I move:
That Seanad Éireann takes note of the National Economic and Social Council, Report No. 88. Ireland in the European Community: Performance, Prospects and Strategy.
NESC Report — Ireland in the European Community: Motion.
Má tá sé ceadaithe dom ba mhaith liom tréaslú leo siúd a ath-toghadh don Seanad seo, fáiltiú rompu siúd a toghadh don chéad uair agus comhghairdeas a dhéanamh leis an gCathaoirleach nua ar a thoghadh don oifig sin. Tagann sé i gcomharbacht ar Cathaoirleach a chuir an Seanad ar mhapa polaitíochta na tíre — an Seanadóir Honan — agus tá mé cinnte go leanfaidh seisean den deaobair. Chomh fada agus a bhaineann sé liom féin bíonn fonn orm í gcónaí teacht chuig díospóireachtaí anseo. Beidh mé sásta í gcónaí comhoibriú le Seanadóirí ar chuile thaobh den Teach.
The Government welcome this debate by the Seanad on this very important and timely report from the NESC. The NESC has played an influential role in recent years in providing advice on an impartial and objective basis on this country's economic and social problems. The present report complements this with an authoritative and detailed assessment of the effects of our EC membership. It also identifies the key issues which arise for this country in the moves now underway to strengthen further the process of integration in the Community.
We regard this latest report as having the same level of importance as the earlier report from the NESC entitled A Strategy for Development 1986-1990. That report laid the foundation for the Programme for National Recovery which, in turn, has provided the basis for the dramatic and sustained improvement in our economy over the last two and a half years. As the NESC has emphasised, our economic success in the Community, as we approach 1992 and the completion of the internal market, requires continuation of the very successful macroeconomic management and supporting sectoral policies which we have been pursuing. It also needs to be underpinned by continued consensus among the social partners in our efforts to increase employment and ensure higher living standards for all our people.
At the outset, I would like to pay tribute to and convey our thanks to the NESC and its secretariat for this very important report. The Government do not necessarily agree with every hypothesis and conclusion in the report. However, we do agree that this country's overall interests are likely to be best served by the fullest degree of economic integration, provided this is accompanied by the necessary parallel measure to strengthen cohesion and reduce regional disparities in the Community.
The report responds to the specific terms of reference set by the Government in areas which are germane to the NESC's general remit. It does not deal with the wider political, institutional or cultural aspects of our Community membership. These aspects are of fundamental interest to us and are, of course, closely related to issues dealt with in the NESC report. Indeed, a nation's approach in these areas must be informed by its concrete economic and social interest and concerns. The NESC, in line with its functions and the request submitted to it, has concentrated on a range of issues in the economic and social sphere. I shall largely do the same and while my remarks on the future shape and nature of the Community may beg institutional and political questions, I shall not, however, be able to deal with these today, given the limited time at my disposal.
It is important to note that the NESC's definition of the EC Economic and Monetary Union is much more comprehensive than that advocated in the Delors Committee's report. The NESC view would involve the development of many more common Community policies and an expanded Community Budget. As I have already mentioned, the Government are supportive of progressively closer integration with the Community, provided this is on a basis which ensures that the benefits of integration will be fairly shared and will extend to all regions of the Community. This is the strategic approach recommended by the NESC and the one which the Government are pursuing.
This approach has guided our attitude to the completion of the internal market, to the elaboration of its social dimension, to development of the Community's environmental and R & D policies, to its response to the concerns of the EFTA countries and to the economic needs of Poland and Hungary. Our approach is, as set out in our Programme for National Recovery, one of the fullest participation by Ireland in every facet of Community activity. Ireland will not be opposed to further economic and social integration in the Community. But we insist that it must be a Community which cherishes all its citizens equally — a Community that fully discharges the Treaty obligations to promote the achievement of greater economic and social cohesion by reducing regional disparities. We want no two-speed nor two-tier process in Community integration.
I should now like to return to the Treaty obligations on economic and social cohesion. Over the past two years, attention has concentrated overwhelmingly, both in Ireland and at Community level, on the doubling and reform of the structural funds. As Senators will be aware, under the Commission's recent allocation of structural funds for Objective 1 regions of the Community, this country will receive over the period 1989-1993 a higher level of aid per head of population than any other Objective 1 region. We will also achieve the highest per capita increase in aid over the 1987 levels. This represents a major boost for this country's economic development prospects.
The Community support framework, which sets out the priorities, the amount and type of assistance which we will be receiving from the structural funds, has now been approved by the Commission. This will be published shortly. Discussions are at an advanced stage between the EC Commission and the various Government Departments in regard to the content of our operational programmes and these are expected to be approved over the coming weeks. Pending this, it is not possible to say exactly which individual projects will be selected for assistance by the funds.
There may be a tendency in the Community to think that this disposes of responsibilities in regard to cohesion. However, as the NESC report argues, and the Government agree, the structural funds will not be sufficient to promote cohesion and reduce regional disparities. In this context, I should emphasise that there is also an obligation, under Article 130 B of the Treaty, inserted by the Single Act, to take account of the cohesion dimension in the implementation of all common Community policies including those under the internal market programme. There has been some trend in recent years towards the differentiation of common policies to cater for particular features of the less developed member states. However, we are far from seeing a fully purposeful and systematic application of Article 130 B. We need this at the stage when the Commission are formulating proposals for Community policies. This is a subject we have been studying and which we will be pursuing with the Commission and with other member states.
The NESC report has emphasised that it would be wrong to expect that the free play of market forces will, left to itself, bring about regional convergence. It underlines the need for stronger measures of positive integration in the Community. It also emphasises that the social dimension of the internal market is an important aspect of this positive integration. It seems to me that if we are for economic and social cohesion, we have to be for a worthwhile and balanced social dimension. We particularly welcome the fact that the NESC has been able to agree on forward-looking and helpful conclusions in this area. Ireland fully supported the conclusions of the European Council meetings in Rhodes and Madrid which put the matter well, saying that, respectively:
Completion of the Single Market cannot be regarded as an end in itself; it pursues a much wider objective, namely to ensure the maximum wellbeing of all, in line with the tradition of social progress which is part of Europe's history. This tradition of social progress should be a guarantee that all citizens, whatever their occupation, will have effective access to the direct benefits expected from the Single Market as a factor of economic growth and as the most effective means of combating unemployment [and] in the construction of the single European market, social aspects should be given the same importance as economic aspects and should accordingly be developed in a balanced fashion.
The dominant issue in this area at present is the proposed European Social Charter. This is one of the major items for discussion at the European Council meeting next month in Strasbourg.
In Community discussions we have indicated that we support in principle the broad thrust of the French Presidency programme in this area. Too often the social dimension is spoken of as if it were a liability, purely a factor increasing costs. I believe that it is more productive to look upon it as an investment in human resources and in social harmony, both basic conditions for successful economic policies and development. We share this French approach of accentuating the positive, while not overlooking possible problems. For us, the social priority is employment. We have stressed this crucial aspect in the past and will continue to do so. We welcome the French proposal to initiate regular ministerial discussions on the subject. As the succeeding Presidency, we will certainly support continuation of this useful initiative. But much more is required and this brings me back to the role and responsibility of the Community in the future, the need for greater positive integration and the whole question of assignment of policy functions. All of these matters are dealt with persuasively by the NESC in their analysis of the requirements for stable integration and, specifically, for a stable and durable Economic and Monetary Union.
There have been a lot of references in recent Community discussion to the principle of subsidiarity. This means that the functions of higher levels of government should be as limited as possible and should be subsidiary to those of lower levels. The Delors report says that adherence to this principle would be an essential element in defining the appropriate balance of powers within the Community in an Economic and Monetary Union. As specifically noted by the NESC, the Delors Committee report says:
Thus, the attribution of competences to the Community would have to be confined specifically to those areas in which collective decision-making was necessary. All policy functions which could be carried out at national (and regional and local) levels without adverse repercussions on the cohesion and functioning of the economic and monetary union would remain within the competence of the member countries.
As the NESC report says, Ireland need have no difficulty with this as a principle. We certainly do not support any excessive centralisation of powers or functions in the Community. We espouse a Community in which, as President Delors said in his recent speech in Bruges, diversity and pluralism are upheld. We agree with him that integration in Europe, a Community of ancient nations, has to be a sui generis process. We agree with the Commission President that we should add to Jean Monnet's aim of uniting peoples, the parallel aim of bringing together the nations.
We specifically supported the invocation of the principle of subsidiarity in the conclusions of the Madrid European Council on the social dimension of the internal market. But, as NESC rightly points out, the issue is the application of the principle. It would appear from other references in President Delors speech and, indeed, from the report of the Delors Committee, that there is a tendency to apply this principle so as to unduly restrict the areas in which the Community and its institutions would have competence and responsibility.
It is to be welcomed that the Commission President now sees a Community budget rising to 5 per cent of Community GDP. Other references though appear to leave to the exclusive competence and responsibility of the member states a number of policy areas where we would feel, together with the NESC, that the Community should have a parallel involvement. The NESC report rightly points out that there are economies of scale, externalities and spillovers deriving from the provision of certain public activities. This suggests that these activities might be assigned to a higher level of government. Examples might be, respectively, air traffic control, environmental regulation and educational provision. They note that an additional criterion is political homogeneity or the feeling of belonging to the same political grouping and sharing the same interests and destiny.
It would be foolish to suggest that the commonality of identity and interests between people from the different member states is yet anywhere as strong as that which exists amongst the peoples of the individual member states. It is to be noted that, again in his Bruges speech, President Delors looked to every European having the feeling of belonging to a Community which would in some sense be his or her second motherland.
I share this vision, but if it is to happen it will be necessary that the Community, as I have said, cherish each of its citizens equally. Certainly, the member states have, as recognised in Article 130 B of the Treaty, responsibilities for the development and welfare of their own citizens. But, with increasing integration, it will also be necessary to give fuller practical expression to the Community's obligations under that Article. Here it is relevant to recall that, as NESC point out, the theory of fiscal federalism strongly suggests that the redistribution and stabilisation functions should be carried out at the highest level. Moreover, in their report, commissioned by President Delors himself, the Padoa-Schioppa Group expressed the view that "greater Community involvement in stabilisation and redistribution policies is the indispensable complement of the ambitious project of completing the internal market". It might be felt that in current circumstances it would be unrealistic to envisage that the Community should exercise these functions. The situation should be different in an Economic and Monetary Union. Even then, it is scarcely realistic or even perhaps desirable, to contemplate the Community exercising exclusive responsibility in such areas as social security or regional policy.
I mentioned fiscal federalism a moment ago and in his Bruges speech President Delors spoke of the merits of the federal approach in the further development of the Community. If we look at models such as the Federal Republic of Germany or the United States, we see that a prominent feature of such federal unions is the concurrent exercise of competences in various fields. I do not necessarily suggest that the future Community has to be a federation or that we should slavishly follow any particular federal model. There is nothing, I suggest, against taking from them the elements that are appropriate to the Community's unique circumstances. One can imagine a situation in which major parts of the responsibility for decision-making in regard to such areas as educational provision or unemployment compensation remains with the member state. But this would be paralleled by an active Community role in ensuring minimum standards of provision and welfare, including through financial support in areas such as these, which go beyond the boundaries of what is covered by the Structural Funds at present.
This implies a larger Community budget. Whether 5 per cent of Community GDP is enough is a question for further examination and debate. The important point of principle is that the NESC are right. Application of the Delors Commmittee's own criterion in regard to the cohesion and functioning of an EMU suggests that the Community will need to exercise a competence, concurrent with the continuing competence of the member states, in a wider and deeper range of policy areas than is apparently being contemplated in certain quarters. By reference to Articles 130 A and 130 B of the Treaty the effectiveness of the functioning of the EMU must be judged by the effect on economic and social cohesion. If real convergence of the different economies is retarded rather than advanced by EMU, the cohesion and stability of the union will, sooner or later, be adversely affected. The Community must have the policy competences and financial resources required in order to effectively promote such convergence.
Some commentators have picked up the NESC comments on the question of the degree of political homogeneity needed before policy functions can be assigned to the Community level. And, further, whether Community budgetary support can expand to fresh fields, beyond those concerned with structural development of the component economies. These commentators have suggested that this degree of political homogeneity is unlikely to emerge in the Community in the near future. Consequently, they feel that the NESC analysis and prescriptions on European integration provide little basis for practical policy purposes. We should, of course, be under no illusions as to the extent of the task of persuasion that lies before us. But, as the NESC itself points out, the degree of political homogeneity changes and develops over time and, as experience shows, sometimes in discreet leaps. This is certainly borne out by the experience of recent years.
One of the dominant issues on the Community's agenda at present, and one which is dealt with at some length in the NESC report, is the completion of the Internal Market by the deadline of 1992. This will require important sectoral decisions and initiatives at the domestic level here to maximise the opportunities and minimise the risks. I now propose to outline in general terms what the Government have been doing to promote the necessary preparations by the different sectors of our economy for the internal market.
Last year, the Government launched its EUROPEN campaign to promote awareness of the Community's internal market programme. This campaign started with an initial phase of ministerial speeches, advertising and seminars and other initiatives focusing on the need to make the necessary preparations in what will be a major change in the economic and business environments.
This year saw a change of direction in the campaign. Emphasis is now on the necessary preparations at sector and firm levels through the support provided by the particular Departments and State bodies responsible for the various sectors and functional aspects, such as standards, export and domestic marketing and so on. In addition to sustaining the flow of information on the adoption of directives and on other significant developments, we are also publishing, in co-operation with the Irish Business Bureau in Brussels, a monthly ‘Europen News’ in Business and Finance and Irish Business magazines, thus reaching up to 21,000 people concerned with business.
Another initiative has been a series of sectoral studies which have been undertaken for ten important sectors of industry by distinguished economists with an extensive knowledge of the sectors and issues concerned. The ten sectors selected are the food processing industry; electronic, electrical and instrument engineering; metals and mechanical engineering; distribution; textiles/ clothing/footwear; transport; tourism; chemicals/pharmaceuticals/healthcare; financial services; and the construction industry. I do not wish unduly to preempt these studies, which will be published shortly, except to say that, on balance, there seems to be a certain degree of cautious optimism about the direct impact of the internal market on Irish industry.
The sectoral studies all stress the importance of informed and well planned preparation in order to take full advantage of the opportunities of the internal market. The studies also recognise that, because our economy is already relatively open and because we have scarcely any non-tariff barriers in our domestic market, a large part of Irish industry has already had to adapt to maintain its competitive position. Considerable emphasis is placed in the studies on the overriding need for management to keep abreast of technical and structural changes in whatever industry it is involved, and to monitor the evolving needs of their customers. This ties in with the conclusion reached by the NESC in their very valuable analysis of the effects of the internal market on various sectors of our economy.
The third main initiative, which we have taken this year, was a major survey carried out by Irish Marketing Surveys. This showed a significant but still insufficient improvement in respect of planning and preparation for the internal market as compared with an earlier survey undertaken by the Marketing Institute of Ireland at a time when the Government campaign was only getting into its intensive phase.
While I am happy to note the improvements effected by the European campaign, the results are far from affording any grounds for complacency. It is clear that a major task of preparation remains for Irish business and for the Government agencies assisting it. The results of the survey have been supplied to the various public agencies and industry bodies as an aid in planning their programmes. The most frequently cited need was for more specific information for different industries and sectors. This is now being addressed with the publications of the ten Europen sectoral studies.
I disagree with NESC that Irish Governments have tended to see cohesion as a purely economic phenomenon. Successive Governments here have, I believe, adopted a consistently communautaire thrust on broad strategic issues in the Community. This is exemplified by our generally positive approach to fresh steps in integration such as the EMS and the SEA. These had much more than an economic significance, in our understanding for the concerns and interests of other member states — whether it is Iberian accession or German concerns about developments in Eastern and Central Europe — in our constructive participation in European political co-operation and in our respect for Community law which provides an essential underpinning for Community legitimacy.
In the light of the unprecedented changes occurring all around us, particularly in Eastern Europe, we should not be too pessimistic about the readiness of Europeans to identify with, and accept, an enhanced role for the community in this context. Senators might recall the recent address in the European Parliament by President Mitterrand of France, in his current capacity as President of the European Council, when he called for a wider revision of the EC Treaties than that required for the establishment of an Economic and Monetary Union. It is also important to note the renewed commitment given by the West German Chancellor, Mr. Helmut Kohl, to the continuation of the EC unification process which he sees as an important condition for the success of the political and economic reforms now under way in Eastern Europe. There is no future in trying to hold back the tide or in standing aside from a process that has such momentum. Our ambitions in regard to the assignment of policy competences or the strengthening of the Community budget may not be fully realised in the immediate future. Nevertheless, the strategic approach I have outlined will provide the best political context for making the maximum achievable progress at any particular time, thus providing successive staging points from which we can aim at further progress.
With the Geoghegan-Quinn EC Coordinating Committee, the Europen Bureau and the regular meetings of the Committee of Ministers and Departmental Secretaries chaired by the Taoiseach, our co-ordination arrangements have been considerably strengthened, as compared with most of the period reviewed by the NESC. The arrangements are working well but we are now considering how they can be specially enhanced to ensure optimum effectiveness in conducting our forthcoming Presidency of the EC Council of Ministers. In regard to the domestic policy response, we have, in addition, the Central Review Committee under the Programme for National Recovery and we have reactivated the Sectoral Development Committee. These arrangements bring together those with executive responsibility in and under the Government and the representatives of economic operators, and are proving quite satisfactory.
In conclusion, I should emphasise that the Government are giving the most serious attention to the NESC report. We believe it constitutes one of the most significant Irish contributions to the debate at European level on the future shape and direction of further steps in the Community's integration. Already it has provided a basis for debates here at home in various fora which I am following with particular interest. It is, I believe, only fitting that the new Seanad should commence its proceedings early on with a debate on EC issues covered in the NESC report which will have a critically important bearing on this country's future economic prospects. I am looking forward to studying the various contributions in this debate which I would hope will be in the same positive and constructive spirit as that shown by the representatives of the various economic and social interests on the NESC.
Túarascáil thábhachtach í an tuarascáil seo. Tuilleann sí díospóireacht bhríomhar agus iniúchadh cúramach. Tá sé suntasach go bhfuil an díospóireacht seo sa Seanad í gcomhthéacs na n-athruithe móra atá ag tárlú in oirthear na hEorpa faoi láthair. Ní bheidh ar mo chumas fanacht libh i gcaitheamh na díospóireachta ach beidh mé ar ais roimh chríoch.
I think all of us here would probably agree that the report commissioned in 1982 by the European Parliament set us on the road to where we are today. That report concluded that Europe was losing out to the Japanese and the American markets by operating as individual national markets within the Community. This led to a new treaty being signed by all member states in December 1985 called the Single European Act. When the Single European Act came before the Dáil the Taoiseach, as Deputy C.J. Haughey, opposed it. It is quite a sobering thought. We need to remind ourselves that our present Taoiseach, as Leader of the Opposition at the time, opposed the Single European Act. Can we now have the confidence in the same man to lead us with conviction into the single market of Europe? He is, after all, a man who a few years ago felt that the price of non-Europe was worth paying. We just have to look to the NESC report before us to see exactly what that price of a non-Europe is. They spell it out clearly; I do not have to regurgitate it here today. But apparently, as Deputy C. J. Haughey, the Taoiseach thought the price of a non-Europe was worth paying, and he voted against the Single European Act.
As we debate the excellent NESC report before us we must, as a result of what I have just said, be ever vigilant and concentrate on the contributions, particularly from the Government side, and look behind every word used to ensure that Deputy C. J. Haughey's or, as he is now, the Taoiseach, about turn on this vital issue is indeed just that, a road to Damascus conversion on the Single European market and not just opportunistic rhetoric, or, as I have heard used, economic spoof.
I would like to add my words of appreciation to NESC, a very distinguished body representing all sections of society, for the comprehensive manner they carried out their task. Perhaps, for the record, we should indicate exactly what that task was and what their terms of reference were in carrying out the final outcome we have before us today. They were requested by the Taoiseach in May 1987 to undertake a project on Ireland and the European Community. The terms of reference were as follows: firstly, to undertake an indepth study of Ireland's comparative performance in the EC, incorporating an assessment of the impact on Ireland of membership of the Community. Secondly, to assess the problems and opportunities inherent in unification of the internal market. Thirdly, to put forward and evaluate the policy options available to help mitigate the problems, capitalise on the opportunities and consider what countervailing measures may be necessary. The Taoiseach requested the NESC to undertake this project only a few short months after voting against our participation in the Single European Act, in other words our participation in an internal market post-1992.
In response to those terms of reference NESC have provided us with a treasury of information on Ireland in Europe, past, present and, more important, to come. It is up to us as a nation to translate the words into action to ensure that Ireland will play a role indirectly proportionate to our size in the Europe of post-1992.
It is interesting that Ceccini comes out of the NESC report rather negatively because up to now he was perhaps for some of us equivalent to the Bible. Any time we discussed the Single Market or Europe post-1992 we would refer to the Ceccini report and quote from it. He appeared to be some type of authority. NESC, perhaps, have deflated that balloon somewhat and my interpretations of the NESC references to Ceccini's findings are that they disagree to some extent with them. NESC maintained broadly that the greater benefits from the completion of the internal market will accrue to areas already efficient and competitive while Ceccini found that the smaller or less developed member states would gain most. There is quite a difference in view between both.
As the internal market in itself will not lead to greater social and economic cohesion we must analyse carefully the report's findings on the doubling of the Structural Fund to £2.8 billion to Ireland over the next four years. The report's findings are, firstly, that even up at £2.8 billion the Structural Fund will still represent less than 0.5 per cent of Community GDP. Secondly, since 1973 the Structural Fund's contributions to Ireland have failed to achieve any narrowing of the disparity between regional incomes and, thirdly, the increase in the Structural Funds does not guarantee that they will be most effective in the most disadvantaged areas.
The NESC report casts serious doubt — I will go further — it points up the fact that the present level of structural funding support for the so-called objective one regions will not create economic convergence or remove social disparity within the Community.
I agree with the Minister when she says that the social priority is resolving the problem of unemployment. It begins and ends there because many of the other social problems we have in this country all spin from poverty and difficulties that are a direct result of the lack of availability of jobs. The implications of this conclusion is that we will still belong to the slow lane in Europe, despite what the Minister had just said, unless immediate action is taken to target the Structural Funds directly to those areas and people it is intended for and, in the process, to achieve what has to be our goal, namely, to disquality ourselves from objective one status. That is for Ireland no longer to be among the most peripheral and disadvantaged regions of the Community. To put it in a nutshell, our goal must be that once the four years of the doubling of the Structural Funds are over — and hopefully we will get more than 0.5 per cent and a higher per capita proportion than has been earmarked so far — and the people in Brussels sit down and look again at the various regions within the Community, Ireland will no longer qualify to be classified as an objective one region. If that is so, we will all have done our job. At the moment we are classified among the most disadvantaged and peripheral areas in Europe.
There are many sectoral groups dealt with by the excellent NESC report we are discussing today and I will turn my attention to just a few of them in no particular order of importance. Confusion still abounds about our strategy, our drawing down from the doubling of the Structural Funds to the specific areas to allow us to compete on equal terms for free market access from 1 January 1993.
We need a coherent approach, an approach that is programme-based rather than project-based. We need infrastructure investment, not just a shopping list of individual capital projects. It must be programme-based and, as one economic commentator put it some time ago, we need investment that will light economic fires and not just put money in on a once-off capital project with the economic spin-off dying once that project has been completed.
Our entry to the European Community was sold to us in Ireland, above all, on the basis of the benefits that would accrue to our farmers and, indeed, the economic benefits from direct access to a market of 320 million consumers. I recall at the time going around to meetings, trying to persuade the doubtful and those who did not quite believe that we were doing the right thing, that as a small open economy, dependent on exports and agriculturally based, we had to be in with Europe. In 1971-72 and 1973 as we persuaded our colleagues, even then to most of us the price of not being in Europe was not one to contemplate.
There was also a commitment to removing the economic and social disparities, particularly in the more peripheral regions, and we talked about that in the early seventies. Today the rate of disparity between economic and social standards in this country and continental mainland Europe is as great as it was in 1973, notwithstanding the money that has come to this country from Europe. Farmers' expectations were shattered after the initial honeymoon period of a few years, particularly when we joined the EMS, and the green pound failed to be sufficiently price responsive and compensatory. The Delors package for the doubling of the Structural Funds to the backward regions — and I hope we will get far more than is indicated for us at present will probably be a once-off offer. If we do not get it right now, if we do not have the mechanisms in place for targeting the help to the regions that need it most and to the people who need it most, we will not get a second chance as full and equal partners in Europe post-1993 to resolve our problems.
There has been a perception, for some time perhaps, that the agricultural community are hard to please. When we were out of Europe, we had our problems and when we are in Europe, we have problems. We have problems with price supports and production controls, and if all else fails, there are problems with the weather. There is always some reason things are not right.
Apart from looking at it lightly, we should analyse the situation. Could the disquiet among the agricultural community be from the fact that they have seen their sons and daughters leave the land in droves over the last couple of decades? Twenty-five thousand of them have gone during the past four years. Could it be because the analysts predict that 60,000 farms will disappear in the next decade, before the turn of the century?
Even Brussels is concerned about the desertion in remote rural areas of this country. We look to our present commissioner, Mr. Ray MacSharry, who has a role in rural development as well as his agricultural portfolio, to ensure that the huge problem of rural development is tackled, and this is quite different to the commercial agricultural problems that we look to the CAP and to him, as agricultural commissioner, to resolve. Combating poverty is as much a rural as an urban issue and it must be clearly recognised as such. Could the disquiet in the agricultural community be because of the ever-widening disparity in income between the dairy farmer with a viable quota and all other farm enterprises? Could it be because of the declining margins in beef and the poor margins in pig and poultry production? Could it be because of the bleak future for our cereal and tillage farmers? Could it, perhaps, be because over 60 per cent of our farmers still have an income below £5,000? Indeed, 15,000 farmers qualified for farmers' dole in this country. We must use this golden opportunity presented with the doubling of the regional, social and FEOGA guidance fund by way of the Structural Fund, not only to close the economic disparity between ourselves and mainland Europe but also we must use it within our country between the different farm enterprises and different sections of society, and above all to ensure a future on the land for the backbone of this country, the family farm.
There are many of us who fear for the future of the family farm and what it may hold and reading this report our fears are not allayed. Is the concept recognised in Europe? In strict agricultural policy, it is not. One is talking about commercial and development farming there. The future of the family farm and the resolving of the problems in the family farm lie far more in social policy than in agricultural policy. Indeed, regional input will help in terms of infrastructural services, but I am afraid it is an area that because it straddles, if you like, two particular funds and two particular commissioners' portfolios, is not getting the attention it deserves. There are very few of us in this House who are more than one generation removed from a small family farm somewhere in Ireland. In any home in Ireland, either with one or both partners is only a generation — if that — removed from the land, and in most cases, from the small farm.
In relation to agricultural concerns, and this whole area interpreting Common Agricultural Policy and the changes in CAP that come before us weekly, I would like to put on record my serious concern at the treatment by the board of Teagasc of the rural economy section. This is the section of bureaucracy in Ireland that deals with and has the capacity to carry out our economic and social research in view of the rapidly changing CAP. We have no agricultural institute. We have decimated the rural economy section of Teagasc, the only section fit to interpret the rapid changes coming from Europe for our agricultural sector. Who is there left to advise, to analyse and to support the Minister in terms of the presentations he will make for the good of Ireland in this area? This is an area which we must look at again another day: I will not dwell on it at any length here today; I accept it is only of peripheral interest to the report we are talking about, but if we are concerned about rural development, if we are concerned about the family farm in the context of post-1992 Europe, if we have no agricultural economic institute in this country and if we have decimated the rural economy section of Teagasc, the only section where there were qualified people to advise us in this particular area, how are we to help and direct the future of the Irish family farm?
Under the Structural Fund's framework, as one of the most peripheral of the objective one regions, Ireland is classified as one single region for objective one status; we are region one as far as the Community is concerned. Bearing this fact in mind, I would like to direct a few moments to the less favoured areas directive and how by using the Structural Fund we can not only remove economic and social disparities between various regions and between different communities within regions but how we must look to the Structural Fund, particularly the FEOGA guidance section, to compensate Irish agriculture for the rapidly changing CAP.
As the various support structures, price supports and more production controls are put in place under CAP we will have to look to the Structural Fund to compensate Irish agriculture. Headage payments under the less favoured areas directives are paid from the FEOGA guidance fund. The present review, under the less favoured areas directive is being done by the economic unit in the Department of Agriculture and Food at the moment. We have had the field officers survey, the desk survey, the Land Commission survey. We will have it all on computer and eventually it will get to Government before Christmas with the recommendations as to which areas will be brought in under the classification of disadvantaged areas status and which areas will be re-classified from less severely handicapped to more severely handicapped. When all this is completed and with the Government before Christmas and when, some time in the New Year we have from Government their submission for Brussels in terms of the extension and reclassification of the areas of Ireland under the less favoured areas directive, only then will we know how we will be able to increase our draw down from the FEOGA guidance section. I favour headage payments above all as an income aid to marginal farmers or barely viable farmers or small farmers on marginal land, however one like's to describe the problems that exist on most family farms in most parts of Ireland today.
This again will be our last chance to exploit the opportunities, to ensure a future for all our farmers, not just our commercial farmers. I am calling again on the Minister to insist on the inclusion of the entire country in the reclassification of existing areas under the less favoured areas directive as part of the negotiations in terms of our draw down from the Structural Fund, as part of our compensation to farmers for the changing Common Agricultural Policy.
If, from the point of view of Structural Funds, the whole of the country can be considered as one region, an objective one region, that is, one of the most peripheral and disadvantaged regions, it is logical to pursue that same argument in discussing the less favoured areas directive we should then be treated as one region under it also. Why must we be redrawing borders now between marginal farmers and saying one is disadvantaged and one is not? How can farmers above the road be that different to those below the road? How can farmers one side of a river in Ireland be that different to farmers the other side of the river?
There are parts of Ireland that are affluent; there are towns on the east coast that one would not consider peripheral and disadvantaged in an economic and social sense, but still the whole country is being put in as one region under the Structural Fund because that, in the wisdom of those around the table in Brussels, is how they thought Ireland should be treated, as a single region. I am saying to the Minister to ask the Government to ensure that Ireland is treated as one region under the less favoured areas directive and the particular review under that directive that is going on at the moment. When it suits us, we are one region. When it suits us, we are peripheral and disadvantaged economically and socially, when we can get as much as we can from Brussels. I am saying it suits us on this occasion under the review of the less favoured areas directive to be also treated as one region and not draw borders around small areas in rural communities saying one is in, one is out, one will get headage payments, another will not.
We are a very small country in the overall scheme of things at the European table. If they want us as one region, and they are talking about the Structural Fund, if they consider us the most disadvantaged and peripheral of regions, I am saying that same criteria should apply to the less favoured areas directive. They should classify the entire country as less favoured under the directive. Areas that are already classified should be reclassified to more severely handicapped. We would have saved a lot of time running around this country with all the submissions that have come in from the different communities in rural Ireland, with all the work that is going on in the economic unit of the Department of Agriculture and Food at the moment. There will be a lot of heart searching at Government when it comes there, there will be a lot of cries for appeals from those sections that will be left out. We will be fighting in Brussels to pursue the submission when it eventually gets there, and it could be another year or two before we know the outcome.
Would it not be far more simple if we treated the country as one region, as we are treated under the Structural Fund. Then, through FEOGA, which is a source of funding for headage payments under the less favoured areas directive, we will also compensate farmers and give them an income aid that will not depress their production. We will give them an income aid in the Europe of post-1992 that will allow them to try to farm themselves out of their present problems and we will not be penalising them by reducing their headage payments if their income goes over a certain level. The problems with the farmer's dole and that type of means tested payment is that if a farmer tries to farm himself out of his troubles he automatically penalises himself by disqualifying himself for dole. The headage payment is a productive payment; the farmer is allowed to consider alternative uses of his land; he is allowed to farm his way out of trouble; we have a healthy, viable, rural economy and there is a future for the family farm.
It could be said that since our membership in 1973 of the European Community there have been winners and losers. Most of us welcomed Ireland's membership of the European Community at the time on the basis of the benefits to agriculture as promised at a time when our agricultural exports were almost entirely dependent on the British market. Community membership offered substantial price increases in the doubling of agricultural income and unlimited markets. They were the lines on which we sold it to this country. At the time — the early seventies — agriculture represented 50 per cent of total exports so the consequences were not to be underestimated.
Membership of the Community has turned out to be more traumatic then expected, especially for the sector we thought would benefit most, the agricultural sector. In 1972 and 1973 Irish agricultural prices rose sharply because of international scarcities; but then in 1974 there was a sharp reversal because of higher costs and chaos in the cattle industry. Prices quickly recovered up to 1978 and our farmers were at last realising the prices and income expectations of joining the Community.
If we look back and recall, in 1978 we became a full member, just as trouble in relation to agricultural surpluses raised its ugly head. However, we were not unduly concerned because at the time we rationalised that the lower profit margins could be more or less counteracted by increased productivity.
In March 1979 the European Monetary System was launched and Ireland joined. We did not expect this radical change in exchange rate policy to threaten agriculture. Again, we reasoned and rationalised that our inflation would have to fall to EMS levels making higher prices unnecessary, or that Irish currency would have to be devalued, giving us green £ increases to supplement prices in the Community as a whole. In other words, we still thought matters would resolve themselves to suit our situation. We were wrong. Inflation did not fall in 1979 and 1980, nor was the £IR devalued within the EMS because of the revaluation of sterling at the time. This spelt disaster for our farmers, with inflationary Irish costs and very modest EC price increases and, indeed, no green £ increase to bridge the gap. In those two years — 1979 and 1980 — all the increased price benefits since joining the Community were wiped out and prices for agricultural produce across the board were below the 1970 levels. Downward pressure on prices actually continued until 1986 when three factors combined to reverse our fortunes. First of all, inflation was at last under control. Second, there was an eight per cent devaluation of the £IR which caused green £ price increases here. Third, the stronger dairy and beef market resulted directly from cutbacks in production following on the introduction of the milk quota.
Presumably, from now on by maintaining our exchange rate within the EMS our real prices can expect to be in line with the EC average. There is no doubt, however, that the greatest tragedy to date of EC membership is the manner in which exchange rates operated against Irish agriculture after joining the EMS in 1979. This is not often recognised. If we had the same price experiences as other states during 1978 and to the 1986 period, agricultural prices would now be 26 per cent higher than they are. Farm incomes would be 50 per cent greater than they now are and agricultural exports would be worth £400 million more than they now are. I dwell on the agricultural sector without apology because it was in relation to the benefit to this particular sector above all others that we sold the membership of the EC to the people of Ireland and yet that is their story in the 15 or 16 years since they have joined. There are certainly winners and losers. I am afraid we got a lot of money directly and indirectly through different support structures and price supports, but the net story is that we were losers in those years relative to the situation we were in before we joined.
However, one may justly ask, if we had not gone in 1973 what would have happened to us, and there an even bleaker story can, in fact, be painted. So, even though our expectations were not realised since we joined Europe in terms of the returns to the farming community and our food exports, we would have had a much sorrier tale to tell if we had even contemplated not joining Europe at the time. The price of joining Europe, or at least the benefits from joining Europe, were not as much as we expected, but certainly the price of not being in Europe is something we could not have contemplated. Even now, with the wisdom of hindsight, we did the right thing. Europe is not interested in our unique problems. To some extent our negotiators are isolated at the Brussels table as indeed are the negotiators from all the other individual states. We must not forget that the agricultural industry sector is much more than the farming sector alone. The upstream input supply industries and the downstream processing industries all have a national value added which is equivalent to all that is generated on the national farm. The state of farming is directly reflected in these linked sectors and they prosper and decline in line with farming itself.
Notwithstanding what I have said, we have gained from the Common Agricultural Policy, if not to the extent we should have, even if we only consider what would have been if we had done otherwise. Our gains have been on two fronts, first, from the FEOGA receipts from the market support operations and, second, from the trade gains from being able to sell into the EC market — 320 million consumers — at protected European Community prices. In fact, the price of non-Europe, if we had opted for that — which none of us, certainly on this side encouraged back in the Seventies — farmers' relative incomes would be 15 per cent worse off than they are today.
The benefits of the Common Agricultural Policy to Ireland are being threatened by the very necessary efforts to reform it, to control surpluses and the cost involved in their subsequent storage and disposal, whether it is intervention, aids to private storage schemes, or export refunds. The choices facing us are effectively between price reduction or supply controls known as quotas. It is very hard to be definitive as to which would be the best road for Ireland to travel. There are different views as to what would be to our advantage. Price control is more damaging to our economy as a whole but, on the other hand, there is market interference with quota controls. I suppose if pushed on it I would have to opt at this point in time and, for a short-term gain, for quota controls. I know the free marketeers and those with a longer-term vision would reckon that price controls are in Ireland's greater interest. My worry is how we will get from the present system to a system where we would only have price controls as a method of controlling production. It would, indeed, let more younger people into the different agricultural enterprises. It would let more efficient people in. It would be far more competitive which, in the long term, may be of interest. There is for and against both systems and, indeed, that debate will continue.
There is another area we must look at and, indeed, be mindful that our economic performance in the last two decades is not solely a function of our membership of the Community; we must consider the two oil recessions, and the technological advances during that same period which have affected this country quite considerably. We must also consider the growing international anger at the EC agricultural expansion and the heavily subsidised EC produce on world markets. I refer to the whole discussion that is going on currently in the GATT round. This time next year this will be coming to a conclusion. So far as one can ascertain the only major bone of contention is in relation to the price support and indeed the whole support structure for agriculture within CAP at the moment. America and the CAIRNS group of countries are pushing to liberalise agricultural trade. They are particularly annoyed at our domestic and export refunds under CAP and indeed they want greater access to our markets. They consider our ban on the use of growth promoters in cattle to be a technical trade barrier and they continue to insist that there is no scientific or health reason for that ban. Indeed there is no evidence in that regard that growth promoters are damaging to humans on a scientific or health basis.
The facts are that the European consumer at this point is demanding hormone free beef. That is the regulation within Europe and it is causing difficulties I know for our colleagues in the United States but this, along with the many other issues, will have to be resolved before the conclusion of the present GATT round which will affect, quite drastically, the direction of agricultural policy within the common market in the years to come. Depending on who comes out on what side of the present argument at the GATT table we could have quite substantial changes in the Common Agricultural Policy in the years to come. Even without the pressure from GATT there is a general reduction in the support structures generally all round in agriculture which will have a direct effect particularly on Irish agriculture. We must be very vigilant and we must demand compensation through the Structural Funds, particularly through FEOGA guidance, for the removal of the support structures and indeed the price supports under the CAP over the next few years.
The control of agricultural surpluses had dominated the EC agenda since 1977 when the first steps were taken to resolve the problem. The process has continued since then but at a slow pace because of the strong resistance of agricultural interests. The imposition of the milk quota in 1984 was, however, a major achievement not only because of its immediate impact on milk production but because of its indirect effect on limiting dairy cow numbers and thereby beef production.
The major remaining commodity which has not been brought under control is cereals. There has been a US drought in each of the past two years and until this intervened effective control measures seemed unavoidable. The American drought has, perhaps, postponed action on cereals until well into the nineties. The immediate years ahead promise to be exceptionally prosperous ones for dairy farmers with viable quotas. In contrast, cattle farmers and pig and poultry producers are likely to experience even lower margins than those which have already prevailed. There is some light on the horizon in the pig industry but they have a lot to catch up with.
Down the road, cereal producers will have to face the adverse consequences of the surplus capacity. Upstream and indeed downstream activity in farm inputs, supply and processing, will be constrained by the limits in farm production. We have talked long enough and often enough about the benefits for our food processing industry of the extended European market, of the internal market, of the greater access to the supermarket shelves. If we limit farm production this will have a knock-on effect on our food processing. Some expansion will take place. The most critical issue in this country is the need to expand the beef cow herd, to produce more calves for beef production. There will be some expansion but because of the high capital and low profits involved the expansion is unlikely to be sufficient to offset the decline in dairy cows.
In recent times we witnessed rationalisation and the rapidly changing structures within the co-operative movement. When we look to the Stock Market quotations the various other manoeuvrings that have been going on I wonder if farmers are sacrificing long term control of their own industry for short term monetary gain. Again, there is a philosophy behind this that I do not know enough about to expound on here today but where is the whole philosophy behind the co-operative movement today? I wonder what Horace Plunkett thinks of what has been going on in the last couple of years.
Will we be left with what was intended in relation to the co-operative movement. They had to change. There is no doubt that some of their practices were as antideluvian as you will find in any time. They have to rationalise, they have to reduce their numbers but we must be sure that in the long term what they are doing is what allows sufficient farmer control which, if you like, is the very premise on which the co-operative movement was started. If not, perhaps we do not need it.
Perhaps we should be more honest. Perhaps by farmers totally relinquishing their control they are doing the right thing. If so, is it a co-operative movement, is it a co-op we are talking about any more? That is for another day to tease out in more detail but it is all part of getting Ireland ready and getting our processing sector ready for the internal market in post 1992 to ensure that they can compete with the biggest, brightest and most competitive there will be in Europe.
From the food sector point of view there will be extreme competition that they must be ready to avail of. They must be very vigilant in relation to quality, price and the service they give. They will need a European focus that is market driven and that will be a major challenge for our presently very fragmented food industry. We will see more joint ventures, partnerships, more rationalisation. Apparently in the Europe of post 1992 we will be talking about 100 major food companies in the Community each with an average sales of about £2 billion. These will dominate as will the multiples when it comes to the retail outlets. Our policy in Ireland must be to ensure that our companies are fit to compete with the brightest and best and that from a marketing point of view every help and advice is given to them to ensure their access on to as many as possible of the supermarket shelves and the shelves of the multiples.
While it is worth pointing out that our membership of the Community, as I have said, is not solely responsible for our economic performance we must ensure that those who will be leading the debate and be representing Ireland's interests during the current round of GATT talks are answerable to this House and indeed to the Dáil generally. Some time ago I was shocked to realise that at a round of GATT meetings junior Ministers were sent over to represent the country.
I have said that our membership of the Community will not be the sole function in relation to our economic performance in the years to come, as it has not been in the last decade and a half or so. The negotiations going on at the GATT table at the moment will have an enormous bearing on the future of this country as it will impact profoundly on the Common Agricultural Policy. We need assurances from the Minister today that representation at the highest level of Government will be given to our position and our negotiations at that table.
The Minister actually dwelt at some length on the EMU, the Economic and Monetary Union. That apparently is defined as co-operation in economic and monetary policy. EMU follows naturally on the creation of the Single European Market. If there are no barriers to the movement of money there cannot be different monetary or economic policies in different parts of what will then be a single economy. It would not make any sense. The ECU or the European Currency Unit should then become a full parallel currency. The ECU is being used already by the Soviet Union to fix prices on import contracts. This gives stability which will be increased even further if the ECU becomes a means of exchange with the status of parallel currency.
There are three phases in achieving EMU. The first involves all EC countries being involved in the exchange rate mechanism of the EMS together with greater convergence and co-ordination of economic policies throughout the Community. At this point the UK refuses to join the EMS until it has its inflation under control though it does now broadly support EMU. The first phase, having all the countries in the EMS, will be followed by the establishment of the parallel currency and finally the establishment of a Community Central Bank. This is quite controversial and we are looking quite far down the road and there is no need to dwell in much detail on it today. We must acknowledge the fact that that is where we are heading.
On 24 October when he was speaking on this motion in the Dáil, the Taoiseach said:
In my discussions with President Mitterrand last Friday, I reiterated our view that EMU could not work without convergence.
The Taoiseach was referring to economic convergence — EMU could not work without convergence. We read, however, in The Irish Times on 7 November last that at a meeting of Foreign Affairs Ministers on the day before, 6 November, Jacques Delors signalled that the establishment of economic convergence within the Community was not a prerequisite for the creation of monetary union. Our Taoiseach insists that economic convergence is a prerequisite for economic monetary union, Jacques Delors says it is not. Given the emphasis on the Minister of State's speech on EMU today — I welcome her emphasis on it — and the Taoiseach's other brief reference to it in the Dáil a few weeks ago, and the differences that have since appeared between the Taoiseach's view on EMU and Jacques Delors', we need a fuller explanation as to what the Government's true position is and what differences exist on this issue of EMU which, after all, is inevitable. There are differences between Brussels and the Taoiseach.
In the same report in The Irish Times the Minister for Foreign Affairs is quoted as saying that he is reaffirming Ireland's support for EMU based solely on the Delors model. The Delors model, apparently, considers that economic convergence within the Community is not a prerequisite whereas the Taoiseach says it is. We are further confused. Apparently the Minister for Foreign Affairs agrees with Jacques Delors but the Taoiseach does not. I ask the Minister, when replying to the debate to tell us whose line do we follow, what is the Government's policy in relation to EMU?
I notice, even though the Taoiseach dwelt for some time on indirect taxation, the Minister today did not give much time to it. This is a vexed question. It is perhaps one of the areas we have been aware of for some time impinging on us. There are questions all along — will the internal market mean that cars are cheaper, will there be VAT harmonisation? The debate has come down the road a little in recent times because we have had Commissioner Schrivener stating that she will not insist on equalisation of VAT bands or indirect tax bands throughout the Community states, if I paraphrase her correctly. We are now into expressions such as "tax approximation" rather than "harmonisation". This is a rather clever move on her part because if we are talking about an internal market with no barriers of any kind, the movement of goods, services, people and money, it will be in the interest of each individual State to ensure that their VAT levels or indirect tax levels are as low as possible so that they are as competitive as possible within the market. She has spotted that there is probably no need for her to tell us to reduce our top level of VAT to 17 per cent. If our neighbours are selling at 14 per cent and we are still at 25 per cent we cannot survive so we have got to come down. We will do it ourselves.
Similarly, the whole vexed area of VAT and indirect tax on clothing, food and the various other areas will be left to individual Governments' discretion if I interpret the present position rightly. If we do not impose it — I know there is a strong feeling in this country that we should not — we will have to make up the shortfall in revenue from somewhere else. Again, very cleverly, Madame Schrivener has left that to us and to the other individual Governments to make those choices for ourselves.
Perhaps the Minister of State could resolve a problem for me. What is this we read of suggestions that, even though the frontiers in Europe will be down, the frontier between the North and South of Ireland will still remain, that we will still have a land frontier and customs post? Is that factually correct? I believe the Danes will have a similar arrangement with their contiguous neighbours as well. In other words, we will have an internal market, no trade barriers, no fiscal or physical barriers of any kind, with the exception between the North and South of Ireland and perhaps between the Danes and their neighbours. I hope that is incorrect. I read it recently. There are 30,000 customs officers employed in the European Community at the moment. When will somebody tell them what their future holds? When will somebody indicate if we will need them in the future? We have them in Ireland. We have them in Rosslare Harbour. Apart from customs officers we have clearance agents. We have the Revenue Commissioner officials and nobody has indicated to them what the future post-1992 will hold. Is it not time we now indicated to them whether they will be needed, whether their job description will change? Perhaps they will be on coastal patrols, perhaps they will be on arms and security work, drugs, public health, plant and animal health. What is going to happen to the sanitary regulations post-1992? What line are we taking in all that area? Will we need these men and women who are now working as customs officials, and generally in the whole area of customs and import and export, at our ports of exit? Will we need any of them in the future? The Government are about to launch an AEP — automated entry processing — system for customs clearance and what they call DTI — direct trader input — also in the customs clearance area; there is a trial run for a computerised system involving millions of pounds scheduled for next year and it is to be introduced by 1991. How does that equate to an internal market with no barriers and no frontiers? What will they be inputting? Automated entry processing for what? Even if we could understand whether statistical data would need to be collected or whether they were just keeping an eye on the revenue that was flowing in and out of the different States or whatever, there is a huge area here where there has been an ominous silence. Will legislation be necessary for AEP? We need answers to these questions because there are different constituencies in our country, and indeed in other Community countries, who have been forgotten in the overall greater debate to the approach of 1993 and beyond.
In relation to cars the debate is over. We have speculated long enough, though all of us in our hearts and souls knew that the price of cars would not suddenly be reduced in this country to the mean price that pertains in the rest of continental Europe. Now we all know that VAT can be applied in the country of registration, in other words, the motor trade know where they go, so they continue as heretofore. We have waited a long time to be told that that will be the procedure. The motor trade waited a long time. In fact, the trade was distorted for a long time in the expectation that we would get half price cars.
The Minister mentioned the European campaign. There was some evidence about eight months to a year ago of efforts on behalf of the Government to make the different sectoral interests aware of gearing themselves up to take maximum advantage of the Europe of post-1992. I am afraid that, despite the Minister's assurances in her speech and the various committees and standing groups she refers to, there appears to be little evidence on the street, among the sectoral groups that should now be preparing, of the effort from the Government. Perhaps we could step all that up a gear because in other countries everyone is aware of exactly what the implications of 1992 will mean to them. They have been gearing themselves for the last three years. They have been gearing their education system, they have been gearing the output of their graduates towards the demands that will be made on them in 1992. As far as I am aware, we have not had the same effort here at all. It certainly has not been evident. The views of the different sectoral interest are that the effort has not been evident.
In relation to manufacturing industry, the European Community has impacted here extremely heavily. The removal of trade barriers to date has caused a major reduction in indigenous industry. Indeed, those that have survived are perhaps healthier, stronger, more competitive and have increased their exports dramatically but there has been a huge price to pay in relation to major indigenous industry. This decrease in indigenous industry has been coupled with the great increase in the number of foreign firms establishing here to achieve, if you like, a foothold in Europe especially with 1992 in mind. We welcome that. We welcome all the firms that come here, that bring with them certain skills and give employment to our people. At the end of the day it is all about ensuring that we have a quality of life in this country where having gone through an education system that will send our children and our young adults out into the Europe of post-1992 in a position to be able to use their talents, to be able to find jobs for their particular talents and qualifications and that those who choose to go abroad, who choose to go to Europe for experience, can come back to Ireland and find a job here if they wish to do so. The real tragedy of our emigration has not just been that we have no jobs or not suitable jobs or that our tax rates have been too high and so have driven people out. The real tragedy has been that there is no room for those who want to come back with the experience they may have gained elsewhere.
As an island nation we have always had to live to a greater or lesser extent with the problem of emigration. It has been exacerbated because of Government policies over the years at different times. It has been exacerbated by certain economic policies and by a certain callousness on behalf of different and successive Governments. The real tragedy is when the young people with their experience and with the benefit they could give back to our country cannot find a place back home when they want to come back.
We must be and — I borrow the phrase — pro-active in our approach to the Europe of post-1992, not reactive. The Ireland I want to belong to as a full and equal member of the European Community must not be part of the second lane in Europe. We must not be part of the slow lane in Europe. As far as I am concerned there is one lane in Europe and Ireland is up there contributing in an indirect proportion to our size to the formation of the Europe of the nineties. As I have said earlier, the planning, the programming, the reporting, the dissemination of information in relation to Ireland in Europe post 1992 will only be a success if it disqualifies us from the objective one criteria we are now in.
I would like to welcome the Minister of State, Deputy Lyons and earlier the Minister of State, Deputy Geoghegan-Quinn. I would like to congratulate her for what was a very comprehensive report to us on the NESC report on Ireland in the European Community. That publication has been available for two months approximately. I believe it will be seen as a very serious, responsible and authoritative document. It will also be seen as a very influential document which will be important in any debate on Ireland's role or on Ireland's future input into the Community.
It can be said in a broad way — indeed this is recognised in the NESC report — that if proper decisions are not made to correct regional imbalances then the opportunity to establish economic and monetary union will be seriously damaged. The aim of the Community should be to become the single most powerful economic unit in the world. If it makes the right decisions on the area of economic and monetary union, it can become a reality. Of course, central to this particular aspiration must be the development of policies which will improve standards right across all regions of the Community.
The structural funding that we have been debating will be vital in this area throughout the Community and for Ireland, too, it will be of vital significance. I have been of the view that despite the fact that there has been a lot of debate there has also been a lot of misunderstanding regarding the regional aspects of the National development plan and the Government's submission in support of our application for assistance from the Structural Fund.
The Government from an early date established that all of the 26 counties of this State would be treated as one region. This philosophy has never been in any way called into question by the Commission or by any of our European partners. This certainly represents to me a very sensible and a very logical approach to the problem. We have a population of just over three million people. In other European countries such as Spain and France there are regions with populations in excess of 11 million people.
Even though the concept that Ireland should be one region has been accepted and acted upon, the Government have gone a stage further on their own initiative without pressure from the Commission, and decided to draw up the national development plan to further break it down into seven sub-regions and to carry out extensive and detailed consultations with economic and social interests in the sub-regions. While nothing like this was required by the Commission, the Government decided this was the right way to do it. There has been general acceptance that this has been the right way to do it. This is in line with the firm definite regional policy implemented by the Government which includes decentralisation of the public service, the establishment of regional airports, roads, tourism and many other areas.
Our specific initiative in regard to sub-regional consultation was publicly welcomed by the Commission. They were impressed with it and they congratulated us. For the first time in the preparation of a national economic plan ideas for various projects and various developments were sought from every area. A proper structural manner has been established for subsequent inclusion in the overall national plan. I believe it was a right approach. It is wrong for anybody to suggest, as there has been some suggestions, that there was a lack of consultation at sub-regional level. This is not the case at all. Wearing my local authority hat, I can certainly say that many local public representatives were disappointed at not having an input into the working group. They were, of course, involved in the advisory group. The bottom line is that it has been a great success story. The total support to Ireland over the next five years will be in the region of £3 billion. That by any standards is a success story.
I do not wish to get political about this. The previous speaker introduced politics on a few occasions I would have to say to the previous speaker that the previous Government — the Coalition of Labour and Fine Gael — did precious little in regard to plans for the structural funding. My information is that there was not a piece of paper ready when the last Fianna Fáil Government took over. They were simply not in the picture. When Mr. Haughey came into Government he set about devising policies which were going to be appropriate to the needs of the future and in time his role in the whole bargaining of the structural funding will be acknowledged, not now but in time to come, as a real success story. Despite what Senator Doyle said, the fact is that we have got a very good deal indeed. I do not think it is economic spoof. What happened was practical, hard bargaining, well organised Government who went about their business at the highest level. There was some criticism of that. Of course Junior Ministers have to go to Europe but on this issue it was conducted at the highest possible level, at meetings all over Europe. Despite some criticism by the media, and by other political parties the fact is that for 5 per cent of the population we are getting 10 per cent of the fund. That has to be a success story. My criticism of the Government is that they are not telling the people the great success story it is. It is a success story because this will be the biggest development budget this country will ever see. It is proof positive that our system, our way of negotiation, was the best possible at the time and that the Government handled the entire negotiations in an excellent and competant manner. No, Senator Doyle, it is not economic spoof. It is a fact of life.
I criticise the Government for not standing up and telling the people of Ireland the excellent deal they got. Remember the north of Ireland got a mere £500 million. Some comparisons have to be made. I do not like making comparisons because we should stand on our own feet. But five per cent of the population has got 10 per cent of the fund. That, to me, is a success story.
In relation to the NESC report the analysis in the report on Ireland's economic performance since joining the Community focuses attention on how we as an economy and as a society have responded to the challenge that has been posed by our membership. In particular it focuses on our economic policy. It is an issue of critical importance in this context. Given that the Community is now firmly committed to greater cohesion between all regions of the community the NESC report evaluation of our performance to date gives us clear guidance for a strategy which will ensure that our policies and actions and those of the Community can achieve the state objective of cohesion. It has put us in very good light. It is clear that the Community have a high regard for the type of policies that we as a Government over the last two and a half years purused, the kind of Government we gave and the kind of confidence we have created.
I did not intend to comment on agricutlure but Senator Doyle referred to it at length. I know the Senator has a particular interest in this area. Having looked through and examined the NESC report the main thrust of it in regard to the whole agriculture and food area is the need for long-term policies to be decided at national level. However, the plain fact is that much of the decision making on agriculture policy takes place at community level. I believe that our Government will do and must do their utmost to have EC policies which are fully supportive of Irish farmers and which are very relevant to the problems of the Irish farming community.
The previous speaker referred to confusion regarding EMU. She talked about what the Taoiseach said, what Mr. Delors said and what Mr. Collins said. I agree that there might be elements of contradiction or confusion but the fact is that at Community level EMU is still at a very early stage. The ultimate form of economic union will be determined by much detailed negotiations which have yet to take place. For that reason the findings in the NESC report are obviously timely and very relevant. When the time comes the Government will have a very positive approach to EMU and will work for its accomplishment.
On the social dimension which has been referred to briefly by the previous speaker, NESC consider that the development of the single market merits considerable and more urgent attention, that this dimension is especially significant for small, less developed economies like Ireland and that the active development of specific policies which are implicit in the social dimension would contribute to the stability and the cohesion of the Community as a whole. I would agree that this whole social dimension is of vital importance to this country. Certainly for us the most important social dimension is the creation of sufficient jobs to meet the needs of our people. As a Government we have stressed this crucial aspect in the past. We will have to continue for a long time to do so. Our priority is to translate the economic growth into increased employment.
The Minister referred to the French proposal to initiate ministerial discussions on employment. I am pleased that he indicated that this would be continued, as I would anticipate it would be, by Deputy Haughey when he succeeds to the Presidency on 1 January. This French proposal is a very important useful initiative. At the same time we want the Community of 1993 to be one in which conditions of employment will be further improved. The last link in the chain of economic recovery is the creation of jobs. There is evidence for that in England and other countries.
The Irish Government have performed very well to restore the kind of confidence that is necessary in the economy to create jobs. There is much evidence of this over the past two and a half years. We have learned from the past. We adopted a policy of reducing current Government expenditure which, in turn, brought about lower interest rates and we had a low inflation rate. Admittedly they are going up somewhat now but the very thrust of the previous Government's work and their commitment to improving the public finances was important and will have beneficial results in the future for this country in the area of job creation.
A vital question for us will be in the area of harmonisation of indirect taxes in the Community. NESC suggest that without frontier controls we would be forced by market pressures to move to the UK excise and the UK VAT rates. This I would regard as being a worrying feature of the report. It would be very serious for us. It could result in an annual loss of revenue of something in the region of £600 million. Certainly if this were the case, it would play havoc with our economic strategy; it would play havoc with any attempt to carry out tax reform and it would generally damage the economic prospects for this nation. We must be allowed to continue as we have been doing. The Government should be endeavouring to do this, to continue the present economic policy which is, I believe, very fundamental, the very basis of our recent economic recovery. The Commission must recognise our position and must be informed at every opportunity of the real problems that this could present for us. They must tackle this problem and bring about proposals which will allow us to benefit from the events of 1992 and to continue with the kind of principles of economic growth which we are at present enjoying. It is a lengthy, important report and one could talk on it for a very long time indeed.
I would certainly like to welcome what we have received from NESC and to congratulate those responsible for bringing out this important report. It is a very complex matter and issues raised are very complex indeed. They have analysed it in great depth and I believe that it will form the basis of much serious discussion in the future in the European Community. I congratulate them. It is a serious attempt to examine this problem and certainly it is one that will help to generate much debate on this important topic for Ireland in the future.
I welcome the opportunity to speak on this debate concering the NESC report regarding Ireland's performance in the European Community. I would like to start by complimenting the National Economic and Social Council on this report. We have been a member of the Community since 1973 and it is certainly time to take stock of where Ireland stands in the context of the Community. I regard the document as a remarkably fine production which can lead to substantial debate.
Having said that, NESC is not the Government. I think there is a tendency in recent years for people to believe that Governments are opting out of Government and that these expert committees are effectively the Government. Of course, they are not. This is simply a basis for discussion and there are some conclusions with which I would take issue.
The report deals virtually entirely with an economic commentary. There are other aspects of Ireland's involvement in the European Community which it could have addressed within the context of the terms of reference set for it by the Taoiseach. We could talk about a lot of psychologically issues; the advancement of politics in this country, the advantage psychologically to us all in the political arena and in the Civil Service through involvement in a much wider arena than prior to 1973 but we are not going into that today.
The report is somewhat negative in tone because it points out that despite membership of the Community and despite the funds flowing to the country from the Community there are still severe problems, that in most sectors under review we have not benefited to the extent that might have been thought to be the case before we became a member in 1973. Having said that, I do not believe the report's negative conclusions in some areas should detract from the merits of being a member of the Community because obviously negative thinking might beg the question as to whether this country should be a member of the European Community. Of course the negatives, if you look at it in that regard, are appalling. Where would this country be today without the Common Agricultural Policy support price mechanism, without the funds coming in through the Social Fund, without the limited funds in the regional sector and in the industrial sector? It is not just a question of price mechanism or subsidies.
The very fact that we are a member of a Community with a population of 320 million people to whom we have duty-free access has been the springboard for major industrial development which has occurred in this country in the past 15 to 16 years. It is probably pertinent as well when we look at our problems today to remember the kind of problems this country had in the fifties, sixties and in the early seventies, the appalling level of emigration we had in the past, the type of protectionism by which we tried to build up industry, especially in the textile sector, most of which folded prior to entry to the European Community, the huge numbers leaving farmlands and moving into the cities. Putting matters into perspective, we are not all that badly off and the right decisions were made by the Government prior to 1973 in relation to entry and in the referendum.
The report points to the earlier benefits we had from 1973 to 1980 but in relative terms it is able to point out that while gross domestic product in those few years increased by about 4 per cent, measured in other terms we were into a diminishing situation. While gross domestic product might have increased by 4 per cent, we had much lower levels of growth in gross national product. In 1973 to 1979, it was 3.4 per cent as against 4.3 per cent in the previous decade. Gross national product when adjusted for terms of trade was only 2.2 per cent as against 4.8 per cent in the years 1960 to 1973. Gross national disposable income was down from 4.9 per cent in the sixties to 2.8 per cent in the mid-seventies. Thus in other regards there were huge problems in this country at the time of entry.
We were probably unfortunate that our entry occurred at the time of the oil crisis which obviously disturbed what the wealthier States in Europe might have agreed to at that time. I think a particular sufferer was the Regional Fund because those of us who, like me, live in the west had great expectations at that time that involvement in Europe meant a fundamental commitment to poorer regions, that this would lead to a major shifting of funds into the regions of the Community such as that in which I lived but, of course, that never happened. That was one of the major disappointments and that is an issue which I will have something to say about later.
The report points out that unemployment increased in this country from 66,000 in 1973 to 100,000 in 1978 so we are still experiencing major problems. In the industrial sector, the report takes a fairly negative view of things. We have had few of our expectations realised. We have still had the major closing of industries in the country. We have had very little indigenous industrial development, if you compare it to a country like Finland, for example, which was decimated in the Second World War, on which war debts were levied, which has poor climatic conditions, and which today is one of the most thriving countries in the world. They have had laws in the industrial sector which would not permit industrial investment in Finland by companies from outside unless there was a majority Finnish shareholding in such companies.
The contrast with what is happening there and in this country is very sharp. We have very few indigenous Irish manufacturing companies. Even the major Irish manufacturing companies, the major achievers today which are Irish based and have some facilities here, are achieving the vast proportion of their growth abroad, and some of them in the context of policy simply do not want to invest in this country because of some of the problems that obtain here.
Of course, we have had industrial development as a consequence of European Community membership. It has been very substantial. Where I live we are beneficiaries of major foreign investment. It is very good to see and these companies are very welcome but there is very limited Irish equity participation in the industrial sector as a consequence of this policy. NESC reports in particular that where it had been thought originally that major foreign investment would become self-sustaining and would lead to complexes of linked manufacturing activity, this has not really occurred. Again it is part of the problem. If you have a head office in New York, in Tokyo or in Paris and if the pinch is felt, the subsidiary in a particular country such as Ireland can suffer. It is not all rosy in the garden in that particular sector.
We have very strong structural problems here still. The report refers to the public debt in this country as it relates to other countries within the European Community. It points to the fact that the Irish public debt is double the per capita average in ratio to GNP, it is the second highest in ratio to gross national product in the entire Community. We are standing at 118 per cent. Next to us is Italy with 96 per cent and the average in the Community is 60 per cent. The public debt in this country is double the European average. This, of course, presents problems for the Government and those of us in politics in the country. It points to the disparities in gross domestic product. In 1988 in gross domestic product we held 52 per cent of the European Community average, again against the background where Denmark were on about double that at 109 per cent and where in the entire Community only Portugal and Greece had a gross domestic product of European Community average of a lesser level than this country.
In the development of the internal market the report refers to taxation and to the necessity for rationalisation. I think this is a huge factor inhibiting development in this country at the present time. The closest link we have within the Community is with our neighbours in the United Kingdom. What we have developing in this country at the present time is a huge voluntary emigration in addition to involuntary emigration because of the huge disparities in personal income tax levels on these islands. It reaches the point where certain people working in certain sectors would want to be outstanding patriots to leave well paid jobs across the water where taxation levels are running at about half the levels that obtain here. Unless this Government and future Government take very strong measures to rationalise this, there is a huge disincentive built into the system which will mitigate, in my view, against the development of this country.
The situation is very serious in the west at the present time. The development of Knock Airport has been a huge unqualified success. One of the major factors of its success this year and last has been the enormous level of emigration from the western counties to England, Scotland and Wales. I applaud the fact that that airport exists because it is leading to a much more palatable type of emigration because for many of our people it is the time spent travelling to the west of Ireland from London rather than money, that is important. Now, they can come back four, five or six times a year instead of once a year or once every two years. That is a very healthy development. It is reaching the stage in the most practical terms, where for large numbers of people who come from my area their effective capital at the moment is London, not Dublin. They are closer in time to London and that is where the job markets are and that is the base to which they look. They see London more often than they see Dublin, Dublin might be the political capital as far as they are concerned but their economic capital is London. It is deplorable that this is happening to the extent it is happening.
Concerning the agricultural sector, the report stresses the fact that if you look at price mechanism or if you look at price support across the board, or in the regional sector, or the social policy sector, or the industrial sector, or the agricultural sector, the outstanding bonus for Ireland, the huge unmitigated bonus where we are concerned — although some of our partners in the Community might not agree — has been the price support in the agricultural sector through the Common Agricultural Policy. It has been of great significance and has had profound significance for the rural community in this country allied to the market stability of guarantees of markets for produce which as a farming community we did not have before. While I welcome the type of support which we are receiving nationally, given my background in west Mayo where the average size farm is about 20 acres, I see the Community with more warts than people living in Meath or north Cork or Wexford might do for example. I can see the continuing problems we have in many regions within this country.
Those of us who have contested Seanad elections have travelled the length and breadth of this land, and have gone from places like Dingle or Westport, and when we go on to the good grass, we see great wealth. We welcome that coming into this country. Having said that, this report refers to the fact that what they describe as the most significant problem in the agriculture sector in Ireland is the persistance in low incomes. There are huge anomalies here. We have globally huge sums of money coming into this country annually, but we are getting far from even distribution due to the nature of the funds. They go on to point out that the disparities in income in the agriculture sector instead of narrowing have widened since 1973. What this means is that for the smallholder on the 20 to 30 acre farm, instead of European Community membership being good for him in relative terms, a huge gap has developed between the type of income he can earn on that small holding and the income that can be earned in many other parts of this country. I have to submit that that is a very unhealthy situation.
The report refers to the persistence of low incomes and the narrow base of the progressive sector. It goes on to say that this reveals the existence of very severe structural and other problems. It is because of these structural and other problems that you have this haemorrhage of emigration from the west of Ireland continuing today unabated and apace. The reason is that when you analyse it, and when you analyse where the price support funds in the agricultured sector are going, all of the increased output has been provided by about 25 to 30 per cent of the farms. This is a staggering figure. When you analyse what is good about membership of the Community, when you look at the price support coming in and when you see the huge proportion of price support coming in a specific sector and when we find, in an analysis of the rural community, that the vast bulk of that has been going to 25-30 per cent of farms, there is reason to concentrate on what is happening in the regional policy sector for these structural reasons.
The report points out that agricultural support per farmholder is very limited— and, again, it is for the reasons I mentioned. It is interesting to note, as the report does, that agricultural support per farmholder here, despite what we are told about the level of support for Ireland, the level of support for agriculture and the breaking down of the disparities, is on average well below the level of support going into the Netherlands, the United Kingdom, Denmark and Belgium. This is because price support is coming in by price mechanism only and we have not addressed the structural problems.
When one talks about structures one is going into the whole area of regional policy, and in the remainder of my speech I wish to refer to these regional policy issues, on which I have quite strong views, some of them political. Senator Fallon accused Senator Doyle of talking about politics and then went on to talk about politics. But this is a political Chamber and, as long as we discuss matters in good spirit, we have to talk about politics, because we were elected to this Chamber to talk about political issues.
We are talking about 1992 — the leadin to an internal market, the removal of physical barriers, the removal of technical barriers and the removal of fiscal barriers. NESC point out — and it is salutary to note this — that before we ever get into an internal market, or before we ever approach what is supposed to happen in 1992, there are huge discrepancies developing; and already, without ever getting into that, regional disparities in income in the Community are at least twice as wide as in the United States of America. USA is quite comparable to the Community, because it is its own community with an amalgam of states; it is a large size, with a large population, and some very poor regions with low income. Despite that, disparity in incomes in the European Community is more than twice as large as in the United States and the differences in unemployment levels are three times as wide.
Against that background, we are going into the internal market. With the removal of physical barriers, technical barriers, fiscal barriers, with the building up of infrastructural improvements, which are two-edged weapon — if you build up great transportation facilities to the south-west, the west and the north-west, you are building up infrastructure to bring goods in as cheaply and as easily as it is to get them out — discrepancies will widen. The report goes on to mention that the advent of the internal market will facilitate the movement of resources to areas of greatest economic advantage, which means to the centre again. The completion of this internal market will widen existing discrepancies between the regions, will widen existing discrepancies between the regions of the Community.
With two-thirds of the farming community not benefiting hugely from the funds coming in, with massive disparities in income already, at least twice as wide as the United States, the difference in unemployment being three times as wide and the fact that the internal market is going to heighten these huge existing discrepancies, there has to be a balanced policy from the Community. It is for that reason that the Community is supposedly committed to a structural fund. The Structural Fund is dealing with structures, with people, life styles, incomes, pensions and so on; but the problem is that this is the fund which is going to help break down these barriers. Those of us who live in the lesser developed regions of this country must be very wary of this internal market unless we see the Community building up the kind of structures that can help our regions to survive in this future European world. From what we see in the context of policy there is no evidence to suggest that there is a strong political will within the Community to help the regions similar to that which I live in to a fraction of the extent that we would wish.
NESC goes on to point out that, in so far as the Regional Fund is concerned, the scale is tiny. In the context of the Community's gross domestic product the funds committed to the Regional Fund at present are 0.07 per cent of the gross domestic product of the Community. It is infinitesimal. It is quite unacceptable if this is supposed to be the solution structurally for these regions of our country which are going to face huge problems with the advent of 1992 and the internal market. The report quotes from a report of the Community in 1983 which states that "the effectiveness to remove these disparities because of these limitations has been severely limited".
In relation to the regional policy sector, in which I have a particular interest, and to what might happen within the Community, there is a new approach within the Commission, within the regional sector, which I welcome. I am one of those who welcomes a far greater input in the decision-making process by the Community and a lesser input into decision-making by a national Government here in certain sectors such as regional policy. I say that in the most apolitical sense, regardless of what Government might be in, because I think that in some of the lesser developed regions we will get a better deal with a bigger European input. The new European Community approach on regional policy is under five main headings. The first is to seek a more active European Community role. Unlike Senator Fallon, I am not going to throw bouquets to the Government for their marvellous activity in getting regional funds and all that goes with it. I am not just saying this because Fianna Fáil are in Government, but that type of complacency is unhelpful to us in Brussels. If people in Brussels get the idea that we are all patting ourselves on the back here for a marvellous job being done, that is not much of an incentive for the people in Brusells to come up with more than is on the table at present. I would like Commissioner Millan to know that I welcome a more active European Community role in regional policy.
The second point they seek within the Commission, and this has been agreed by the Council, is a reduction in national quotas and more distribution of funds by the European Community rather than their being based on national priorities. I would like the Commissioner for Regional Policy to know that, as an Irish Senator, I welcome that also.
Thirdly, they seek that funds should go into development programmes and not simply projects — and I welcome that too. The fact that programmes have not been adequately developed is one of the major issues of contention at present between the European Community and the Government.
They also seek that the regional impact of other Community policies be monitored and taken into account. I welcome that approach because on analysis, and as somebody living west of the Shannon, I look at where the agricultural money is going, where the Social Fund money is going, that rural areas are designated as eligible for top regional funds and that major funds are going to the cities, which I welcome, but I want to speak on issues in relative terms. In Counties Donegal, Cavan, Monaghan, Longford, Mayo, Sligo, Roscommon and west Kerry, any analysis in the broadest sense of where Community moneys are going will highlight special needs. Therefore, I welcome it for that reason.
The fifth point they make, which again is a policy statement, is that regional development programmes should be integrated and that they should build up as a result of consultations between the Community, national Governments, sub-national agencies, that, collectively, it should be co-ordinated and that the resources should be concentrated in the most disadvantaged areas. I want to tell the Commissioner for Regional Policy that I welcome all of these approaches.
This leads us to what is a contentious issue, the present approach in this country to future regional fund policy based on these yardsticks. Successive Governments have designated all of this country a single region to avail of regional funds — I would take issue with that, but I do not want to develop the point unduly here. I would submit that, if you build up two or three other regions where there are gross disparities and all that goes with them, it is a useful levering process to highlight particular problems. As well as that, the major present contention is that, in so far as funds for Ireland under regional policy are concerned, the Government in March produced the national development plan and this plan was the basis of its submission to Brussels for support under the sector.
The Commission have been stressing that what they seek is sub-national input into such plans and the following up of plans by the submission of programmes which would be detailed and integrated in the regions. It appears that, Ireland's plan was submitted to Brussels but the programmes were never submitted. It seems that the structure of decentralised Government in this country is very different from that which obtains in most other members states in the Community, where we have an extremely centralised administration in the Department of Finance, the rein is held very tight and there is extremely limited input from the regions into these plans and programmes.
I believe the consultations were quite inadequate. Seven sub-regional reports, I gather, were collated subsequent to the plan. My understanding is that these sub-regional reports, which might be in the nature of programmes, were not even sent to Brussels. What made people in the regional policy sector irate was that they got an initial plan which was entirely global but which did not break down sufficiently specifically or in an integrated fashion what it thought. These sub-regional reports were produced but they have not even gone to Brussels. This was the major contentious point in recent negotiations, negotiations which are not yet concluded and which the Minister referred to as being close to conclusion.
The Council's decision in this area involved a particular effort being made to assist the least prosperous regions within the list of priority areas: the objective of the Structural Funds to promote, develop and structurally adjust less developed regions; the converting of regions of industrial decline; the combating of longterm unemployment; the facilitating of occupational integration of young people and certain structural adjustments in the agricultural policy. My own view is that in regions such as the west, where you have a lower income level, structural farm problems, massive emigration, etc., there is scope for much more consultation than is taking place at present. I applaud the fact that the Commission is seeking to negotiate in regard to structures in the regions. I deplore the fact that these recent negotiations were apparently attended by chairmen of county councils and nobody else. I regard that as entirely inadequate. It is by developing integrated plans that you can highlight the problems in such regions and it can lead to much more funding coming into these regions.
The question of constituting this country as one region has been a matter of debate. The Taoiseach, in his speech of 5 October, referred to it. He referred to discussions he had with the President of the Commission, Mr. Delors, and he put words into Delors' mouth. He suggested that he fully agreed that, in the case of such a small country as Ireland, this system of national programmes we have adopted for sub-regional monitoring co-ordination was by far the most effective, if not the only way to successfully organise the implementation of a national development plan. But nowhere do we find President Delors on the record with such a statement.
We have seen comments recently in a publication on regional policy by Maurice Doyle, Governor of the Central Bank, former Secretary of the Department of Finance, where he in particular points out a different route: that the need for aid should be determined on the basis of regions, not of countries, and that aid should be concentrated in the poorer regions. He goes on to point out that there is no reason, simply because we are a small country, that we cannot break down our regions. These programmes which have been developed have been global inputs which relate to global funding for tourism, global funding for infrastructure, global funding for all the support areas. I think this is a huge weakness in regard to the west of Ireland. Many countries as small as Ireland have distinctly different plans.
I am saying this in a very apolitical sense. Some years ago I was involved in a policy document which would have led to the establishment of a western development board. The Government of 1973-77, which could have and should have done that, did not do it; so I am being as critical of my own party in the past as of this particular Government. Again, even in recent interviews, the Commissioner for Regional Policy speaks about this as well — the progress specifically related to the regions as distinct from countries. Despite these huge problems — structural problems, small holding problems, massive emigration problems, there is no setting out by this Government of the uniqueness of the west. That is not being done and should be done in the future.
I welcome this report, which gives us all scope for debate in coming weeks. I am glad to play my part in it. Again, I would like to compliment NESC for having produced it and I would like to compliment the Taoiseach on taking the initiative for having it commissioned in the first instance.
Cúis áthais dom, an chéad deis cainte a fuaireamar sa Seanad, gur ar an ábhar seo atá sé, ábhar a bhaineann le chuile dhuine sa tír agus a bheidh an-tábhachtach don saol a bheidh ag na daoine a thiocfaidh in ár ndiaidh. Tá mise ar dhuine de na daoine sin a raibh faitíos orthu i 1973 faoi na cúiseanna a raibh an oiread sin deifir orainn dul isteach sa Chomhmhargadh. Bhí faitíos orm go rabhamar, mar phobal á dhéanamh le fadhbanna a sheachaint nó a chaiteamh uainn seachas le deiseanna a thapú. Sílim, sa tuarascáil seo, go bhfuil cuid acu sin le feiceáil go soiléir sa mhéid atá le rá. Ach é sin ráite, creidim go bhfuil todhchaí maith romhainn má thugaimid aghaidh ar na fadhbanna atá againn agus, chomh maith leis sin, ar na deiseanna iontacha atá sa saol, go mór mhór leis na hathruithe móra teicneolaíochta a tháining ann le cúpla bliain.
Mar sin féin ní bhaineann an cheist seo, dar liomsa, díreach leis an gComhphobal Eorpach. Baineann sí chomh maith leis na hathruithe móra domhanda atá tar éis tarlú le cúpla bliain anuas.
We are, in my view, not only facing a situation of rapid change within the European Community, which initially had six members, but we are also facing a rapidly changing world where barriers, and particularly trade barriers, are coming down across the globe. I welcome this because I think that in the final analysis this globe and this world of ours is too small for unnecessary barriers. I particularly welcome the trends within the European Community and worldwide to standardise technical standards and specifications, whether it be for the simple items like plug tops or whether it is relating to computer standards and so on.
The world we live in is one of rapidly changing technology and particularly in transport. This has opened up new frontiers. Nowhere is this more evident than in the massive changes that have taken place in eastern Europe in the last few years — changes that, I think, none of us could have foreseen a few years ago. I visualise not only the breaking down of barriers within what is now the European Community but also large changes in the distribution of our trade with these countries.
As I have said, the Community has changed and is changing. I think that the Community that we now are involved in is very different in nature from the Community we joined. We have to ask ourselves, how have we responded as a nation, not only Government but people, to European membership. It would be a fair comment that in certain ways we have responded positively, but at times we have seemed to have a little of the begging bowl mentality and we have not believed in our own ability to challenge and compete as equals in this Community.
Another factor that comes out in the report, and it is very important, is the fact that the EC itself has changed. We also have to face the fact that changes in the EC approach to things have had a huge effect on the Irish economy in the past 15 years. None of us foresaw on membership of the EC that by 1989 we would have seen quotas placed on such things as milk and fish and that these would particularly hit a small island nation which is particularly dependent on these products for its wealth. In this matter it is very important, too, to stress the fact that when these quotas came in various countries in Europe were frozen at unequal levels of development, that the stage of development we were at at that time was not the same as our partners and that this inequality has to be addressed in the future if the aim of cohesion is to be achieved.
As we face into 1992 and the open market we have to look at the task facing us in a very basic and practical way. I have been for the past 15 years involved in the productive sector, involved with both agriculture, industry and forestry and in that time I have learned a lot of hard lessons. In the first place, our industry and our agriculture must be competitive within themselves in terms of cost, quality and marketing. As well as that, we must be able to compete in terms of our cost structures, and those cost structures particularly which have a large Government influence. In this connection I would refer specifically to energy costs, where we have high taxation, to labour taxes and labour costs, the costs of telecommunications. It is very important that these costs are made at least as competitive; particularly in relation to transport costs it is very important as an island nation — in fact, we will soon be the only nation state in Europe completely cut off from the market as regards direct access in terms of land, or a bridge, or a tunnel. It is very important that this question of transport costs be addressed.
We also need to make sure that we make the best use possible of all modern technology because, as an island people, and particularly for us in the west of Ireland as a people far removed from the market, we must use all the modern communications technology and computer technology to enable us to make up for the disadvantages that we suffer because of our location.
We will also have to ensure that the various services to industry, particularly banking, legal and insurance, adopt practices and methods that are not only as good but are better than those elsewhere, because in that type of approach will lie our future.
When we are talking about the fact that we will have a local market of 300 million people we should not forget that because we are an island, our local market will basically still consist of the people of this island. One of the things that we all look forward to is the dismantling bit by bit of the customs tariffs and customs border within this island. We must ensure more and more in the future, just as barriers are coming down all across Europe, that the barrier within this island disappears and that the differences in the economies of the North and the South disappear and particularly that the costly duplication in services that we now have also disappear.
As I have said, we face a daunting challenge because of our location but if we identify our strengths, identify those things that we are best at, we have nothing to fear for the future. We must particularly ensure that agriculture, forestry, fishing, tourism, and the high-tech and information industries will become the basis of our strength in Europe. In these things we have natural advantages. In these things the disadvantages of our location are minimised. We have a super opportunity, by reaching high efficiency and high quality, of competing particularly in these industries. It is very important for us to insist that the jobs be brought to the people and not the people to the jobs.
This now is possible in a way that maybe was not so 20 or 30 years ago because of the advent of modern technology. We have all seen — I think with some amazement — the possibilities of computer link-up through the telephone which allows us in remote places to provide services that would not have been possible even ten years ago.
I would like to say a few words on the question of cohesion and subsidiarity. I must say that I disagree vehemently with Senator Staunton on the statement he made as regards approaching the EC or national government.
Debate adjourned.
An Leas-Chathaoirleach
When is it proposed to sit again?
Mr. Farrell
At 2.30 p.m. on Wednesday next.
An Leas-Chathaoirleach
There is an adjournment matter to be dealt with.