with the other but if we accept them and accept the principles of CAP, then we must accept that Irish farmers are still way behind their counterparts in Europe in the area of production.

I have been on record in the past pointing out how deficient we were in this area particularly regarding milk production and beef production. Our party objected to the terms of entry because we felt that there were deficiencies in them. In the negotiations of the terms of entry reference was made to agriculture and it was emphasised during the negotiations on the agreed terms that with the existing members there would be plenty of opportunities for our farmers to expand their production base having regard to the natural advantages we have. We have good quality grass which grows whether we like it or not and is a major asset in the production of beef and milk.

This expansion in products has only about taken off over the last two or three years and then suddenly we were faced with a milk levy. The Minister for Foreign Affairs this morning remarked on the increased tonnages that were added this year to ensure that the base level would now be set at 1983 production figures and that we were allowed a percentage over that. If that had not happened there is no doubt that our major milk producing area would have suffered because of the concept of a levy on production which would make it uneconomic for farmers at the higher level to produce more.

The Labour Party concede that the diverse structure of agriculture in the different member states is the inheritance of many generations in the past and as well it is essential to the fabric of rural life. In Ireland it is much more essential to the fabric of rural life than in any other country because you have the factory farmers in other countries in which rural Ireland is so different and so important to us. It can be ensured only by a better integration into the economy as a whole not by its isolation from the forces of change. In the long run it would be a mistake to think that the problem of the less favoured areas of the Community could be solved essentially by market intervention and price support. If the Community is to find enduring solutions to many of these problems it must put relatively more emphasis on long term structural action involving an integrated strategy for the less favoured regions. I contend that Ireland is one of the less favoured regions of the Community and it must place less emphasis on guaranteed prices or income support.

This is the only approach which could provide a rational long term framework for CAP in the coming years. Arising out of the Green Paper from the Community this year CAP is now the subject of a major review and it is important, as the Minister said this morning, to acknowledge that it is one of the few policies that they have in the Community. In the restructuring of it — most of us contend that it needs to be restructured — the special position of the Irish farmer must be uppermost in our negotiations in the Community because for the vast majority of farmers there is no viable alternative to dairying given the structure and size of our holdings, the type of soil and the climate particularly this year. Furthermore because of underdevelopment the majority of full time farmers must increase production if they are to generate a viable income.

When you put this in the context of the fact that Ireland only accounts for about 4.5 per cent of the total EC milk production you worry about the attitude of the Community to our milk producers. Milk production accounts for about 33 per cent of our gross national agricultural product. The beef sector, which is also very dependent on the dairy sector, accounts for about 35 per cent and dairy cows comprise about 80 per cent of the total cattle of our breeding herd. The dairy sector also provides an outlet for the grain sector by utilising over 45 per cent of annual compound production, that is feed grains account for about 6 per cent of GAO. Just to have the record right, dairying is about six and a half to seven times more important to the Irish economy than to the overall economies of the other countries. When beef is added to the figure for Ireland's dependance this rises to about seven and a half times more importance.

It could be argued that Greece and Denmark also have a significant dependence on dairying but even their dependence does not match Ireland's one. Milk is three and a half times more important to the Irish economy than it is to the Greek economy. In the area of the superlevy I want to put on the record the important support we got from the Socialist Government in Greece for the argument we made in this area. Milk is about four times more important to us than it is to the people in Denmark. Sixty per cent of dairy output from farming is for export and this accounts for about 40 per cent of our total agricultural export, so cattle and beef, which are 80 per cent dependent on the dairy sector, account for a further 43 per cent of our total agricultural exports. This must be proof if proof is needed of the importance of the milk and dairy sector to Ireland and of the spin-off effect it will have on the beef sector and indeed in the production of cereals and the market for them.

Any changes that might come about in the revision of CAP must take all these into account. If I may go to beef for a moment there was a recent proposal from the Commission to the Council of Ministers in connection with the total ban on hormones. Many of us have an interest in increasing beef production and in the methods that have been used by farmers over the years in this area towards an economic participation in beef production. The use of hormones has been an important factor in this area. In recent years there has been a growing worry about the use of hormones, and rightly so. There is no doubt that the use of various hormones, particularly synthetic hormones, has had a devastating effect on the production of beef in particular throughout the Community, in America and in other agricultural countries.

It was right and proper that action should be taken by the Community in the area of hormone control. In 1980 we had the first discovery of stilboestrol, which is one of the hormones that have an adverse effect on females in particular. This was found in veal in Italy in September 1980 and triggered off this awareness of people using hormones indiscriminately and allowing animals to be killed within the limited period which should elapse between the use of hormones and the killing of animals for human consumption.

In November 1980 the Community decided to ban all hormones by the EC but in July 1982 only stillbeans and terestakicks were banned. Scientific committees were then set up by the Community to examine five other substances, three of which were natural and two were synthetic. In November 1982 the committee reported that natural compounds were safe but they requested further data on synthetics. In 1984 there were proposals by the EC to allow natural hormones under control and to ban the two synthetic hormones. That was a most welcome step and one that all of us in the Community and the Council of Ministers could agree to because nobody could condone the use of products that would have an effect on the consumer.

A proposal has come forward from the Commission which advocates the total banning of all hormones including the natural ones. That should not be allowed to go unchallenged by our Minister at the Council of Ministers. I would ask him to challenge it on the basis of the research that has been done in this area and the medical evidence that is available. I have no doubt whatsoever that the use of natural hormones should be allowed in assisting beef production. We may not have too many friends in the Community who would agree with this line but if we look at the importance of this to the Irish producer and if we look at how it affects the other countries who are advocating the abolition then we have to question the credibility of the Community as a whole in addressing themselves to this problem. If countries and Council Ministers allow themselves to be out-run by the posse of consumers in this area, with no back-up technical research or otherwise to prove the point, I think we would then have done a disservice to the producers particularly in this country.

When we look at the type of animals we produce beef from, in Ireland about 53 per cent of our beef is produced from steers; in the United Kingdom, 51 per cent; in Belgium and Luxembourg, it is only 9 per cent; in Denmark, 1 per cent; in Italy, 9 per cent; and the Netherlands, 1 per cent. Therefore steer production in those other countries is not important. When we look at beef produced from bulls we see that in Ireland only 1 per cent of our total production of beef comes from bulls; in Britain, 2 per cent; in Belgium and Luxembourg, it is about 31 per cent; in Denmark, 46 per cent; in West Germany, 52 per cent; and in Italy, 54 per cent. The production of beef from bulls is more important to the other member states than to us. They are excluding this ban on hormones from bulls because they say that instead of suffering animals to castration they can be treated by hormones which will have a negativing effect on them and will allow the bulls to proceed into producing beef quicker without castrating. I seriously question the credibility of the other members of the Council of Ministers in agreeing to a total ban on all hormones on the basis that it does not effect themselves but could have a serious consequence for our beef production here. If this is carried through it could mean a serious financial loss to the Irish farmer. Research carried out by the Agricultural Institute has shown that the correct use of growth promoters can result in an average increase of about 45 kilos of carcase weight and at current prices this represents about IR£100 extra value per animal properly treated by a recognised natural growth promoter. At present we slaughter about 700,000 steers per annum in factories and about 400,000 are slaughtered elsewhere or are shipped live for slaughter outside of Ireland.

The total loss to the Irish beef producer, if this ban is enforced or allowed by the Council of Ministers, would be in the region of £100 million. This figure would not even take into account the improved feed conversion that would follow and the improved grading, the extra lean meat that would be produced from this process. I want to put it on the record that when our Minister goes in three or four weeks' time to the Council of Ministers this kind of research, which is available, and the kind of back-up for the situation as we see it should be put on the table for the other Ministers. If not they will have conceded a directive which could have tremendous implications for our producers, would have absolutely no bearing whatsoever on the consumer and would have served to deplete the production of Irish beef into the Community. We must view with a certain amount of fear the possibility of getting through this document from the Commission because our Minister will be faced with a dilemma with other member states saying "If you do not go down this road with us, we will curtail the actual export of beef from Ireland into intervention". We would find that we would not have a market. Britain could say: "We will retain the use of natural hormonies for internal use only". They will do that on the basis that they are not dependent at all on the export of beef like we are. The Germans are the biggest advocates of this change. The ban on the use of natural hormones or growth promotion would have no effect whatsoever on the German farmer since most of their meat is produced by bulls which are implanted for growth promotion.

The Minister talked this morning about Community preference. Of course, this has been a bit of a laugh in the Community. There has been no Community preference whatsoever. This has been proved over the 12 years of our membership. We can take it that the Americans will still have access to the Community market. The Americans have no intention of banning the use of natural hormones because they regard them as an important element in the production of beef. If their beef, which is treated with natural hormones, is allowed to come into the Community and ours is precluded from it, the Americans will put a lot of presure on the Community, as they did before and it is inevitable that they will do it again. The Community will have to do a turn around on this issue if they allow themselves to go down the road of a total ban. I would accept that there was a genuine reason for the banning of synthetic hormones because of the damage that they can do to the consumer but there are absolutely no statistics whatsoever to prove that the banning of natural hormones will have any effect on the consumer.

I would contend from our experience, when we started banning stilboestrols, that people will begin to use them illegally. It would be a pity if farmers, in the interest of their own protection, faced with having to give up using something which they know not to be harmful and to be an advantage in beef production, went down the road of illegal use of implants. They would take other points in the animal's body for using these implants. If implants of any nature are used in a part of the body that is not discarded at killing time, then there is a risk to the consumer if any foreign body is being put into the meat. If they used the brisket or any other part of the animal they would have to do it illegally, because it could not be discovered on examination and then it would be a problem for the consumer. The Minister will have to have regard to all these aspects.

The extraordinary thing is that the levels of hormones in beef compared with any other food is, to say the least of it, not subject to a critical analysis or any credibility. In the normal course of an animal's life it is endowed with a certain amount of hormone level. If, for example, a hen's egg has more hormones in it than an implanted steer or an unim-planted steer, we will have to ask ourselves where are we going. If we are going to ban beef and label it as being hormone free, are we going to agree that we will have to label cabbage, eggs and peas that contain a natural level of hormones which is higher than any animal with an implanted natural hormone?

I would like to put this on record for the Minister's benefit. I have spoken on this subject directly to the Minister for Agriculture so that when he has discussions in this area he will realise the importance and the significance of trying to defend the Irish producer in this area of beef production. It is an important area and is one the Minister must grasp and must be able to fight his corner within the Community.

The Minister also referred to the other developments that have taken place within the Community, particularly in regard to European integration. I welcome the inter-Governmental conference that has been agreed by the Council of Ministers in Milan. They held their first meeting about a month ago. They are in the process of producing a draft treaty. If it achieves its objective of increasing the economic cohesion of the Community, then naturally all of us would welcome it. We would welcome any move.

From what the Minister has said our Government have not been slow to develop that area of European integration. This would take us to the point of contention which Senator Lanigan referred to, in the Spinelli-Dooge report. I have no intention of repeating the major contribution I made on the Dooge report when we discussed it before. I said on that occasion that the Labour Party are adamant that Irish neutrality is a positive thing and that any move, either by Spinelli or by the Community following the Dooge report which might compromise us in this situation, would be unacceptable to us.

I was glad when Senator Dooge responded to that debate and with the necessary assurances he gave regarding Irish neutrality. They were acceptable to me and to the members of the Labour Party. We will keep a watching brief on any developments in this area. There is need to improve the decision-making process in the European Community. This was also referred to by Senator Lanigan and Senator McDonald, who talked about the right to have a veto or the right not to have a veto.

I quote from the report of the European Council of the Ad hoc Committee for Institutional Affairs, which is the Dooge report. It is only right that we should put it on the record. On page 27, section (a):

The majority of the Committee favour the adoption of the new general principle that decisions must be taken by a qualified or simple majority. Unanimity will still be required in certain exceptional circumstances cases, which will have to be distinctively fewer in number in relation to the present Treaties, the list of such cases being restrictive.

Senator Dooge entered the caveat as a reservation. He said:

. . . . though in agreement with the principle underlying this text, (he) felt unable to support the text because, although 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.

There is no doubt in our minds or in the mind of Senator Dooge that in the question of vital national interest it would be unacceptable to us to give up our right to a veto or to the Luxembourg compromise. I am satisfied that nothing that has been said in this report by Professor Dooge compromises Ireland's situation. It is obvious that in areas of agreement one would like to have a consensus on agreement. When one looks at the veto situation in terms of the United Nations, one can realise that because the Russians have a veto on many decisions there relatively little gets done. There are possibly many areas of decision-making in which the majority voting may be the proper cause. It is essential that in questions of Ireland's national interests — and I would put neutrality into that — the question of the veto must be retained by the Council of Ministers and by those negotiating on our behalf.

This brings me to the accession of Spain and Portugal which is today being discussed in the other House and will be arriving to us possibly next week or the week after. The Bill proposes:

to amend the European Communities Act, 1972, so as to make part of the domestic law of the State the Treaty relating to the accession of the Kingdom of Spain and Portuguese Republic to the European Economic Community and to the European Atomic Energy Community and the decision of the Council of the European Communities relating to the accession of the Kingdom of Spain and Portuguese Republic to the European Coal and Steel Community.

Having agreed that Spain and Portugal must enter, the Minister referred to them this morning as welcome neighbours. All of us have contributed in some way or another at various forums throughout Europe in convincing the people of Spain and Portugal that they would be welcome. There is no doubt that their accession to the Community will have a major impact on Ireland. The plus factor for us is that it opens up to us the widest possible range of additional markets which I hope the Irish producer will come to grips with. If we open up a whole new area of demands and consumers within the Community preference then the accession of places like Spain and Portugal must be welcomed.

We must also have regard to the implications their accession will have on our fishing industry. There is no doubt in anybody's mind, from the behaviour of the Spaniards over the last couple of years, that we will have to be extra-vigilant to ensure that whatever conditions are laid down about our fisheries will be accepted and respected by the Spanish. Otherwise, if they are seen to be plundering our fish stocks that could lead to nasty situations between members of the European Community.

I am also aware that in certain parts of Portugal the farming community are probably more disadvantaged than some of our farmers. They are probably comparable to the disadvantaged farmers in the West of Ireland. In that event, or when that becomes obvious after their membership is enacted, it is obvious that there will be lesser amounts of cake to be divided between what we term the disadvantaged areas of the Community, particularly those on the periphery. Spain, Portugal and ourselves will be on the periphery. We will be joined by neighbours who, in some areas, are as poor as ourselves. If we refer to the begging-bowl syndrome, to which none of us will admit, it is obvious that many people are going to be looking for assistance from the limited resources which seem to be available to the Community. That puts a major responsibility on the members of the Community in the area of "own resources". If the major powers in Europe, who are calling for political power and otherwise, are not prepared to pay the price of that in the economic area, then the whole concept of the Community will have failed. There is a responsibility on the major partners in the Community to ensure that the level of VAT which is determined as the main source of funding to the Community is sufficient and that level of VAT must be increased to ensure that our own resources within the Community are capable of meeting demands of such as those of Spain and Portugal, as well as the demands we are still making in this area which have not yet been acceded to in spite of our best efforts.

We have benefited to a large extent from regional funds, social funds and from the Common Agricultural Policy. The Minister this morning itemised the increases on the CAP as being 8.6 per cent. In the area of the regional funds it is 14 per cent. In the social fund it is 15½ per cent. It is important that we should recognise and put on the record that proportionately we have benefited to a large extent under these headings. Much of the infrastructural development which is taking place in this country is being done by the Department of the Environment under that particular heading. It has made a major impact on the infrastructural development of our country which, in turn, could lead to improvement in industrialisation. I want to put it on the record that I am not unaware of the benefits that have arisen in this particular area.

I would like to refer briefly to the developments in the Community regarding our attitude to other problems throughout the world, such as the Third World in particular. I want to join in the Minister's compliment to Bob Geldof in the contribution he has made in this area. He triggered off an awareness in the Irish people, and a pride in being Irish during his Live Aid concert, and on his previous efforts last Christmas with Band Aid. The whole enterprise triggered off by Bob Geldof was responded to magnificently by the Irish people and the Irish Government, bringing our total contribution to over £6 million. This was positive proof of our commitment to less well-off parts of the world. During our Presidency of the Community we made a major impact in ensuring that the Community itself paid more attention to the problems of the development of the Third World, particularly Ethiopia. I welcome the decision of the Community to withdraw its ban on assistance to Vietnam because Vietnam happens to be under a Communist regime. That fact would have to be ignored when one thinks of the problems that have been faced by the people of Vietnam. It was also a pleasure that they decided to give the responsibility for Vietnam to our national agency, Trócaire. That was a compliment to that organisation. The Community are more aware of their responsibility in this area. As a small, neutral nation we have never been slow to remind the Community of their responsibilities.

We welcome the Minister's commitment that we would continue to support the Contadora process in Central America. This is an area in which many of us have taken an interest. We feel that the Community should make a major contribution towards a peace process there.

The Minister's comments on South Africa have to be welcomed. We have to compliment the girls who took their courage into their hands and went out into the streets to prove that Ireland as a nation abhors apartheid. They went so far as to give up their jobs and stand on the streets for over 12 months to prove that we do not condone the type of action that is presently going on in South Africa. We have to sound a warning note from the results of yesterdays elections in South Africa which, of course, were confined to the white population. The election results indicate that even apart from Mr. Botha there is somebody still to the right of him in the white community who has no intention of changing anything to the benefit of the black community. This is a warning. Unless there is proper participation by the natives of South Africa in their own government and in the electoral process it must be noted that there are people to the right of Mr. Botha who are prepared to take other action and support them in a white-controlled election. The success they have achieved in doing that must be a warning to us. We must be ever-vigilant in the area of apartheid and our attitude to the government in South Africa.

The Minister also referred to our efforts in the Middle East. Senator Lanigan also referred to the Middle East. Both Senator Lanigan and myself have a mutual interest in this area. All of us would accept and welcome the recent PLO-Jordanian accord. We also welcome the fact that there is hope that peace talks might follow with Israel. I hope that Israel in trying to prove that they want peace — and there are times when I doubt this — would not exclude the participation of the PLO from the Jordanian accord in any peaceful settlement, or any talks that take place towards promoting peace in the Middle East. The bombing of Tunis was widely condemned by us, the Community and people all over the world. There is no doubt that for the first time the problems of the PLO were being accepted throughout the world as being legitimate. Suddenly we were faced with the hi-jacking of a ship which, if we are to believe the reports, was carried out by Palestinians. It has been denied categorically by those representing the Palestinians that the people involved in the hi-jacking had anything to do with them. It was an obvious act to jeopardise any possible peace in this area by bringing the odium of the world down on the PLO again. They have condemned publicly the people who carried out the hi-jacking. They hope to be involved with the Italians in the trial of these people to prove that they were mercenaries, or double agents and that they were going in to jeopardise any hope of a peaceful settlement. I am glad the Minister met Dr. Makhlouf last week and had discussions with him on this subject. We have played an active role in this area of the Middle East. We hope that the day will come when peace can be achieved there. The situation has been a source of concern to all of us over a long number of years.

I compliment the Minister on the actions he has taken within the Community over the period of his Presidency. He raised the level of Irish participation to a degree that had not been achieved before. This has been accepted by the member states. We made a major contribution as a small nation to the workings of the Community during our period of Presidency. There is no doubt that the Community as a whole will continue to evolve. We have to be a part of the whole process of change. We have to participate in the Intergovernmental Conference and ensure, if a draft treaty is drawn up, that Irish interests will be protected. Major developments continue to arise in the Community. It is appropriate that each person should take an active interest in it. Our future seems to lie as members of the Community. Although we are a small nation it is important that we should play the major role that is expected of us.

I would like to put on record that one of the recent decisions in the Community involved the Young Farmer Establishment Aid Programme. Submissions have been made to us by Macra na Feirme in this regard. This programme is a package from the EC regulation of March 1985 which would be 50 per cent supported by the EC. It involves a premium at first installation of approximately £5,000 and an interest rate subsidy on loans of approximately another £5,000. I have no doubt that this is an excellent scheme. I have no doubt also that if it is implemented in its present form people who do not really need benefit will benefit.

I am suggesting to the Minister for Agriculture and the Minister for Finance that they should look at the possibility of tailoring this scheme to the Irish situation so that young farmers who genuinely need this kind of assistance can go forward and improve their opportunities in agriculture. That kind of scheme, in principle, would be generally welcomed by the Labour Party and those of us who have an interest in ensuring that young, competent, trained people in farming would get every incentive from the Community and the national Government. We should look at the possibility of tailoring that scheme to suit the needs of young Irish farmers. If we do that, we will have made a major contribution to a revamping of the old farm modernisation scheme.

The Government have to consider the financial implications of the scheme. Any scheme like this which comes from the Community should be looked at seriously. We must assess the benefit which the national economy would gain from the impetus that would be given by the introduction of such a scheme. I hope that the Minister for Finance and the Minister for Agriculture will give serious consideration to establishing the young Farmer Establishment Aid Programme in the way in which I have recommended it. I do not know if it is possible to tailor a directive to suit a particular national situation. If that is possible I would advocate that the Minister should proceed in that manner and look at all options open to us.

I welcome the opportunity that these motions have given for a debate on the Community and on the changes that are taking place in the process of our participation in it. The whole area of unemployment needs to be addressed. That is the most important aspect of our membership of the Community. It has created problems in our industries which have suffered because we were not geared to membership. It is important that the Community should accept this. We must put emphasis on the creation of employment rather than on the creation of capital. If we weigh one against the other, employment will take people into account whereas capital will only take profit into account.

Mr. Fitzsimons

These two motions give very wide scope for debate, particularly motion number one. In making my contributions on previous occasions I dealt with a large area and went into various matters in considerable detail. There is no point in going over the same ground again. Some Members remarked earlier that we are at a slight disadvantage by not having an up-to-date copy of a report of the developments in the European Communities. Nevertheless, I must admit that there is no scarcity of material from the Commission Office. I want to express my gratitude for this and also for the help which they have given many of us over a considerable time.

I intend to confine my remarks mainly to the area of research, development and technology which I believe is a very important one. There are a few other matters to which I would like to refer briefly. The first one is the Common Agricultural Policy, the importance of which the Minister has rightly stressed. It seems to be coming under attack, and I feel that it should be strengthened. It is fundamental to the EC. Joining the EC was most important to Ireland. Without the Common Agricultural Policy we would not have decided to join the EC and I believe it needs strengthening.

Regarding the package which was decided on recently to help farmers in trouble because of the bad summer weather, while the grain will in many instances be a help to farmers, farmers who are involved in tillage will not benefit under this scheme. Something should be done to help them also. Representations have been made to me about this matter.

In the area of agriculture also, Senators McDonald and Ferris have referred to the Young Farmer Establishment Aid Scheme and I would like to refer to it as well. Representations were made to us by Macra na Feirme. They informed us of the public concern, anger and dismay at recent reports that the Department of Finance are refusing to include provision for young farmer establishment aid under the new scheme to replace the farm modernisation scheme. I understand that the Minister for Agriculture secured, under article 7 of the European Council regulation No. 797/85 of 12 March 1985, EC support for installation aid in the form of a flat rate premium and an interest rate subsidy. The situation is now that the Department of Finance are opposed to the implementation of article 7 which would give young Irish farmers some of the financial help which their counterparts in other EEC countries will enjoy because of this directive. The EC will contribute 50 per cent of the cost so that the Exchequer element would be smaller. It will be approximately £500,000. It is generally conceded that this is a vital measure for young farmers who are attempting to get established in farming in a very difficult economic environment. The small amount of public expenditure involved would be returned many times to the country by the young farmers who would benefit by the help. The establishment aid will help the process of earlier inheritance and the transfer of land to young trained farmers and thus help to achieve a central objective of agricultural policy. It would be a vote of confidence in young farmers at a time when their options in the different farming enterprises are very severely restricted.

I also believe that all the farming organisations have indicated strongly their support for the establishment aid for young farmers. It would be deeply felt as a betrayal of young people in the farming and agricultural areas should the Government renege on it at this stage, having supported it in Brussels last spring.

The comments made by Senator Ferris that perhaps many young farmers who would be financially sound would benefit from the scheme are new to me. I am sure there could be some way around this, rather than refusing to implement the scheme. It seems to me that it should be implemented under the terms intended. I would appeal to the Minister to see that this scheme is implemented.

Regarding apartheid, the Minister expressed my sentiments on this very well in his statement when he said that it has always been the view of the Government that the apartheid system is of its very nature inherently unjust and immoral. I believe that is so. I believe that it is unnatural and inhuman and I would urge the Minister to do whatever can be done to influence the Government of South Africa to end this system.

Regarding the area of science, research and technology, I believe there is a consensus that this is one of the most important areas. There is no question about that whatever. I will quote from the Community report of October 1985. It is a short paragraph under "Can Eureka Provide an Answer to Europe's Technology Lag?":

Did Ronald Reagan unknowingly help to bring into being the Europe of technology? Is Eureka the beginning of Europe à la carte, or the emergence of variable geometry Europe? Will Eureka enable Europe to bridge the technology gap? What does the presence of “neutral” countries such as Sweden and Switzerland mean? Is the Europe of research a myth or a reality? What must be done to make the “technological revolution” acceptable to the citizens of Europe? These questions emerged in the wake of the launching of “Star Wars” in the United States and of Eureka in Europe.

In another article further on under "Europe's Weakness in Technology is Blunting its Competitive Edge in the World" entitled "Why Europe is Lagging" I will quote the first paragraph:

There is one sector about which it can be fairly said that Europe of the Ten is in technological decline. This is an area whose importance would be difficult to overestimate: the information industry. This general term includes a whole range of fields based on information science, producing "hardware" (equipment) as well as soft ware (programmes used to treat information). It is essentially in the manufacture of information technology tools, in the electronics gap, that European backwardness is worrying. During the last few years, our trade balance has disimproved in every part of the electronics sector. This has happened despite the overvalued dollar which should have made our products more competitive.

To emphasise my point, I would also like to say that on today's Order Paper there is a paper laid before the Seanad which is termed "European Parliament — Resolution on Europe's Response to the Modern Technological Challenge", so I would think it opportune to raise it at this time. It is a relatively long document and I do not want to delay the House quoting from it, but I would like to quote briefly from page 2:

The European Parliament is aware that Europe's weaknesses lie chiefly in the fragmentation of its research activities and the lack of a genuine internal market but also in the exploitation of research findings for innovation, aware that the scale of funding available for research and development in the US and Japan has strengthened their industrial competitiveness vis-à-vis the European Community,

aware that Japan and the newly industrialised countries pose a similar, and in the long run, possibly greater threat, aware, however, that the aims, objectives and resources of US and Japanese technology and industrial policy do not correspond to the political, economic, and social needs and circumstances of Europe and for that reason cannot simply be copied,

aware that Japan's success rests on Government organized and subsidized strategic research and development where universities, industry and governments co-operate closely together,

aware that innovation results from industrially relevant applied research and development and not from pure research,

having regard to the vast and growing opportunities for a technologically developing society which can thereby exert a favourable influence on the quality of life and health to create greater wellbeing in Europe and the world.

I could go on further, but everybody would agree that in this age science research and technology are most important and in Ireland we are lagging very far behind. These matters are dealt with by the National Board for Science and Technology who do a very thorough job. They held a seminar on 11 January this year and the title of the proceedings was "Ireland and the EEC Programmes for Science and Technology". This is a definitive document for anybody whose interests are in this area. It covers all aspects in a number of learned papers. I will quote a paragraph from one of the papers by Dr. Stanley Nielson of the National Board for Science and Technology with regard to community programmes and Irish needs:

Ireland is in many ways atypical compared to other Member States. It represents 1.7 per cent of the Community population and 0.6 per cent of GDP; GDP per capita is about half the Community average. Irish R & D represents only 0.3 per cent of the total gross expenditure on R & D (GERD) of the ten Member States and our GERD per capita is about one-fifth of the Community average. A recent survey of substantive R & D facilities within Member States indicated Ireland's share as about 0.5 per cent and there are presently no Community laboratories located here. There are important differences in the characteristics of our industry and trade and in the priorities accorded to R & D; our peripheral location and lack of contacts with European science and technology in the past, presents further problems. Economic development in Ireland has to place greater emphasis on the acquisition and application of technology, often in the context of smaller firms responding to ‘niche’ markets. The Community as a whole has to face up to competition from the USA and Japan, often in the context of larger firms operating at the forefront of technology. It is not surprising therefore that many Community programmes are more relevant to larger countries and larger companies.

However, even in the context of the acquisition and application of technology, it is clear Ireland cannot afford not to be involved in Community programmes aimed at technological development. Indeed the indications from Irish participation in previous Community programmes are that considerable benefits have been achieved.

Nonetheless there are important aspects for concern.

These proceedings of the Killiney seminar which I have quoted from and referred to provide the most up-to-date assessment of Irish interaction with EC science and technology programmes and this has proved most useful.

The National Board for Science and Technology who have put considerable effort into promoting Irish participation in the EC research and development programmes apparently were satisfied that Ireland has benefited as much as possible, recognising that the programmes were designed to benefit the Community as a whole and could not all be expected to be in line with Irish requirements. Not everybody might agree with this and I would have reservations.

The Commission believe that their research and development programmes have been successful in helping to integrate and co-ordinate research in the Community and would like to expand the Community's research and development budget. They proposed to double the total research and development budget between 1984 and 1987 and to adjust the balance between programmes particularly in favour of industry. Although progress has been made, these targets seem unlikely to be fully achieved. Proposals for a subsequent framework programme for the period 1987 onwards are expected later this year and naturally the Irish side will be arguing for an increase in those programmes from which we are most likely to benefit. Of course, an expansion of research and development expenditure can only be achieved by either increasing the total EC Budget or by decreasing the expenditure on other programmes which could present problems.

A new factor has been the Eureka proposal in which European collaborative programmes are to be industry-led and have particular civil markets in mind and in which participation is optional. This has some potential benefits for Ireland in gaining access to new markets but also raises problems in terms of our capacity to participate effectively. Programme details and financing arrangements have yet to be clarified but there are grounds for optimism in the light of our experience with the European Space Agency programmes.

In general, the National Board for Science and Technology feel that participation in the EC and European programmes should be an essential part of our science and technology policy. We are highly dependent on effective transfer of technology and this is one of the ways in which this can be assisted. However, it is well known that our indigenous technological capability is weak relative to our competitors, as indicated by the recent SDC report on the technological capacity of indigenous Irish industry and this is a limitation on the commercial utilisation of the results of the co-operative research.

There are about 12 programmes set out in a separate publication. All of these are very interesting and given in great detail and many of them would apply to Ireland. The one with which I am particularly concerned is non-nuclear energy research and development — DGX 2. This is the third non-nuclear energy research and development programme to be launched by the Community. It is the largest and most expensive research and development programme to date covering nine fields of application. The programme has a budget of 175 million ECUs for the four years 1985 to 1989 and the programme will run in two phases. Ninety-five million ECUs have been allocated to the first phase to the end of 1986 after which the programme will be reviewed.

The aims of the programme are set out very briefly. As in previous non-nuclear energy research and development programmes, the objective is to encourage and assist research and development of new energy technologies. Project applications to the first phase of the programme will be accepted in the following areas: solar energy, biomass energy, wind energy, geothermal energy, hydropower and other technologies, energy conservation, utilisation of solid fuels, new energy vectors, energy systems and modelling. All of these are areas from which we could benefit.

With regard to solar energy, I think this is neglected. The Department of the Environment are at fault in some ways in not helping to make solar energy more popular. Changes of this kind often require a little urge in the form of regulations and a little incentive by way of grant. I remember some years back, after the oil crisis, it was possible to get packets to provide active solar energy — heat in the way of stored water. But these have gone off the market because there was no demand for them. While I understand and I believe that experiments are being carried out in various places and progress has been made, nevertheless with regard to the ordinary house being built or reconstructed there is no regard to the possibilities of solar energy.

There are two areas of solar energy, active and passive. In the area of active solar energy it is necessary to have a complicated set-up by which water is heated or air is heated or whatever and the pay-back may not make it worth while. But in the other area of passive solar energy, where all that is needed is a glass conservatory at the south end of a house, it does not cost very much. The grants should encourage this. As I said before in this House, one encouragement would be to ignore the area of the conservatory in calculating the floor area of the house for grant purposes. The Minister did indicate that he would be prepared to make some concession in this regard. In that area of solar energy we could avail of this programme. I would like to know from the Minister how many applications were received from this country, how many applications were accepted and in general the progress that has been made, will it be monitored and will the House be made aware of the progress made during that term?

Biomass energy is another area where great strides could be made in this country because forestry is not developed to the extent that it should be and biomass would involve planting rapidly growing trees and using them at an early stage to provide heat or electricity. Again this is very possible in this country. I remember during the last war wind energy was very popular in individual houses. We had windchargers and, as a matter of fact, one of them used in my locality was only taken down about five years back. It was successful over all of that period. This is a source of energy with very little expense involved. Again, it should be exploited and great strides could be made.

With regard to energy conservation, the same applies as for the others — not enough has been done. By and large we have improved considerably in the last ten years because in new houses walls, floors and roofs are properly insulated. Again, glass porches would be another method of conserving energy. I feel that overall very little concern is shown for the proper siting of houses with regard to energy. Also in regard to utilisation of solid fuels, we still have a system of the open fire which is wasteful and I believe that grants of some kind should be given to install closed stoves which are far better and give a far better return for the outlay. This is an area in which I believe great strides could be made. I believe energy conservation development is tailor made for this country and I also believe that we are not taking advantage of it to the extent that we should. I would urge the Minister to see what could be done to bring about an improvement in all those areas.

On 26 June last the Taoiseach gave us a very comprehensive statement on the position in the EC and when he was dealing with the European Parliament Draft Treaty establishing the European Union — I do not want to go into it in any great detail — he made it clear at that time that the Community was based on the Treaty of Rome which in turn was concerned mostly with the economic, commercial and social matters and that the founding fathers had greater ideas of integration. The attempt was being made to see that those would be brought to fruition. The Taoiseach did at that time spell out to us, also in great detail, the benefits that we got by being members of the EC. He told us that 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. It would certainly be in our interest to improve the Community.

With regard to the Dooge Committee I, too, would like to join with the other Members who have paid tribute to our illustrious Member, Professor Dooge. The Taoiseach told us at that time that there was a majority consensus on all issues except two. The two on which there was no consensus were (1) Senator Dooge did not agree to the inclusion of the section on security and defence; and (2) 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. The Taoiseach went on to say:

I should also say that despite Professor 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.

Nevertheless, while that is so, we welcome the strides that are being made. I would also like to say with regard to neutrality, which has been referred to previously by Senator Ferris, that I too believe that neutrality has no price tag. It is very important that we should preserve our neutrality under all circumstances.

I would like to commend to the House copies of the European File which are published monthly. I find them of great interest and indeed of importance at times. The one to which I would refer in particular is entitled “European Community and Environmental Protection”. On page 4 of that it states under “Total overall prevention Strategy”:

The European Environmental Policy has three major objectives; to protect human health; to ensure the continued existence in sufficient quantity and quality, of all resources on which life depends: water, air, open spaces, climate, raw materials, the urban environment and our natural heritage; finally, to preserve and, where possible, restore the natural environment and the habitats needed by both fauna and flora.

That is something with which I believe all the Members of the House would be in total agreement. Finally, I would just like to refer very briefly to the latest publication by the commission of the European Communities which was the Annual Economic Report 1985-86. It was published on the 17 October. Ireland is covered by about five or six pages. The first page deals with the position in Ireland; it points out that there is a pattern of vivid contrasts which has characterised the macro-economic performance since recovery began in 1983. In some sense it is a situation of damning with faint praise although everybody might not necessarily agree with that. It does refer to unemployment which continued to rise during the year to the unprecedented rate of 17 per cent. In fairness, I should point out that it also refers to the rate of inflation as high as 20 per cent in 1981, which is expected to come down to almost 5 per cent this year.

On the following page, page 156 there is a very short paragraph which states:

However, fiscal adjustment has effectively marked time for the past two years so that the size of the national debt continues to grow by further substantial annual increments and may indeed approach 120% of GDP by end-year of which close to half will be owed abroad. Moreover, the deficit on the current balance of payments is still rather high in view of the relatively low level of domestic demand.

That is something which gives us food for thought and about which nobody could be happy. With regard to labour it states that:

The labour supply is likely to increase by about 1% per annum in the next few years even allowing for significant net emigration. The problem therefore, if any inroad into the level of unemployment is to be made, is to raise employment by a much faster rate each year. To this effect, the authorities should endeavour to make simultaneous progress in three areas, namely, restoring order to the public finances, improving labour market management and making industrial policy more effective in terms of retaining more value added in the economy and generating more employment.

Again, this is an area where we are clearly losing out.

Finally, on page 157 it states:

the persistence of high public deficits entailed not only a rapid accumulation of external debt (almost 50% of GDP at end 1984) and resultant interest charges (1981, 2% of GDP; 1985, 4½%) but also, bearing in mind the relatively narrow tax base, exceptionally high levels of personal taxation. Over 40% of income tax payers fall into the two higher tax bands (48% and 60%) "Building On Reality" proposes to reduce the EBR and Current Budget Deficit (CBD) to 9.8% and 5% of GNP respectively by 1987 (that is a reduction of 3 percentage points in each relative to 1985) while holding taxation constant as a % of GNP, at the 1984 level. Substantial imbalances will thus persist in the period after 1987. These targets must be regarded as a minimum. Consequently, in 1986 the authorities should reduce the EBR and CBD by at least 1.5 percentage points of GDP respectively, by reference to the probable outturn for 1985, constituting a half way step towards 1987.

Clearly, nobody could feel happy with regard to this report. This is an area of great concern, particularly unemployment. The Government will have to look at the problem of unemployment very seriously.

In conclusion, I wanted to make, as the main thrust of my contribution, the grants, the incentives, the finance that is available for research and development in the energy sector. By and large, we could benefit far more from these incentives which are available. This is an area I would ask the Minister to look at very seriously.

Mr. Hourigan

In common with the other speakers I would like to say this is a great opportunity for us to have a chance to review the activities and progress — indeed in some cases not as much progress as we would like — of the European Economic Community during the period referred to.

First, it is no great revelation for anybody to state that we are at a crossroads as far as Europe is concerned. I feel that there is a great danger that developments which would not necessarily be beneficial to us could, conceivably, take place. Frankly, as far as we are concerned, the Common Agricultural Policy is the main and clear advantage point of our membership of the Community. We have seen that quite clearly from the beginning in 1972. We know that the Common Agricultural Policy from our point of view is central to the EC and indeed it is a central part of the whole EC make-up in any event, because there is greater cohesion in relation to the Common Agricultural Policy than there is in relation to other areas of policy. But it has a relevance for Ireland far greater than for many of the other member states — perhaps it has a greater relevance for us than for any other member state.

We are at a major crossroads. We are at a point where we must accept and realise that we have been very significant net beneficiaries as a result of our membership of the EC since 1972. There are countries who have been picking up the tab — Germany in particular — and who are now asking many more questions than heretofore. We must be very vigilant on this but that is not to say that we must not be firm and resolute in pointing out to our partners in the EC that, while we may have gained advantages on the side of benefits to agriculture, we have lost very heavily in other spheres. In 1972, we became a member of the EC in the full and clear knowledge that we would have certain serious disadvantages in the industrial sector, that we would be faced with an element of competition that we would not be able to cope with and levels of efficiency in industrial areas that we could not match. We accepted that overwhelmingly. The result of the referendum was something like 80 per cent in favour of our becoming a member. The main political parties threw their full weight behind our becoming a member of the EC and very correctly so in my view. I must emphasise we did this in the full and clear knowledge and with the assurance that we would be allowed to develop our greatly underdeveloped agricultural industry. The potential for development in agriculture, as we saw it in 1972, was considerable. It had a big bearing on the views expressed by people who advocated membership and on the actual decision of the people of the Irish nation to join the EC.

We have suffered setbacks over the years. The most traumatic and alarming setback was when the super-levy was introduced. When we had to face that situation in 1983, it gave us a very serious warning that the brakes were being put on in so far as our underdeveloped agricultural industry was concerned. This industry is, without any question, quite underdeveloped still. Perhaps it is more developed then it was in 1972 but its potential for further development is enormous.

With the introduction of the super-levy right across the board in 1983, we had a serious position confronting us. Apart from the effects on the milk sector it was a clear warning to agriculture that the brakes were being applied. Fortunately, the Taoiseach, the Minister for Foreign Affairs, the Minister for Finance, the Minister for Agriculture and other Ministers too joined and, assisted by members of the European Parliament, together with people of different political persuasions, helped in securing a most magnificent outcome to the very serious dilemma in which we found ourselves. We succeeded in getting an increase of 4.6 per cent. This was based on a 1983 production figure which effectively meant that we got scope for a 20 per cent increase. The 1983 figure was 15.6 per cent higher than the 1981 production figure.

A great tribute is due to the Taoiseach, the Minister for Finance, the Minister for Agriculture and the Minister for Foreign Affairs for having succeeded, against all the odds, in getting in reality a 20 per cent adjustment or a licence to move forward while, at the same time, our colleagues in Europe were asked to move backwards from their 1983 production levels to the tune of 6 per cent, 7 per cent and 8 per cent. Their base line was taken at the 1981 production figure. This is something which could not be exaggerated but there was a serious warning signal in it. It was a signal that this unlimited scope for development was now being very seriously and positively scrutinised.

There is no doubt that there are other areas of agricultural production, notably the cereal production area and beef as well, where similar possibilities are not out of question. We must at all times make certain that our Government and any future Government insist that we are a special case. We are a small island on the periphery of Europe and the parameters that apply and relate to Europe as a whole have little meaning as far as we are concerned. We are entitled to make that case and continue to do so because, without special exemptions, we have no hope of surviving in the general melee of the EC make-up. I am confident that our present Government and indeed Governments of the future will at all times make certain that that message is not alone carried to Europe but is also successfully negotiated and established in the minds of the Europeans around the various tables where decisions are taken, and will emanate in the decision process in the ultimate.

We must, of course, recognise very clearly that we are an asset to the European scene as well. While we talk about our special case, and so on, from a political point of view it is important for Europe to have us as a member. We must not underplay this or underestimate its relevance or its worth, just as Greece from a political point of view is important for the EC to have in its ranks. We are now facing the situation where Spain and Portugal are about to become members of the EC and, while one could on economic grounds stand up and logically say: "We do not want them; they are no asset to us", politically they are a great asset and I, in common with other people, welcome their entry to the EC in the very near future.

There is a lot more to the EC than just the economic aspect. The other aspects must not be under-rated and particularly by countries such as Ireland. They certainly must not be under-rated by Greece, Spain and Portugal. It is a question of selling one's message and continuing to do so in the most efficient, most effective and most palatable and acceptable form. We have in Europe now various mountains of agricultural produce. We have it in milk in its various processed forms, we have it in beef and in other products as well. This is fairly disturbing. It is something that we must acknowledge and recognise but at the same time we must relate production to actual ordinary type farming which we have in the main in this country rather than relate it to factory type farming which is the order of things in Germany, Holland and in much of the UK as well. For that reason we must not be held up to ransom for these vast mountains of excess supplies that are in stores all over Europe and indeed here in Ireland as well.

While tackling these excesses at production level we must also make some serious attempt to tackle their disposal because the cost of storing excesses of production can be very great. Rather than selling at a give-away price to the Russians we should be able to organise to help to feed the teeming millions of people in Africa and elsewhere who are dying by the minute from starvation. They have not enough to eat and some mechanism has to be evolved which can overcome political and economic implications and complications to allow us to do that. I believe that this question has to be tackled. We saw in 1984 where cow slaughterings in Europe amounted to 250,000 tonnes of beef. That was a very significant amount. Figures are not available yet for 1985 but the figure will be high. This obviously had a very definite knock-on effect as far as we are concerned because we rely very heavily on beef exports as an earner of foreign currency and as a matter that is very important in connection with our balance of payments and so on. We have not come unscathed out of this massive slaughtering of animals in Europe because it has adversely affected our beef market and perhaps it is likely to do so for some time to come. It was not unexpected in the context of a super-levy as it applied in the EC, with the exception of Ireland, that the slaughtering of vast numbers of cows would take place.

There is a very significant improvement in the technology as it relates to agriculture and particularly bio-technology. This applies at the production end and it applies right through. We must be very mindful of this. The difficulties that exist will be compounded as time goes by regardless of certain qualifications that are to be put on. Early in 1985 the Commission decided to publish a Green Paper or a consultative document and we look forward to its recommendations which will be made available at the end of this year. That brings home clearly the emphasis and importance the Commission is laying on the agricultural scene at present. In so doing I think it is tackling the problem very correctly.

There is a very real problem and I will quote from the document "Perspectives for the Common Agricultural Policy COM (85) 333". One paragraph reads:

The common agricultural policy is a cornerstone of the European construction. It was in this sector, from 1962 onwards, that a profound effort towards economic integration was commenced by the original Six Member States, in parallel with the creation of a common market in industrial goods. In this sense, the CAP was and remains part of the "marriage contract" of the European Community. It was accepted by the new members who joined the Community in 1973 and 1981, and will be adopted by the new members who are to join in 1986.

That says a great deal in a concise manner and it highlights clearly for us the sort of situation that exists at present. I want to quote one further paragraph from that same document:

During its life, the CAP has passed through different stages of development, as regards both the markets policy and the structures policy: it has experienced continual adaptations, to meet new situations which were not foreseen by the "founding fathers" who met at Stresa in 1958. In the first 15 years, technical progress in agriculture and good conditions in other sectors of the economy permitted a rather rapid rural exodus. Since the mid 1970s, the economic crisis has slowed down the outflow of labour from agriculture, and the high level of unemployment has created conditions in which an acceleration of the rural exodus would be intolerable; however, the demographic structure of Community agriculture is such that a certain decline in numbers working in agriculture can in any case be expected.

In my view that clearly sets out for us that the EC has to make up its mind about what it wants, whether it wants to maintain many more people in agriculture or whether many more people can be sustained elsewhere.

The Spinelli report which, no doubt, people have studied with interest, has given a very objective assessment of events and indeed has made very worthwhile comments on various aspects of the EC situation. The regional and social policies very often get left aside and we get embroiled, almost exclusively, in the agricultural sector; but the regional and social policies have enormous potential, enormous relevance, for us as a country. There is no doubt that a regional promotion or structural policy correctly applied can do very great things to alleviate difficult situations. Similarly in the case of the social policy I believe that its full and complete potential has not been exploited or developed. One would need a lot of time to go into all the details. We must ensure that regional and social policies become more and more relevant for us. There is in my view a need to have a greater and tighter set of policies that would help us along that path.

A question was posed earlier today as to whether the EC in 1985 and the events that take place within the EC have much relevance, I would debate that very strongly. I believe that our efforts as a country in 1985 have ensured that we have held our position very solidly and very clearly on the EC scene. It is going to be a continuing effort and something that we cannot let up on at any point.

We have of course the very major problem of unemployment. We have 14 million persons unemployed in Europe. We have a major unemployment problem at home as well. This is a problem for ourselves domestically, and certainly it is one for the Community. It is something to which all governments individually and collectively as members of the EC must address themselves a lot more than has been the case so far. I believe that financial assistance, while very important, is in no way a substitute for any person eager and willing to work. All governments at national and EC level should concentrate a great deal more on ways and means of having people meaningfully and gainfully employed. Giving money to people is important, and people who are not employed need money, but that in itself is not sufficient and a good deal more is required.

I referred to the accession of Spain and Portugal. I, too, believe that perhaps we could be bordering on what somebody described as a two-tier Europe or perhaps a three-tier Europe where we would have an inner sanctum and then another outer tier or perhaps we could have an inner one, another one outside that and perhaps one that was only just there. It would be a great pity if that ever developed within the EC. We must as a nation fight strenuously to make certain that there is no division, strata or tiers as far as the EC is concerned. I know from some visits to Europe that there is a very strong feeling within the stronger states like Germany, Holland, the United Kingdom and France that they should have a certain set of regulations applicable to their state of affairs and perhaps a different set for somebody else. This is something we must be very mindful of and guard against at all times.

Throughout the EC for the last year for which figures are available, agricultural production increased by from 1½ per cent to 2 per cent but unfortunately the demand, the consumption, increased by only 0.5 per cent. That is a further aggravation of the situation. The EC must make certain that it becomes clearly an exporter of goods and goes out to the market place and sells goods. While intervention is extremely important as a safety valve, I believe it is used too often as a marketing factor rather than as an area where surplus production is placed. The EC as a whole should be more mindful of marketing to advantage rather than resorting to intervention. Of course, in the absence of an efficient, effective marketing machine intervention is very necessary. We have in the beef sector fared pretty badly in 1985 in getting intervention for only 18 days and only on a very selected basis for that short period of time. It in no way met our situation; and the price of beef animals in this country, compared with the prices obtaining within many areas of the EC, is quite low. At best we are talking about 90 per cent of the guide price, which is very unsatisfactory.

Reference was made earlier to the question of natural hormones or growth promoters as distinct from synthetic growth promoters. I believe that those producing beef should be allowed the choice to use natural growth promoters or hormones. I do not see that natural hormones can be damaging to human health. I know the big problem we are facing here is the question of getting the man or woman in the street to understand the difference between the natural hormone and the synthetic product. An effective job of selling should and could be done to ensure that that is got clearly across so that people understand the difference. This is a time in farming when margins are becoming extremely narrow, and people are relying very heavily on aids such as growth promoters to make, for example, a beef enterprise profitable. I believe things are so bad that many beef producers will go to the wall.

We must also acknowledge that with the introduction of the super-levy there are no choices anymore. People growing grass in land that is not suitable for tilling have no choice. They feed their grass to cattle or sheep. Therefore they produce mutton or beef. They cannot produce milk. They had not done so before 1983. The reality of the situation is that we must not introduce restrictions and disadvantages that people cannot sustain.

I share the view expressed earlier that there is no way that many of our beef producers could survive economically without the use of growth promoters. I emphasise the natural growth promoters as distinct from the synthetic products. I also acknowledge the difficulty in getting this message across to the people consuming the meat. It is imperative that there is not a total clamp down on the use of growth promoters. There is another related aspect to that which is more domestic than EC which I will leave for another occasion, that is, the actual control of them. I am talking about the availability of growth promoters for stock.

We have heard a lot about this great European political union. We have not, realistically speaking, advanced a great deal down that road yet. I am confident that, provided there is no fragmentation, classifications, categorisings or anything of that sort that we can look forward to a very effective political union ahead.

There was one very significant step — made by the EC — the Government had a big part to play in the matter — in the export of beef to Canada. The Canadian Government decided in December 1984 to impose specific quotas. This affected Ireland and Denmark but Ireland mainly because we were the main suppliers of this 22,000 tons. It is very satisfying to note that our negotiators, working through the European mechanism and GATT succeeded in alleviating that problem. That is something that ought to be noted.

An anomaly arose with regard to the super-levy between the actual figure of production and figures that were worked out. I would now like to place it on record that the actual figure is the figure which is used as the base figure. We are all very glad of that. It was not an easy matter for the Minister for Agriculture and others to make sure that that will happen.

One could go on but I would like to give an opportunity to as many Senators as possible to speak on this matter. I again want to refer to intervention. I believe there must be an alternative to intervention, I do not think that it is the answer. It is a temporary measure. It must not be as discriminatory as it is. For example, heifer beef in Ireland is excluded from intervention altogether. There are a lot of mixed farmers who produce heifers as well as steers, so that is a very obvious weakness.

We are at a critical point, not alone as far as agriculture is concerned but as far as the whole EC situation is concerned. We have got to be extremely vigilant to make certain that decisions taken are in fact favourable to us. In every other country we have people at this moment we can be quite certain are advocating that decisions taken are favourable to them. This is understandable. At the same time we have to be prepared to make certain sacrifices from time to time in the interest of the overall good because other people will make them for us as a member of the Ten at present and shortly Twelve.

I see great potential within the EC. I want to conclude on a note which I have stated throughout my remarks, that is that Ireland must be given special concessions in different areas from time to time. I am confident that our negotiators will succeed along that route. Frankly without that we have no hope of survival because our whole industrial sector, to which I referred earlier, has already got into major difficulties. We must get special measures as they are warranted. We are not looking for anything over and above what would not be good for this country and in the long term good for the EC.

I feel confident that within the framework of the EC we have good prospects. A more cohesive type organisation, as referred to earlier by myself and by others, is required. It is important that there is greater cohesion, at the same time retaining national identity.

I want to compliment Senator Dooge for the excellent report which he spearheaded earlier this year.

Mr. Smith

After watching the queuing up in the other House to get to the slot machine for first in on the divorce issue I find it rather difficult to get down to thinking about more mundane matters in relation to the European Community. I continue to marvel at the capacity of top civil servants and Ministers to present addresses to this House which seem to convey the impression that everything is rosy in the garden as far as the EC is concerned. We will have lots of imagination, we will not make mistakes and there is no reason to be unhappy about the situation. It is almost like a patient who is being prepared for the operating theatre with only a 50 per cent chance of getting through and being told that he is getting a capsule and he will be all right in a quarter of an hour.

We should try to face up to the developments within the European Community and be more frank. I am not saying that the House is being deliberately misled. The European Community is in a crisis. While the Preamble, the Treaties and the momentum behind the original idea and all of the aims are absolutely laudable as they operate within the Community today the contradictions, the policy changes and the developments which have taken place leave me in no position to believe that all is well.

At this stage we should not be complimenting one another. We have to face up to what appears to me to be fairly severe surgery with regard to developments in the EC. I do not think I would argue very much the case Senator Hourigan has made in relation to the Common Agricultural Policy. Over the past couple of years people who have tried to dismantle the Common Agricultural Policy, continually indicating that it is taking 70 to 72 per cent of the budget to fund the only real policy that is in the Community, ignore the fact that nearly half of the agricultural budget is taken for developments which have nothing to do with the primary producer.

I am not saying you should argue with the 500 million units of account that go to the ACP countries, which perhaps mainly benefit the UK in relation to New Zealand imports, which cost 105 million European units of account, for imports of beef into the Community where you are already self-sufficient. We are supposed to have Community preference. We could go on listing these contradictions — the import of cereal substitutes, for instance, and the effect this is having in relation to the production of dairy surpluses and the way it interferes with cereal prices.

We have not begun to sit down to try to work out solutions to these problems. We are spending millions of European units of account on policies which arose from bilateral and multilateral agreements, or political consideration, but they are placed in a blanket way against the Common Agricultural Policy in order that consumer resistance can be built up. That is not to say that you can sustain mountains of produce that you cannot sell. There is no logic in continuing to produce at a rate beyond which you can sell. Policies have to be tailored to the marketplace and take into account food aid policies to developing countries and famine stricken countries. Where we have the capacity the aim should be always to have some surplus but it must be containable and it must not reach a situation where you end up having to dispose of items and produce which have been held in storage with high energy costs and storage space and finally having to be either marketed for very low prices or else, in the case of produce which is not available for food, has to be reconstituted into feeding. The principle point I want to make is that we should look rather searchingly at how this policy has evolved and not set out to dismantle it by the present policies in the EC, which obviously are aimed at hitting the smaller to medium sized producer.

The quota does not affect a factory farmer in Germany or Holland because he had ten or 12 years to build up his production and the cut-off point means nothing to him. In a developing stage, such as we are in in this country, particularly for the smaller and medium sized producers who are unable to expand, that kind of policy is obviously creating a doomsday situation for them. I want to argue that it is essential that we do something about that. We have had very significant migration from the country areas into our cities. That situation will accelerate when they cannot be maintained on the land. The extension you built to your school in X place is no longer necessary and you need to build a new school in some urban area. The sort of chaotic way these matters are developing and the way the city of Dublin has been allowed to explode with the consequent urban psychological criminality and the sociological difficulties that develop from lack of planning — even trying to get from A to B in Dublin — is enough to give some people blood pressure at present, yet we continue to follow policies which take people out of the rural areas. We cannot afford to support them on the land and we have to have social welfare, medical cards, lower differential rents, subsidised housing and a variety of other things to try to change that situation. It calls for a bit more logic and imagination. It certainly does not call for the sort of complacency which abounds in relation to this whole area.

In recent weeks we have been informed that the general thrust of EC policy in relation to the common agricultural area is that the price guide will be closer to the world market situation. The question of pegging cereal prices in a way like that will rapidly produce a situation where the cereal production will move into the domain of the very large producers. In this and in a number of other ways, the policies which are being pursued are making it virtually impossible for the smaller and medium sized producers to survive. I cannot see the logic in creating surpluses, where the larger factory farm production unit can contribute enormously to that surplus and is heavily subsidised to do it. By any yardstick, whether you are on PAYE or whatever kind of a taxpayer you are, it is not logical to find huge sums of money to support the units which should be capable of making their own way and at the same time, by supporting them, eliminating those in farming who have no alternative. As Senator Hourigan said, where you have slopes, where you have rocks close to the soil, what choice have the people in these areas but to be in animal production and in dairying if they can?

Anyone who had the opportunity to visit some of the areas which were badly hit by the desperate weather conditions saw it this year. The response from the EC to this problem was not adequate. It is fair to say that the Government's efforts represented a reasonably genuine attempt to do something about this, but the matching exercise from Community sources was totally inadequate. If it were not for the good furtune of reasonably good weather in the past few weeks, the situation might have been much more aggravated. One can only hope that the winter will not prove too difficult for the 60,000 farmers who do not have anything like adequate fodder facilities.

I join with other Senators in congratulating Senator Dooge on the efforts he made through his committee to chart a course for a new effort towards greater union of European people. Obviously when one looks at the European situation, the way we lag behind in technological advance and how the Americans and Japanese are heading out in front, it is quite clear that a new initiative has to be taken. I am not satisfied that there is anything happening in relation to economic convergence or in relation to Community preference. Where do we see the evidence that countries are prepared to take the necessary steps in relation to border taxes, tariff barriers and all of the integration which will be necessary if greater European union is to be brought about?

The attitude of the UK Government in relation to a variety of matters in the Community would not lead one to believe that they are prepared to go down that road. No significant concessions can be made by our Government in relation to the veto, in relation to neutrality, or in relation to any of the areas which are absolutely essential to us without first having a clear indication from the major countries in the Community as to what steps they are prepared to take down the road to economic convergence and in transferring resources to the poorer regions. The situation will be more difficult now because, with Spain and Portugal joining the Community, in the farming area the number of holdings in the Community will increase by 50 per cent. The carve-up of the resources and the spread of that cake will be even more difficult. While one recognises the urgent need to find a new path and a new way to meet the original aims of the Treaty of Rome and the treaties since then, there must be evidence of the commitment of the major countries towards helping the smaller countries.

I have tried in a brief contribution to introduce a note of wariness in the context of what is happening in the European Community. There is absolutely no reason for the complacency which seems to abound in relation to developments in the Community. Unless there is a significant move down the road to economic convergence and greater unity of purpose, particularly by the major countries, I am not at all optimistic about future developments within the EC.

Mr. J. Higgins

In addressing myself to the assimilated and amalgamated motions we have before the House, I should like to begin by saying that the most significant development in January 1985 was the appointment of Commissioner Peter Sutherland. He has made his mark in Europe. For somebody previously unknown, naturally there was considerable curiosity about him. At 39 years of age, he was not alone unknown but also the youngest member of the EC executive ever. His instant impact, however, ensured that no mediocre portfolio or no mediocre assignment was to be the lot of Ireland. Here I am casting no reflection on previous assignments delegated to various Irish Commissioners, but we can justifiably feel very proud of the magnitude and the status of his brief as Commissioner for Competition Policies.

Although Commissioners take an oath to forswear national interests, the reality is that unless we have a strong, dominant, competent, confident national nominee, then Irish interests can suffer very profound consequences. His competition portfolio is a key position within the EC, particularly in relation to industrial strategy. It is his task, and a vital task from our national viewpoint, to ensure that the Community's fair trade rules and regulations are enforced. Of course, Mr. Sutherland's status and standing were further enhanced when he was given the social affairs area, a weighty enough portfolio in its own right, something that he might possibly have to forfeit with the accession of Spain and Portugal.

He was also given other additional areas such as education and training. This means that Commissioner Sutherland is undoubtedly the most powerful Irish Commissioner to date with a cabinet second only in size to that of President Delors. He faces many difficult problems. He will probably make mistakes but I am sure he will also learn from his mistakes. Among the most difficult tasks facing him in the immediate future are ones such as the potentially explosive EC moves to restrict Government support for the coal industry and, of course, the very much invoked proposal to liberalise air transport. He will also be confronted with the stubborn resistence in the Council of Ministers to the Vraidling directive — very contentious, something about which there was an initial flourish of enthusiasm which has gone off the boil. I heard utterances in this House last week to the effect that we are unlikely to see its acceptance within the next ten years. I think it was Senator Lanigan who said that. Another problem facing Commissioner Sutherland is the process of arriving at conclusions about what is desirable in terms of minimum support and protection. We wish him well and we can justifiably be proud of the manner in which he has gritted his teeth, grasped the nettle and made considerable impact thus far.

The Brussels summit in March was of extraordinary significance because it cleared the decks for a serious push forward in the area of institutional development. It also made the accession of Spain and Portugal to the Community a realistic prospect for 1 January 1986. There will, of course, be difficulties and readjustment problems; but undoubtedly the EC, in the long term, will be much the better for having Spain and Portugal as members. It will be larger; it will be different; it will never be the same again. It will now encompass virtually the entire land block of western Europe with the exception of Switzerland and the Nordic regions. The Community's position as the world's largest trading block will be consolidated. We will become an increasingly powerful voice in world affairs.

I wish to pay tribute to my fellow county man, the Minister for Fisheries, Deputy Paddy O'Toole, for leading a very successful Irish negotiating team in the fishery negotiations. It was difficult. Naturally, we had our apprehensions and worries, because the admission of a great fishing nation like Spain could create difficulties for us. The whole principle of the Community is based on common interests and shared resources. The whole movement towards European integration would have been badly damaged had Ireland continued to block Spanish entry because of the fish issue. The box solution which was eventually arrived at is a fair and equitable solution and achieves the necessary balance between national and European interests. Agreement on enlargement means that the Brussels summit marks another milestone in EC history and gives us all, as Europeans, a reason to celebrate.

The whole question of European Union is very much to the fore. It has been mentioned by successive speakers in this House today. It has been very much to the fore during the period specified in the motions for this debate. The two launching pads or springboards are, of course, the Dooge report and the Spinelli report. I would like to join with the Members from both sides of the House in congratulating Senator Dooge for, first of all, managing to wrest the chairmanship of that very prestigious committee and, secondly, for his handling of the very onerous position.

Of course, there is nothing new or radical in the idea of European Union. At the Paris summit in 1972 the original Six, with the then newcomers, Ireland, Britian and Denmark, agreed to set 1980 as the deadline for achieving the economic and monetary union. The 1974 oil crisis, which precipitated the then recession, put paid to that. Then we had the economic hiccup of 1978-79. It is interesting to see what was said by people at that time. Mr. Seán Lemass, who has rightly been described as the father of modern industrialised Ireland, when applying for EEC membership on our behalf in 1962, while noting that membershop had no military links, said that a military commitment would be an inevitable consequence of our joining the Common Market and that ultimately we would be prepared to yield even the technical label of being neutral. He said that we were prepared to go into this integrated Europe without reservation as to how far that would take us in the field of foreign policy and defence.

New membership was being negotiated at the time by the then Taoiseach, Mr. Jack Lynch, and the then Minister for External Affairs, now President Hillery, and both of these people conceded at that time that a Europe worth joining was a Europe worth defending. Again, one notes that during the discussions with Mrs. Thatcher in Dublin Castle in 1980 the present Leader of the Opposition, who was then Fianna Fáil Leader, was prepared if necessary to enter into bilateral discussions with the possibility of a joint defence policy emerging therefrom. The Dooge and Spinelli reports have the same basic objective, but they chart different paths to reaching it. Spinelli argues that political co-operation and defence must come first with economic union eventually following in its aftermath. The Dooge report, if I am to read it properly, argues that economic union and political co-operation take precedence, and the chairman, Senator Dooge, disregards the emphasis on placing the defence arrangements within the economic timescale. A question we may all have to ask ourselves sometime is whether, in fact, if it came to the crunch we would be prepared to withdraw from the EC rather than forfeit our neutrality. There are times when I feel we do not face up to that problematic eventuality arising at some time.

The Dooge report goes far beyond the complex issue of neutrality. It involved participation in the united states of Europe, the model of independent yet unified states. It seeks to mobilise the massive resources of the Community in a cohesive and unified way in order to generate further power, strength and, most importantly, employment. More power would be delegated to the EC Commission and to an elected Parliament. Within a united and integrated Europe, the Northern question would take on a different complexion. We would all be in the European melting-pot together. However, it is a false presumption that such a unity model would ensure prosperity for all our people, or equilibrium and equality across the board, because there are people living on the slopes of the Appalachians who are still living on the poverty line while the staggering wealth of California co-habits within the union. Therefore, I would be very much in tandem and agree with the Greeks who have argued that there must be special models and special mechanisms which would actively support the poorer regions.

Might I briefly digress? In my opinion the Commission and the Community in general should be aiding and assisting many of the very worth-while movements which are under way on a voluntary level between various member states. I instance, for example, what has now become known as the twinning programme which is very much a feature and a part, strangely enough, of rural Ireland, where towns and villages have twinned with places of equivalent size and with similar interests in Brittany, France and Germany. This has become known in the French term as the Jumelage Programme. Here we have people voluntarily committing themselves to a fusion of both cultures and to a collective determination that they will get an adequate mastery of the linguistics of the various languages involved. It is a very meritorious, worth-while development. It is an extension of the principle of European integration and is one that should be supported by the Social Fund.

It is well worth support also from the Department of Education, because one of the main deficiencies of our whole educational system has been our total incompetence or our inability to master linguistics. One of the reasons for this of course, is that we have never had in this country the opportunity to go and to absorb the languages in situ. As result of reasonably moderately priced ferry services, one can now get on to the European mainland, the European gateway, through the Cork-Roscoff link or through the Rosslare — Le Harve link. We have situations where classes in post-primary schools are now being brought by their teachers to Brittany, France and to Germany in order to participate in this jumelage or twinning programme. It does not, by any manner or means, fill the void or the gap. It is not going the whole hog, nor is it the answer to all the problems, but to me it is a major leap forward that we can now have situations where leaving certificate classes from this country can spend up to a month in classroom situations in France with the consequent benefits that derive therefrom.

One of the most recent controversies that we have had has been about the whole issue of the rescue package for farmers. As I did on the occasion of the introduction of the package by the Minister, Deputy Deasy, I want to compliment him for the manner in which he addressed himself to the situation, the manner in which over virtually the entire summer — and particularly as the weather situation deteriorated — he gave unstintingly of his time and of his energies to appraising the situation at first hand. Could I again emphasise what to me was the central point in his contribution in presenting the package? That is, that the package is a rescue package, not a compensation package. Even in a doomsday, dire disaster situation it is not possible to compensate people fully for their losses. All one can do, no matter how plentiful resources are, is rescue people and try to hold the line so that the economic fabric or structure is not damaged beyond redemption. In my opinion the Minister did an adequate job. From the time that the crisis was first identified the entire emphasis from day one was on the word "fodder". In that regard the Minister has taken adequate steps. He has taken adequate steps from the point of view of providing an adequate supply of grain to ensure that no farmer will have to sell off stock because of fodder shortages. Again, he has taken a positive step in relation to some type of monetary compensation for the people in the Shannon Basin. I know that a £500 maximum may be nothing to write home about, but when it is taken in tandem and in conjunction with the grain provision hopefully it will bail people out from the situation in which they find themselves. That is what we are speaking about, literally — bailing people out.

The Minister has been blamed for not taking action in time. He himself explained that what was a bad situation in mid-July was three times as bad by mid-August and was unbelievably bad by the end of September. The situation was changing not alone by the week but by the day and, indeed, by the hour. I have no doubt whatever that the fortuitous weather we have had over the past three to four weeks which has enabled the growing season to be prolonged beyond the normal growing season, coupled with the rescue package, will afford the necessary redress and rescue service to the farmers in question.

I would like to conclude by saying that one of the most refreshing statistics recently published was one which shows that Irish labour costs are among the lowest in the EC. This, hopefully, taken with the other economic components such as the drastic reduction in our inflation rate, the increase in our balance of trade situation, plus the other nuts and bolts of the economy which are gradually beginning to come right, will form the base for the economic resurgence and resuscitation which hopefully we are about to witness. That is why it is vital, despite the pressures and the tensions and the assaults that are hurled at Government economic policy from time to time, particularly by those people who find themselves in unionised situations in which it is difficult and, indeed, now impossible because of the national plan, to get special awards which were not provided for in the plan or which were specifically precluded from the plan, to hold the line. The message has to be got across to the people that cheap labour costs are vital if, in fact, we are going to harness the benefits of economic resurgence when it does come. Those people who agitate so vocally and so strongly for 10 per cent higher wage packets must be made to see that a £10 increase to somebody who is on the maximum rate of taxation works out to be less than £3 in their hands. The consequence of such special pay awards and the consequence of astronomical or exhorbitant pay rises is that they blow the lid off the economy and inflation goes mad again and we are back to the neverending spiral.

I am delighted to have had the opportunity to address the House on the question of European involvement and European development since January 1985. It is a worth-while debate. We should monitor, appraise and assess the situation within Europe and our own situation in relation to our role in Europe. It is refreshing that when we go abroad the invariable and unanimous view of our fellow Europeans is that the Irish people are very good Europeans.

Mr. Ellis

Senator J. Higgins said the Irish are good Europeans. Perhaps we are too good Europeans to our own detriment at times, but I will deal with that later.

When we study what has happened in Europe since January we see that the main topic is the agreements which have been reached with regard to the accession of Spain and Portugal to the EC. We will now have two extra members of the Community who will be competing against us for the funds available. We should look back and see how well we have used the funds which were available to us from the Community. Many regulations were made with regard to the agricultural sector, for instance. We have not been in a position to take up what has been available to us from Europe as far as agriculture is concerned. Indeed, this year we have seen a number of attacks made by other member states on the Common Agricultural Policy.

One of the most vocal attackers of the agricultural policy of the EC at present is our near neighbour, Britain, who has traditionally had a cheap food policy and believes that the subsidisation of the farming community throughout the EC by means of intervention and other payments is affecting its cheap food policy. Indeed, numbers of British EC officials have recently made such attacks. At a seminar in Scotland, Mr. Andrew Khan, an adviser to the Commission's Vice-President, admitted that the aims of the CAP were now open to debate in the face of the growing crisis. The position as far as I am concerned, and I hope as far as the Government are concerned, is that the Common Agricultural Policy — which was one of the chief reasons why we joined the EC — should not be dismantled but improved. If it was dismantled the prices which our farmers receive at present would be drastically cut.

Whether we want to admit it or not, the lobbying power of the agriculture sector in the EC has been greatly diminished in recent times. As we approach further urbanisation and further industrial development within the Community, we see that the percentage of people involved in agriculture is falling annually, which means that our principal industry will be further affected, as time goes on, by the attacks made on the Common Agricultural Policy. It is important to stress to the Minister for Foreign Affairs and the Minister for Agriculture that, as far as Ireland is concerned, the Common Agricultural Policy cannot be watered down under any circumstances.

I started by referring to Spain and Portugal. Looking at the accession of Spain and Portugal and seeing how such accession will affect Ireland in the future, one begins to worry very much about our fishing industry. We know that the Minister for Fisheries made a very vocal fight to safeguard our fishing rights as far as possible. It is very easy to be vocal. One can be as vocal as one likes but the deal that has been worked out with regard to fisheries is totally detrimental to the Irish fishing industry. We all know the reputation the Spaniards have regarding the observation of territorial waters. It is common to read articles in our newspapers about Spanish trawlers being arrested for illegal fishing. Indeed, they have been quite active for the past number of years in a little bit of gamesmanship with regard to re-registering vessels in other EC member states, so that they can fish here. They have also ignored the guidelines laid down with regard to the number of EC nationals who should be on those boats. If they are playing those sort of games before they are within the European Community, what type of tricks will they try once they get inside?

We will also face competition from both Spain and Portugal in claiming EC regional aid. When one looks at the amount of regional aid which is available and when one sees the cases being made for this aid by countries such as Greece, and the use they have made of it, and when one considers the use we, as a nation, are making of the various EC funds available to us, one begins to wonder should we now reconcile ourselves to the fact that we have missed much of what was available to us.

Debate adjourned.

Professor Dooge

It is proposed to adjourn the House until 2.30 p.m. on Wednesday 6 November 1985.