Senator Howard is in possession, He has 13 minutes left. After that we move to Senator Dardis, and then to Senator Pat Upton. They have, as the opening speakers, 30 minutes each. All other speakers after that have 20 minutes. Senator Howard, please.
European Economic/Monetary Union and European Political Union: Statements (Resumed).
I began my contribution the last evening when the Minister was here and I raised certain points with him and I hope to develop those points. However, in the Minister's absence, I find I am at a disadvantage.
I appreciate your views on the matter. I cannot give any cause to the House of the difficulties that are confronting the Minister at the moment. If the House agrees we can suspend the sitting until 11 a.m.
Maybe the House is due some explanation as to what has happened?
I am satisfied the Minister is not obliged to give an explanation to the House for his inability, for whatever reason, to be here.
No; the Minister cannot give an explanation because he is not here. That is quite simple. Maybe the Government side could tell us what is happening?
I do not think the Government side would be appropriate in making any excuses on behalf of the Minister.
Perhaps I could ask the Leader of the House, through the Chair, what is going on, where the Minister is and if he is due to come here?
I think the best thing to do in the circumstances is to suspend the House for ten minutes until 11 a.m.
I do not agree to that. This is happening far too often. I thought this sort of rot had stopped — that we keep sitting and no Minister is available. The House is due an explanation if no Minister bothers to come in. It is not good enough.
The experience of all of us over recent months is that Ministers are here on time and on a regular basis. The situation yesterday morning with the Minister for Education, Deputy O'Rourke, was that she suspended a very busy schedule and spent quite a considerable amount of time waiting to come in here. In the circumstances in which we find ourselves now, we should not attempt to misrepresent the very severe and difficult tasks that Ministers have to undertake constantly. If the House would agree to suspend the sitting to 11 a.m. then we might have some opportunity of making progress. I think there is a general agreement to do that.
I do not feel there is a general feeling of agreement to do that. I do not agree with that for one moment. It is outrageous that this keeps happening. I do not agree for one moment that this is an exceptional occasion. It happened very often in the last session and it is happening again. The House has to continually suspend its business without explanation——
Just because you have found a vacuum in the day, Senator, I am not going to allow you an opportunity to engage in a debate.
I did not find a vacuum; the Government found a vacuum.
The House is suspended until 11 a.m.
Sitting suspended at 10.55 a.m. and resumed at 11 a.m.
I welcome the Minister to the House and thank him for making himself available at short notice.
Before Senator Howard begins, may I put on the record that the Minister, Deputy Daly, had nothing to do with the fact that we had nobody here this morning. I hope he will accept our position on that.
I would like to welcome the Minister. I am glad to see my fellow countyman here and I am sure he will take careful note of my contribution. I was in the midst of developing a point here on the last occasion when we had to adjourn the debate and, consequently, I lost out. I felt that the point I was making needed further clarification.
I was saying that progress towards European Economic/Monetary Union and the Single Market is progressing on target and is irreversible. In that context I wanted to look down the road over the next decade and to raise certain questions as to how the Community of Twelve might develop and to try to relate to that the implications of changes that have been taking place over the past year or so in Eastern and Central Europe for the present Community and for Ireland in particular.
I referred to a recent visit by me and others to East Germany and a subsequent visit to the European Commission in Brussels. During the visit, particularly to East Germany, dealing with people of influence in the political and economic fields and looking at their projections, I got the impression that what I would describe as a new industrial and economic centre or powerhouse of the Europe a decade down the road would be centred on a grouping of countries that would perhaps comprise the new Germany and countries like Switzerland, Austria, Czechoslovakia and Hungary, with Poland coming in as an afterthought but an inevitable thing happening there. These views were being advanced despite the fact that the countries I have referred to are not members of the present Community. In the case of Austria, there is an application from it to become a member. In the case of Czechoslovakia and Hungary, there are indications already that they are interested in becoming members and this is being received positively in Brussels. It may never happen in the case of Switzerland.
The other Eastern bloc countries are regarded by the people I was talking to as being a long way from qualifying for membership, countries such as Bulgaria, Romania and Yugoslavia, pending progress on political development in these countries. The others I mentioned are there and there is a tendency by individuals of influence in the political and economic fields to welcome them.
In Brussels I found that there was also an acceptance that that progress was inevitable. I also found in Brussels that they had already engaged in calculating the cost of reconstruction of these former Eastern bloc countries. We were fortunate enough, so far as the implications for Ireland are concerned, that in relation to what was East Germany the economic resources were in West Germany to look after the reconstruction costs there. The other countries I mentioned will require enormous funding. The calculation would appear to have been already done in Brussels. In fact, the reconstruction costs have been listed under a number of headings. Food aid is regarded as something rather immediate. The reconstuction costs of industry and agriculture are regarded as a second priority and there is the improvement of the environment, the question of market access and management training. There will be major demands for the reconstruction of these countries on the structural and development funds of the EC.
From my discussions there, the other implication is that the economic centre or economic powerhouse is moving more to the centre and the centre is moving eastwards. Therefore, the question is: how much and what will be the position in relation to the structural funding after 1992? We know that the financial aid available to Ireland is something in the region of £2.9 billion covering the period 1989-92. That is in place but I am fearful of the availablity of financial aid where Ireland is concerned because of the demands of reconstruction in the former Eastern bloc countries post-1992. There are major questions there.
There are other matters that have emerged that are causing me a certain amount of concern. I would like to advance them to the Minister and I look forward to his response. There is certainly a measure of dissatisfaction within the Commission in Brussels as to the use by Ireland of EC funding already received by us. First, there is a certain feeling there that the use we have made of it has been wasteful and that it has not been put to the most productive use. There is certain confirmation of that in the recent NESC report that we have had published here and it is a matter we would want to look at in a very serious manner.
There is a disappointment within the Commission at the failure of the national Government to set up proper regional structures in Ireland. There is also a criticism emerging quite freely of a sort of a dole mentality on the part of the Irish to funding within the EC. This mentality prevails far too much in many of the Irish contributions within the Councils of the EC. It is more or less what can we get out of it.
The other point I want to make is in relation to agriculture. On that visit to Eastern Europe, looking at the rolling plains of splendid agricultural land stretching for miles, one knows that where volume of production is concerned, we are simply not in competition with the land and the quality I saw there. Therefore, where Irish agriculture is concerned I believe our future has to be in the production of quality product produced and marketed as coming from a green and pollution-free environment. That is what offers the greatest opportunity to us but we have been remarkably slow either in recognising it or doing something about it.
To sum up the points I have made: we will find ourselves post-1992 in competition with that anticipated industrial powerhouse in the centre of Europe and that centre is moving eastwards. There is recognition that there is an industrial tradition in the area I speak about. There is a work ethic there that we may not have to the same extent. There is the central situation of that area in relation to markets, while we are out here on the periphery, and there is the availability of resources there. Therefore, if there is a conscious decision within the EC to develop that situation then I think we face serious competition. We are in the north-western corner of Europe and we are remote. The industrial pull is away from us and it is to the centre of Europe and that centre is moving eastwards.
We have a poor image. Within the Commission we are often regarded as being in there for what we can get out of it and that we have not made the best possible use of the funds that have been available to us. We have a lot to do and we have very little time in which to do it.
I welcome the opportunity to contribute to this debate because the experiences I have had, and I have confined myself solely to these, have confirmed to me that there is severe competition facing Ireland as far as Regional and Structural Funds are concerned in the post-1992 period. I look forward to the Minister's response to the points I have made.
I thank the Minister for his attendance here this morning. We have had, as has been mentioned, some similar instances over the past few weeks and I hope someting can be done to rectify the situation. I also hope that whatever time has been lost can perhaps be added on so that those who wish to speak, and I know there are quite a few, may do so.
May I say formally that the Progressive Democrats welcome the move towards political and economic union within the EC and in particular we unreservedly welcome the Charter of Paris which was agreed after the Conference on Security and Co-operation in Europe yesterday. It is a very positive move and indeed if one reads the text from that Charter it indicates there is a foundation for a constitution for a federal Europe if such is required at some future stage. As enthusiastic Europeans, my party hope that the Inter-Governmental Conference in Rome in three weeks time will consolidate the work done during the Irish Presidency and the pace for parallel political and monetary union will pick up as a result of the forthcoming conference.
The Community is entering a very exciting phase in its development as we witnessed only this week. I would submit it is a phase of opportunity for Ireland and a phase in which we must participate fully. The events which have taken place this week in Paris at the Conference on Security and Co-operation in Europe are a source of great encouragement to those of us who believe that we enjoy a common heritage and a common future within a Europe where the protection of human rights, commitment to peace and a desire for pluralism are priorities. Indeed, I would like to quote and to put on the record of the House what is in the Charter of Paris. It is truly inspirational in the words that are used. It says:
We undertake to build, consolidate and strengthen democracy as the only system of government of our nations.
Human rights and fundamental freedoms are the birthright of all human beings, are inalienable and are guaranteed by law.
Democratic government is based on the will of the people, expressed regularly through free and fair elections.
It goes on to say:
We affirm that the ethnic, cultural, linguistic and religious entity of national minorities will be protected and that persons belonging to national minorities have the right freely to express, preserve and develop that identity ...
In an Irish context that is a very important point, to see included and, of course, it also reaffirms the commitment of Europe, not just the EC but the wider European community, to settle disputes by peaceful means. They are really historic words. It must be conceded that the lesson for us is that the momentum for these historic events did not derive from inflexible political institutions or establishments, rather it came from the people, especially from the people of Eastern Europe. Things which were considered improbable, indeed even impossible, little more than a year ago are now commonplace and the growth of democracy in Eastern Europe, the way it has turned from looking towards Russia to looking towards the EC, and the unification of Germany were caused by ordinary people and by the will of the people.
There is a lesson there for us all as politicians as to what the will of the people, if it is sufficiently motivated, can achieve in a peaceful way without resorting to some of the barbarity which we see within our island. The people have paved the way for the CSCE Treaty ending the Cold War and reducing armed forces and armaments; people power brought all that about. We have to ask ourselves, are we in Ireland going to retreat into some sort of an offshore ghetto and allow these changes to pass us by without any response to them? Do we wish to remain so obsessed with relationships within this island and with our nearest neighbour that we are unable to relate to the new realities which are sweeping through mainland Europe?
I do not share the view expressed on the Order of Business this morning by Senator McGowan that now that there is a new leadership about to emerge in the Tory Party in England we fall back on to looking at an internal solution to our problems on this island. I submit that it is through enthusiastically working for economic and political union with the rest of the EC and through embracing the spirit which tore down the wall between the east and the west that we stand any chance of ultimately breaking down the barriers which divide so many on this small island. I would dispute that greater European union will damage our sovereignty but even if it were to damage it to a degree it would be a very small price to pay if it were to help bring peace and reconciliation between North and South in Ireland.
I welcome the statement made by the Taoiseach at the Paris conference when he said, in a European context,
We are committed to establishing lasting relationships based on co-operation, friendship and the recognition of a common European identity.
He also said:
We believe the security measures reflect a shared will to overcome the divisions of the past and to contribute to the development of a new era of co-operation.
I think everybody in this House would agree with those sentiments and they were to be applauded. If they do reflect a vision of Europe, they can equally well apply to relationships within the island of Ireland.
Immense barriers of mistrust and hostility after the Second World War were dismantled by the founding fathers of the Common Market and the last of those barriers have been removed by the move towards economic and monetary union, and the CSCE Conference in particular and its truly historic charter. The barriers between east and west, as we are well aware, are also tumbling. I was fortunate to be in Hungary and East Germany earlier in the year and one of the very encouraging aspects of that visit was the enthusiasm which the people had for politics, the wish they had to debate politics at every opportunity, having not been able to debate politics for so long. Then when we come home and find this cynicism which exists within our country towards the political process, we have to ask ourselves serious questions about our attitudes.
I think there is a perception that the people in the east of Europe are somehow backward and less intelligent than we are but certainly my experience would not indicate that is the case. I do not know how we can explain to our European partners our immunity to change in this island, although I can see glimmers of hope in the election of our lady President; maybe it does signal the dawn of a society more open to outside influences. It is my firm conviction that it is only by fully participating in the totality of the European process that we can make more and more people on the whole island of Ireland recognise the futility of some of our obsessions.
We cannot be selective in what we contribute to or take from Europe. We must have enough confidence in our own sovereignty and in our institutions to subscribe to European union and to embrace a European heritage which, let us remember, Irishmen and Irish women helped to create by bringing civilisation to Europe at a time when it was in the Dark Ages. Now our young people, those who, forced to emigrate and seek work on the European mainland, are helping to shape the new Europe.
Within this whole context our ill-defined policy of neutrality is likely to become less relevant as the trend towards union accelerates. We must decide where our interests lie and ask ourselves whether it is realistic for us to sign on for only those European policies which happen to suit us. Adopting a common foreign policy for the Community is almost inevitable and we must participate in it, but it does not mean that we have to participate in any military alliance. The future of the existing military alliances such as NATO is highly questionable in any event given the developments which are taking place.
As is expressed in the charter, our cultural identity can be reinforced rather than diluted through federalism. Our sovereignty has been strengthened rather than weakened by our original decision to join the Common Market and by our decision, again by referendum, to adopt the Single European Act. The states within the Federal Republic of Germany still maintain substantial powers in relation to taxation, security, education and so on. I have no fears about our sovereignty when it comes to a more unified Europe.
The principle of subsidiarity accepts that only a minimum amount of domestic power should be transferred to Brussels and there is no reason economic and political union should lead to any increase in centralised bureaucracy. Monetary union is entirely compatible with national sovereignty, as our experience when we were linked to sterling shows. The present Exchange Rate Mechanism has not removed the need for us to manage our economy properly nor would a single currency and a European central bank remove that need. However, the question of economic and social cohesion is an important one in the context of the development of the Single Market and of the single currency. I noted what the Minister, Deputy Calleary, had to say last week in this context and I support the views which he expressed then. The immense economic benefits which will accrue to the Community in the circumstances of economic and monetary union must be shared and the periphery must be given the same opportunity to benefit as the centre. We have been successful under the Structural Funds in providing for 1992 and the same, and indeed more, must happen as we go towards monetary union.
I also share the Minister's view expressed here last week that it is important that economic and monetary union progress in parallel and that if monetary union were to go ahead more rapidly than political union it would not be in our interest or in the interest of the Community. Both must go ahead together to make the EC an effective competitor with the US and Japan both economically and politically.
The European Parliament is central to this debate, as is the Commission and the Council of Ministers, but the Parliament should have a more meaningful role within a more united Europe. The Commission and the Council of Ministers should be more accountable to the Parliament which, after all, is elected by the people of Europe. Our MEPs have a mandate from an electorate which is greater by many thousands than any poll topper in the other House. I find it quite extraordinary and indicative of our general indifference to the institutions of Europe that we confine our MEPs entitlement in Leinster House to that of being able to park their cars. When I visited the European Parliament recently I was able to sit in the Chamber at a committee meeting on German unification and at that same meeting the chairman invited representatives from East and West Germany to speak from the platform. That is a measure of the flexibility and of the forward thinking which exists within the European Parliament.
I would submit, a Chathaoirleach, and I think you will agree with me, that a more liberal approach by the Seanad as to who can address this House is needed. Certainly our MEPs should be able to report to the Oireachtas at regular intervals. I would recommend to the Committee on Procedure and Privileges that is would be beneficial if we introduced informal sessions, or even sessions which are not proper sessions of the Seanad, for an address by the Commissioners or even distinguished persons such as trade unionists or farming leaders or academics. We might even learn something. It is quite conceivable. I note from the report of the Committee on Procedure and Privileges that there are proposals in relation to distinguished persons speaking here. The problem is what constitutes a distinguished person and how flexible we are in that regard. That is for another day.
In relation to the events which have taken place in Britain, it must be our hope that the new leadership in Britain, will espouse the vision of Europe which was espoused by the other 11 member states and to which, so far, they have not subscribed. It would greatly accelerate and cement the will for union, for outward looking and positive thinking and for a liberal view of the Community if the British leadership were to come in that direction. There are some indications that it will. Over the past week or so there has been a lot of cricketing metaphors used in debates on the other island. We can now say that stumps are drawn and that the home side has been defeated.
They are my observations in relation to political and economic union within the EC.
I want to confine my remarks to some of the issues relating to European economic and monetary union and European political union. A number of Senators have made various points in relation to this matter. At the outset, I firmly welcome the process of European economic and monetary union and European political union. I want to deal with the whole question of democratic accountability and also I would like to make some references to Irish neutrality and how this might be affected by this process. Finally, I would like to deal with the whole question of the need for a real convergence between the economies of Europe and also the central issue of the centre versus the periphery in EC relations.
I very much welcome the move towards economic and monetary union and European political union. Like other Senators I would like to welcome the satisfactory outcome of the Council meeting in Rome on 27 and 28 October. At this Councial meeting it was agreed that an Inter-Governmental Conference would be held in December. Only 11 of the States of the EC agreed to this; unfortunately, the UK could not agree to it. As Senator Dardis and others have said, perhaps that might change now. That would be very welcome. I hope the incoming British Prime Minister will consider this issue very carefully. It is fairly obvious to everyone that one of the reasons for Mrs. Thatcher's downfall is her attitude to this process. It is something we should all be very conscious of in this country and I have no doubt we are.
I agree this is a very timely debate and it is something to which the Seanad should pay great attention. The cynic might say yes, of course we are all in favour of economic and monetary union and European political union but that is because we do not know what it is. Everybody is in favour of it but nobody can quite say what it is at this stage. That is what this debate is all about.
There can be no doubt in anybody's mind that EC membership has been very good for Ireland. It has been good from an economic point of view, from a political point of view, from a cultural point of view and indeed from a social point of view. That must surely be beyond dispute. It has brought about widespread economic prosperity in this country. It has brought us into contact with many other political cultures and so enhanced the political process here. It has also brought us into contact with many other cultures of Europe and that has again enhanced our culture.
Nevertheless, there are groups that still oppose our membership of the EC. There are not very many people who would go on the record and say that they are opposed to EC membership, but there are others who would certainly say that they were opposed and still are opposed to the Single European Act. The results of the referendum on that issue clearly demonstrate that. I have no doubt, again that there are even more individials and groups opposed to the process of economic and monetary union and European political union.
I had a letter recently from a group called Amárach, I am sure every Deputy and Senator received that letter. So, there are still people who oppose not alone EC membership but this new process which we are now debating today. Their criticism is misguided. History has shown that you cannot stand still, let alone turn back the clock. The day of traditional fundamentalism is gone in Ireland and indeed in Europe. European integration and union is happening; it is a fact. The European movement is powerful and it is also dynamic. It now has a dynamic of its own. The momentum is speeding up, and we in Ireland can either go along with it and influence it, or simply be left behind.
I would now like to deal with the whole question of democratic accountability. I said on the Order of Business last week that the Oireachtas has not been particularly vigilant regarding the process of European integration, and I firmly hold that view. As the power and influence of the EC increase, effective measures need to be examined to ensure democratic accountability. There is now a need to strengthen democratic accountability. This involves a number of questions. The power and balance between the EC institutions need to be looked at. The role of national parliaments also needs to be carefully examined. Professor Basil Chubb in his book, A Sourcebook of Irish Government, chapter 11, page 206 states: “Surveillance and control on behalf of the public of Community activity is tenuous.” The cynics might say that we have come this far with European integration, but that nobody has in fact noticed it; it has not been debated and nobody knows where exactly we are at this stage. It must be said that the Oireachtas has little power of scrutiny and it is deficient in this regard.
At present the Taoiseach merely reports twice a year to the Dáil following a meeting of the European Council. I believe that this can be further enhanced and developed and that perhaps a debate should take place regarding the communique after each summit Council meeting. I believe the Dáil and the Seanad must become much more involved in debating each communique as it is released to the general public following the Council meeting.
I also believe that there is a need now to enhance the role of the Oireachtas Joint Committee on the Secondary Legislation of the European Community. I had the honour to serve on that committee in the last Oireachtas and I was very disappointed by the lack of resources which that committee had to undertake its work. It simply could not deal with the workload which it had to deal with. That committee should be given adequate resources to undertake its existing work and its terms of reference should be broadened to encompass this whole debate and to encompass the debate on European integration. I am not talking about a foreign policy committee and I was flabbergasted yesterday to hear that I had called for a foreign policy committee. I do not ever remember calling for such a committee. I did call for more debate on economic and monetary union, to which, I am delighted to say, the Leader has acceded. I do not believe enhancing the role of the Oireachtas Joint Committee is, in fact, making it a foreign policy committee because the EC now deals mainly with domestic issues central to this country. Were there to be a foreign policy committee I would wish to be involved in it, but I can see problems for a Prime Minister or a Taoiseach or, indeed, a Minister for Foreign Affairs or Government with a foreign policy committee. I have no doubt that the age of secret diplomacy and 19th century foreign policy is now gone. On the other hand, we would need to carefully look at what signals a foreign policy committee might send to other countries and if they could become very much involved in areas that must by their very nature be left to the Executive. However, that is a debate which I am sure is going to take place actively over the next few months and years.
As has already been mentioned, with regard to democratic accountability I would see a greater role for the Seanad — I know Senator Honan agrees with that also — and that our MEPs could become involved in the Seanad process. All these issues can not be considered at the European Congress of National Parliaments to take place in Rome. That would be a very important congress to consider the whole question of how national parliaments can become more involved in this porcess.
This brings me to the EC institutions themselves. There is general agreement that the balance between the EC institutions is fine. However, I have to admit that I have a problem with the European Parliament. I am not attacking it by any means but unfortunately, the European Parliament is not visible in this country. For the vast majority of people it is not relevant and this can be seen following the directly elected assembly elections in recent years. I know we had a general election on the same day as the European elections in 1989, but even in that election many people did not bother to fill out the ballot paper for the European Parliament. Therefore, we do have a problem with regard to the European Parliament. It is not seen as relevant, it is not visible and the media have little interest in it, and I would even say they have no interest in it whatsoever. It is very rarely that the European Parliament proceedings are reported in our national media. Therefore, when people call for an increase in powers of the European Parliament this needs to be looked at very carefully. I have no doubt that there is some justification for increasing the powers of the European Parliament but this must be set against the need to bring about effective decision making. Decision making cannot be unnecessarily delayed.
I emphasise that I am not attacking the European Parliament but I think these issues need to be looked at very carefully.
I believe the answer to democratic accountability is to increase the role of national parliaments in the process. We need to scrutinise very carefully the decisions of the European Council. A Prime Minister or a Taoiseach is answerable to his own electorate. The Council, therefore, is representative of the people and, as the Minister said last week, we have only 15 MEPs in a very large Assembly; nevertheless, we have one voice in 12 at the European Council. Therefore, I believe the emphasis needs to be placed on the European Council and that decisions of the European Council would then be considered very carefully by the national parliament at home.
I now want to deal briefly with the whole question of Irish neutrality and the implications of European integration for Irish neutrality. The first question that needs to be asked is: what exactly is Irish neutrality? Historically, it merely demonstrated independence from Britain; it was a symbol of nationalism. Therefore, from this aspect the EC process has strengthened neutrality and it has decreased our dependence on Britain. We not play a much greater role in world affairs and, as I said earlier, the EC will enhance and promote the different individual nationalities within the entire EC.
Neutrality can also be seen as a mission to promote peace and justice in the world through international institutions and organisations and, indeed, to promote greater fairness in the world. It can be seen as a process invloving working towards a decrease in expenditure on arms budgets. From this point of view Ireland has a proud record also. The new moral argument of the CND has also enhanced the role of Ireland in bringing about peace and justice in the world. It is interesting, as an aside, to wonder where this peace-making role came from because traditionally through the ages the Irish were a very violent people. This can be seen in our legends and so forth. I wonder was it Christianity or sheer poverty which resulted in us taking this peace-making role.
It was Dev.
I suggest that that relates to the more modern Ireland. Yes, Dev. certainly was the founder of Irish neutrality in the modern sense, but that has also been added to by the new arguments of the CND and so on. However, for whatever reason, modern Ireland is peace loving and that is certainly to be welcomed.
Neutrality definitely means the avoidance of military alliances. There is no question of that. Given this background, Irish neutrality is not under threat by EC membership. We can bring our unique peace making role to the process of European political co-operation. That should be emphasised. We can bring our proud record and our proud tradition through the process of EPC and actually be heard for the first time.
As Senator Dardis said, this whole process is strengthening our sovereignty in one sense and allowing us to play a role in world affairs. Under no circumstances must the EC become a military organisation. A distinction is clearly made between security and defence needs and this was seen in the debate in the Dáil on 1 November. Security can deal with political and economic aspects, but the military and defence aspects, I would suggest, must be separate. The Taoiseach said in the Dáil on 1 November, 1990:
A common security policy is not likely to include the defence or military aspects for some time to come.
The inference is that these matters should be left to NATO. Therefore, I would like to comment on the suggestion by Senator Raftery last week that military neutrality was being abandoned. I do not know where the Senator got that suggestion or that notion because it certainly was not evident in the Dáil debate on 1 November or, indeed, in the communiqué following the Rome Summit.
Ireland is opposed, and must always be opposed, to joining military blocs. This brings us to the whole question of the Gulf crisis which I can only refer to briefly. The situation is now radically changing. Collective security is now emerging in a real sense for the first time. We are dealing with a whole new ball game, as it were. The UN is now truly coming of age and playing an important role in this process. Therefore, we need to examine our situation very carefully. It could be the case that the UN could dictate that Ireland goes to war or certainly supports a war in the Gulf. I would like to suggest that we should use all our efforts to oppose war in the Gulf. That is why the statements following the Conference on Security and Co-operation in Europe by the Taoiseach are to be welcomed. War is evil; it brings about widespread devastation. We have an active role to play in disarmament and we should therefore use all our efforts to ensure that the Gulf crisis is solved peacefully and that the UN and collective security would avoid the option of war and bringing Ireland into supporting a war there.
Finally, a brief point. I believe there should be a real convergence of the economies of Europe. We will need an enhanced role for the Structural Funds. As the Minister said last week, we need a widening of the eligibility criteria for access to the Structural Funds. Unless we have this cohesion the process of EC integration is going to fail. This is not a begging bowl attitude; it is fundamental to the survival of the EC as we know it. We must have social cohesion and real convergence; otherwise the whole process will disintegrate.
I was very interested to hear what Senator Haughey had to say about neutrality as I believe it is the most crucial issue which affects Ireland in political and foreign policy terms in the immediate situation in Europe and in what is happening in the Gulf. I disagree with virtually everything Senator Haughey said, not in its actual content but in what he left out and in the direction in which he saw us going.
Irish neutrality is changing by the day and it really is irrelevant to refer back to Irish neutrality as it was or Irish neutrality as it was even a year ago or in the time of Dev. We have moved so fast so quickly that we have to think about what Irish neutrality meant and what it means. It is not good enough to say we no longer believe in neutrality as it was but we can still play a role in promoting peace and justice and disarmament. That is what the Russians, the Americans, the Chinese and all the countries who have massive armaments say they want to do. We are all in favour of peace, we are all in favour of disarmament and we are all in favour of a very pleasant world; but we are all in favour as well of doing something active to promote it, but we all do it in different ways.
The days of cop out for Ireland in terms of international affairs and international commitments are over. We simply cannot say any longer: we do not want to be part of a military pact but we believe in this, that and the other, we will avoid military alliances. This particular ambivalence and problem confronts us every day in the Gulf crisis. As I understand it, we, with our European partners, are against the invasion of Kuwait. As I understand it, we have taken a moral stance on that and the Twelve have been unanimous in that. Perhaps we expect all our European colleagues to do all the dirty work on it. Perhaps, as Senator Haughey said, if the United Nations decide to declare war on Iraq one way or the other, Ireland is expecting to say: "well, everybody else in the United Nations had better send in the troops and defend Kuwait, defend the territorial integrity or the people of Kuwait, but Ireland will not; we do not believe in what is happening; we are morally outraged by it but, sorry, when it comes to getting involved in military action, we are not going to be there. So, we will get the kudos for our moral superiority and our moral position, but we are not prepared to put anything on the line." That simply does not wash any more.
I have often objected here when the Fianna Fáil benches were silent as the Minister for Foreign Affairs said our situation in numerous critical foreign affairs areas is that we stand behind our European partners, that we do not have any other view on this. This applied to Nicaragua and to several other places I cannot recall at the moment. It applied to several flash-points in the world where Ireland refused to have a voice outside its European partners. That is a position which I find cowardly and difficult to take, but it is a position. But to then say: although we hide behind this foreign policy, which we do when the issue is uncomfortable, we are not going to go too far down that road when it really becomes serious, that is hypocritical nonsense. We have to make up our minds what neutrality means and if it means that we are going to have to opt out of the Common European policy and if we are going to have to opt out of any common European foreign affairs. That is the honest situation. But for old-fashioned, political reasons, we still have not faced up to the fact that neutrality is dead. We cannot say, as Senator Haughey maintained that we will leave that to NATO. In a changing world NATO is now a dead duck. The Warsaw Pact is quite obviously a dead duck. Those particular military alliances will no longer exist in their present form in a few months' time because, alliances are changing and loyalties are changing. It is unrealistic to talk about NATO and the Warsaw Pact any more because the world is changing and boundaries are changing so quickly.
We have great difficulty with words in the present neutrality debate. We are approaching a very thin boundary line when we talk about our security needs. In the Dáil debates the Taoiseach has talked in a cavalier fashion about uniting to defend our common security interests, but then we say our defence needs are different. We are playing with words and trying to back both horses. There is no difference between security needs and defence needs. Senator Haughey tried to make that distinction by saying that we would join together and unite with other countries to defend our economies. With what? In the last analysis we defend everything with our forces of law and order and with our military forces. If our economies are threatened by outside military forces we have to defend them with our own military forces. If in the future the European economy is threatened by outside military forces, which at the moment seems unlikely — but, goodness knows, unlikely things happen — we will have to defend it with military forces. When the united economy of Europe is threatened by outside forces we cannot, as part of a united Europe, say: "Sorry, we want you to do it for us."
We will have to make up our minds that to talk about security and then to ignore defence is pure semantics. The Government know this. All those who talk about it and all those who were always involved in it know this. It is a current problem. It is a problem which will probably be solved by slipping into a situation where we are part of a European military pact of some sort. However that may be a little way down the road. I think that privately this is probably acknowledged. It may not be called a European military pact but it will in essence be a European military pact. The logic of what Senator Haughey says is that we had better opt out of the United Nations pretty quickly as well, because if the United Nations decide to go to war on Kuwait or on Iraq are we going to say: "Sorry, we are not part of that either, although we disapprove of what is going on, because we are neutral."
We are neutral against immoral regimes just as we are neutral against moral regimes. To me that argument is over. It is time neutrality and independence were no longer confused. We are far too sensitive to what we call the threat to our neutrality because we see it as a threat to our historical independence: as Senator Haughey quite rightly said, it was independence and neutrality against Britain. It was a way of defining our independence from Britain in the early years of this State. Now it has become confused with that independence and, unfortunately, the word "neutrality" itself still rings as meaning independence from Britain. We have to dress it up by saying that we will not be part of a military pact. If we are not to be left out of Europe, if we are not to be left out of the development of Europe, we will inevitably become part of a military defensive pact in Europe. The step from being a defensive pact to an aggressive pact is a very small one, because the difference in the definition of "aggressive" and "defensive" in military terms is something I defy anybody to tell me because the interpretations are simply open to subjective judgment.
We have to stop pinning our colours to the neutrality mast when we know that the days of old fashioned neutrality are over and that we will, in fact, be part of a defence or military pact in Europe if we are to be part of the true Community. That is the enevitable consequence of economic and political union, unless we are to be somewhere in a half-way house, which we will not be because we are very committed Europeans in every other sense. It often startles me quite how committed we are in terms of Europe. This is very refreshing and a lot of it is for the best of motives.
The European developments will obviously take a dramatic turn as a result of the resignation of the British Prime Minister this morning. Mrs. Thatcher, for reasons with which we may or may not agree, was undoubtedly reluctant to make that full commitment to European political and monetary union which the other members of the Community were very happy to make, and, in fact, appeared to be in a hurry to make. By her resignation this morning the greatest obstacle to political and monetary union has now been removed. Anybody who replaces her as British Prime Minister will be more in favour of monetary union than she has been. She was certainly dragging her feet on it and was holding the British people back for reasons which may well have been genuine — and I think were genuine — but as a result of her resignation European political and monetary union will go ahead faster.
I was very privileged to be involved in the monetary world in 1979 when the first dramatic taste of what is happening now happened in Ireland when we broke the link with sterling. It must be said in retrospect that that has been a very mature, very correct and very good decision for the country. I remember very well at the time that in the monetary world there was absolute chaos. It took a lot of people in the financial world by surprise despite the fact that it had been signalled by the politicians. The break with sterling was a terrible structural difficulty for the financial world and it was a cutting of the umbilical cord because we had been protected by the link with sterling for so long that we found it very comfortable. Initially it was a very difficult situation for the Central Bank, for the other banks, for stockbrokers and for foreign exchange dealers to cope with. I have no doubt that many of the initial rules, such as the imposition of exchange control, were broken by these people, not deliberately but simply because it was a new world which they did not understand. However, having got through that particular difficulty and with economists and other experts in that field maintaining it was a mistake to break the link with sterling, and having suffered initially from the break with sterling because the British economy prospered in terms of interest rates and inflation when we did not benefit from it, we have since then benefited quite a lot from being attached to the EMS because we have been attached to the strongest currency in Europe and one of the strongest currencies in the world. That as much as anything is responsible for the fact that our inflation rate has been far lower than British inflation rates and our interest rates have been far lower.
Everybody knows that Governments claim credit, as this one does, for the fact that inflation is running as low as 3 per cent here in comparison with our nearest trader, Britain, where it is running at a much higher rate. We also claim credit as a Government when interest rates are running lower than Britain or anyone in close proximity. Oppositions, of course, do exactly the same. They knock Governments when rates are high and are silent when they are low. The reason our interest rates are low and our inflation is low is mainly because we are attached to the Deutsche Mark. It is very little to do with domestic policy.
The result of where we are heading is that we will have a European central bank by 1994 and we will have a single currency by 1997. Certainly by the year 2000 we will have it. The result of that will be that we certainly lose all autonomy in terms of monetary policy. We will have a very small say in monetary policy; it will be far smaller than one in 10 or one in 12. It will be a minute say because our economy is so small in terms of Europe. That may not be a bad thing at all but it will mean that we have no control over out interest rates and virtually no control over our inflation. There will, of course, be certain advantages in that which will be peripheral to the advantages of having no indepenence in our monetary policy. If we are reluctant to hand over those particular powers, we should ask whether we have very much anyway.
One of the great advantages for us of being part of this larger Europe and sacrificing that independence is that really we are recognising a reality because we have very little control over out economy, our interest rates and our inflation at this stage. We are a small open economy which is really dictated to from outside. These great dramatic events in terms of monetary policy, which we are continuously hearing about and reading about, will not be so dramatic for Ireland. They will be dramatic for the UK, France and Germany because they will be a larger part and they are sacrificing more. They are sacrificing what is a more real independence in terms of monetary policy. We never really had it so it will not be a great sacrifice for us.
There will, of course, be great advantages; the elimination of exchange rate movements which is inevitable if we are to have a common curency will have an immediate beneficial effect on interest rates and on inflation. There will be no currency transaction costs whereas at the moment currenct transaction costs are a disproportinate part of our annual output. It runs to about 0.5 per cent of our annual output. There will, undoubtedly, be increased trade as a result of a common European currency and, as a result, there will be increased confidence, increased investment and stable prices. That is one of the things which we can look forward to.
The introduction and creation of this new system will create greater stability in the economies of the European Community. There will, of course, be difficulties also. While we welcome the advent of European political and monetary union, we must not rush into it headlong in the way we are. I am finding it slightly difficult, particularly here in the Irish political world, to accept the unanimity with which this rush to political and monetary union is greeted. As an Independent in this House I am naturally and instinctively suspicious when I find unanimity between the Government, the Opposition and the Labour Party, who were so opposed to joining the European Community in the first place, about welcoming the moves in the European Community.
I know there is a great wish not to be left out of this particular movement and I hope we are not left out of it. However, unquestioning and slavish agreement with what is happening in Europe is a pity. We should question the alternatives to a single currency and whether it will be a good thing for Ireland. I can see the advantages but giving up national sovereignty is something we now seem to have accepted willy-nilly but is something which we should continue to question. That is a sacrifice of our independence. If we are to give up our independence fiancially, if we are to accept that we give up fiscal, financial, monetary independence and we sacrifice political independence, Senator Haughey cannot have it both ways. We will also have to sacrifice all military independence as well.
This morning we are debating European economic and monetary union and European political union. I find no trouble in supporting either, I welcome this debate in the calm atmosphere of this House. It is on record that I feel we should have at all times more discussion on the European situation and ourselves as a nation. We should look with great care at what it means for Ireland as a small nation. We must know does political union mean the same for the giants in Europe as it does for us as a small nation? Do we understand today the total result of political union and monetary union? Have we discussed it sufficiently among ourselves to understand it? I have long ago left behind me the narrow traditional grounds for which I was well known for the sake of the younger people of my country and for the betterment of the nation in the years ahead. However, we should at all times, explore wider debate where Europe is concerned and its effect on us now, and its future.
Political union has become a crucial element in the progress being made in the establishment of a reliable framework for peace and security in Europe. The European Council conformed in this context its commitment to political union and decided that foreign Ministers should carry out a detailed examination of the need for possible Treaty changes and prepare proposals for the European Council. Political union will need to strengthen in a global and balanced manner the capacity of the Community and its member states to act in the areas of their common interest. The unity and cohesion of its policies and actions should be ensured through strong and democratic institutions. How should the role of the European Council, as defined in the solemn declaration of European unity and in the Single European Act, be developed in the construction of political union?
With regard to general principles we should ask, in the context of ensuring respect for national identity and the fundamental institutions, how best to reflect what is not implied by political union. In the context of the application of other principles we should ask how to define them in a way to guarantee their operational effectiveness. Foreign Ministers will undertake, I understand, this examination and prepare proposals to be discussed at the European Council with a view to a decision on the holding of a second inter-governmental conference to work in parallel with the conference on economic and monetary union and with a view to the ratification by member states in the same time frame.
Following discussion of the proposal put forward by President Mitterrand and Chancellor Kohl in regard to political union and also the paper submitted by the Belgian Government on the same subject, a detailed examination, I understand, will be put in hand forthwith on the need for possible Treaty changes with the aim of strengthening the democratic legitimacy of union, enabling the Community and its institutions to respond effectively and efficiently to the demands of the new institution and assuring unity and cohesion at all times. Senator Haughey referred to that aspect in his address to the House this morning.
The debate on EMU at Community level is still at a very early stage. The ultimate form of economic and monetary union will only be determined by the detailed negotiations which are taking place. With regard to Ireland's or would I be more correct in saying, the Government's attitude to EMU, as recently as the European Council meeting in Madrid last June, it was pointed out that we have a positive approach to EMU and will work for its accomplishment. We have also made it quite clear in the matter of progress, with regard to the two essential requirements there must be a balance as between the advance in economic and monetary union and the development of EMU and the strengthening of the economic and social cohesion of the Community.
I hope that, as a result of the standing down of Prime Minister Thatcher, there will be a different attitude by the next Prime Minister of Britain to monetary union and to its development in Europe. I feel that Mrs. Thatcher was not as supportive as she might have been in that matter. I am sure there will be a different attitude on the part of the next Prime Minister of Great Britain.
In discussions with President Mitterrand in recent times the Taoiseach reiterated the view that EMU could not work without regard being had to the reports of the NESC and of the Delors committee. In other words it must be clearly recognised that if sufficient consideration is not given to correcting regional imbalances the prospects of lasting economic and monetary union will be at serious risk. The reports differ as to the degree of the effort which requires to be made towards strengthening economic and social cohesion vis-a-vis the efforts in this respect in the past. In making this comparison, however, we must bear in mind that the Delors committee consisted of individuals of different nations. Given this factor, it is of more significance that the committee can bring forward a report which acknowledges that particular attention be paid to promoting balanced development throughout the Community.
Senator Ross has just given credit to other people for the achievements of the past two-and-a-half years but then he never finds it possible to recognise the success of Fianna Fáil in government. The Senator's attitude does not concern me. Nevertheless, it must be pointed out that reduced Government expenditure and the reduction in borrowing since Fianna Fáil were returned to office have resulted in lower interest rates, greater improved public finances and, more recently, increasing employment. This improvement, too, has enabled us to derive the real benefits from EMS membership by enabling us to maintain inflation and interest rates lower than those in Britain and closer to those of Germany.
Pursuing the foreign policy objectives of the Twelve in a rapidly changing and increasing complex world will require the full commitment of each member state. Indeed, never were things changing as fast, whether here in our own nation or just across the water. We should be prepared for change. Those of us who have certain values try to watch the changes and to have our say.
Our recent Presidency of the EC was very successful in bringing together all the views of member states so that the conferences that could be put in place would go ahead but without forcing any Government to commit themselves to detailed positions on what will be contentious issues when full negotiations start next month. A tribute could well be paid here to the Taoiseach and the Government on their Presidency.
While I accept that Europe at times seems to be far removed from us. I do not think we are out there as a nation with a begging bowl. To that extent I cannot agree with my colleague, Senator Howard. I do not get that impression of Ireland in the Europe of today. This nation is a small open economy with a small domestic market. We must succeed in raising the living standards of our people and in ensuring that they have social and cultural amenities at work and outside it. They have shown that they can compete with the best in the world when given this back-up.
I support in full Senator Dardis's remark in relation to giving a forum to our MEPs and others. I suggested something on similar lines a long time ago when I was first appointed Cathaoirleach and, subsequently, when I was reappointed to that position. To be honest, the reason I made the suggestion in the first place was because of the difficulty I experience at times in keeping contact with my constituents. I am aware that my colleagues here experience the same difficulty. I wanted a place where I could address my electorate so that I would survive politically. When I could not find that I moved on to the idea that this would be a forum where our MEPs could address their electorate. We are all politicians and we would like to have some such forum. In the case of our MEPs they would be in a position to bring us firsthand information on developments in Europe. Perhaps, a Chathaoirligh, you would put the matter to the Committee on Procedure and Privileges and report back to us on it.
On neutrality, as far as I can determine, any benefit which comes to us by virtue of our being a member of the EC is also available to all other members and indeed even to countries that are not members. We hear it argued at times that we would have much to gain in giving up our neutrality. My answer to that is that our neutrality is a fundamental principle of our foreign policy and until somebody else tells me otherwise that is what I believe in. It is still important. Even with events that took place this week in Paris, neutrality is as important to us as ever. It stands for peace and what we believe in. I understand that other elected members differ from me on my position on neutrality.
Regarding business traffic in the future, as well as keeping its full status, Shannon should now be promoted as the hub airport capable of taking substantially more traffic and increasing its traffic into Europe as well as to the United States. Closer co-operation between the nations of Europe will bring further opportunities to places like Shannon. I support the special status of Shannon as the main international airport and I urge more development plans for places like Shannon.
The matter we are debating this morning is very important I have gone on record saying that the Houses of the Oireachtas should debate European affairs more often. In fact, we should be able to give our views and hear the views of Ministers. I support our membership of the European Community. Most of the contributions since the debate began have been excellent. The nice thing about Seanad Éireann is that Members do not adopt party lines. Everybody is quite independent and they can give definite views on issues. I support this holding of the debate.
The previous speaker said it would be desirable to give a hearing in the House to our MEPs. Indeed, in the last term I had the honour of chairing a sub-committee reviewing our Standing Orders which made that provision for the second or third time in the last 15 years. It is up to the Leader of the House to implement it.
Many Senators agree that we would find a foreign affairs joint committee useful and I agree. We should decide, in the absence of such a committee, to use the Seanad to monitor the very interesting changes and the opportunities at European and United Nations level. I look forward to monthly debates on any one of the important aspects of foreign policy which will have a very significant effect on us.
The establishment of a single market ensuring, on a lasting basis, the free movement of goods, persons, services and capital calls for the prompt establishment of monetary union. The existence side by side of twelve national currencies, controlled by twelve independent monetary authorities in an integrated market, that is one with no internal frontiers, would be compatible with a continued freedom of movement only if their exchange rates in relation to each other were fixed. A return to floating exchange rates would mean a repartitioning of the internal market into monetary areas.
In order to maintain fixed exchange rates, a high degree of convergence between the member states' economic policies is required. The machinery and institutions responsible for ensuiring convergence forms part of the basis for economic union. It follows then that there can be no single market in the absence of monetary union and, indeed, vice versa. In the ten year history of the EMS, experience has clearly shown that the two processes of unification, economic and monetary, are mutually re-enforcing. They must, therefore, continue to progress in tandem. This disproves what has been termed the crowning achievement theory according to which there could be no monetary union until economic union has been fully achieved in all its respects.
Monetary union implies complete and irreversible mutual convertability of currencies, complete freedom of movement of capital and the permanent fixing of exchange rates. In order to satisfy those conditions, partiularly the third, there would have to be such a high degree of convergence between the member states' economic and monetary policies, that monetary union would appear a fanciful idea unless national powers were ceded to a substantial extent to a Community monetary economic authority.
It is preferable under the circumstances to take monetary integration to its logical conclusion, that is a single currency, the benefits of which are more obvious and the constraints less onerous for national Governments. When there is but a single currency, a single capital market and a shared pool of foreign reserves, the balance of payments constraints at national level will cease to exist. Abandoning the power to expand the monetary supply to finance public deficits returns to the capital market the task of carrying out savings transfers at a cost which will act as a deterrent to those Governments unable to keep their finances in balance.
Costs incurred in foreign exchange transactions involving the currencies in the system would be eliminated. They can be put at roughly 600 billion ECUs, which is equivalent to the annual value of the inter-Community transactions involving goods and services, not including capital market operations. The narrower the parity fluctuation margins, the greater cut in theory in costs. If there was a single currency, it means that costs should be zero. There would be reduced levels of speculative activity involving European currencies, and based on country to country variations in exchange and interest rates. Prices would be more transparent enabling Community-wide comparisons to be made. Competition would increase and productivity gains would be better distributed to the consumers' benefit.
Accounting in any transnational operating organisation should be simplified. The budgetary and financial constraints on all Governments that result from the need ultimately to secure balance of payments equilibrium should lessen. Benefits would accrue as a result of an expanded role for the ECU as an international reserve currency and, in particular, lending and liabilities, vis-a-vis the rest of the world in connection with ECU dominated transactions, would enjoy a more stable environment. The aggregate value of the benefits can cautiously be put, I am told, at more than 1 per cent of the GNP growth, or in excess of 50 billion ECUs, which is the level of the European Community budget at present.
National monetary policies need to have more convergence. Countries which succeed in imposing discipline afforded by greater monetary stability have enjoyed more success in safeguarding investment growth and employment. Ultimately, Community Governments have been won over to the objective of monetary stability. Involvement in the hardened EMS has enabled them to move nearer to this goal. To secure broad support, the prospect of monetary union must both lessen the concerns of those in strong currency countries who are afraid their purchasing power stability will suffer, and satisfy the hopes of those in weak currency countries who expect an end to be put to their vulnerability in this respect. The ECU would be acceptable to the Germans and Dutch, in my belief, only if the ECU were as sound as the Deutsche Mark and the Guilder. The other European currencies will only accept the discipline imposed by a common currency, that is, the fact that this involves giving up national sovereignty if the economic benefits to be derived by them appear substantial. In other words, the public must quickly gain the impression that monetary stability represents a more reliable guarantee of economic and social progress and employment to cope with the other measures which would result in a lax budgetary policy. Given the experience of the past 15 years there ought not to be too much argument about this self-evident fact.
That policy cannot be implemented or advanced without a central bank autonomy. This can be ensured in a number of ways. These approaches should be combined in an orderly fashion and, most importantly, should be enshrined in treaties or constitution so that they would be safeguarded even if political authorities were tempted to discard them. The Central Bank alone must be empowered to control the money supply, must bear sole responsibility for managing the currency and foreign reserves and must have complete freedom, not subject to prior authorisation, to make use of the entire range of modern methods of intervening in the money and financial markets. In addition to this monopoly role, the bank statutes must guarantee that the bank's senior officers act independently and that the bank enjoys legal budgetary and financial autonomy. This means, to put it very plainly, that the bank will have to have its own resources, that is, a sufficently large subscribed and paid up capital on day-to-day revenue for its investment operations to enable it to meet its requirements without being obliged to go begging for funding from any source whatever. I suppose that sounds all right, but in return for this kind of extensive monopoly of power and autonomy, the bank's senior officers will have to report to someone. I would hope that they would report to the European Parliament in accordance with a procedure which, I think, is in place for many years on US federal lines.
This is a great challenge at the present time to this country and to all the European countries concerned with the future of Europe. These proposals for European monetary union and their implementation must take account and make provision for the necessary changes in the existing economic Community institutions in order to facilitate the desired political union. That achievement in itself would be incomplete without a comprehensive strategy for the wider association for all European countries. In this regard, the Community will have to assess the best way of helping the Central European and Eastern European countries to gain and achieve prosperity through liberal and democratic state systems while, at the same time, recognising the emerging requirements of the 12 member states.
To what extent does the Minister think German reunification will have an impact on future policies of the European Community? Eastern Germany has a population larger than our country, Luxembourg and Denmark twice over. The effect of unification is much like enlargement. I believe the complications and the knock-on effects have been significantly understated. It is quite obvious that the unification of Germany, which I warmly welcome without reservation, is having quite a dramatic effect on the Community. The House should be told what policy has emerged regarding other East European prospective applicants, bearing in mind their underdeveloped economies.
How do the present European Community policies reconcile the treatment of Turkey, for example, whose programme towards accession has been in place for many years? They have an association agreement going back to the sixties before we joined the Community. The state of Turkey has a higher and much better economic base than any of the East European countries. The western world should bear in mind the contribution that country has made towards western security over the past 40 years of less enlightened policies. I hope the accession of Turkey will not be further deferred when it has been possible to admit the 13th member state which, in effect is what the reunification of Germany has meant to the Community. I hope Turkey who are knocking on the door for almost two decades now will be allowed to join as the 13th or 14th state. The recent momentous events in Europe have overshadowed this important issue of full membership.
Turkey, although located at the very south-eastern end of Europe, has been playing a vital role in the protection of the interests of the west in the region, as well as the defence of western Europe. We should also always keep in mind that this is the only Moslem country with a secular system which has established various links with Europe since the Second World War. While we are talking today about the importance of creating associations with Eastern European countries, and even of their eventual accession to the Community as full members, the European Community should not ignore the fact that Turkey has been an associate member of the Community since the early sixties and that she has already applied for full membership.
I note the Council of Ministers has decided to defer the Turkish file until 1993. Meanwhile until then the Commission has proposed a package of proposals in all spheres of economic activity which are designed to prepare that country for accession. While I understand that 11 of the member states are in agreement with those proposals, I ask if the Minister can indicate to the House when it is expected that the Community will ratify them. I was pleased to read on the papers last week that the President of Greece and the President of Turkey had a positive meeting in Tokyo recently on the occasion of the crowning of the new Emperor there. I hope that is a positive sign of progress towards the realisation of Turkish accession as the 13th member state.
One may say that the accession of further countries has little to do with economic and monetary union, but I submit it has all to do with that. There are two festering sores in the existing Community. One is Northern Ireland and the other one is the Cyprus question. The Community should devote more time to both those questions. Hopefully, if we have economic and monetary union, where there will be greater harmonisation of taxes and greater convergence of policies between the various difficult regions, we should avail of every opportunity to improve both the economic and political situation in those countries.
The relationship between national Parliaments and the European Parliament is most important for the future development of policies and for the development of political union itself. We must have greater independence of the Oireachtas from the Government. This is the only one of the 12 member states where parliament plays a very minor role to the government of the day. I am not talking about any government in particular. It has grown up in this country that the Executive——
I am glad the Senator clarified that.
——have usurped all the power of the House so that in the other place — which we are not supposed to mention — the vast majority of Members are foot soldiers who just vote with their feet on whatever the 14 or 15 Members of the Government decide is good for the country, or whatever.
Under a united Europe the parliaments must reassert themselves. We must be able to devise in the Oireachtas greater and stronger ties with the European Parliament. We, as parliamentarians, should be able to move much closer and have a greater input. We should be able to influence decisions in a significant way. This country is really dictated to in the main by the Department of Finance and for European and foreign policy the Department of Foreign Affairs play a muter second fiddle. What is going to happen if the Community achieves monetary and European union? We will find that much of the power that is at present vested in the Department of Finance is going to slip either to a European central bank or to the Commission and we are ill prepared to do anything about that.
The whole question of neutrality is not very important. The Warsaw Pact have announced that they are going to fade away. That means that the NATO organisation will have precious little to fight with, so we are a state of flux. It is important that the Oireachtas, and this House in particular, should be kept abreast of the policies, the changes and the contribution our Government are making. It is opportune that we should be abreast of the vastly changing developments.
In conclusion, I welcome the recent developments in London. Last week we had the air clearing speech of Sir Geoffry Howe and today we have the resignation of the Prime Minister. We cannot expect to advance European integration unless there is a change of attitude in the United Kingdom about Europe and the closer development of Europe. A federal Europe or an integrated Europe to any degree without the United Kingdom would be incomplete and unreal. Therefore, we must hope that a way will be found to have a more constructive role played by the United Kingdom in the changes that are taking place in Europe.
In Eastern Europe we have countries like Bulgaria, Romania and Czechoslovakia as distinct from the present European Community. All these regions are being involved in discussions. It is important that we should have an opportunity to note the changes taking place.
I am happy to have the opportunity to participate briefly in this very important debate. Because of the recent developments in Europe it is very appropriate that we have this debate. It is appropriate also because of the forthcoming intergovernmental conference on political union and economic and monetary union. The Irish approach to economic and monetary union had been one of very strong support for the process. I am glad to note that the Government gave equal weight to the economic and monetary aspects of integration. This is right, because if monetary union were to go ahead more rapidly than economic union it would not be in our interests and it certainly would not be in the Community's interests either.
Enshrined in the Treaty of Rome is the cardinal principle of laying the foundiations for an ever closer union among the people of Europe. When we joined the European Community in 1973 we bravely set out on a course, part of it uncharted, which we hoped would lead us towards the fulfilment of this cherished ideal. The massive endorsement of our electorate of our accession to the Community reflects the spirit of adventure of the Irish people and their intrepid approach to pushing our constricting frontiers in order to promote prosperity and political union among our European partners.
The European Community is the framework that provides us with the best opportunity of achieving the highest level of prosperity. The Community is not a static entity. It has to develop new policies, some not altogether familiar to us, to come with the challenges facing us. The benefits of EC membership are balanced with the obligations that are placed upon us to ensure its continued development.
The progress of Community development has been chequered over the years. The pace of integration became noticeably slow in the eighties when decision-making almost came to a standstill. The Community was buffetted by the cold winds of competition from the technological superiority of the United States and Japan. However, undaunted, the latent strength and resourcefulness of the people of Europe was mobilised. The Community responded with the adoption of the Single European Act and its entry came into force in 1987. This paved the way for what will be, perhaps the greatest development of the Community since its inception, namely, the achievement of the Single Market.
We are on the threshold of an exciting new era in Europe. It would not be unreasonable to argue that the Community has acted as a catalyst for the wave of democracy that has swept across Eastern Europe over the past few years. Many of the infant democracies bordering the Community are looking to us for support and guidance to underpin their newly found, much valued freedom so that they can build efficient market economies in order to provide for the improved welfare of their citizens. All these developments will put severe pressure on the Community for enlargement and will tax its infrastructural capacity. The EFTA countries are also seeking closer ties with the Community in order to protect their interests. The net effect is that not long after the entry into force of the Single European Act the Community is again considering how it can prepare itself to face the new realities — political, economic and social — of a changed and changing world. The question of amending the EC Treaties has again raised its head and the Intergovernmental Conference in Rome in December will have to face this issue.
Economic and monetary union is making progress with the possibility of a single European currency on the horizon. Economic development must be underpinned by political progress. Accordingly, both concepts must be seen as complementary. Most of what I have referred to already largely falls within the domain of Government, but as a parliamentarian and as a member of the body delegated by the Dáil and Seanad to oversee Community developments, the Joint Committee on the Secondary Legislation of the European Communities, I would like to raise the implications of the major developments foreshadowed in the EC for parliamentary democracy.
There is a perception in Europe that legislative power is constantly being ceded from member state parliaments to the Community, particularly to the council of Ministers, thus leading to what has come to be known as a democratic deficit in the Community decision-making process, as national parliaments can only exercise democratic control over their single member of the Council of Ministers. There is a need to keep sight of the objective that the citizens of Europe should be kept informed of developments as there is a perception that the systems in operation to date tended to remove those citizens further from the process of decision making. This aspect needed to be redressed so that future institutional changes will take full cognisance of the rights of European citizens as a whole. One suggestion made at the Third Conference of European Affairs Committees in Rome on 1 and 2 October was that there should be a European standing liaison committee, representative of parliaments, which would have the specific task of monitoring and discussing draft EC legislation. I think this suggestion is good and is one that should be followed up by the member states. Certainly, it would give national parliaments an input into EC legislation rather than the present system where legislation is foisted on national parliaments without any input by them.
I feel that economic and political union should not be the outcome of an agreement between governments but should directly involve the institutions which represent citizens, i.e., the parliaments of member states. Accordingly, it is proposed to hold a congress of parliaments of member states and the European Parliament known as the Assises in Rome next month to confront the challenge posed to parliamentary democracy by the proposals to amend the Treaties. The Dáil and Seanad will be represented at the Assises to ensure that the Houses of the Oireachtas have an input into, and an influence on, the outcome of the Intergovernmental Conference.
Without wishing to detain the House much longer, because I know that all the points of importance have been raised already by the different speakers — and I do not wish to hog the time of this House — I would like to conclude by hoping that the Intergovernmental Conference will not neglect the issue of economic cohesion which featured so significantly in the Single European Act.
Economic divergence between regions of the Community would not augur well for mobilising the political will that is called for to meet the daunting challenges that lie ahead of us. There are great challenges out there which we have to meet but I have no doubt that we have a great contribution to make in Europe. I am looking forward to the Intergovernmental Conference in Rome in December, and I hope that the decisions taken at that conference will be in the best interests of our parliaments and citizens.
I welcome the opportunity to participate in this debate. It is a debate which deals with highly significant matters, partly economic and partly political. I do not have an enormous amount to contribute with regard to the process of economics. Other distinguished colleagues of mine on both sides of the House have a far greater grasp of the principles and practical workings of the economic system, so I will just use the few minutes before lunch-time to make some general remarks on the economy. I have some things to say about political union and about the great dangers that exist in allying ourselves without questioning the ethical basis, for example, of the foreign policy of a number of our partners in Europe. I will be making certain very specific charges against some of these governments, including a charge of criminal conspiracy by politicians representing those countries with regard to human rights abuses in, for example, Cambodia and Nicaragua and also with regard to the treatment of their own nationals within their own frontiers. In addition to this, I will wish to raise a very important question regarding the harmonisation of asylum policy in Europe and will be looking for some solid information from the Minister with regard to what the intentions of the Community are in this regard and the processes by which policy in this area is being determined.
This all flows from the passage of the Single European Act. I regard this with some interest, first, because it was the first item of legislation in the debate in which I was privileged to participate upon my election three years ago. It is also interesting to notice that the resignation of the British Prime Minister, Mrs. Thatcher, is a significant element in this equation. Mrs. Thatcher stuck out resolutely against the trend within the European Economic Community towards the harmonisation of economic policy and towards the development of both the ECU and EMU. These are acronyms with which boat people are now becoming familiar, particularly the ECU, and I want to return to that in a minute or two. I am rather interested in EMU, European Monetary Union, because I recall that there was an emu on television when I was younger and it was, in fact, a ventriloquist's dummy. The interesting thing is not, in fact, what constitutes the dummy but who is operating it.
We must be very clear with regard to who is operating EMU or, indeed, the ECU. The Minister made an extremely relevant point when he said that developments towards the common currency and towards financial union on the one hand and monetary union on the other must be proceeded with in tandem, because it would be highly dangerous, particularly for the interests of a small country like this, if monetary union preceded the development of the financial arrangements. We must be clear that the interests of this country in financial terms are not in any sense prejudiced, particularly since I notice phrases occurring in the Minister's speech which indicate that exchange rates will be irrevocably fixed. It is important that they are not irrevocably fixed in a manner that damages the national interests of this country. We have a strong economy. I would like to think that one of the by-products of the move towards economic and monetary union would be that the benefits of belonging to the larger unit would be spread a little bit more evenly with the result that this country would have some degree of benefit from participation.
Sitting suspended at 1 p.m. and resumed at 2 p.m.
I welcome the Minister, Deputy Calleary, back to the House. I am particularly glad that he is here this afternoon because I intend to spend most of the time discussing political rather than economic matters, although I would like to finish one or two of the things I was saying before lunch with regard to European economic and monetary union. I whimsically evoked the image of EMU and suggested that there was an element of ventriloquism involved, in other words, that somewhere behind the scenes it was possible that people were pulling the strings unannounced. I am a little bit worried about that as, I think, Mrs. Thatcher was, although it is not often that I share views with her. I would not like to see, for example, the President of the Bundesbank directing our economic affairs for us. There is no doubt, however, that as we move towards final economic and monetary union a third great currency unit, will be created, giving us the Dollar, the Yen and the Ecu. I am not sure what the provisions will be for the minting of the new European currency because I would like to point out — and I am sure the Minister will agree with me — that if there is a new currency to be minted, perhaps the excellence of Irish design in coinage should be borne in mind by the European Community.
I would like to turn now to the question of political union and to indicate the kind of concerns I have. I suggested earlier that I felt there was, in certain circles in Europe, a criminal conspiracy between Governments or between certain secretive elements of Government to engage in an act without the authorisation of the people of Europe and directed against the peoples of third countries. I would like to instance specifically the case of Kampuchea. There has been extensive documentary evidence produced in recent months, particularly in the last few weeks by John Pilger, the independent television producer, which demonstrates quite clearly that, for example, Mrs. Thatcher's Government is covertly engaged, through the SAS and through MI6, in the training and arming of the Khmer Rouge faction in Cambodia. I hope the Minister will be able to give the House some assurance that the very strongest protests will be made, because if we are to align ourselves politically, as a unit in the European Community, we must demand certain ethical standards of behaviour and must not allow this kind of behaviour to be acted out in our name.
The great French writer used the phrase “J'accuse” and I would like to say here today: J'accuse. I accuse certain European Governments of being engaged in this conspiracy without the authorisation of their parliaments or their people. For example, it is perfectly clear that there are German-sourced weapons being imported wholesale into Kampuchea and Thailand with the connivance of the United States Government. Perhaps there again the Minister might like to indicate to the Government of the United States of America that it is unacceptable that they should so attempt to subvert the rights of a small country such as Kampuchea.
It is quite clear that the United States Government are leasing certain lands in Thailand from United Nations organisations and employing these lands as military storehouses, warehouses for arms and munitions and also as training camps for the Khmer Rouge. I will be very interested indeed in the Minister's response to this serious problem, particularly as it also involves countries such as the Federal Republic of Germany through the Ambrust manufacturers. Perhaps the Minister or his assistants will make a note of the name, Ambrust, because there is documented evidence — serial numbers, the business connections have been traced. There is no doubt whatever that this arms manufacturer is implicated and, thereby also, I would say, sections of the German authorities. The same is true in Great Britain. The firm which manufactured the elements which made up the big gun, parts of which were dispatched to Iraq, are also manufacturing secretly and under licence in places like Singapore, weaponry for the torture of the unfortunate people of Kampuchea.
I would like to ask what the policy of this new Europe will be with regard to the use of United Nations agency funding, relief organisations and so on, for the people of Cambodia. The people of Cambodia are the only people in the world who are excluded from these reliefs. Again this is not what the people of the world want. It is a cynical ploy by governments. What purpose is served by denying the very basic elements of medical supplies to the suffering people of Cambodia? Do we not have any recollection of our own tribulations as a people? Is it not a cynical exercise? It seems to me that this is something which simply must be examined. How can we continue our silence or our complicity in these policies at the United Nations and tolerate the seating of the Pol Pot faction?
Recently President Bush said that if there was a war in the Gulf, after that war Saddam Hussein and his officers would be brought to a Nuremberg-style international human rights trial. But President Bush has allowed himself to participate in an even greater crime by assisting the continuing genocide — and I insist upon using those words although the mealymouthed politicians such as our own oleaginous Minister for Foreign Affairs, shy away from using the word "genocide". It has been discreetly removed from the terminology of the United Nations. I would say to the Minister that he and the Foreign Ministers of other European countries will be flying in the face of the clearly expressed wishes of the European peoples if they do not insist that this criminal, lunatic and self-defeating policy is terminated once and for all.
What hope of this have we got? It comes even into our own personal sphere. A good friend of mine, valued for 16 years, an internationally distinguished psychologist, a priest of the Baptist Church in Paris, a man who established the Centre Du Christ Liberatem in Paris, a centre for the study of sexual minorities, on the 19th July last was lifted from that centre, invited to accompany three men, French policemen apparently, who showed their identity cards. He disappeared. I received news ten days ago that his mutilated and decomposed corpse had been found in a wood outside Paris. I cannot pre-judge what has been going on there. I have written to the French Ambassador expressing my concern and it has been subject to a row in the Assemblé Nationale in Paris, but it would fit in very nicely with what we know of the French Government and its attitude towards human rights. The Minister is shaking his head and I would remind him of Greenpeace. Does the record of history not show that the French Government, acting illegally, in conspiracy, connived and were responsible for the murder of innocent civilians by the planting of limpet mines on the Greenpeace boat, and having spent about 18 months in some little carefree captivity on a Polynesian island, did they not miraculously get transported back on compassionate grounds? These are the people we are mixing with.
We are right to be deeply suspicious and to demand the kind of standards at a European level that we insist upon in this country. We are not getting them either from our nearest neighbour who, as I say, has despatched named SAS personnel, named MI6 personnel, to Kampuchea or our great ally, the French, who have shown themselves already to be involved in murder as an instrument of policy and may well, through their police force, find themselves in the same dock again in the question of the murder of Pastor Doucé.
I would like to turn finally to the question of the harmonisation of asylum policy in Europe. Again, I worry about what I call the EMU syndrome. Who is pulling the strings? The Minister will know, of course, that this question of harmonisation of asylum policy is on the agenda for the European Community but who has it been left to? It has been left to a group called the group of co-ordinators. This is who is making the decisions on our behalf. Some anonymous, faceless, nameless group of senior civil servants deciding in our name who will and will not qualify for the privilege of asylum. I am very worried indeed about this, as are Amnesty International and as are certain agencies of the United Nations organisation.
One of the problems highlighted in this situation is that there is a proposal that European Community states will impose visa requirements on nationals of particular listed countries, thereby making it virtually impossible in a number of cases for people who are fleeing from unjust regimes in which they may very well be liquidated to gain access to asylum. Until now the Governments of the member states of the Community have not provided any detailed information about the proposals under discussion or put them forward for a public debate despite the major implications for the protection of human rights if they are adopted.
I do not believe these serious issues should be discussed in an unrepresentative way by anonymous bureaucrats without the requirement that there should be accountability to the European Parliament and to national Parliaments. I do not know about the group of co-ordinators; maybe it would be a nice experience to be co-ordinated; maybe I would enjoy it but I do not think so. I do not think I would enjoy being co-ordinated at all by this group of co-ordinators; I am certainly extremely suspicious of it. This all comes up because when in 1992 or whenever it is there is the establishment of the Internal Market——
The Senator has a suspicious mind.
I have a very suspicious mind, and rightly so. There will be a dissolving of internal passport controls so that an asylum seeker would have, in principle, free access among the different countries once he breached the external barrier. The problem is that having become aware of this, the European Community institutions wish to establish particular and very severe and, in some cases, unjust criteria with which to deal with this problem of asylum. There is no indication that the very minimal standards internationally required by decent, civilised people and by agencies like Amnesty and the UN are going to be observed. These would include access to legal council, to the United Nations High Commissioner for Refugees and, for example, an interpreter and that the interview should be carried on by somebody conversant with the human rights situation in that particular part of the world. We need the determination to be made by an authority that is impartial and knowledgeable and that seems to me to be an appropriately reasonable legitimate demand to be made. We ought to be concerned about restrictions on entry to the Community. There may be different criteria and it seems to me that the most difficult criteria will probably be applied for any of these people.
The Minister was here in the House for part of the debate we had on the abolition of the death penalty and he will remember when we were discussing it one of the problems we discussed was the question of extraditing people to a jurisdiction or, in fact, not granting them asylum which would mean that they would be sent back to a country in which they might face this ultimate horror of State murder. I have only lightly sketched in the provisions to signal a warning bell about this harmonisation of asylum policy. There may well be situations where it is convenient not to be troubled on an issue of conscience by people who are genuinely fleeing from persecution. I have given just a couple of instances: Pastor Doucé who was a valued academic colleague and personal friend of mine, possibly murdered, the Greenpeace personnel unquestionably murdered by the agencies of a friendly Government. What confidence should we have? Are we not right, as Senator McKenna asked me earlier, to have suspicious minds?
First, I would like to agree with some of the things Senator Norris has said, and also what Senator Ross said earlier. We have to look very carefully at the standing of Ireland internationally our neutrality and our foreign policy, and how well respected we are in many parts of the world. Obviously some people believe it is inevitable because of monetary union and political union that we are going to lose that neutrality. In fact, it came up at a meeting the other day of the joint committee dealing with secondary legislation. I do not believe it is a foregone conclusion. The committee saw that there were problems, that it had to be fully debated later. I believe it must be debated and must be much clearer for many of the reasons that Senator Norris gave because countries like France and England unfortunately have not got the best record and have supported regimes in certain parts of the world with which I and the vast majority of the people in this country would not like to be associated.
When Ireland acceded to membership of the European Community in 1973 we signalled our commitment to an integrated Europe, a harmonious communal market which would ultimately lead to an increased prosperity for all its citizens. We declared unambiguously our mutual objective of securing eventual economic and monetary union. These initatives deserve our unstinting support as a fully fledged and dedicated member of the European Community. Ireland has been an undisputed beneficiary of European Community membership since 1973.
The EC has experienced enormous and rapid change. This change is absolutely essential if the EC is to maintain its prominent role in the world economy. The immediate challenges now facing us is to successfully conclude the process towards completing the Internal Market by the end of 1992. Ireland is fully supporting and contributing to that important process. This momentum must be sustained if the Community is to achieve its stated goal. Ireland and all members of the EC will stand to gain in the long term.
The changes which the EC has undergone must be viewed in a positive light. The attendant advantages of a single market represent fresh and exciting opportunties for us not only in economic terms. We must be fully prepared to grasp the emerging opportunities and to avail of all material developments. In 1987 Ireland adopted the Single European Act which enabled the acceleration of European integration. The primary objective of the Single European Act is to create a uniform market which will set about improving and increasing competitiveness and growth within the member states, reversing high unemployment trends and creating a unified internal market featuring freedom of movement for people, goods, capital and services.
Progress towards monetary union is an integral component of the Community's movement towards completing the Internal Market. It represents the next phase towards monetary integration since the inauguration of the EMS 12 years ago. Ireland's membership of the EMS has been a resounding success. It has been a great influence in achieving the lower levels of inflation and interest rates which have prevailed in recent years. The establishment of an effective EMU with a single currency and one independent central bank is critical if the EC is to increase its capacity and resilience to cope with economic tensions which may happen from time to time. Interdependence between members of the EC is an important formula if we are to succeed in reconciling the twin aims of peace and prosperity. It is important for the overall cohesiveness of the EC. It consolidates our position in the world marketplace vis-a-vis powerful economies such as the United States and Japan. It will represent increased stability in a turbulent world and it will be conducive to future growth and increased prosperity.
In his address to the Dáil on 1 November last, the Taoiseach outlined the current position in relation to progress on political and monetary union. Agreement has been reached on various crucial issues among 11 of the 12 member states. We must welcome this almost complete consensus on the main aims of economic union which includes an open market system, price stability, growth in employment, sound financial and budgetary conditions and greater economic and social cohesion. As part of the final step towards monetary union, agreement has been struck on the establishment of a new monetary institution to include all central banks of member states and a new central body which will exercise full responsibility for the monetary policy. The final move will also include the fixing of the EMU exchange rates. This process will also see the introduction of the ECU as a single currency across the member states.
Ireland's attitude towards the EMU has been one of vigorous support and good will. However, as the Taoiseach indicates, we must be fully aware of the crucial parallel existing between the economic and monetary aspects of integration. We must recognise that our collective best interests would not be served if monetary union were to advance while the economic aspects were left underdeveloped. It is vital that the EMU be coupled with a strong commitment to the implementation of the effect of EC policies with the purpose of realising economic and social cohesion.
Some degree of caution must be exercised. Ireland must be mindful of the fact that greater integration could accelerate development in the more affluent and prosperous economies, thus broadening the chasm between rich and poor regions of the Community. Ireland's peripheral position in the Community would not benefit if this scenario were to take place. I welcome the Government's commitment towards progress on convergence in each of the necessary phases.
Given Ireland's relative isolation from mainland Europe and the consequences which may unfold, it is heartening to note that the European Commission may confer greater latitude in terms of assessing qualification for fund allocations. As the Taoiseach correctly pointed out, structural funding alone cannot successfully bring about economic and social cohesion. In this regard it is incumbent on the EC to focus on a more effective implementation of common policies thus correcting unnecessary imbalances among the member states.
Ireland must ensure its economic capacity and strength when continuing to advance the EMU process. The Commission's indication of introducing a system of grants and loans should be encouraged. Such a support system would be invaluable for Ireland in the context of resolving any problems which we may encounter because of our peripherality. The European Community must be sensitive to the implications of the EMU for Ireland which now finds itself in the unique position of being the only member state not directly connected to mainland Europe. Such a disadvantage must be duly acknowledged and the necessary support system and common policies put in place to redress our situation. The special circumstances in which Ireland finds itself must be adequately taken into account as we proceed towards the eventual completion of the Internal Market.
This country has never been neglectful of its role as an active and diligent member of the European Community. We have always subscribed to the letter and spirit of the European ideal and we have demonstrated consistently our commitment to making that ideal and all that it entails work efficiently for the benefit of all member states. In the past 12 months the whole face of Europe has changed dramatically. Thirteen months ago no one would have anticipated that Germany would be united. Indeed, Europe has experienced extraordinary changes and even that last bastion of Communism, Albania, is beginning to reexamine its structures.
The changes have been drastic as more and more move away from the centrally planned economy giving way to the forces of the market driven economy. The changes have been momentous and the implications for the EC are enormous. Such changes have presented enormous opportunities and challenges for us Europeans. The European Community as a whole must now poise itself to avail of the opportunities to the full. In that regard the Community must assume all the discipline and maturity of a powerful and unified economy with the capacity and dynamism to seize the opportunity to grapple with future inevitable changes on the world stage.
I salute the Government on the determination which they have shown in their participation in the process towards integration. Our role has been meaningful and constructive. Equally we have been sensitive to our particular national interests and we have been vocal in promoting and protecting these vital interests. As true Europeans we have succeeded in displaying our support for the European agenda while simultaneously preserving our own special identity within the Community. As national boundaries are crossed by European change, Ireland must have the versatility and stamina to discharge her obligations with dignity and vision.
It has been said that the debate on economic and monetary union in this country has been the preserve of academics and civil servants. I suppose if we are strictly honest we would have to agree with that. EMU does appear to be sneaking up on us without a true realisation of the enormous impact it will have. The timetable appears to be set. The first stage, we could say, is just about completed with the recent announcing by the UK of their acceptance of the exchange rate mechanism-ERM. The second stage will be the setting up of EUROFED, a European central bank — there is a date of about 1994 set on that achievement — with the final piece of EMU in place by 1997, namely, the establishment of a single currency.
With today's announcement from 10 Downing Street of Mrs. Thatcher's resignation this might indeed be a realistic timetable for all members of the Community. I do not think the reality or the true impact of what is involved in EMU has really struck home to most of us even in the houses of the Oireachtas, let alone the electorate generally.
The Commission assures us that there is no reason to suppose that the economies of small peripheral regions such as Ireland will not gain as much as the more powerful and central regions. But, somewhat ominously the National Economic and Social Council disagree with this view and insist that we will not gain as much from EMU as the central areas of the Community. Gain or not, there is a certain inevitability about the path to EMU. Indeed, as a full and equal member of the European Community we must trust that our negotiators recognise the enormity of the task ahead of them and that for all our sakes they are up to it.
I was reminded in an article in the press which I read during the week that Keynes once stated that politicians were the slaves of defunct economists. When it comes to EMU the opposite could be said to be true; the economists are now the slaves of the European politicians. It appears the political decisions have been taken, and indeed timetabled, but the economic and monetary details have yet to be worked out.
There is much at stake for a small nation like ours; a nation that I feel will continue to have an influence in the community disproportionate to its size. As a small open economy we do not share the same concern about the loss of sovereignty and monetary policy, for example, involved in EMU. We have tied ourselves to the Deutsche Mark in the EMS and our interest rates are kept at a level relative to our Community partners to ensure funds are attracted into our economy and to stop large outflows, in other words, a lot of our monetary policy is already de facto, determined elsewhere by Community, by world money markets and by trade situations.
Equal weight must be given to the economic and monetary aspect of integration. It would not be in our interests nor would it be in the Community's interest if monetary union was to move at a more accelerated rate leaving the economic aspects undeveloped. This is a situation that could develop, and is quite likely to develop. It seems to be easier to detail, tidy up and timetable the progress towards monetary union but when it comes to nailing down economic integration in the Community, even post-1992, it is harder to analyse and to ascertain that the economic developments are moving at a parallel rate to developments in the area of monetary union.
Our support of EMU is also based on the implementation of effective Community policies aimed at achieving economic and social cohesion. The Structural Funds, as has been pointed out by many contributors, will not meet these objectives on their own. By the very nature of EMU there will be a large degree of institutional change contemplated. The whole area of democratic control, the democratic deficit immediately comes to mind and needs immediate attention as a result of the major institutional changes that are before us. The role of the European Parliament in particular will require special attention. In Dublin in June the European Council decided to convene a second InterGovernmental Conference on political union and in the consideration of political union particularly the whole debate on the democratic deficit needs to be looked at.
I would like to say a few words on the third issue that arises, political union. The development of political integration must be based on a growing community of interests in the economic and social fields. We all accept that. Indeed, there is a certain attractiveness about the whole concept of political union. Again, we have not managed to define exactly the implications in it for individual member states, and particularly for the smaller member states. What is involved in the concept of political union? When it comes to timetabling I know we are looking at some years further down the road and to my knowledge we are looking at 20 years. If we expect to spend the next ten years sorting out EMU, and all that goes with it — I know the discussions and negotiations on political union will be going on at the same time — I imagine we are looking at ten to 20 years down the road at the earliest in terms of political union. Again, that has not been so specifically timetabled for us as has EMU.
The development of the whole Treaty to cover new areas of policy must proceed on the basis of the existing obligation of the Community, and member states, under the Treaty to strengthen the Community's econmic and social cohesion in particular and to reduce regional disparities and the problems of the least favoured areas. The Structural Funds alone will not meet these goals and it would be unrealistic to consider extending the scope of Treaty competences without assessing the means, financial and otherwise, required to meet the new objectives and to implement new common policies.
There are two other issues that could be usefully examined when we are talking about political union. One is the whole issue of subsidiarity and what controls we will effectively hand over to the Community as a group and what we will keep to ourselves or allow to be left with individual member states. We talk rather glibly about the concept of community citizenship but, again, to get down to defining what exactly we mean and where we are going on it has taken somewhat longer. Subsidiarity has been defined as the notion that the Community will only carry out tasks which can be undertaken more effectively by the member states acting in common rather than separately. That is the official Community definition of subsidiarity. In other words, we will be left doing what we can do more efficiently and the Community will take over what it can do better for each of us on a collective basis.
The question is an important one and is related both to the transfer of competence to the Community and to the exercise of competences which already exist. Several EC member states would like to see the whole principle of subsidiarity firmly anchored in the Treaty. In relation to Community citizenship, as the European Community evolves and develops it is only proper that more consideration be given to the rights which the citizens of the Community might enjoy. As part of a programme to establish the internal market, decisions are being taken which would allow people, for example, to move more freely between member states, to take up residence and to take up employment in different states. We are also trying to reduce the bureaucratic barriers which confront citizens of one member state when they move to another for employment, recreation or whatever. It is very important that the interests of the people of Europe should not be ignored by an overconcentration on economic and monetary issues. When striving to improve the efficiency and effectiveness of the institutions of the Community we must not ignore the interests of the ordinary man and woman in the street.
I support the joint committee's views. I welcome the proposal to see included in an amended Treaty the question of citizen's rights. I trust that the EC's view reflect the views of the Government and those of our representatives who will be involved in negotiations. It is very important that the ordinary man and woman in the street feel that their rights are being protected and that they do not assume that this whole debate about EMU and political union is at another level altogether and does not impinge on the ordinary day to day running of their lives. It is very hard to talk about EMU and political union in a language that is relevant to the ordinary man and woman in the street today, and which will make them feel that it is as important to their lives as it is to the institutions of our State. It is a technical area. It is an area a lot of us find hard to stay on top of as it is moving so quickly, but we have got to present what is happening to the ordinary man and woman in the street so that they understand the relevance to their lives.
Political union particularly — EMU as well — begs the question of democratic legitimacy, the democratic deficit and the strengthening of that deficit. There is all sorts of Eurospeak used in this area. Concern has been expressed by the European Parliament, and by a number of member states, that unless the democratic legitimacy of the Community is strengthened as part of the present Treaty reform process the basic principles of democratic accountability could be undermined. I feel very strongly about this. At the same time national parliaments have expressed disquiet at the erosion of their own powers following the adoption of the Single European Act. My fears are not based on any disquiet about our particular role in the Community, In EMU or in political union, but I would like to be sure that we never lose sight of the ultimate necessity of democratic accountability concerning what is going on in the greater Europe in relation to the national parliaments.
Scrutiny of EC legislation, and democratic accountability, are what we should turn our attention to. There is a huge deficit in this area. There have been many proposals for redressing this deficit and, indeed, the brief mention of a few would not be out of place. For example, we should insist that national parliaments continue to have a strong role, particularly in relation to overall scrutiny of EC institutions. I do not think that the Irish role have been strong enough to date. I do not think our scrutiny of the institutions or EC legislation has been adequate. We need to look to our own structures to ensure that we redress the deficit that exists before we worry about the deficit that will definitely be there when we move further on down the timetable towards EMU and political union.
National parliaments, and their EC committees, should be enabled to debate and examine all relevant proposals before they are referred to the Council for decision. Adequate resources must be made available for this purpose. On this issue we need to set up some sort of two-way system so that we can influence our Ministers as regards their activities at the Council of Minister's table. This has been very evident in recent times with the difficulties over the GATT talks. We must have a system whereby we can influence our Ministers, support their views, strengthen their hand or disagree with them if we do not like what they are at, but we must influence their proposals and their performance at the Council of Ministers table.
We are all extremely concerned at the moment about the way the GATT negotiations are going and about the fact that we are now being threatened with a trade war because we did not succumb to the bullying of the American point of view in relation to what they want on the agricultural support issue. This is not acceptable and we should have a mechanism. Be it a strengthened EC committee, direct debate or question time, there should be a mechanism through the national Parliament where we can help, support and strengthen our Minister for Agriculture and Food in the very difficult job he has ahead of him and be sure he can go out there in the firm knowledge that he has the support of all in both Houses of Parliament and the various relevant committees on this island.
European affairs committees generally should have a major role affecting the decisions that are made in this area and in consulting other EC partners' committees on an on-going basis. We need greater liaison between other EC committees so that together each member state can remove the democratic deficit and we can all move in the same direction to ensure that we have the same structures set up for plugging into the decision making processes in the Community in the years ahead. We need to strengthen the democratic legitimacy in the relations between the Community and the member states. That is most important.
We also need to strengthen the democratic legitimacy within the Community institutions. This is an area that must not be forgotten. The role of the European Parliament in relation to the Commission and the Council of Ministers must be strengthened, but not at the expense of national parliaments which, never let us forget, represent the national electorates. We appoint the Government in office and we raise the revenue and disburse public funds in particular member states. We have to get the balance right and it is a critical time now to turn our attention to having the formula in place.
We must look again at the number of commissioners. They need to be reviewed. Various proposals are being made, one per member state. Why do the larger member states need two and smaller member states need one? We are looking at voting power and influence in everything. Each member state is equally important in making up the whole of the Community and we must be sure that the present formula is correct. I very much favour the question, which we discussed at EC committee level, of a European Senate. We will not delay by wondering what the electoral system would be because that begs a huge question. The principal of a European Senate is very attractive in terms of democratic accountability and answerability. I think it is one that we must pursue and investigate further. This will be representative of national Parliaments, it will bridge a real gap that exists at the moment between the Community institutions and national parliaments. It would keep the national parliaments in control of the activities of the Commission and the Council.
There are many areas that we could turn out attention to. I give you those thoughts not in any particular order of importance but as a committed European, as one who views with a certain excitement the progress in EMU and indeed political union. I do not think we have anything to fear, as a small member state on the periphery of Europe, providing the pieces are put in place before irrevocable decisions are made. The onus is on the shoulders of our negotiators, whether they be at the political level, at the level of the permanent Government or at the level of the economic, monetary and financial institutions. The difficulties should not be underestimated. We have to turn the debate into the language of the ordinary people in the street so that they realise the huge irrevocable steps that are being taken at this time.
As a committed European, I can see Ireland in the years ahead having a disproportionate influence to its size in the Community, not as part of the begging bowl mentality but as full and equal members. I have not touched on the other areas that are implicit in political union — the security and defence areas. There is one statement I need to make at this time because I think we cannot fudge the issues involved much longer. We need a serious all-party debate without trying to score political points here at home.
The neutrality issue was very important to Ireland. As a stance it was most important to Ireland when we were a small country standing alone. It served us extremely well. We are now firmly part of the European Community. There is no going back — I do not want to go back — but, even if we did, there is no going back. We must be sure when we discuss the whole neutrality issue that we have a full grasp of the reality of where Ireland is now as a member of the EC. In practical terms the whole issue of neutrality could be said to have been decided. If we grasp political union with the enthusiasm we profess, it is implied that the defence and security issues of the Community will require us to be full and equal members in this as well as in every other area. We will have to debate it; we will have to discuss it. It will be contentious. We are going to have to stand up and be counted on this issue, but we must look at what the reality is rather than the romantic view we might have had of it. Neutrality certainly served us well in the past. Is it a realistic option for the future? I just cannot see it, but I am prepared to debate it and to be convinced and to listen to other people's views on it, but personally at this point I cannot see it.
I thank the Minister for his forbearance with all the contributions in this House. Senator Norris referred to the oleaginous Minister for Foreign Affairs — I am still trying to work out how one spells that; I do not even know what he means by it, but I shall refer to my dictionary. The Minister of State and the Minister have a most important role to play at this critical point in European development and I wish you well, because it is not an easy task ahead.
May I take this opportunity to support Senator Norris, not in relation to his reference to the oleaginous Minister for Foreign Affairs, but to the concern he expressed about some of the atrocities, or alleged atrocities, of some of our EC partners. I would respectfully suggest that when full integration takes place in the Community, as Senator Doyle has said, this country will have an extremely important role to play and we can use it as a lever in respect of those countries who would appear to be stepping out of line in relation to injustices. We could play a very important role, as we have done in the past, being an emissary for the underprivileged and in respect of different countries where atrocities have been committed, particularly by partners in the EC.
By the end of the year the 12 members of the EC will be launched on the road to European political and monetary union. If everything goes well it will be ratified by the national parliaments by the end of 1992 when the Single European Act is completed. Two intergovernmental conferences on economic and monetary union and political union are to begin work on 13 and 14 December in Rome. They are to be completed quickly to meet the deadline of the last day of 1992. I think everyone can appreciate that the targets which the Twelve have set themselves are extremely ambitious and would mean bringing the hugely divergent views of Britain, on the one hand, and the Benelux countries and Italy, on the other, together on such sensitive issues as a common foreign policy, including security, and a federal style central bank.
This is a long way from the orignal Common Market which was set up in 1957 and included just six countries — France, Germany, Italy, Belgium, the Netherlands and Luxembourg. I remember some years after that, as a commerce student in UCD, stating at a tutorial that when Ireland became a member of the Common Market the benefits for this country would be very great. I remember at the same time a tutor telling me there was fat chance of that ever happening and that the probability of Ireland being a member of the Common Market was extremely remote. We have come a long way since then, first by becoming a member in 1973 and then by the continued integration ever since.
The passing of the Single European Act means that by the end of 1992 we will have an internal EC market free from all remaining barriers, all customs duties and other barriers to trade. These other barriers are caused by the fact that different product standards, safety, health or environmental standards, operate from one member country to another. The welter of apparently petty restrictions which these barriers cause is endless. For example, cars and televisions have to be altered in innumerable ways to meet all sorts of different national standards. A simple example is that chocolates cannot be sold in some member states because there is a different definition of what chocolate is. German laws for years prohibited the sale of other countries' beers because they contained additives that contravened German purity laws. I hasten to add that the purity laws referred to the additives, not to the individuals drinking the beers. Such regulations are in effect barriers to trade because they increase costs and they discourage business co-operaton. In future any goods legally manufactured and marketed in one member country should be able to be sold in another member state.
The Community will adopt common safety and health standards to allow this to happen. The single administrative document which has been introduced to simplify documentation replaces about 70 documents relating to international trade and the movement of goods between one country and another. This is a huge development when one appreciates the number of people involved in the transport of goods between countries and the huge amount of documentation they have to get through in order to transport their goods. It is a very beneficial development.
There is also the development of proposals and the mutual recognition of academic diplomas. These diplomas would allow graduates to move more freely from one country to another provided they attain certain basic qualifications. This is an area in which I have a particular interest. It is a tremendous step forward to have common qualifications where graduates are able to move freely from one country to another. The benefits of that development are appropriate to people coming to this country just as they are to people moving from this country to other countries.
There is also the question of vocational training for apprentices. Again, this is a very important development in relation to the whole regulations governing employment within the EC. There are difficulties — I have been involved myself — in relation to apprentice training, where qualifications were acceptable in one member country and not in another. This common standard, both in relation to academic diplomas and to apprentice certificates, is a very welcome development. The consumer in 1992 will be able to avail of a choice of a wide range of insurance policies, unit trusts, banking services, mortgages and company shares from any member state. In 1992 will also see each country's VAT and excise taxes moving closer together.
I wonder if the latest talk about European union means any more than the rhetoric which has ben heard on the subject almost since the process began back in 1950 with the Schuman plan to pool the coal and steel resources of France and Germany and of any other country that wished to join. While the plans that have been put forward and the dates for implementing them have very much over-run in relation to proposals that have been finalised, nevertheless one has to acknowledge that great strides forward have been made. It is only fair to argue: better late than never. People may ask if the target for 1992 is realistic, but I pose the question, as some Members have already done here today: who would have foreseen German reunification in 1990?
During Ireland's Presidency of the European Council in the first half of 1990 the Government's main role was centred on preparations for the two intergovernmental conferences which are expected to produce agreement on the necessary Treaty changes for European monetary union and political union. The particular role of our Government was bringing together the views of all member states without forcing governments to commit themselves to detailed position on very different and difficult issues when full negotiations get going in December.
This country accepts that under stages 2 and 3 of the EMU there will be a federal-style central bank, fixed exchange rate parity and a centralising of existing national budgetary policies. We are insisting, as the Taoiseach has said, that the principles of economic and social cohesion are included as integral elements of EMU and adhered to in the context of completion of the Single European Act. The outline opposition of Mrs. Thatcher to full EMU is well known, but in view of the announcement today the attitude of the British Government in relation to this area will have changed drastically, and that change is imminent.
The Taoiseach has made it clear that Ireland supports the goal of European unity which does not compromise our neutrality or our military neutrality, because Europe's security framework is likely to become the Conference on Security and Co-operation in Europe, CSCE, in which Ireland fully participates. The Government have always declared that the priority for Ireland is economic cohesion and the closing of the per capita income gap with the EC norm. Effectively, political union must have a solid economic underpinning.
One particular area in which I have a special interest is that of product quality. Quality has become a central issue in the harmonisation of standards within the Single European Market. The International Standards Organisation (ISO) has developed a new series of quality management systems known as ISO 9000 series. Quality management relates to the operation of an entire company, not the standard of the product. The assumption here is that the manufacturer cannot be depended upon to produce goods to the required standard all the time unless his quality management system also operates to an agreed standard. ISO has members all over the world. Its Community and EFTA members are known as CEN. CEN, in turn, is made up of the national standards organisations of each member country. The EC has allowed CEN to set standards for its markets so that all members will operate to harmonised standards thus eliminating technical barriers to trade.
At the request of the EC, CEN has adopted the ISO 9000 series of quality management standards for use throughout the Community. This is a far-reaching decision which has profound implications for 1992. EC directives on public safety, health, product liability, environment and other public issues are based on agreed European standards so that if a manufacturer's product conforms to a standard the manufacturer has little to fear from legal action. By 1990 the huge governmental EC public procurement market will purchase only on ISO 9000 standards. Because of this over 120 Irish firms are now certified to the ISO 9000 series.
The impact of the standards on both the internal and external operations of a company is dramatic. In Digital, for example — one of Ireland's largest manufacturers — their two plants in Clonmel and Galway have quality management developed down to individual operators and embedded in each operation. It is not something apart, such as quality control or fault checking. It reaches out to the customers on the one hand and to the suppliers on the other. The effect on suppliers is of critical importance to Irish industry, because the national linkage programme of finding suitable Irish sub-suppliers for components and materials for foreign-owned industry is based on the assumption that the smaller Irish suppliers can operate to the required level of quality. That level is now the ISO 9000, so we find Digital and similar companies who already operate the ISO 9000 demanding the same from their suppliers. This has an extremely important spinoff effect in relation to the smaller Irish companies, because effectively what Digital and other large companies are saying to them is that the products we are going to procure from you will have to pass the test on the basis of the ISO 9000 series standard. It is extremely important for our indigenous industries here who would see themselves as sub-suppliers of Digital or any other major industry or foreign company in this country that the quality control of their products has to be inbuilt as part of the whole set-up of that company and not just a sectional type of thing. It is part of the whole scheme of things.
I support what Senator Doyle said in relation to the man in the street and the whole problem with EMU. It is only right that we should acknowledge that Europe was always in difficulty in bringing emphasis in relation to the importance of the European scene to the ordinary man in the street. That should not prevent us continuing to ensure that, as far as possible, the ordinary man in the street is made aware of what is happening. As has been said, European Monetary Union is extremely technical and it is very difficult to put it across in the type of a language that would be understood by the ordinary man in the street. The implications of unity in the long term are so great and so enormous that it is incumbent on us, at every opportunity, to try to bring it home to the people. That is why this debate is of such importance in relation to the whole area of political union of this country.
I welcome the opportunity to say a few words on political union. I do not think this country has anything to fear in the long term from political union. We have received enormous benefits from the EC in the past and I do not see why we cannot continue to receive them in the future. This gives a small country like Ireland the opportunity to play a very important role in the whole area of the united states of Europe. People should not be too concerned about the loss of national identity or anything like that. Even within the country, we all in our own counties still keep our own identity and we refer to different areas which have their own style and way of doing things. I am reminded, as the British Government and British Prime Ministers are in the news today of when a former British Prime Minister, Mr. Ted Heath, was being interviewed in New York. He is a very strong supporter of the EC and he was asked how he could identify with Britain becoming a member state with France. He asked the questioner who was from New York, "how do you feel about California? If you can sit comfortably with California, we can sit comfortably with France". He answered the question in a very simple way.
We have a tremendous amount of work to do. I know the benefits which will accrue to this country will be enormous as they have been in the past. I support the Government in their efforts to ensure that this country secures both economically and culturally everything it can through the EC.
It was Lorenzo Natali, a Vice-President of the European Commission who said in Brussels on 10 November 1989:
Our generation has been fortunate to have had a man of inspiration like Jean Monnet, who launched Europe on its first shared venture, but what kind of Europe do we want to find the day the scaffolding finally comes down?
It is in the context of that fundamental question that I welcome this debate on the two main fronts on which progress must be made, namely, economic and monetary union and political union.
It is interesting to recall today that it was on 9 May 1950 that Robert Schuman, the French Foreign Minister, made the famous declaration, to which Jean Monnet had contributed in a most decisive fashion, and began the process of integrating the countries of Western Europe into the European Community. On 18 April 1951 the Treaty of Paris was signed. That marked the creation of the first of the three communities, the ECSC, the European Coal and Steel Community. That first step resulted from the untiring efforts of a few men of great vision, courage and integrity, people such as Schuman, de Gasperi, Monnet, Hallstein and Adenauer.
These men shared a vision of a Europe bound together by economic and social ties instead of being divided into competing and, indeed, often hostile groups. They realised how terrible the cost had been to ordinary people who had witnessed two dreadful wars in the first half of this century. They realised how deeply people yearned for peace, a peace that would be enduring. To Schuman, and his colleagues the basis for such an enduring peace lay in economic co-operation amongst the European states persuaded to share their resources and to trade freely with one another.
Co-operation in coal and steel, of course, was but a first step. However, the real advance was achieved with the signing of the Treaty of Rome on 25 March 1957. On 1 January 1958 the European Economic Community and the European Atomic Community, the EURATOM, became a reality. This set the European states on the road to economic and social unity and has made the possibility of war between these states utterly inconceivable.
The Treaty of Rome created an entirely separate and distinct legal entity to which each acceding state surrendered portion of its national sovereignty. The creation of the European Community saw the emergence of a new, autonomous legal order which had to be recognised as having supremacy over national law, if the Community was to function as the Treaty intended and envisaged.
Of particular significance of course to this country, is the publication by the National Economic and Social Council of a major study of Ireland in the European Community, its performance prospects and strategy. The NESC report presents a detailed analysis of the effects of EC membership on the Irish economy, an assessment of the likely effects of the completion of the internal market by 1992 and an outline of the approach which Ireland should take to current and future European integration. In my view the NESC report makes two crucial conclusions:
(1) Ireland has made little or no progress towards catching up in economic terms with the rest of Europe and the Community is still developing in an unbalanced way which could be to Ireland's detriment.
(2) Ireland needs to adopt a more explicit, coherent and a fully articulated European policy and strategy.
Following a detailed analysis of the relative merits of different levels of economic integration the NESC unanimously concluded that Ireland's interests lie in advanced economic integration. Consequently, Ireland's strategic approach should be the objective of creating a European economic and monetary union.
The NESC emphasises that in advocating economic and monetary union it means a Community which will have sufficient resources and policies to create a genuine, economic union and to manage a unified European economy. On the other hand, as we know, the recent Delors report adopts quite a different definition of economic and monetary union. The NESC report says that the Delors report on economic and monetary union, the blueprint compiled by the central bankers of the European Community under the chairmanship of Jacques Delors, the President of the Commission of the European Communities, ignores the essential role of the central European Community budget in maintaining an economic balance and in achieving the convergence which is essential if such a union is to succeed.
The NESC report considers that the policy measures envisaged in the Delors report would be quite inadequate to create the level of integration and economic convergence and cohesion necessary to sustain monetary union. Their analysis of the implications of economic integration clearly shows that by continuing to neglect these requirements the Community as a whole will sacrifice its central objective, namely, a genuine common market monetary union and economic cohesion and convergence.
It is clear from the NESC report that the development of the Community has not facilitated the convergence of Irish living standards and that it is unlikely to do so unless there is a seminal and important change in Community direction. European integration tends to reflect and, indeed, to reinforce existing advantages and disadvantages so that the creation of a Single European Market cannot on its own be expected to cause living standards to converge.
It is appropriate, therefore, that Ireland, with a relatively long period of EC membership, should lead the peripheral and smaller economies in any analysis of the deficiencies and difficulties of European economic policy and in the search for new directions. For 17 years Ireland has been a relatively passive recipient of directions from Brussels. The Government and the Taoiseach should now develop a more active and, indeed, a more creative approach to participation in the European Community.
With regard to European economic and monetary union, at its meeting in Hanover in June 1988 the European Council decided to set up a committee under the chairmanship of Jacques Delors. That committee was given the task of studying and proposing concrete status leading towards economic and monetary union. That committee reported in April 1989. It proposed a three stage transition to full union as follows: stage one was to start on 1 July 1990 and to include the stronger co-ordination of economic and monetary policies and the full participation by all member currencies in the European monetary system, the EMS. Stage two is a transitional period and it aims to take the process of integration significantly further by creating a central monetary institution to be known as the European system of central banks. The recent European Council meeting agreed that the second phase of the European and monetary union should begin on 1 January 1994 provided a number of conditions are met. These conditions include the achievement of the Single European Market programme, the ratification of a new treaty and the prohibition of the monetary financing of budget deficits. Stage three, of course, is the final stage. It embraces a permanent linking of the exchange rates, the transfer of responsibility for monetary policy to the European system of central banks and the application of binding rules and procedures to the macro-economic and budgetary field.
With regard to European and monetary union, it is interesting to note that the German plan for EMU calls for a slow phase in. On 19 September 1990 Karl Otto Pohl, President of the Bundesbank, presented a detailed set of Bundesbank requirements for European economic and monetary union. Pohl outlined the bank's views amid an atmosphere of divergent views both inside and outside Germany over the EMU. Pohl's cautious and lenghty transitional phase approach is backed by the German Finance Minister but on the other hand, it is opposed by the German Foreign Minister, Hans Dietrich Genscher, who favours the speeding up of the pace towards EMU and the establishment of a European central bank.
With regard to European political union, it was indeed Douglas Hurd, a man very much in the news now, the British Foreign Secretary, who pointed out that if we ask ourselves the question, what does political union mean, we are bound to come up with 12 very different answers. Indeed, the EC Foreign Ministers aired rather than settled their differences over EPU at their meeting in Asolo, Italy on 6 and 7 October 1990. Giovanni de Michelis, the Italian Foreign Minister, said that the airing of divergent views was to be expected given that the Ministers were only at the beginning of the preparatory process scheduled to culminate with the intergovernmental conference on EC political union in Rome in the middle of December this year. He added that introducing a political dimension to the EC would be flexible, pragmatic and, indeed, a gradual process. Turning to the future role of Europe de Michelis sais that he had a vision of Europe consisting of a series of concentric circles stretching from San Francisco to Vladivostok with the EC in the middle, the European Free Trade Association countries in the next circle, the Eastern Europe countries in the next circle and the USSR, the United States and Canada in the outer ring. Given the degree of institutional change contemplated by the moves towards European integration, it will be necessary to consider the question of democratic control in some detail.
The role of the European Parliament and its relationship with the national Parliaments will, of course, require special attention. The French Government on 27 April 1990 aired a worth-while suggestion — the creation of a second parliamentary chamber or Senate in Strasbourg in which members of the national parliaments would sit. Under the French scheme the Senate would have powers equal to the existing 518 member body and would act as a check on any major shifts of authority from the national parliaments to the European Community.
Finally, we are now at a very crucial point in the development of the European Community. It is essential, therefore, that the Houses of the Oireachtas and, indeed, the Oireachtas Joint Committee on EC Secondary Legislation, be given an opportunity to debate in detail what route the Government think we should be taking and what proposals we should be advancing for the development of the European Community from the European monetary and political points of view. The decisions which will be taken as a result of the intergovernmental conferences will affect this country for very many years to come. We would, therefore, want an opportunity in both Houses to hear clearly the Government's views on these matters. It is quite fair for us to ask the Government to put before the Houses of the Oireachtas a White Paper outlining what they see as a solution to the problems which this country will face in bringing about and integrated Europe in the future. There is, in my view, a clear need for a comprehensive reappraisal of foreign policy and a clear statement of the priorities and policies for the next stage of European integration. For that reason I believe the Government should now, even belatedly, set up a foreign affairs committee representative of Members of both Houses of the Oireachtas to deal with these important matters for the future.
In this debate and in what we read about the present situation in the EC, we have seen clear references to the possibility of a two speed approach to economic and monetary union because of the inability or the unwillingness of some members to sustain the pace that is favoured by the majority. This morning we saw the repercussions of that situation. I hope this situation will not emerge and I know member states will make every effort to avoid it. However, if it should prove unavoidable, it should be our intention to move forward with the leading group. If we do that we are indicating what is a known fact in terms of economic indicators, the question of inflation, the balance of payments, budget deficits and things like that, that we meet the economic conditions that are needed for union.
Of course, the objective of economic and monetary union is to achieve greater prosperity throughout the Community. A fully integrated economy will, in the first place, lead to the development of a strong economic bloc in Europe that will be a worth-while and a very powerful force in the world economy. Internally, the removal of transaction costs and the convergence of individual single economies will lead to improved benefits.
There may also be costs in this scenario for member states in surrendering the element of flexibility. As Senators know, an assessment of the costs and of the benefits has been prepared by the Commission and has been examined by it. Its conclusion is that the sizeable benefits which will accrue from the greater efficiencies and greater stability will clearly be to the benefit of all. It points to potential costs in terms of loss of flexibility in relation to monetary and exchange rate policy but the overall affects and conclusion is that benefits should well outweigh the costs.
There can be no doubt we are in the process of creating a more integrated, forceful and dynamic Community. The events of the past 12 months have shown the need for this and they have pointed to the role the Community can play in the affairs of our Continent and in international life. First, we had the collapse of the old regimes in Central and Eastern Europe and the need to provide swift and effective support for the new democratic Governments emerging in their place. The Community was quickly off the mark and responded very well and was chosen by its major democratic partners to coordinate the international effort to assist those countries.
Another example was the unification of Germany. The union of the two Germanys under a European roof became the priority of the Community after the fall of the Berlin Wall in November of last year. Again, member states reacted quickly and very positively to the demands made on them. The complex measures which were required to make the two Germanys a part of the Community were agreed without to much difficulty. The enthusiasm for the new Germany was genuine and was expressed by many of the nations in Dublin at the European Council Summit in April. After that meeting the Taoiseach told the European Parliament we looked forward to the positive contribution which the former two Germanys could make to the future prosperity of the Community, thus repeating the expression of goodwill that was widely shared by all our partners.
We can all be justifiably proud that the main lines of the Community's response to one of the most significant events of the post-War European history was settled during the Irish presidency. The Taoiseach was President from January to June of this year. In the meantime the work that has been done on the interim measures and shortly to be complete on other arrangements, has been undertaken with full participation of all the member states. I believe our interests are being well and truly protected.
In the context of economic and monetary union I would like to mention the question of tax harmonisation. We are all very much aware that there is a great variety of tax regimes and tax practices throughout the Community. Greater uniformity is obviously needed but not to much progress has been made in achieving this greater uniformity. We all realise that harmonisation is essential and that this matter has to be addressed with greater urgency. Obviously, we are anxious to know what will happen in the future.
One area where work has been going on steadily over the past year or so and where some progress is being made is on the VAT regime to apply after 1992. The broad outline of the new system which will allow imports and exports to move freely without border controls has been agreed. Discussions are now centred on the technical arrangements to make this system work and decisons are due to be taken by the end of December or thereabouts. As I understand it, one major component of the new regime to be decided is the level of VAT and excise rates that will apply after 1992. It is abundantly clear to me that when custom controls disappear our rates will need to measure up or approximate closely to those in Northern Ireland if serious distortions are not to occcur. Obviously, such distortions would be contrary to the Single Market philosophy which is grounded on the principle of greater economic convergence. However, it is my view that the process of bringing our rates in line with the lower UK rates will be expensive. The figure I saw was something like £500 or £600 million annually. We have a problem here and we must look to the Community as a whole to assist in the solution of this problem. It is a very serious problem and one that needs to be addressed quickly.
I would like to talk about aspects of the Common Agricultural Policy. I am not a rural man but, nonetheless, I agree it is vital to our nation. We can certainly say that it has been beneficial to Ireland in recent years. As one looking on, I would say that it is time it was re-examined. We know anomalies exist. Quotas and restrictions are imposed. It is important that we consider initiating an overall review of the common agricultural policy in the years ahead with the aim of protecting its basic ideals and principles. These are designed to protect the smaller family units so vital to this country of ours.
If this must be effected by means of additional subsidisation of smaller farmers perhaps then it should be done in that way. I am not sure that we should stand back and apologise for so doing. It would be regrettable, and serious, if we reached the stage that quotas were so small and were supported to such a degree that they would prevent farmers developing to a reasonable standard. In agriculture or, indeed, in any other sphere it is vital that people make a livelihood from their produce. They should not have to depend on subsidies.
If there is to be a subsidy system then let it be an equitable one. Let us ensure that the people who need it most are allowed to develop to a level at which they will not need any subsidisation. That train of thought, I think, is prevalent at the moment. It appears to be accepted by many of our European partners and I would certainly welcome this. With regard to the GATT talks which were referred to this morning by some Senators, it is no harm in passing to make the point that in regard to the American position their Secretary for Agriculture came to Europe and proposed a reduction beyond that which could be accepted by the Europeans. We know that they did not make it clear that under their own system their farmers have a much higher subsidy rate than European farmers. It is no harm to highlight this point.
The debate has been a long one and many Senators have shown a great interest in it. If there are other speakers I recommend to the House that we might have an extension of time next week, if that is what has to be done. I am grateful, and delighted, that this debate has led to this great interest. I found great interest in it on my side of the House. My colleagues and Senators on the other side also are queuing up to speak, which is a great sign. I am glad to say that throughout the debate which I have been listening to on a monitor there was a noticeable measure of agreement across the House on the value of our community membership and of the need for protection of our national interests. We all share the hope for this country and expect that we will play a positive role in the construction of the new Europe.
Thank you, Senator. Perhaps I could put it to the House that the proposal of the Leader of the House that in the event of speakers not having time to make a contribution this week the House will agree to extend this debate to next week? Agreed.
I would like to welcome Minister Noonan, my constituency colleague, to the House. I am delighted to see him here in his capacity as Minister. I concur with the previous speakers that the movement towards European unity is a positive thing and to welcome the positive approach taken by the State to the challenges that lay therein. I would, however, like to discuss an issue which is very important and which Europe, and the Government, are not now ignoring but did ignore up to about three months ago. I refer to the policing implications of open borders in the Community after 1992. There is no evidence that the serious implications of free movement of criminals across borders is being addressed. The Government, and in particular our Minister for Justice, and the European Ministers for Justice, his colleagues in Europe, should address this problem immediately.
Ireland will have to be vigilant to ensure that terrorists, drug traffickers and other criminal elements will not have a field day after 1992. We must guard against the State being used as a base for farming out criminal activity after 1992. The Government seem to be unconcerned with this.
The policing implications of open borders should be a priority for the Government. There is no doubt about the commitment of the EC to move towards open borders. The deadline to achieve this is 1992. The specific measures set out in the timetable aim to eliminate barriers of all kinds, physical, technical and fiscal. By 1992 Community citizens will be free to move within the Community without systematic checks of their identity or checks of their goods and personal belongings. Goods will be free of all controls throughout the EC. Community manufacturers, in fact, will be able to market their goods freely throughout Europe. The removal of frontier checks will create a situation similar to that prevailing in the United States which has a police system consisting of individual State forces, plus an overall non-uniform nationwide force, the Federal Bureau of Investigation.
There is great dissatisfaction in the United States with this. There is no common front against crime in the US. It is widely acknowledged by police in the US, and by others, that the drug problem in particular, and crime in general, is out of control. Recent statistics, which I read over the past few weeks, indicate that there has been a considerable increase in the level of crime throughout the United States over the past 12 months. The fragmentation of the police force in the United States has been a positive advantage to the criminals who have freedom to move from state to state while the police jurisdiction is confined at state level.
A similar system will exist in Europe after 1992 as Europe gets closer and closer to political, fiscal and economic unity. The situation will be similar to that of the United States with regard to policing, with the added disadvantage that there will be no nationwide police force similar to the FBI in the United States. I wonder if the Trevi Ministers, at any stage during their deliberations or during the EC Presidency when they met in Dublin in June, or at their recent meeting in Paris, considered creating a uniformed European police with authority to cross borders and arrest suspects for certain scheduled offences. We are not talking about a police force which is centrally controlled. There should be a specific police force for scheduled offences like drug trafficking, illegal arms movements and other scheduled offences. It is common knowledge and accepted that drug traffickers know no boundaries. The war against drug organisations will be lost unless the EC coordinate their police forces and activities.
I understand as a result of the statements made after the last Trevi Ministers' meeting that this is now under consideration. Maybe the Minister is in a position to inform us if any decisions have been taken with regard to the control of drugs and about the views of the Government with regard to the movement of drugs once the borders throughout Europe are removed. It is frightening to note that since between 5 per cent and 10 per cent of drugs are recovered by security forces throughout Europe, 90 per cent to 95 per cent are sold and peddled with the consequent human misery and family problems that arise from such illegal activity.
In the open border situation to which I referred the harmonisation of laws within the European countries will be necessary to limit the growth of criminal activity. In the event of disparities in the law continuing, criminals will centralise their operations in countries where it is perceived that the laws are more lenient and in areas where the penalties and the sanctions are lenient as well. Using a selected country, criminals and drug dealers, illicit arms traders, terrorists and so on will base themselves there and farm out their illegal activities to other countries. It is important that the EC should address this problem and look at the divergence of laws and sanctions throughout the EC to see what effect it will have on the growth of criminal activity post-1992. For the same reason a country which is perceived to have a police force which is less efficient than its neighbours in terms of manpower, training and equipment will attract criminals and their operations. This is evident because it reduces the risk of detection if the police force is less efficient. Perhaps the Minister will inform us what developments, if any, are taking place in Europe to ensure the harmonisation of efficiency in police forces in terms of their manpower, training and equipment and what steps he is taking to neutralise the effect of open borders and the growth of criminal activity in countries which have less efficient policing than their neighbours or other EC member states.
Another area that has been mentioned of late is that of the unwitting facilitator — a part the banks played in the international banking systems — when they accept as deposits the proceeds from criminal activities. International banking legislation and conventions of secrecy at present facilitate the safe disposal and concealment of vast profits from criminal activity throughtout Europe. While it is accepted that the confidentiality of legitimate financial transactions must be maintained, no progress has been made to devise a means of detecting amounts of funds from criminal activities within the legitimate banking system throughout Europe. I wonder if there are any proposals within the European Commission, the European Council of Ministers or the Trevi Ministers to make the laundering of money impossible or to reduce the level of laundering which takes place at present.
What implications has German unity, for the involvement of the Eastern European police force in a united Europe? As regards the harmonisation of the policing systems in terms of manpower, training and equipment in East Germany, especially training, has the EC considered the implications of criminal activities in Eastern Europe and the transfer of that activity to the west?
Finally, I was pleased to hear Senator Fallon talking about the implications for agriculture. There is no doubt that at the moment, the approach is to change from the direct support of the Common Agricultural Policy to more indirect support systems. The Minister present is very much aware of the concern in many parts of the country about the limited approach of the Government to the extension of the disadvantaged areas. I would ask the Minister to look again at this scheme and to accept all the areas which fulfil the criteria set down in the disadvantaged areas scheme. This is a way of reducing the effect on farmers, especially the less well off farmers, of the change from the direct support systems.
I will be parochial for a moment. I would ask the Minister to give some indication when it is likely we will have an announcement on the extension of the disadvantaged areas. I wish to draw his attention to the dissatisfaction in many areas of our constituency — his and mine — due to the non-inclusion of certain areas which appear to fit the criteria, especially when we compare them with other parts of the country which have been accepted into the scheme. There is a strong case to include all of Ireland in the disadvantaged areas scheme. It is something the Government should look at in order to modify the effect of the changes which will ensure from the GATT proposals and the change away from direct support systems under the Common Agricultural Policy.
Finally, I would like to draw the Minister's attention to the statement made by Mr. Ray MacSharry, the European Commissioner, with regard to the appeals system subsequent to the announcement of the disadvantaged areas. Mr. MacSharry said at a meeting I attended and subsequently at another meeting with Mr. Alan Gillis, President of the IFA, that there is no limit to the level of acceptance of areas under the appeal system. If it goes above 2 per cent it will have to go to the Council of Ministers, but there was no reason whatsoever why that should not happen. If the Commissioner accepts that, I am sure that the Minister present can confirm that the Government will, in fact, accept under the appeals system all areas meeting the criteria to be included in the disadvantaged areas.
The principle of European and monetary union is a good thing. At least, that is what we are told. It is particularly good if you live in Germany and what could be generally referred to as the central regions. However, the implications for the peripheral regions, specifically Ireland, are only now being addressed by what the Dublin Opinion used to refer to as Mr. and Mrs. Seán Citizen. Indeed, Mr. and Mrs. Seán Citizen have much reason to watch the developments in Europe. The major implication for Ireland is the effect of a European-wide central bank and a common currency and the effect that will have on the Irish economy in the short term and, of course, the longer-term implications of political union.
To date the pressure for European monetary union has come from the business community who see the completion of the internal market as the way forward. The statement of a former US President that the business of America is business has been adopted by European industry as a catchphrase for Europe in the Nineties and beyond. However, when one looks at the lack of compassion in the American economy and in its structures generally towards the poor, the disadvantaged — the so-called underclass — I applaud the efforts of our Government in negotiations to emphasise the social implications of EMU and political union for this country specifically and for Europe in general. The French President Mr. Mitterrand and Euro Commission President Mr. Delors, have already expressed concern that the united market is weighted too much in favour of business and that the interests of the trade unions and workers should be given more attention.
I would like to draw the House's attention to those aspects of the tax harmonisation policies which will have a serious impact on the nation's health, an issue which has been centre stage in Irish political life for the last couple of years. The more vulnerable sections of our community will be specially affected by tax harmonisation proposals if they are implemented. The British Medical Journal in a recent article drew attention to the little known fact that the completion of the internal market will increase the death tolls from cigarettes and will also widen the health divide between rich and poor. The European Commission proposals on tax harmonisation — and I accept that they are at this stage only proposals and there has been no widespread agreement on tax bands towards harmonisation — could cut the price of a packet of cigarettes by 10 per cent, leading to a 4 per cent increase in consumption with many thousands of deaths from smoking-related diseases. The effect of those figures could be substantial in this country.
With regard to alcohol, duty on spirits could be halved, with a tenfold reduction in duty on wine and a fourfold reduction in duty on beer. The result would be, according to the report, a 39 per cent increase in consumption, which would be certain to increase the number of alcohol related deaths. VAT on food, which is also being proposed, could cut food consumption by upwards of 3 per cent, while the overall effect of indirect tax changes, if channelled back to the public through income tax cuts, would leave those on £60 a week £1 a week worse off, and those on more than £450 per week nearly £3 per week better off.
The conclusions of this report from the Institute of Physical Studies makes stark reading, particularly for those who are concerned about the negative aspects of European economic and monetary union. Ireland, with its generally tougher taxes on alcohol and tobacco, should weigh up the benefits of free trade against the cost in terms of poorer health, wider disparities in income and consequent increases in health care costs. It is an aspect of tax harmonisation that does not receive the publicity that it should, in my opinion. Perhaps it is because there is such a headlong rush towards all of the more attractive aspects of the European package that we forget that with the good bits we also have to take the bad bits. Also, the very powerful alcohol and tobacco industries in this country, which are international corporations, were very quick to latch on to the tax harmonisation proposals. It obviously will have a beneficial effect on them and this goes back to my original comments that the business of the new Europe could be just business.
I have no apologies to make for my low tolerance level for the tobacco industry, more so perhaps and to a lesser extent the alcohol industry where abuse leads to deaths and to domestic destruction. I would hope that our negotiators in Europe will take cognisance of the implications for the health of the community in their negotiations with their European partners and also of the unscrupulous tactics that are sometimes adopted by the tobacco industry who are to me a subtle cancer in our society, particularly in their manipulative activities in the media to attract and recycle their market by encouraging young people to take up smoking. I hope the Government take cognisance of these implications for our nation's health in framing their own proposals towards tax harmonisation.
On the wider question of European political and monetary union, we live in exciting times. Several speakers have referred to the suddenness of the collapse of the communist regimes in Eastern Europe, the new order in Europe typified by the declarations on human rights signed by the 34 member Conference on Security and Co-operation in Europe in the last few days, and the imminence of a supranational Europe. In this context I am sure that all sides of the House will agree that the Taoiseach, representing this country, and all of this country, carried out his duties in the manner in which we would expect from a man who has strode the European stage, both as President of the Council and as Taoiseach of this country over the last number of years. The manner in which he carried out his duties in recent days in Paris gave us all a little bit of extra pride that Ireland was represented at this important conference which really did signal the ending of the old, the ancien regime as it would have been called in France, and the beginnings of a new order.
When is it proposed to sit again?
It is proposed that the House will sit next Wednesday at 2.30 p.m.