I should like to remind the House that together with item No. 2 on the Cecchini Report, we are taking items Nos. 3, 4, 5, 6, 7 and 8. There is a comprehensive range of reports from the joint committee.
Cecchini Report: Motion.
An Leas-Chathaoirleach
I move:
That Seanad Éireann notes the studies published by the Commission of the European Communities in the research project directed by Mr. Paolo Cecchini.
I am pleased to have the opportunity to address the Seanad today on this important topic. It has already been the subject of a very useful debate in the Dáil last week and I welcome the initiative of the Seanad in also debating the subject.
Senators will recall that the issue of the internal market was discussed in great detail in the Seanad, in the Dáil and elsewhere, in the period leading up to the Referendum on the Single European Act in May 1987. The completion of the internal market was one of the main elements in the Single Act. It was, therefore, one of the main issues in the Referendum campaign, the outcome of which was the overwhelming approval of ratification of the Single Act.
The publication of the series of studies, which are being generally referred to as the Cecchini Report, is very timely for a number of reasons. The Community is today almost half-way through the eight-year timespan allotted for the achievement of the Single Market by the European Council at Fontainebleau in 1984. The Commission's White Paper Completing the Internal Market, published in 1985, listed all the pieces of Community legislation — over 300 of them — it then envisaged as necessary to achieve that objective. As we approach the half-way stage, the Commission has now presented drafts of over 200 of what it expects to be a final total of 286 proposals to the Council. It expects to have tabled all of them by the end of this year. The ball is now in the Council's court, and we can expect the pace of negotiations on the Internal Market to increase considerably over the next few years, as 1992 approaches.
Recent developments have facilitated this change in tempo. The entry into force of the Single European Act on 1 July 1987 means that over two-thirds of the 286 proposals will now be decided on by a qualified majority in the Council, rather than unanimously as previously required. Already more and more items are being decided upon by a qualified majority, except, of course, in the most sensitive areas such as harmonisation of indirect taxes, which will remain subject to unanimous agreement.
The agreement on the future financing of the community reached at the Brussels European Council in February of this year has secured the Community's finances into the medium term, and removed from the agenda, for the time being, the subject which has done most to sidetrack and bog down the Community in the last ten years. The Community is now free to devote its full attention to implementation of the Single Act, of which the completion of the internal market is a major part.
The current German Presidency of the Council has made the internal market one of the main items on its agenda and has vigorously pushed forward negotiations in a number of areas. We can expect the internal market to be one of the dominant issues at the Hanover European Council and to remain a key issue for some years to come, including the period when Ireland will next hold the Presidency in the first half of 1990.
The completion of the internal market has been an objective of the Community since its establishment in 1957. Since accession in 1973 Ireland has strongly supported the drive to achieve its completion and we have welcomed the renewed effort which has followed the negotiation of the Single Act.
A small, less developed country on the edge of the Community, Ireland is critically dependent on exports for its prosperity and for the maintenance of employment. This is especially true at the present time, when the Government's determined efforts to restore the public finances have seriously curtailed their ability directly to stimulate growth in domestic demand. Growth must for the moment depend heavily on the expansion of our exports and geography alone dictates that that must mean expansion of our trade with our Community partners, who in 1986 absorbed 72 per cent of our exports.
The studies which I have been referring to as the Cecchini Report were initiated by the Commission in 1986 and the Commission team was headed by Mr. Paolo Cecchini. In fact the report consists of a number of publications, all deriving from the studies, conducted by various experts, consultants and institutions supported by the Commission Services. Most Senators will probably only have seen a little of the documentation produced by the studies and will have had time only to absorb its basic thrust. The total output of the research when it is finally published is estimated to run to some 6,000 pages. In will be useful, therefore, if I outline the main conclusions of the report.
The aim of the report is to provide a body of scientific analysis identifying and quantifying the immense costs of existing barriers to trade and the potential benefits for the Community as a whole of the completion of the internal market. The report attempted to estimate the costs to Governments, business and consumers of various constraints such as market barriers, unnecessary customs procedures, administrative delays, artificial technical barriers and discrimination in public procurement policies. It contains a wealth of analysis, but its basic conclusions are as follows.
It found that industrialists reckoned the direct costs of the various barriers to trade as about 3½ per cent of the value of goods produced, with further very considerable indirect costs resulting from these barriers. It estimated that up to one-third of European industry could reduce its costs by from 1 per cent to 7 per cent, or about 2 per cent of Community GDP; from economies of scale, with certain sectors such as financial services able to make even bigger savings.
At a macroeconomic level, the report has estimated the likely impact of the completion of the internal market on the economy of the Community as a whole. In the current economic environment, it suggests that over a five to six-year period the programme could result in an increase of about 4½ per cent of Community GDP, a decrease in prices of the order of 6 per cent and some two million new jobs. If, in addition, Community Governments take the opportunity offered by the completion of the internal market to switch to more growth-oriented policies, the benefits could increase considerably. In those circumstances, the report estimates gains as some 7 per cent of Community GDP and up to five million new jobs.
It should be emphasised that these figures refer to extra growth on top of what the Community would normally achieve and to net job increases, above those needed to absorb losses from streamlining as a result of the completion of the internal market. It is also hopeful to note that this growth would be accompained by a deflation of prices rather than higher inflation.
As Senators will be aware, the Taoiseach in his speech to the Dáil on Thursday last welcomed the report on behalf of the Government. The report can contribute usefully to the debate on the internal market which the Government hope to stimulate throughout the country over the coming months, and indeed right up to 1992. We welcome in particular the emphasis in the report on the need for the adoption across the Community of growth-oriented policies if the full benefits of the internal market are to be realised. Only by taking measures to stimulate growth in demand will the full potential of the principally supply-side benefits of the internal market be achievable, thus enabling the Community to achieve higher overall growth and so begin seriously to reduce the great burden of unemployment.
The quantitative aspects of the report must, as many commentators point out, be treated with some caution, as they represent broad orders of magnitude rather than concrete predictions. There is no reason, however, to doubt the broad correctness of the report's analysis especially in its expectation of a more vigorous competitive environment for which we must be prepared.
There are, unfortunately, some deficiencies in the report from Ireland's point of view, which reduce its usefulness to both Government and industry in this country. In the Dáil last week the Taoiseach drew attention to these deficiencies. There are two principal shortcomings in the report, as the Government see it — it does not analyse the regional distribution of gains and losses and its analysis does not embrace all of the members states.
Rather surprisingly the report barely touches on the likely distribution across the Community of the effects, positive and negative, of the completion of the internal market, and no quantitative analysis is undertaken of the distribution of the likely effects. Thus while the report powerfully supports the assumption that the Community as a whole will benefit from the internal market, it does not help to assess in any detail the likely effect upon the specific member states. It will not, therefore, assist us in analsysing the impact of the completion of the internal market on the less prosperous regions of the Community, of which Ireland is one.
The analysis presented is based on research done almost entirely in seven of the 12 member states. Furthermore, six of the seven states chosen were the more developed, central states of the Community: the UK, France, Germany, Italy, Belgium and the Netherlands. The peripheral or lesser developed States were largely ignored by the detailed research. The thinking has been that the more developed central states stand to gain more from the internal market, and the study should have addressed this important question. This deficiency is all the more disappointing in view of the substantial time, resources and effort which obviously went in to producing such a weighty body of analysis.
The member states in drawing up the Single European Act, which enshrined the completion of the internal market by 1992 as a central objective of the Community, recognised the likelihood that the larger economies stood to gain most from the process. For this reason they established the achievement of economic and social cohesion as an equally important objective to be purused in parallel with the completion of the internal market. Their intentions to reduce the disparities between the richer and poorer regions and to develop the backward regions are outlined in the new Article 130 of the Treaty. Provision was made for amendments and improvements in the Community structural Funds and Article 130B states that the achievement of cohesion shall be taken into account in the implementation of all Community policies, including the internal market.
The cohesion objective is part of the mainstream of Community policy. At the last three European Councils there has been detailed discussions on the Structural Funds. This has led to agreement in Brussels in February last to a doubling in the size of the funds between 1987 and 1993. For the less developed regions, of which Ireland is one, assistance from the funds will be doubled by 1992. In addition there has been agreement on higher rates of Community contributions. The aim is to help the less prosperous regions of the Community to reach a level of economic and infrastructural development which will allow them to avail fully and effectively of the opportunities which will be presented by the opening of the large European market.
I am glad to note that while the Cecchini study is relatively silent on cohesion, President Delors in his introduction to the summary of the study maintains the balance and recognises that the large market without frontiers has a social as well as an economic dimension. The Government will be working to ensure that the cohesion dimension remains in the forefront in Community negotiations in the coming years. The declaration made when the Single European Act was ratified recalls the provisions of the Protocol on Ireland negotiated at the time of accession. The cohesion commitment is reflected in the Programme for National Recovery and will be pursued with full vigour to ensure that this country is geared as well as possible to maximise the benefits available from the internal market.
As the Taoiseach has stated in the Dáil, no one should suppose that benefits will flow automatically to Ireland from the achievement of the Single European Market. Now is the time for what he called "a cool, careful assessment of what is involved", and for us in Ireland to anticipate the impact of 1992 and to take action in plenty of time to make what changes and preparations are necessary. For some firms it will be a question of preparing for difficult challenges, for others, perhaps, a period to gear up for the opportunities ahead. No sector of the economy should be complacent, as some were on our accession to the Community in 1973. Senators will recall that while Ireland as a whole has benefited greatly from our membership of the Community, some sectors such as textiles and footwear suffered a sharp decline partly through failure to prepare to operate in a more harshly competitive atmosphere.
Some specific areas of difficulty for Ireland with the completion of the Internal Market have already been identified and addressed. The Minister for Finance spoke in the Dáil of our difficulties with the proposals for the harmonisation of indirect taxes. The Government have publicly stated their acceptance in principle of tax harmonisation, but have impressed firmly upon our partners and the Commission that in the current budgetary situation it would impose losses on our finances which we are simply not in a position to support at this stage.
The Department of Finance and the Revenue Commissioners have estimated that these losses would amount at a minimum to £350 million per annum, plus a further loss of £120 million in the first year due to the loss of VAT at the point of entry. As the Minister for Finance has explained, in our current position we cannot cover this loss either by increased borrowings, higher direct taxes or additional expenditure cuts, and we shall, therefore, be seeking a solution at Community level when the negotiations on tax harmonisation begin in earnest.
The report suggests that larger firms will be better placed to capitalise on the changes to come, and we in Ireland must take careful note of the implications this will have for our economy, which at present is overwhelmingly composed of small firms. It would be wrong, however, to be gloomy about the prospects for Irish business. I am encouraged to note that Irish industrialists sampled in the surveys undertaken as part of the Cecchini studies were very optimistic about 1992. Two-thirds of businessmen and women questioned felt that the internal market would bring increased business for them. Questioning also revealed that Irish companies consider administrative barriers, national standards and regulations, and physical frontier delays, in that order, to be their principal barriers to increased exports.
These types of barrier weigh more heavily on small firms than on large ones, and all will be substantially eased, if not removed altogether, by 1992. It is worth bearing in mind that Ireland has one of the most open economies in the Community, and in general stands only to gain from the removal of the barriers. Such challenges as 1992 will pose for Irish industry will arise rather from the subsequent increase in competition which our exports will have to face in all Community markets.
The internal market can be expected to increase Ireland's attractiveness as a location for extra-Community investment. As the House is aware, many non-Community firms are anxious to set up subsidiaries within the Community, and Ireland has in the past benefited greatly from this. The Cecchini report confirms that the location decisions of such investors can be heavily influenced by threats to discriminate against their products on the part of the larger member states, whose markets are most valuable. The internal market, by ensuring the free movement of Irish-made goods and services throughout Community, will eliminate this trend and improve our attractiveness as an investment location.
The potential implications of 1992 are clearly enormous for the economy as a whole but specific and different to each firm involved. It is in the end the responsibility of the individual firm — and of every firm in the country — to assess for themselves how 1992 will impact on their business, and how best to prepare for that. The Government will, however, do everything they can to assist firms in that analysis and preparation, and will take all such steps as lie directly in their power to help the economy prepare for the challenges and opportunties ahead. The Government have already been very active in this regard.
In their management of the economy as a whole and in specific initiatives, the Government have been acting to improve the business environment in Ireland. Inflation is currently at its lowest point for 20 years. Interest rates have dropped dramatically, and the costs to industry of electricity and telecommunications services are being reduced. Steps are in hand to reduce insurance costs, lighten the administrative burden on firms, permit increased competition in transport and improve the transport infrastructure. In short, the Government have given top priority to creating the environment in which Irish firms will be well placed to benefit from the internal market.
At the operating level the Taoiseach has set up a special committee of Ministers and departmental secretaries. He is chairing this committee which meets as frequently as once every week. Their function is to consider what steps will be necessary to help the economy to adjust to specific features of the internal market programme, and to consider the best and most effective use that can be made of the increased receipts to be expected from the structural funds. The committee have already commenced on a substantial programme of work to ensure that the Government give an effective and coordinated lead in preparing for 1992.
The Government have been preparing since October 1987, in anticipation of the decisions reached at Brussels in February this year for the introduction probably, in January 1989, of the operation of the new programmed approach to the structural funds. We took the initiative late last year when we started preparations for the programme approach. We are beginning with pilot studies in three regions — Dublin, Cork and Galway — and the approach will be gradually extended to cover the entire country.
By taking rapid decisions to go over to the programme approach as quickly as possible the Government have demonstrated their readiness to maximise Ireland's benefits from the structural funds. As I already mentioned, the Brussels European Council in February provided for a progressive doubling of the resources of the funds. Furthermore the rate of assistance from the funds can now be up to 75 per cent in the less-developed regions, as compared with a maximum of 55 per cent at present. We would expect to benefit substantially from these improvements in the structural funds regime. They will make a considerable contribution to the achievement of the objectives of the Programme for National Recovery not least in areas such as the food industry, the maritime industry, forestry and tourism.
As Senators will be aware, the Government are about to launch a national campaign to increase awareness among the public, but particularly among industry, of the implications of 1992, and to encourage consideration of how best to meet the changes ahead. The House will wish to be aware of the shape of the campaign as it is being planned.
The Government's approach will reflect the co-operative approach involving all the sectors affected by the opening of the internal market. A subcommittee of the Geoghegan-Quinn committee who co-ordinate our position on EC matters, will bring together the various Departments involved in the internal market. In addition a joint committee has been established bringing together these Departments and the parties to the Programme for National Recovery. This sub-committee will provide a forum for liaison and co-ordination of approaches to a greater awareness of the opportunities and risk involved as we move towards 1992.
While final details of the awareness campaign have yet to be settled, it will cover all sectors affected by the internal market, focus on their specific problems and involve decentralised delivery of information through the representative bodies. The campaign will be launched with a major national conference, which will be co-sponsored by the organisations party to the Programme for National Recovery. The conference will be addressed by the Taoiseach and by other distinguished national and Community figures.
As regards what is happening elsewhere in the Community, I should say that with the exception of the UK and Germany, which began their campaigns last month and France where there has been an active campaign since 1986, all other member states are still at the planning stage, and many indeed are considerably behind us. Indeed my Department have received inquiries from a number of our partners concering the shape of our emerging campaign, presumably in order to assist them in their own planning.
The Government plan, after the national launch, to operate on a smaller scale, more specifically targeted campaign, more appropriate to our resources and the scale of our economy rather than the large scale, expensive and rather diffuse and generalised style of campaign operating for example, in the UK. The campaign will, as I have said, operate in a decentralised manner, with Government Departments giving such help as is required to the sectors with which they are concerned, but relying to a large extent on the sectoral, regional and functional organisations to provide the fora at which information can be put across. Departments and State bodies, such as the IDA, CTT and SFADCo, will provide speakers and information where possible, and members of the Government will be very active in this regard.
As I already mentioned, the primary emphasis will be on the delivery of necessary information and stimuli to specific sectors, rather than more general publicity. The Government hope that this campaign, and debates such as that in the Seanad today, will ensure that Irish firms take early steps to inform themselves on the implications of 1992 and take measures to get the maximum benefit.
To conclude, the message to send out concerning the internal market is one of careful and realistic assessment, but also one of hope and optimism. The Government are playing their part to ensure that Irish business will be operating in the best possible conditions by 1992, and I see no reason to doubt that Irish industry is alert to the challenge, and will ready itself to reap the undoubted potential benefits of the internal market.
I welcome the Minister to the House and thank him for what has been a very helpful full account of the current state of play and views of the Government on our approach to 1992. There was much interesting detail and new material in what the Minister had to say.
Obviously the approach to the completion of the internal market has implications which are potentially enormous for this country. If even half of the new jobs which are estimated in the report materialise, the impact of this will be enormous, as will be the impact of the many other benefits, the dangers to this country and to the different sectors will also be enormous.
The Minister got to the nub of the problem in debating the Cecchini Report when he highlighted the deficiancies in the report from this country's point of view. The report does not analyse the regional distribution of gains and losses. The analysis in the report does not embrace all the member states. This is one of the major drawbacks. It is what makes this report, to some extent, a flawed report, and certainly a report which will need to be followed up by a great deal of further research and study within this country.
The report does not tell us what the effects, positive and negative, of the completion of the internal market will be. No quantative analysis is undertaken of the distribution of the likely effects. As the Minister said, while the report powerfully supports the asusmption that the Community as a whole will benefit from the internal market, it does not help us to assess in any detail the likely effects upon the specific member states. It is our job in this House, as part of a national parliament, to be in fact more concerned with the effects of the completion of the internal market on this member state than will be the effects on Europe as a whole. It is precisely here that the report falls down. We are one of the less prosperous regions of the Community. The remedying of this defect is something upon which we cannot depend on the European Community as a whole to make good. This is something which we, on our own behalf, must tackle straight away.
I have already seen a number of academic studies on the different effects and on the impact which different changes in the completion of the internal market will have on this country. I would like to see, if possible, some sort of task force set in place, made up of people from Government Departments, academics, people from consultancy firms — who now seem to have a very fashionable entrée although not a very welcome one, into Government thinking on economic matters — and, indeed, for the various interest groups. We are concerned with getting the fullest possible information on the implications and consequences for this country of the completion of the internal market. I hope the Government give that the priority which the Minister seemed to indicate in his speech.
Before looking at the Cecchini Report as such I would like to say a few words about one aspect of the approach to 1992 which is causing me a great deal of concern, that is, the absence of any common educational policy. I believe that a move towards a common educational policy would enormously benefit this country. At the moment we have some of the best qualified young graduates in Europe. We see coming out of our schools today the products of a very talented generation of young people. It is very clear from the demand for our graduates and from their performance outside this country that this is recognised elsewhere. I am told that at the moment in London, in the south east of England and in other parts of Britain Irish graduates are, after Oxford and Cambridge graduates, the most sought after in many sectors of the labour force. Frequently, they are ahead of all others, including those from Oxford and Cambridge. Some of our graduates are also very much in demand by some of the major international firms based in Germany and Holland and France, to a lesser extent.
More and more we can see that the other countries of Europe are looking to this country to supply their needs of very highly qualified personnel. Each year the big international companies are trawling around in our third level institutes for students who may be only in their second or third year of a three, four or five year course. Our graduates are being snapped up. In many cases they are lost forever to the country. Obviously, we must have very mixed views about this. First of all, it is a great compliment to Irish education, to the quality of our young people and to the quality of our educational system that there is such demand for these people. This is a new development. It certainly makes a reality of the idea of free movement of labour within the Community and of greater mobility and greater opportunities for people within the Community.
I suppose we can say that if we cannot provide jobs for these young people here, then at least it is comforting that they are getting high quality jobs in other countries within the European Community. It does also raise a very important question of policy. It means that in effect we, as a less prosperous country are subsidising the educational needs of other countries in the Community. We are financing the needs of the multinational companies and we are making up for deficiencies in the provision of graduates to other countries. Part of the reason for this, of course, is the change in demographic pattern. Britain, Germany, France and Holland all find themselves in a situation where, because of falling birthrate, there are fewer graduates coming out of the universities each year to fill demands made by industry and financial concerns.
We now find ourselves subsidising the educational needs of other richer states. It is only fair to ask at this stage if there should not be some recognition of this and some return to our educational system on the basis of what is happening. It will only happen if we have some structured, common educational policy. I would like to see much more attention being paid to this problem. It is one which is going to cause great problems to Irish industry itself in the coming years. We are going to have difficulty in finding a sufficient number of the right people to make the financial services sector operate as quickly as people would hope. The draw from Britain for people who are qualified in these areas is very great at the present time for various reasons — partly restrictive practices and partly the way in which we organise our third level education. We are not producing enough relevant graduates. This is a problem which is recognised by the financial services industry itself. A major study has been undertaken, the results of which will be published shortly.
For all of these reasons I would like, in the context of 1992, to see more attention being paid to the implications of what is happening and what is going to cause very great problems for us. I was interested to hear the Minister outline the plans for a greater campaign to bring home to people the implications of the completion of the internal market. I am glad to see that there is a top level committee in place. I am glad to see that it is meeting on a regular basis. I am glad to see also that the various sectoral groups will be included in this. Certainly, a short six month campaign, such as a blitz campaign in 1990-91, will not be enough. There was need to move months ago but what is happening now is welcome. What we need in all of this is a concerted national campaign with a strong emphasis on information geared to the understanding of ordinary people. The European Community is still for many people a remote concept, something vaguely hostile and threatening. It is certainly not something with which people easily identify. It is an institution of unnecessary complications and difficulty and often obscure language. There is a need in all of this to bring the European Community itself and its workings closer to people and to explain in straightforward language just what is happening with the completion of the internal market and what the implications of all of this will be. There is, without any doubt, the absence of any sense of a European awareness in this country. It may well be that Europe has appeared to be élitist. It may have much to do with the absence of any course of European studies in our schools. It may have something to do with the way in which we downgrade the teaching of European languages at first, second and, indeed, third level in our schools.
There is need to raise the level of awareness. It is very important that we approach this with a great sense of realism. Any attempt to turn this into a pro-European movement, or any attempt not to spell out clearly and truthfully the implications of what is involved, will backfire very badly.
To a certain extent we have fooled ourselves about the impact of European membership on this country over the past nine or ten years. We have persuaded ourselves that the benefits have been greater than they are. We have persuaded ourselves that the benefits have been properly directed while, in fact, the opposite has often been the case. There is no great evidence to show that we have used our membership as well as we should have. There is no great evidence that we were as well prepared for membership as we should have been, or that our civil service, politicians, industrialists and trade unions were as well prepared for the changes as we might have had a right to expect.
I hope that the forthcoming election to the European Parliament next year will give us an opportunity to debate once again many of these issues. Our place in Europe can once again be put under scrutiny in a realistic way. We can benefit from some of our earlier mistakes. There is no evidence that we have used our membership as well as we should have or that even yet we have any clear sense of purpose in regard to the European Community. This operates at all levels. We have missed many opportunities in foreign policy. We are missing an opportunity at the moment in the area of development aid. We are missing opportunities also in terms of redevelopment of the regional and structural funds. We must as a country define our own priorities. We must decide what we can give to Europe and what we want from Europe. We must choose an explicit development path if we are to succeed.
We, in Fine Gael, are very clear on where our priorities must be within the developing Community. We must tackle, first of all, a number of major problems which beset us as a country. The first of these is the problem posed to us by virtue of the fact that we are an island behind an island. This problem is posed to us by our remoteness from the main markets of the Community. If our truckers have to do two journeys right down through Europe, if they have got to go first of all from Dublin, drive right through Britain to cross over for the long sea journey to France or some of the other ports, this obviously imposes greater cost strictures on us than on any of the other countries. We have, as a priority, to push as vigorously as we can to ensure that air, sea, telephone and postal costs between here and Europe are brought down as rapidly as possible.
In asking for this we are not asking for any change in the laws of nature. We are not asking for things which cannot be done by concerted action of Governments at national and international level. There are far too many unjustified restrictions operating at present. At long last the Commission is taking a lead in trying to break some of the cartels and some of these restrictions. We have seen a very welcome move in this country over the past year or two to bring down the cost of air, sea and road travel. In almost all cases it has to be said that this has been the result not so much of Government policy as of vigorous competition from new companies coming in and putting the pressure on the established companies — usually State companies — to open up the market and to engage in real competition.
Air service costs in Europe are still significantly higher than in the US. Air costs are higher and sea transport costs are higher than in other comparable areas. That is the first task that has to be undertaken. That relates to the whole question of our access. If we cannot get our goods onto the European mainland at the cheapest possible price in the best possible condition and in the fastest way possible, a huge burden is imposed on us from the very beginning. That awareness has to be brought home to us. No vested interest, State body or group can stand in the way of that objective. If we do not start from that point, we are not even at the races.
All of this applies as well to the cost of telephone, telex, fax, and so on. We are delighted with the tremendous improvement in recent years in the telephone service and with the direct access to almost all parts of Europe through direct phoning. We are pleased with the great improvement in telexes, fax, and so on. Once again we are into the cost factor. If An Bord Telecom or An Post are not able to react to the challenge, very serious steps must be taken. There is no substantial evidence to date of any great new spirit in Bord Telecom or in An Post. There is no evidence that many of the problems, such as the lethargic approach and the absence of any innovatory policy which characterised the operations of these bodies in the past, have been overcome. With the advent of the completion of the internal market it is important that An Post and An Bord Telecom should be made aware that they have not been as effective as they might have been. They are not showing the sort of determination that might be expected of them. They cannot be allowed to place extra costs on Irish industry which make it impossible for us to compete effectively on the European mainland. As a consequence extra jobs in this country are not available.
In terms of competition, Ireland starts the race with some very serious disadvantages. The problem of access has been mentioned. It is a vital one. We will only win out in the battle for the markets of Europe if we are more competitive. We start with a variety to disadvantages, largely because of our geographical location. In some cases we have created problems ourselves. We will only win if we are more competitive and if we are leaner, hungrier, sharper and fitter than our opponents. That is why it is so important that we do not pat ourselves on the back today and say that, apart from Britain and Germany, we are ahead of the other countries in preparing for the internal market. That is the way it should be. We should be ahead of all the other countries in our preparations. There should be a much greater degree of common awareness of what is involved. It is we who are starting from behind. It is we who have the major disadvantages going into this race.
We must look hard at restrictive practices in this country, as my colleague Deputy John Bruton said last week. If this means restrictions on numbers entering a profession, if it means that scales of fees are being held unrealistically high in some of the sheltered professions, that problem must be tackled. If we are having problems in providing the right type of people, the right type of graduates, the right type of highly-trained people from our second and third level institutions, priority must be given to all these areas.
A third problem we have is the absence among very many of our people of any strong sense of being part of the Community. I mentioned earlier the absence of European studies at second level, primary level and many areas of third level. I believe it is vitally important that, just as we expect people going through our schools to know about our Constitution, how our democratic system works, our electoral system and about local government, our people should know about the existence of the European Community, why we have chosen to a a member of it, how it operates, what the obligations are and what the benefits to us are.
Unless we can create among people at an early stage some sense of idealism about Europe, the purpose of the EC and the benefits of Europe, we are not going to grab their attention as they grow older. I would like to see real attention given to some core group of studies labelled "European Studies" and giving the subject an important place in the curriculum at all levels.
It is true to say that many of our engineers and accountants who are highly qualified graduates do not have any real sense about how the European Community works or of the issues I raised earlier. Side-by-side with that goes the scandalous way in which we have approached the teaching of European languages in our schools over the years. If people do not feel comfortable with languages — German, French or Italian — they are likely to be inhibited in doing business. They are likely to seek other markets where English is the dominant language. People do not like to feel inadequate. We have probably been the worst performers in terms of language of any of the EC countries, with the exception of Britain.
Figures given here show us that only 3.5 per cent of students doing the leaving certificate achieved grade D or higher in German; only 1.8 per cent achieved that grade in Spanish; only one-fifth of our secondary schools offer German as a subject; only one-tenth offer Spanish and one-fiftieth offer Italian. We have concentrated on two very fine languages — the Irish language and the French language. However, the time has come to shift the emphasis away from French to German and Spanish and to have a reappraisal of our attitude to Irish and of the place of Irish in our curriculum. We must ask whether the over-emphasis on Irish inhibits the teaching of other European languages. We must ask ourselves whether the policies to date towards the teaching of Irish have been successful? Are they well regarded by the people? Is there a better way of teaching Irish? Is there a better way of offering inducements so that people will want to study Irish rather than having it as a compulsory subject for so many different outlets as it is at the present time?
I have no doubt but that the professional groups concerned with the teaching of Italian, Spanish, French and German are seriously concerned and anxious to be involved in seeking to remedy this deficiency. That can only happen if there is a political lead on this and if the goodwill of these people is channelled in a positive way. This may mean approaching the subject in ways not thought of before. It may mean sending people out for subsidised crash courses to the countries in question. It may mean bringing in teachers on a short-term basis to this country from these countries. It may mean spending more money hiring teachers at various levels, but it is something which we have to tackle as a priority. If people are not comfortable with a language and if they do not feel reasonably relaxed, they are unlikely to feel confident doing business. They are unlikely to be out there knocking on doors looking for new markets and seeking out new customers. It is to our great disgrace that our educational system and Government policy over the years — this includes all parties — has not served us well. It is time for a major change.
In looking back on the past ten years or 14 years of membership, it is time we had a stronger sense of belief in ourselves. We need to build up a more robust sense of belief in ourselves and our capacity to fare in a competitive climate. There is no doubt that when we entered the European Community back in 1972 there was for many people a fear and a sense of inferiority as to how would we, who had been sheltered for so long behind protective tariff barriers, who had for generations exported some of our best people, who had not been innovative in any area of industry or agriculture, were going to fare with people from much more developed communities who had been mixing and intermingling with each other for generations. We have seen that where Irish people are good, they are superb. Irish people have proved themselves capable at every level in the Community, at the level of civil servants, industrialists and trade unionists. All of those who have been involved at different levels in the Community, where they are good, are every bit as good and often better than their European counterparts. As I have said earlier, we have some of the brightest young people coming out of any set of schools or universities in Europe at present. They are as well educated and well trained as anybody in any of the other countries of Europe.
Where we have developed products with the emphasis on quality we have shown we can compete. The message has not got home sufficiently to us that we are a young country and that if we have sufficient belief in ourselves and our own capacity, this can psychologically affect the way in which we perform in Europe. We need to get rid of the sense of dependency, of going to Europe with the begging bowl, that Europe was something to be milked, that there is some sort of dole, that we took what we could out of it but we did not think we could contribute very much because we did did not have a belief in ourselves. Until we get that psychological change the dependency mentality is going to stay with us.
There must be a new way of looking at EC funds. We must not look at them as stop-gaps, hand-outs or as handy ways of solving problems whose roots go far deeper than the stop-gap can ever provide for. We must be realistic. We must ask ourselves with some courage if the use of the funds which are being given to us is in our best interests. If we look at our food industry in the ten to 12 years since our accession to the Community, our farmers never had it so good. Our farmers were never more prosperous. A great number of them believed the bonanza would go on forever. They simply reared more cattle and produced more milk and that was it. There was very little spin-off to the Community. Many of the farmers quickly discovered that the bonanza could not last and many of them ended up in debt. Either they were badly advised or they were greedy, but many of them ended up with enormous debts, some of which are still crippling them.
We must ask ourselves, did our food industry develop during those ten years? Did we use the funds during those ten years to develop new processes? All we can think of is Bailey's Irish Cream. Can we think of any significant new Irish cheese that has been developed during those ten years? Can we think of any new meat products which we could sell on the European market?. We cannot. Today we are running fast to try to catch up with the failure to use the funds properly during those ten or 12 years. We were greedy and shortsighted, and we are paying the price. We do not yet have the products which our natural resources would warrant and which would give us a real niche in the European Community.
I am convinced that over the coming years if we can establish the niche for Irish agricultural products in the Community it will happen in the quality area. We are still the most uncontaminated country in Europe. We are still the country least likely to be affected by nuclear fall-out. If we can trade upon the image of this country as a country which produces pure quality and good quality foods, we have a real niche. By the same token the damage inflicted on this country by Sellafield is something which could do our image in Europe enormous harm. If it is seen that there is contamination from the disposal of nuclear waste from Sellafield, it will have enormous deleterious consequences for our image abroad and, most important, for the whole concept of pure and quality food products which should be at the core of our agricultural success. It is not a problem of this Government or the last Government. It is a problem of the Irish people, of this country. There is no issue on which there is a greater degree of unity in this country than on the undesirability of Sellafield and on the need for us to in some way see that it is closed down.
When we ask ourselves about the use of funds, we have some very serious problems to face up to. Nobody would argue that the use of funds through AnCO over the past number of years has been planned, well-organised and beneficial. We have all seen European funds go into courses for which there were no jobs in the end, in which the training was at best questionable. These funds were understandable sops. They were there to help take young people off the unemployment market. They were there in the hope of helping with their training, but nobody would argue that we thought about it properly, that we asked if this was the best way of spending that money to help these same young people and to help the country.
Undoubtedly a lot of the resources that came to this country over the earlier years of membership have gone down the drain, sometimes in a real sense through the over-provision of milk, and so forth, where we did not think through what we wanted to do. I hope the degree of national consensus which exists on the debt at present can also extend over to the way in which we look at the funds coming from Europe and that we are prepared to ask the hard questions even when the asking of these questions will offend important interest groups at present.
To sum up the effects for us of the completion of the internal market, there are huge dangers. Many Irish companies could lose out to foreign competition in 1992 if major changes are not made in our industrial policy here. I come back again to the central point, as I see it, in the Minister's contribution here today, that is, unless we as a country can find out in far greater detail, and very soon, just what these implications are, to a great extent there is not an awful lot of point in having a debate of this kind and going into the whole exercise. I know the Minister accepts that just as as much as I do.
Secondly, there is the danger that, if we do not increase the level of awareness, no matter what the Government do, no matter what interest groups do, it will have very little effect. Thirdly, there is at present here a strong sense of fear among many Irish business people, a negative sense about 1992. That has to be converted into a sense of positive opportunity. There is also a great need between now and 1992 to be aware that one particularly vulnerable sector of our economy, capital intensive, labour intensive industries, and those in the food sector, which account for over 60 per cent of our exports, are likely to be extremely vulnerable to foreign competition unless major changes are made and major developments are put in place between now and 1992.
We will have to tackle the whole question of achieving a cost advantage, given many of the drawbacks I mentioned earlier such as geographical drawbacks. How do we achieve cost effectiveness and a cost advantage over our neighbours between now and then? It will be important that our industry qualifies on quality over the coming few years. We need to build up a pool of specialised skilled labour. We need to develop our technological resources and we need to face up to the very real problem I referred to at the beginning, the likelihood of a major drain of our best graduates, best qualified people from third level education over the coming years, because, there is no doubt about it, there is a huge demand for them outside this country. Industries in Britain and Germany will pay top prices for them and we may well find ourselves training people to the highest levels in a very expensive way and not having them here to be of service to Irish industry.
We need to look at our use of the £200 million from the European Social Fund to see if we are using it in the proper way towards the funding of skilled labour, and we are not at present. The current policy of offering low corporation tax in order to attract international companies to this country is, I believe, seriously flawed. It is a wrong policy and certainly it is having an inhibiting affect on many Irish companies. It offers an unfair advantage without real commitment and inhibits many of our local companies. We must also look very hard at the way in which we bring our indirect taxes into line with the European Community. Otherwise we will be stuck with the cost of maintaining frontiers after 1992.
I would like to bring the Minister back to one point he made in his speech, the promise that the Government will work with small industries throughout the country to ensure that they are kept fully informed and are shown how to go about fully preparing themselves for the completion of the internal market. I hope this is more than an aspiration. I would like to see the details of how this will be done. I would like to see how it will be structured. I would like to see it being monitored. I do not want it to be a case of fellows in shiny suits, collars and ties from Dublin going around in big cars from Dublin, staying for a few hours, patronising the small local industries and then going away. This has to be an effective programme. One of the most important parts of our preparation for 1992 is that our industries are helped in the proper way. I agree with the Minister that it is their primary concern first and last but, in between, if there is to be Government help, let it be effective.
I thank the Minister for his contribution. It was a very helpful one and I hope that the major deficiency in the Cecchini report, its failure to estimate the impact on this country of the completion of the internal market, is taken on board by Government as an absolutely urgent priority and that we can begin to see a stream of studies on this in the very near future.
Like Senator Manning I would like to thank the Minister for coming here today and thank him also for his very informative address and for outlining what the Government are doing in relation to the completion of the internal market. I would also like to thank the Leader of the House, and indeed the Government, for allowing the Seanad to debate this issue today, to have a discussion on the Cecchini Report and on the completion of the internal European market. A major discussion took place last week in the Dáil on the Cecchini Report. It is important now that the Seanad should also have a major discussion on it. This demonstrates very clearly that the Government are very concerned and committed to ensure that the internal market is completed in 1992. The fact that two major debates have taken place in the Oireachtas in the past week clearly demonstrates that.
I welcome the commitment given by the Government last week in the Dáil and also by the Minister here today in relation to the internal market and in particular their commitment to launch a campaign very shortly to alert all economic interests to the implications of the 1992 market beginning with a major conference for business leaders and other leaders in the Community. The Minister outlined several things which will be happening over the next few months in order to heighten public awareness on this issue. I am delighted also that the Government have set up a special committee of Ministers and departmental secretaries to examine this whole issue and to ensure that we are fully prepared for the completion of the internal market. I very much welcome the publication of this document. It is indeed a very lengthy document. However, it will act as a stimulus for us all to prepare for the completion of the internal market and we should all very much welcome the publication of the document.
Ireland is fully committed to the EC, to the advancement of the EC and to the process of integration. This process of intergration has speeded up in the past couple of months and will proceed speedily over the next few years. I am confident that this process of integration in relation to Europe has got the support of the vast majority of the Irish people. This was demonstrated clearly by the result of the referendum last year and also by the result of the initial referendum which brought us into the EC. Our public awareness of Europe and the EC is developing and the whole process of EC integration is now apparent to the general public. Our commitment to Europe is increasing and we are much more aware of what Europe is all about and of what our role is. Our age-old inferiority complex as a nation is disappearing and we are now a truly independent, strong and confident nation and well able to take our place among the nations of the world and the nations in Europe. We have nothing to fear from this process of integration in Europe.
Ireland and the Government are strongly committed to the completion of the internal market and recognise that this is the only way forward for us as a nation in the years ahead. There are a number of advantages in the single European market, which will apply to Ireland in particular. We are heavily dependent on Europe for exports. A total of 73 per cent of our exports go to EC countries. By the completion of the single European market we will have full access to a gigantic market. The completion of this market will result in the creation of the largest, wealthiest market in the world comprising 320 million people. Another advantage to us of the single European market is that it will lower costs and production costs, particularly in relation to other non-European countries. As Senator Manning mentioned, it will also increase our awareness of the importance of competition and of the need to strive towards efficiency and to be more competitive in our production techniques.
The single European market will have other advantages for Ireland. It will allow the free movement of goods, capital and labour within Europe and will allow Europe and Ireland, being a component of that, the same advantages now enjoyed by other industrial countries such as Japan and the United States. This will be welcomed by industrialists when the elimination of barriers and so forth have been dealt with.
As outlined by the Minister the completion of the market will also bring a number of advantages to the Community as a whole. It is estimated that combined with a growth-orientated economic policy the implementation of the 1992 programme will result in an increased Community output of 7 per cent. It is hoped it will create five million net jobs, that it will lower the price level by 6 per cent and improve the budget balance of member states. These are all to be welcomed and to be striven for.
The process of integration presents a major challenge to this country and indeed to the EC. By January 1988 the Commission had only produced two-thirds of the 300 proposals in the original White Paper dealing with this issue. Of these the Council has only adopted 70. Much work remains to be done. It is a challenge to the Community and to member states to agree on the remaining proposals at the Council of Ministers. Every member state must, from now on, treat the completion of the internal market as a matter of great urgency. I know that Ireland in the Council of Ministers will not slow up the process. While defending our interests our Ministers will strive towards the speedy implementation of these directives, which will be of benefit to us all.
There is one major danger in relation to the completion of the internal market, that is that all wealth may in fact flow to the centre of Europe, to the detriment of those poor countries on the periphery. As the Minister mentioned, one of the major drawbacks in relation to the Cecchini Report is the fact that no consideration is given to the issue of distribution of resources between member states and also within member states. It is generally accepted that there will be aggregate net gains in relation to wealth as a result of the completion of the internal market but there is no mention whatever in the report of where these gains will end up, for example, to what countries they will flow. This is a serious question and must be seriously addressed by the Government over the next few years.
Ireland at the periphery of Europe has a number of disadvantages. It is quite conceivable that all wealth will flow to the centre unless the Government are extremely diligent in the negotiations over the next few years. The Government must ensure that Community policies promote convergence rather than divergence within the EC. This will present a major challenge to them. This challenge in relation to the issue of distribution represents the greatest threat to the whole success of the development of the EC as a whole, in that every country must be seen to be prospering from the completion of the internal market. If some countries are left behind, then the whole process of integration will be seen to have been a failure to the total disadvantage of member states at the periphery.
Already we have had the commitment for the doubling of the structural funds by 1992. This is to be welcomed. However, on a number of specific issues, particularly in relation to tax harmonisation, further concessions will have to be brought about for this country in order to ensure that we can share in the aggregate net gains brought about by the completion of the internal market.
As I have mentioned already, the harmonisation of taxes will present a major challenge to us. The exact nature of this challenge is not as yet clear. However, it would seem that the proposals envisaged in the programme for 1992 will have serious implications for our public finances. There is no suggestion that we should not participate in this process but we will have to be very diligent in order to ensure that we are not placed under a severe disadvantage in relation to our taxation régime.
The proposals in the 1992 programme will result in a big decrease of several hundred millions in revenue due, in particular, to the harmonisation of excise duties measures. Our provision in relation to VAT at the point of entry will also have to be abolished. There is a strong possibility that VAT on children's clothing and footwear, books and passenger transport and many other items, will be introduced. How will we tackle this situation? Will we have massive increases in PAYE or will we have massive reductions in public expenditure in order to meet the huge decrease in revenue accruing to the Government?
These are issues which will now have to be seriously addressed over the next year or so. It presents a great challenge to the Government in negotiating our position at the Council of Ministers. The Minister for Finance, Deputy MacSharry, suggested recently in Europe that we do not have to fully accept the proposals in relation to taxation harmonisation. That is a good bargaining position to begin with. He suggested that we will have to exmaine the possibility of getting exemptions in relation to some of the taxation measures.
He suggested also that we will have to seek financial compensation for the revenue loss in this country. This would be totally separate from the doubling of the structural funds already announced. This will be a major challenge for the Minister for Finance. I am confident that he will represent our interests very well and ensure that we cannot be left in an intolerable position in relation to taxation. I appeal to him also to try to have specific items excluded from VAT particularly food, childrens' clothing and so on. I am sure that all these issues are now in the melting pot and they are not a fait accompli that we cannot make representations on.
As I said already, I welcome the doubling of the Structural Funds already announced. As the Minister for Finance has already said this may not be enough to compensate us for our loss. However, having said that, there is no question but that we will play our full role and should play our full role in the completion of the internal market and the items involved in that.
Ireland has had a mixed economy since the foundation of the State. Indeed, the mixed economy structure is very suitable to our people and to our economic development. As I said in the Seanad on previous occasions over the last few years we got the balance very wrong in relation to the mixed economy. Over the last 15 months the country has been given a quick sharp does of free enterprise and competition in order to stimulate industry and to bring about economic development. The Government are to be congratulated on the measures they have taken over the last year in order to bring about increased competition, increased efficiency and a better economic climate.
Competition is a major aspect of this single European market proposal and it is important that we realise that and that we will have to become more competitive. The completion of the internal market will ensure that we will have to address ourselves to that issue. Senator Manning said we will have to get our costs under control, particularly in relation to air, sea, telephone, telex charges, postal costs and so on. The Government are producing the right environment at the moment but we will have to seriously address that matter over the next few years and meet this challenge head on. We will have to become more competitive if we are not to be left behind in this process.
There are a couple of points I would like to make regarding this issue. One of them has been mentioned already, that is the whole are of foreign languages. It has been suggested already that this country has an appalling record when it comes to foreign languages. This will not be tolerable if we are to play our full role in Europe in the coming years. Senator Manning suggested that maybe it would not be necessary to attach so much importance to the Irish language in our educational system but I would disagree with him there and suggest that any language, especially the Irish language, has not been taught very well in our schools and that once we master the techniques of learning a language and the importance of learning a language, we will realise it is as easy to learn one language as it is another.
I suggest that if Irish is encouraged it will open up a whole new culture to many people and that culture will certainly enrich the European Community as a whole. All languages have not been treated as importantly as they should be in our schools and this must be seriously addressed over the next few years. We have adopted a lazy attitude in relation to languages when we consider that when most Irish people are considering emigration they go to the USA or Australia where they do not have to learn a foreign language. This highlights clearly that we will have to become more fluent in European languages if we are to encourage our people to move about Europe in search of work and experience. That is a major issue which must be addressed. We will certainly be left behind if we cannot communicate with our partners in Europe in the language they are fluent in.
This completion of the internal market presents a very important challenge to us. A lot of work remains to be done over the next few years. I am confident that the Government will ensure that Ireland's position will not be eroded in relation to a number of areas that I have mentioned already and that they will negotiate our position in a strong and determined fashion. There is no doubt that everybody is behind them in ensuring that the 1992 programme is implemented to the benefit of all the people of Europe.
First of all, I want to thank the Minister for his contribution at the start. I certainly found it very informative and very useful in trying to assess the matter. I will not pretend for one second that I have read the Cecchini report. Certainly all 6,000 pages over three volumes is a fairly daunting prospect. The report itself generates a fair level of excitement. It also generates the kind of programmed responses which in a sense saddened me. I want to deal with the comments of two of the previous speakers before I get into the report proper.
Obviously I have a very strong vested interest in the whole education area. It always saddens me at times like this to hear the discussion on the lack of European languages in schools and people's lack of facility in the use of foreign languages. I will even spell it out in more stark terms than anybody else. Our worst export market in Europe is in Italy, the largest market there for us. It is also the European language where we have fewest graduates or fewest qualified people. That in itself tells a very sad story. It means that we are not able to exploit the Italian market. I have not got the figures here with me but in terms of the balance of trade with various European countries our balance of trade figures with Italy are the worst in Europe. One of the reasons they are so bad is the lack of facility in speaking the Italian language. I could go beyond that and say the greatest potential expanding market in the world is China. The most influential language at the moment, in terms of development in many areas of industry, particularly the motor industry, is Japanese. The whole of South America is there to be explored, we need Spanish for all of it except Brazil where we need Portuguese but these languages are not being taught in our schools.
I can develop this point much further and carry it to a much more logical conclusion but it bothers and annoys me that in these discussions people never ask the question, "why". The reason these languages are not available at the moment is that we are not investing in facilities for teaching them. There is no commitment from the Government. There is no commitment from the Department of Education to teach these languages. We are cutting back on education provisions. Our students, our teachers, our educational service are trying to run an obstacle course in competition with sprinters running on a tartan track.
If people stand up here and say that we need European and foreign languages, will they also stand up and say the Government must invest in providing facilities to teach them. There would be no problem in dealing with the teachers, parents, the service, unions or anybody else. I challenge the Government to see to improve the foreign language provision in Irish education. They do not want to. They are not prepared to invest in it. We have stopped investing in that kind of development in education and we are the losers. I believe that anybody who speaks and demands that should also he prepared to pay for it. The quality of our graduates, students, and teachers is there. We can deliver on this if somebody provides the training, the teachers, the finance and the investment.
In dealing with that I want to come back to the report and what it intends to do. First, its objective is basically to implement the Treaty of Rome for the free movement of goods, labour and capital between various European countries or markets. That was the commitment in the Treaty of Rome. We are looking at a situation at present approaching 1992 when we complete the internal market — in laypersons terms it means we create one market where there were 12 before.
A major change has taken place in one year. We discussed this issue when we discussed the Single European Act on 25 April last year. A major change has taken place in the meantime. We are an exporting country and speakers must have regard to this fact. We export more than we import at present. That has been the case for most of the past year and the trade figures for the past five to seven months reflect that. It is important. Being an exporting country we are less vulnerable to the detrimental effects of an open market. We are less vulnerable because we are already out there in the 12 marketplaces of Europe and in marketplaces worldwide. We are not selling our products because somebody in France, Russia, the USA, South America or somewhere else wants to keep jobs in Ireland. We are selling products because they are competitive and of good quality.
I am trying to recall from memory the first line of that infamous report in The Economist where it said, “Take a small open, post-peasant economy and leave it vulnerable to the worst that the free international market can do it”. We have moved somewhat from that position even in terms of the trade figures. We are less vulnerable to international competition than before. We can now go to the international marketplace and we can sell our products. We can tie up markets and we can compete with the best. We can do this for many reasons. We can do it because we have quality people running our industry, who know and can see where they are going. I was very pleased last night to hear of an international company being set up in Los Angeles which is being run by Irish graduates but I ask why it is not being run here?
The reason I became involved in the conversation is that I was talking to an industrialist and I was berating him for the lack of commitment of industrialists — particularly multinational and international industrialists — and I was basing that criticism on the recent figures on the investment in research and development in European countries. We have a disastrous record. We were very firmly last in the league in terms of the percentage of our national product which we invest in research and development. The second last was Belgium and they invested twice as much as we did. So long as that continues we are going down a cul-de-sac. Unless we research, develop, test and produce new commodities and new products we are not going to expand in the way we need to expand.
On the completion of the internal market in 1992 it will be necessary to get rid of all the technical barriers, the fiscal barriers and the actual physical barriers between countries. I will deal with those one by one. In general terms the attractiveness of that from the point of view of the ordinary consumer is that it should lead to a price convergence of products across the different countries. We will get a closer price level for the same product in different countries. A Ford Escort in Dublin should be more or less the same price as a Ford Escort in Rome, with just the differences created by distance which will always add to the cost, if not to the value, of a product. That kind of price convergence is to the benefit of the consumer and is, therefore, to be welcomed.
I have studied the various technical regulations which are a barrier to trade and movement between different countries and I came across the statistics that there are approximately 100,000 different regulations for trade within the European Community at present. These would arise from health, safety and consumer legislation in the different countries and I am sure there would be other legislation as well. Each country would have very specific health laws governing food products, very specific safety laws governing the factories where products are produced and would certainly have very different consumer legislation. I worry about that area and I would like to see that problem addressed.
I think we fall behind in those three areas. I am not saying that in the sense of an inferiority complex. I am saying it in the sense that we have not developed our legislation satisfactorily in the area of health, safety and consumer legislation, I am worried about the way this is being dealt with in Europe. It will be dealt with through the principle of mutual international recognition for the internal laws, regulations and legislation in these areas in different countries. That, in effect, means going for the lowest common denominator. I do not like that.
The only example I can think of at present is the row which took place about the importation of beer in Germany. As the Leas-Chathaoirleach will be aware, the German brewing laws are 800 or 900 years old and they do not make exceptions for anyone. Three years ago one of the few beers that matched the purity regulations required by German legislation and which, therefore, could be imported into Germany was Guinness. They have very strict legislation. I do not like talking about brands but it makes the example easier: for example, Budweiser which is brewed from a combination of rice and hops could not be imported into Germany two or three years ago and neither could the Irish red beers like Smithwicks and so on. They did not match the requirements and the standard of the German beer legislation. Some other countries took the German authorities to court and Germany lost; in other words, it is now an open market for the importation of beer.
That might be a good thing or a bad thing. It is a good thing in the sense that the biggest beer market in Europe has now been opened up to the rest of Europe. On the other hand, the Germans could say that they have always insisted on a pure brew of beer and now they have been overtaken by European legislation. That is the only example I can give to prove what I said about the lowest common denominator. I do not like that: it could be a very bad thing. I want to hear how can we process some sort of pan-European legislation to cover these areas?
Legislation governs all these areas. It is something which must be of major interest to us and it is something to which we must address ourselves. In putting together that kind of legislation, it must be with a view to achieving the highest standards rather than the lowest common standards. Therefore, in any particular product range, we look at the requirments of the 12 different countries and an assessment should be made of the requirements. It should then be assessed and extrapolated from the mass — or maybe the mess — of regulations in the 12 different countries, that they would distill from that the requirements that would then be implemented in pan-European legislation or whatever. I would like to hear from the Minister how that could be implemented.
In a glance through the paper this morning I noticed that last night the Minister for Industry and Commerce launched a new European standard. I presume that is a new European technical standard. Is that something that would replace something like the British standards or the Irish standards? Is this something which will overtake those particular standards? These are some of the technical regulations which will have to be looked at and which will have to be changed. The present regulations will go but what will replace them? That is of vital importance.
You only have to drive to Belfast and see half a mile of trucks on each side of the Border waiting for Customs clearance to recognise the cost of keeping hundreds of drivers idle every day and the mass of paperwork that has to be gone through in order to get a product, truck or whatever through a frontier. Let us examine some of the various problems that arise physically at the barrier point. They are astonishing. VAT has already been discussed and dealt with. Various items attract different rates of VAT in different European countries. Senator Haughey, with a side swipe at Fine Gael members on this side, brought us back to the tax on children's clothes, etc. That is something people understand but there is a lot more to it.
There are also different excise duties in different countries. We have this great rip-off of the famous duty-free shops at airports and on planes and most people when returning from holidays buy some supposedly cheap duty-free goods in the plane which they could have bought cheaper in the local supermarket. This is because of different excise rates in countries. At the frontier point those things have to be checked.
Because of the complicated bilateral or international legislation, dealing with, for instance the Common Agricultural Policy, where various foods attract various subsidies, that has to be assessed at the frontier point as to whether that product being brought in is liable for a payment, that there is some compensation for it.
I wish to refer to the different health and food standards and this brings me back again to the other matter. Senator Manning earlier talked about this country having the reputation of being clean. That is a bit pie-in-the-sky. I think we are a filthy country and our legislation on food products is not good enough. I can immediately give examples of additives, colourants, etc. which are allowable in certain countries in Europe and are illegal in others. There is quite specific legislation in France and Germany and now also in Britain about items which cannot be added to food products in those countries but which are still quite legal here. Last year I looked at some common everyday products such as coke or Lucozode and a quick check of the ingredients in Ireland as against the ingredients on the same can or bottle in Europe showed a marked difference. If this continues we will become the dump of Europe.
I appeal to the Minister to bring the area of food legislation forward. I do not like referring to E numbers because they have become almost a cant word; some of the products coded by E numbers are absolutely harmless — there is no doubt about that — and some of them are quite natural products. It is just simply a European standard codifying system but some of the items with E numbers are dangerous and have been shown to lead to cancer and other things. I am not scaremongering here but I am using it as an example. One of the things as of now which has to be checked going through customs is whether food complies with the regulations of other countries. I am afraid that we will fall down to the lowest common denominator again on that general area. There should be Euro-legislation covering that area also.
In terms of customs, travel and transport there are different and differing standards required for something like driving licences in different European countries. The need to check the qualification of the driver, etc. will now go. The statistical analysis that has been necessary in terms of counting, measuring and keeping statistics on the importation or exportation of products will no longer be done at the frontier point. It will be done in some other way and that also will make for ease of movement. Some countries still have trade quotas with each other where they agree to import a certain amount from country A provided country A buys a certain amount from them as well, so that A and B might have bilateral arrangements in the present European Community and those are checked at border frontiers. That is also something that will go in the future.
All the paperwork associated with all those activities, the collection of VAT, excise duty, monetary compensation, health and food standards, transport and driving qualifications, statistical analysis and the trade quotas will vanish. This will facilitate the easy export and the easy movement of goods from one country to another and, therefore, will also reduce the cost of the product because the paperwork adds to the cost. The cost of drivers sitting around for perhaps a couple of hours at every frontier point can add significantly to the cost and price of a product.
It has now been estimated — although I have no faith in this kind of estimation — that getting rid of the technical regulations can lead to a reduction of up to 2 per cent in the cost of the product; in other words, trying to meet the requirements of the various technical regulations in different countries can add about 2 per cent to the cost of a product in simple terms. Similarly, the cost of the paperwork involved in frontier and customs checks has added more than 1 per cent to the cost of a product. Therefore, the easy interpretation is that the removal of all those technical blocks or barriers, frontiers and customs' delays should give a net reduction of 3 per cent in the prices of products moving from one country to another. That is very significant.
Those are only two of the areas affected. It can be developed far more than that because we then look at the economies of scale that are possible. We can now put into operation a production line which is producing a commodity which can be sold in all Twelve countries, whereas before this slight adjustment or changes in order to meet the different requirements in different countries had to be made. Obviously, the economies of scale that can be achieved through that kind of production are very significant. In other words, we start the production line, run the products off and simply send them into the different countries. There is also a saving there. It is not possible to quantify that, but it can be done. We can produce more and cheaper products and sell them in a much easier way. This should lead to fairly significant price reductions.
In order to make that possible and in order to make it work for us, we have to look at quite a number of issues. One of those issues is that we must provide efficient, instantaneous low costs audio visual communication between countries. There has been massive development in the internal communications network in Ireland. In particular, I am talking about, the development of the telephone network. The development of our telephone lines has been very significant. The growth in the use of FAX and the growth in the various spin-offs of that communications industry are significant. We must develop them more and make them cheaper. Our telephone costs are still too high and it has a bearing in market terms.
We have really fallen down in the area of information technology. I had reason recently to investigate what was available, in other words, what can I plug my computer through a phone modem into in terms of information? We are behind in that area. Only this week I attended a function organised by a group from Corcha Duibhne who put together a programme on access to computer and VDU screens which will give all the back up information necessary for the tourism industry in that area. This is very important. We need more of that. It should be possible now for me to press a button on my computer and find out what the technical requirements in Italy are for the importation of spaghetti into Italy. That kind of information should be freely available at the touch of a button. Information of the kind of markets that are available should be there. We must develop that area. I will not go any further into those two areas except to say that we must have efficient and instantaneous audio visual communication and information technology.
We must also look at where we are going. I am back to the education area again with a more neutral approach to it this time. I am not clear about a number of points on the free movement of labour. What exactly does that mean? I am qualified as a teacher. Can I go tomorrow or in 1992 and teach in Italy? Can I go and teach in Paris? Can I go and teach in Germany? I certainly know that a German teacher cannot come and teach here unless he or she has managed to acquire the required knowledge of Gaeilge. The present regulations would not allow him or her to work here.
What work has been done in terms of the international, mutual recognition of the qualifications of professions? Can a vet move from Dublin to somewhere in Germany. What are the problems? What has been done? It is not just enough to open the market. There must also be a recognition of the qualifications of people in the different countries. Can a teacher, a vet, a doctor an engineer move from one country to the other? I know they can physically move, but will their qualifications be recognised? Will the Irish qualifications be recognised in Italy? Will the Irish nurse's qualifications be recognised in Spain? I suspect that this background work has not been completed. I cannot find any evidence of it. It is essential. That is one area that must be given a huge amount of development.
If we are looking at developing one of the largest markets in the world, the Twelve countries becoming one, we also need to invest in education to exploit that area. There are obviously going to be major changes and developments. If I want to sell a product and I know I can sell it in 12 different countries without any obstacle in my way, means that advertising and marketing strategies are going to be different. This means that we must have very high level quality control. Will the Minister say what he intends to do about that? It is all very well to say we are going to have a major information programme about what the completed internal market means. We can do that in a word. We say to people: "There are 12 countries, 12 markets there now. After 1992 it will be one market. You can sell in Nice in the same way as you can sell in Naas, as long as you can get your product there." People can understand that. It is quite simple. What people will want to know is how the quality of life, the standard of living of the ordinary worker or citizen in this country will be affected and how that will be reflected?
We must look at the whole area of advertising, market survey and quality control. I could go back to my old bugbear and say, how we have let ourselves down. I was the only person in Ireland who was delighted three weeks ago with the ferry strike when they could not export fish. We have now educated our people to know that exporting cattle on the hoof means loss of jobs. They still do not see that exporting fish "on the hoof" so to speak, also means job losses. We should not be exporting raw fresh fish; we should be processing it here. We should have ten times the number of jobs there are at the moment. I want someone to tell me why Denmark — a country whose economic policies we should aspire to — a country very like our own in terms of economic comparisons, processes 15 million pigs per year and we do one million. I am not worried about being swamped in pigs or pig excrement, or anything else, but I want us to be competing on equal terms. We are not preparing for that. The agricultural sector is letting us down terribly in this area. They are just some of the things we should be examining. The other main area is the area of quality control. I noticed different groups, companies and service industries trying to put together a standard for their service. Listening to the radio about two months ago I heard the security business people, people who put in alarms and all that kind of stuff, who are very conscious of cowboys and fly-by-nights in their work, discussing ways of trying to put together a standard and a bonding system. It is great to hear that, but there should be a greater State involvement in that area. There should be demands in that area that our quality control should be the best in Europe. Ireland should be seen as the clean food centre of Europe. We should be the granary of Europe. We will not be the granary because our climate does not allow us to be that. However we can certainly be the food supply centre of Europe in many other ways. We should be able to supply the best meats, the best fish and the best processes. We should have a standard of quality control which would leave us above reproach.
We have five years to do those kind of things and they do not need a huge amount of money. They need decisions. That is why I am going to be the only person who is critical of what should really be welcomed. The Minister referred to the setting up by the Taoiseach of a high level committee of departmental secretaries and Ministers. It saddens me to hear that. That is a good, positive development, but if that committee is to work the social partners must be represented there.
They are.
I am sorry, perhaps I misunderstood the point, but not all wisdom is invested in the people who happen to be elected and become Ministers, etc. We must take it somewhat beyond that.
The growth I have just talked about has come mainly from a very passive macroeconomic policy of allowing the market find its own level, but this growth creates wealth. There are poor, disadvantaged, underprivileged, unemployed people all over Europe. I want to hear how they get their share out of all of this. I thought Senator Haughey was going to talk about the redistribution of this wealth, but what he was really asking was which country would it finish up in. It does not matter to me whether an Irish capitalist or a German capitalist finally grabs the money. If it does not do any good for the poor, or for the unemployed, then we have lost out. We would all agree on that point.
The whole area of wealth redistribution must be looked at and that means the personal taxation policies in individual countries. I would like to hear how we are going to approach that. We have now reached a stage where the whole barrier to service transactions and fiscal transactions is being removed. Does this not mean that we will now have a European stock exchange in real terms? It will not be called that; it will still be called the London Exchange, the Dublin Exchange, the Belfast Exchange, Paris, Cologne or wherever it is. But the fact is that now I cannot go and say I want to buy shares in that German company in Cologne, because of the financial control and exchange regulations which are there, and it would be illegal for me to do so except where I can get certain provisions from the Central Bank. In general terms it cannot be done.
In 1992 I can buy stocks, shares, bonds or whatever in any of the European markets. That means that the stockbroker in Dublin will have a screen for every European stock exchange which, in effect, means there is a pan-European stock exchange with floors in Dublin, London, Paris, Cologne or wherever. The next step from that is that one does not need the floors any more, and one just does the work from the screen. How is this connected with the Custom House development? We are coming into a situation very shortly where we are going to have an options market and a futures market and where we will be part of a Europe-wide financial unit. The implications of that are incredible. Some of the companies who are setting up in Ireland are companies who are operating in a way that would not be allowed in other countries. I certainly know that one company which is unwelcome in the Chicago futures market, which is the biggest futures market in the world, are setting up in the Custom House development. What controls will be there to make sure that people act honourably within the regulations? I notice that one of the items on today's Order of Business, which can be discussed now as well, is the stock exchange regulations in different European countries. I have not read that, but I would like to know what the implications of it are.
These are just some thoughts on where we are going. I tried to do a number of things here. I have tried to look at the barriers that are there, and some of the results that will come from the taking down of these barriers. I have also tried to raise, just touching on them, some of the areas we should develop right now. We must look after our own reputation. In many ways our reputation as a centre for quality products and also our reputation for looking after the poor, the disadvantaged and the underprivileged, has taken some hammering in the last couple of years. We need to have a new look at that, and to make demands on Europe now at this stage. We should say that we want to know how we are going to redistribute this wealth. I also want to know about the constraints on the movement of stocks, shares, bonds etc.
I mentioned at the start of my contribution that we were now an exporting country. As far as I recall, our exports in the last year went up by 13.7 per cent. That should have meant a huge boom time for this country. It should have reflected itself in an improved quality and standard of living for the ordinary people, but it did not. The reason was that the wealth was created through the movement of cheap imports into the industry in Ireland with very little added value, which were then exported, and all we got out of the companies involved was the wages of the workers here. The profits that the company made were in fact exported. It now becomes wide open to do that quite legally and quite effectively. We cannot legislate against it. How will we deal with the problems that that can create?
I spoke vehemently against the Single European Act last year and the view I held then, I still hold. I am speaking now purely in terms of the market-place here, and I am not talking about the political implications of being part of a united Europe, although I worry about the fact that things like defensive products, for instance, can move freely between countries. It is appropriate that the Minister who has just joined us is here, as he will be quite interested in this general area. There are now very good working arrangements between customs people in different countries with regard to the import and export of drugs, etc. With the open frontier policy, we need to have a look at that as well. These are some of the areas of interest. I could go on and go on, but I am beginning to lose my voice, so I will spare the House any more.
I thank the Minister for his contribution and I am delighted we have had the opportunity to debate this. I look forward to the developments and I look forward also to hearing an up-date on what is happening in order to prepare this country and our people for the completed internal market of 1992.
I am sure that if I had sufficient time to read this report, it would not be possible to do it justice in this House due to the time constraints and for other reasons. It is a very important, positive report and I welcome the opportunity to make a few comments on areas where we have a particular concern. I thank the Leader of the House for including this on the Order of Business and also six other very important reports from the Joint Committee on the Secondary Legislation of the European Communities. These are individually very important reports and perhaps it is unfortunate, that with such an extensive Order of Business, it is not possible to do justice to each and every one of them. Nevertheless, I will make a few comments on the areas that I feel apply particularly to me.
This report is a positive one. There is always a danger in extrapolation. It more or less comes into the realm of fortune telling or looking into the future. Nevertheless, having regard to historical fact and progress to date, I am sure that most of the projects and the improvements highlighted in the report will take place. I welcome the news that two million more people will be employed in the EC when the internal market is developed by 1992. I also welcome the fact that £200 billion will be added to the economy. That is a considerable amount and apparently it will increase in the years ahead.
The Minister gave a very helpful and a very comprehensive introduction, which was a great help, at the start of this debate. He said the Government should attempt to switch to growth-orientated policies because there will be greater capacity there. The estimates are that the gain will be as high as 7 per cent of Community GDP and up to five million jobs. That is important. I would have liked if the Minister had developed this theme a little more. Perhaps this is not the correct forum in which to do so, but in the months ahead I would like to see development of this area and this information given.
I note that deflation of prices is expected, rather than inflation, which will please everybody. It is a matter of history, that while we have benefited to a very considerable extent, in some areas we have suffered. The Minister particularly picked out textiles and footwear. I am aware of the problems in the footwear industry, because in Kells, over the years we had a very important footwear factory which gave considerable employment but because of the problems which arose through the importation of footwear that factory has closed. It is only when one sees the problems of former employees and how their families suffer, that this problem comes into proper focus. I am not sure if anything can be done about it. In the context of the factories that have suffered in this respect, I am sure that very little can be done for them but it is a lesson and from that point of view we should be prepared for the future.
The Minister told us that the report suggests that larger firms will be better placed to capitalise on the changes to come. In Ireland we have a predominance of small firms, so we must be concerned in this regard. There is a lot to be said in favour of small firms. There was a time when large profits were associated with large firms for many reasons. That is not the situation any longer. In many cases, small firms can also amass considerable profits. We have a policy, a correct policy, to encourage small firms. We have a big problem in this regard. It is a matter for the Government to look after the interests of small firms, because, after all, this not only affects the proprietors and the people involved in these firms, it is something about which the country should be very concerned.
There will be challenges after 1992 for Irish industry. They will have to face exports from other countries and all the Community markets. The Minister has emphasised that. It is important to realise that we must give value and that our exports must be up to a very high standard in order to compete in the European markets.
The Minister told us, and other members have commented on the fact, that non-community firms are anxious to set up subsidiaries in the Community. Ireland has benefited greatly in the past from this. Senator O'Toole made some comments in this regard. We should be glad that firms have come to this country and have given considerable employment. We have experience of this also in Kells, where the Zenith factory is giving considerable employment. Nevertheless, it would be preferable if a native firm could do this work. We have a problem with the expatriation of funds. While incoming firms have expertise and finances that perhaps would pose a problem for native firms, nevertheless it should be possible for the Government to set up some kind of procedures where information, finance and help would be available to search for areas in the market where there would be a demand, and to encourage native firms or an amalgamation of native firms to invest.
The Minister said that in the end it was the responsibility of every firm in the country to assess for themselves how 1992 will impact on their business and how best to prepare for it. It may be the responsibility of the individual firm from the point of view of carrying on a viable business but it is in the interests of the country that each and every firm would be encouraged and helped to survive and to make a profit.
It is more than the responsibility of the individual firm: it is the responsibility of the Government to help out in this regard. I join with the other Members who have paid tribute to the Government for the advances they have made. In recent times I have heard nothing but the highest praise for the Government. I have heard no criticism whatever of their handling of the situation. It is easy to ask, as did Senator Manning, if we benefited enough at the start, and if we benefited enough all along. I do not know if that question can be answered properly. At this stage, it is an academic matter, the important thing is how we proceed. We could have done far more in one area, and that is with regard to our roads. This report dwells largely on the removal of barriers, customs posts and so on. I know from an individual who set up a transport firm that on the Continent this is a major problem, and people have to be prepared for it. This man was not, and consequently pulled out of that business. In Ireland we have a problem with regard to transport problems on our roads. I have made a case many times in this House about the road I travel on when I come up to Dublin from Clonee. If there is a tractor on the road it is impossible to pass and consequently there is a delay. This could be repeated for many areas throughout the country. This in the long run increases costs.
The begging bowl syndrome always comes up when a debate of this kind takes place. It is hard to reconcile that kind of criticism with saying that at the start, we did not get enough. In both instances we are looking for more as was Oliver but by and large it is agreed that we are only looking for what we deserve and for what we are entitled to, and we have plenty to give in return.
With regard to languages, I agree there is a problem. I was interested to hear Senator O'Toole refer to the Italian market, because in recent times my native town of Kells has twinned with Torres San Patrizio in Italy on the Adriatic coast, and consequently I have an interest in that area. I am sure that twinning will be of benefit to both countries. Senator O'Toole referred to the language problem and felt that this is an investment matter and that, without investment, we cannot make any strides in this area. I would agree that to some extent investment is important, but that is not the whole picture. Even if we had invested more in this area in the past, more than money would be needed in order to make it a success. There must be a demand for a language. I have been involved with the VEC which ran day and evening courses which were very attractive and many of them fell through for want of support. The same holds true in this area. To simply invest money in teaching languages will not be sufficient to ensure that it will be a success.
I value very highly any contribution Senator Manning makes. I am sure that his suggestions in relation to Irish from the intellectual point of view was thrown out for consideration. I am opposed to any diminution of the drive to teach Irish and have it spoken. We have lost ground up to now. It was unfortunate that at the start we did not make an effort to invest in the Gaeltacht areas and keep people who spoke the language in those areas. From that point of view we have missed out, but we have learned or we should have learned. In my county we have two areas where Irish is the spoken language — Baile Gib and Ráth Cairn. It would be unfortunate for the country and for our culture if Irish were to suffer through the teaching of foreign languages and I hope this will not happen.
Senator Manning said that perhaps we were too greedy in the early years when we joined the EC. He referred to farmers having suffered to a considerable extent, and asked whether they were too greedy. They were not too greedy, but certainly they suffered. The unfortunate thing was that it was the enterprising farmers who suffered, those who invested and went out to work hard, and those who did not invest were better off in the long run. We must remember that farmers at that time were badly advised by the banks and so on. We should guard against this in the future and make sure that will not happen again. I saw land sold at £4,200 an acre in my area and in a short period after the same land had to be sold back at less than half that price. We must guard against that sort of thing in the future.
I agree that there is a failure in the report to spell out its effect on the different regions. We could have expected this from the report, but perhaps the Government might do it. It is a matter for the Government to consider what effect the report will have on the country in a positive and negative sense. In compiling this report, only seven countries were considered and Ireland was not one of these, but that is not of any great consequence. It is for the Government to consider the repercussions of what has been stated in the report and relate that to this country and take steps to deal with areas that may lose out.
I am glad that a campaign will be launched shortly, to bring home to industrialists and to those who are involved in that area, the market that will be available and how they should prepare for it. Competition will be important and the cost of what is produced is an important feature. This will be a matter both of the workers and employers. Information technology in this day and age is a matter of prime importance. We have lost out in different areas. Some years back in the building area we had a centre where information was available to people who called in. It must not have been a success from the point of view of finance as we no longer have that service. In the building area we have no service of that kind. It is pie in the sky looking for computerised information with regard to 1992 when in important areas at home at present it is not possible or easy to get information.
I welcome the report. It is comprehensive, and it would be an intrepid Member who would stand up and feel capable of delivering a worthwhile contribution on it. Again I thank the Minister for his introduction which was very helpful in starting this debate.
With regard to the other reports, it is unfortunate that there is a time constraint on the debate because they are all important in their own right. For example, the report on the Community trade mark would take a day to debate if we were to do justice to it. It seems there will be no research done to determine if the European Community trade mark is already in existence, and it will be the responsibility of the firm or the individual who is legally entitled to use the trade mark to follow up situations where the same trade mark may be used. This will be unsatisfactory and perhaps in the long term some arrangement may be made to deal with that. The report makes the suggestion, and indeed the plea, that the office which will deal with the Community trade mark should be set up in Dublin. I urge the Minister to do everything possible to ensure that the Community trade mark office will be set up in Dublin.
There are two other reports to which I would like to refer, one is report No. 2 which deals with 19 statutory instruments. In particular I would like to refer to Statutory Instrument No. 11 of 1986. This implements Council Directive 80/77/EEC which deals with the harmonisation of the national laws of the member states relating to the exploitation and marketing of natural mineral waters. The Irish regulations provide, inter alia, that a person shall not market or exploit natural mineral waters unless they comply with the provisions of the Council Directive and these regulations. I agree with the criticism of the report that it may not be possible for the ordinary Irish citizen to be familiar with these regulations and also that it is not the responsibility of an Irish individual to be familiar with them; it is up to the Government to comply with the regulations. In that sense it does develop what has been discussed in this House before, that to incorporate the terms of the Directives two methods may be used, primary legislation or secondary legislation. Primary legislation would give Members of the Dáil and Seanad an opportunity to make amendments and recommendations and to discuss the matters in detail so that the public would become familiar with the legislation. The other method is a regulation introduced by a Minister and I think this is a method that should be employed as seldom as possible. All the reports we have dealt with have made the point that the Dáil and Seanad should get the opportunity to discuss legislation before it is incorporated into Irish law.
I wish to refer to report No. 1 which deals with the implementation of the Directive on product liability. This is an important report, particularly in regard to what we are discussing and the completion of the internal market in four years time. This introduces an additional legal redress to liability in tort and contract law. Apparently an injured party can proceed with actions under any of these laws henceforward. I understand also that this Directive will be implemented in the next month, so it is rather important. The report states:
Indeed, depending on the nature of the damage, there would be nothing to stop claims, in respect of the same offence, being made under each of the laws.
That is difficult to understand. I would like to have gone through this report in some detail because it is an important one, but other Members want to make their contributions and I do not want to delay the House.
I wish to refer to the recommendations in the report. Paragraph 34 of the report states:
The alternative to enactment of legislation by the Oireachtas to implement the Directive is for the Minister for Industry and Commerce to make Regulations under the European Communities Act, 1972. Oversight of such Regulations has been delegated by the Oireachtas to the Joint Committee which has been assigned the statutory power to recommend annulment of the Regulations to the Houses of the Oireachtas, if it sees fit. The Joint Committee has, however, no statutory power to recommend amendment of the Regulations.
This is unfortunate. It is an important issue and perhaps it could be looked at in time. The best method — and I think this is the view of the Joint Committee — is to introduce the legislation as a statute so that the Dáil and Seanad will have an opportunity to deal with it.
Paragraph 35 of the report states:
Where EC Directives have been implemented in the past through Ministerial Regulations, the Joint Committee has been critical of the practice of incorporation of the terms of the Directives by reference as this procedure frequently employed technology not familiar in the Irish legislative context. The Joint Committee feels that it would be singularly inappropriate on this occasion to resort to secondary legislation as the terms of the Directive need to be defined with precision and accuracy. This is a legislative function appropriate to the Oireachtas.
The Confederation of Irish Industry and the Irish Insurance Federation have stated that introducing the legislation by ministerial regulation means that there is less chance of divergence with regard to other European countries. In other words, if it was introduced in the same way in all the countries there would be no legal problem, but if we introduced a separate statute perhaps we would in some way differ from our European colleagues. This matter has come up time after time in the reports of the Joint Committee on Secondary Legislation that we have dealt with in this House and perhaps it could be looked at in some depth in the near future so that we could come to a satisfactory conclusion.
Again, I welcome the reports and thank the Minister for his very comprehensive and helpful introduction.
Initially I should like to follow on from where the previous speaker left off. The debate on these reports is of particular importance because of their impact on industrial and commercial life over the next number of years. The research project undertaken on behalf of the Commission by Mr. Cecchini is important but the seven reports of the joint committee now before the House are also important. I am very glad that we have the opportunity to discuss these reports because they represent a considerable amount of the work undertaken by the joint committee over the past few years. I am glad that we have a number of them before us for discussion and I hope many Members will avail of this opportunity.
I agree with Senator Fitzsimons's assessment of the two reports — Report No. 1 of the Fifth Joint Committee: The Implementation of the Directive on Product Liability; Report No. 2: 19 Statutory Instruments. We are also discussing Report No. 3 of the Fifth Joint Committee: Council Directives Relating to Credit, Suretyship and Legal Expenses Insurance; Report No. 30 of the Fourth Joint Committee — which is quite an old report and has been on the stocks for a long time — Stock Exchange Regulations; Report No. 4 of the Fifth Joint Committee: Community Trade Mark; and Report No. 5 of the Fifth Joint Committee: Proposed Directive Relating to Mortgage Credit.
I hope I will be excused if I spend some time on these reports because the joint committee and the sub-committee, so ably chaired by our colleague, Senator Robinson, put many hours of work and consideration into each and every one of those reports. In addition the committee had the advantage of having submissions from all of the interested parties in the economic and professional spheres and also of people coming before the committee to give of their experience and assist the committee in the formation of these reports, which must be of tremendous benefit to people whose livelihood and professions are perhaps touched by the regulations to which these reports refer.
The report on the Implementation of the Directive on Product Liability was prepared for the joint committee by the sub-committee on legal affairs and statutory instruments. The joint committee are, indeed, indebted to their colleagues who worked on this. In the course of the preparation of the report the sub-committee considered written and oral submissions from the Department of Industry and Commerce, the Confederation of Irish Industry and the Irish Insurance Federation. The committee also considered views expressed by Mr. John G. Roche, director of the quality assurance research unit at University College, Galway. I should like to take this opportunity to express our thanks for the amount of work and energy and thought each of the people involved put into that.
The joint committee have followed the progress of the directive since its first publication in draft form in 1976 and are pleased that it is now about to be implemented into domestic law. They see the Directive as the bench-mark in consumer protection policy. They urge implementation through primary legislation where debates in the Dáil and the Seanad on the various stages of the enabling Bill would allow for the incorporation into Irish law of the terms of the Directive, precisely and accurately, in familiar Irish legislative terminology, and would appraise consumers of their newly acquired rights and encourage their exercise. The joint committee commend the representative bodies of industrialists for their endeavours to familiarise their members with the implications of the directive and endorse their conclusion that the best defence industry has against possible debilitating claims for compensation is proper quality control and adequate insurance cover.
Report No. 2 on the 19 Statutory Instruments is a collection of technical documents. They are of the utmost importance to the general public. Instrument No. 1 deals with aliens regulations, S.I. No. 39 of 1985; Instrument No. 2 deals with the introduction of organisms harmful to plants and plant products, S.I. No. 88 of 1985; Instrument No. 3 deals with exemption from value-added tax on permanent importation of certain goods; Instrument No. 4 deals with the removal of restrictions on immature spirits; Instrument No. 5 deals with the labelling of textile products; Instrument No. 6 deals with aliens amendment regulations, S.I. No. 441 of 1985; Instrument no. 7 deals with the natural mineral waters regulations and was dealt with by my colleague Senator Fitzsimons; Instrument No. 8 deals with dangerous substances classification, packaging and labelling; Instrument No. 9 deals with the co-responsibility levy on cereals regulation; Instrument No. 10 deals with feeding stuffs, tolerance of undesirable substances; Instrument No. 11 deals with road transport, recording equipment regulations, which the haulage people are fairly familiar with; Instrument No. 12 deals with protein feeding stuffs; Instrument No. 13 deals with fruit and vegetables regulations; Instrument No. 14 deals with non-automatic weighing machines; Instrument No. 15 deals with dehydrated preserved milk; Instrument No. 16 deals with recognition of qualifications in veterinary medicine amendment regulations; Instrument No. 17 deals with scheduled inter-regional air services regulations; Instrument No. 18 deals with marketing standards for eggs; and Instrument No. 19 deals with cereal seed regulations.
I wanted to put those on the record of the House because the list itself is an indication of the very wide-ranging technical work and thought put into the examination of this secondary legislation by the joint committee. It is perhaps unfair that we should have seven of those regulations before the House at the one time. A few years ago we had a better system of debating regulations — one regulation was taken on a more formal basis every month. It is unfair to our colleagues because they devoted so much time to this work. The committee meet in public but they do not get the same prominence as others do. It is important that the public should have an opportunity to know that those regulations exist and, by bringing them to their attention, they may be able to purchase copies of them from the Government Publications Sale Office.
I should like to refer to Report No. 4 of the Fifth Committee which deals with the Community Trade Mark. The Minister with responsibility for trade and marketing has been in the House several times and he is putting a lot of effort into encouraging Irish engineers and scientists to provide technology that will be of benefit right across the Community. With regard to the draft regulation on the Community Trade Mark the committee received written submissions from the Patents Office, the Association of Patent and Trade Mark Agents and the Confederation of Irish Industry. The committee gratefully acknowledges the cooperation received from those bodies. We also had the expert assistance of the distinguished former civil servant, Mr. John Hogan, in preparing this report. The subcommittee had consultations with the Controller of Patents, the Association of Patent and Trade Mark Agents and the CII and these consultations provided a valuable opportunity for discussion and examination of the many points raised in the written submissions. When the committee were making their recommendations they said — and I think it is important to put this on the record of the House:
The draft regulation on the Community Trade Mark makes no provision for an official search of its register by the Community Trade Marks Office for prior conflicting registrations, nor for subsequent examination. Owners of registered rights would, if this provision were implemented, be obliged to keep applications under constant surveillance — an exercise which would be costly and disproportionately so in the case of small and medium enterprises. Given its structure, Irish industry would be put at an unfair disadvantage. The Committee recommends, accordingly, that every effort be made to secure that, at least, a search be made and that the new application be notified to owners of appropriate prior registrations. In this connection the Committee notes that the early drafts of the regulation contains such provision.
I am trying to highlight some of the points that have activated the minds of my colleagues on the joint committee. I want to take this opportunity of complimenting them on the diligence they have shown in their work during the years.
I suppose the main thrust of the debate this evening is on the research project which is referred to as the Cecchini report. This has set many people thinking about the development of the Community and the status and the evolvement of the European Community after the Single European Act. I hope that we in this country will be prepared to be at the forefront of developments there.
I came to the House this afternoon prepared not to attack the Minister but to ask for a greater effort. During the recent French general election I listened to the emphasis French politicians put on the benefits the French will receive on the completion of the internal market. Similarly, one can see from British television the work that has gone on there in trying to bring the British public up-to-date with the opportunities that will be available. In line with that, the completion by 1992 of the Channel Tunnel will give the UK a further benefit as they will have closer access to the concentrated European market.
I believe — I have no scientific base for making this observation — that after 1992 the original golden triangle is going to shine forth again. It is up to us in the peripheral area to ensure that it does not attract in a magnetic fashion all the wealth of the Community. It is because of that that the recent Council meeting agreed to greatly increase the funds available for distribution through the regional policy. I do not think we will be justified in complaining, crying or, as some of my colleagues said, rattling the begging bowl if this happens to our detriment because we have four years to make preparations to ensure that we will be in a position to export high quality products to the market.
This will not be just an opportunity for the brighter people on the Irish export scene. As 1992 looms large, I believe there will be a new strategic approach to European marketing based on added-value, high quality management skills, and on speed of information transfer. That is the kind of thing that is urgently required here. We should be equipped to get in with the best and we should be able to target concentrated areas in, say, Germany. We should be able to zoom in on a city like Hamburg, which has a huge population, and be able to concentrate our selling in a wealthy area like that where the population and consumers appreciate high quality produce.
A few years ago I sent to the people in Kilkenny Design Workshops a problem which is exercising the mind of my colleague, Senator Hogan — and asked them if they would consider setting up in Hamburg an Irish shopwindow, which would be both retail and wholesale. I went as far as identifying a suitable store chain who were agreeable but they did not see that as being an option at that time. We must still pursue the market. I believe we can produce high quality produce and we must trade on what we have. We have a few years in which to do that.
The Cecchini report has concentrated the minds of politicians and economists in Europe to a great extent. I watched with great interest the developments in the European Parliament during the past number of months. The European Parliament's Committee on Institutional Affairs have been active since early last year. They appointed Sir Fred Catherwood as rapporteur and they have drawn up a very interesting report. The findings in the committee they were passed by 18 in favour with one abstention, if my memory serves me correctly — represent the same kind of views we hold. I think a Danish member pointed out during one of the debates that a truck with produce travelling from the north of Denmark to the toe of Italy averaged 12 miles per hour by virtue of the fact that it had to pass through 27 custom posts and had to prepare over 30 sets of documentation, whereas a similar consignment travelling State on the west coast averaged 72 miles per hour and absolutely no documentation was required.
We must make up our minds that we are going to benefit from free and easy access to the markets of our choice in a huge market which is now the European Community. I was very pleased the Minister gave the House details of the sub-committee the Government have set up, which is working on assisting the different sectors of Irish industry in this very valuable and natural interest.
Debate adjourned.