When I last spoke on this issue I referred to the marvellous performance of the Taoiseach at the 34 member Conference on Security and Cooperation in Europe. I welcome the innovations that were decided on at that conference and pay tribute to European political leaders in general who have shown the way and grasped the challenge facing Europe with broad, bold strokes combining idealism and realism, leading to what all of us hope will be a new era of peace and prosperity in Europe.
There are conflicting reports and very little consensus on whether European monetary union and political union will bring real benefit to Ireland. The NESC report earlier this year was dismissive of Commission inspired reports that Ireland and the poor regions generally would be better off as a result of a single currency. It would, they said, lead to inwared investment particularly in those economies with low wage costs and mobile labour forces.
I favour the NESC conclusions, especially in the light of German unity. Despite assertions to the contrary, the German economy will have to pay heavily for unity. Last year the German budget deficit was a derisory 0.5 billion DM; this year it is estimated at 1.25 billion DM and next year the estimates are that it will be at an intolerably high 40 billion DM. The implications for Ireland are self-evident. Germany, as the EC's largest paymaster, will be in no mood to continue paying out to eliminate the regional disparities at the rate of previous years while it struggles at home to improve the lot of its new citizens from the former territories in East Germany.
However, I am pleased to note that the Department of Finance and the Minister, Deputy Reynolds, have already put down a marker that acceptance by this country of the full responsibilities of European monetary and ultimately political union will have a price. I believe that that price should include the question of our national debt. It now stands at £25 billion and the obligation to eliminate this staggering amount in the long term and to service it in the short term is already putting an intolerable burden on our people and our economy. Indeed, historians and economists, who do not often see eye to eye, would probably come to a broad agreement that the ongoing national debt has inhibited the orderly prosperous development of this economy. In that context, if we are to really move into a new Europe and a new European order where disparities between the regions will be eliminated, this is a very big halter around our neck. Although it might seem radical and perhaps might not seem practical, perhaps it might concentrate the minds of our European partners on the real problems that we face in the onward rush to European monetary and political union. I believe that discussion of the debt should be our price for being good Europeans, and the progressive elimination of the debt through a system of credits granted by the new proposed European Central Bank might be a way forward. It would give this country, with its limited financial resources, an opportunity to set about real improvements in the Irish economy.
A commitment by our European partners to assist Ireland in this practical manner would release such an outpouring of national rejoicing that, for the first time ever, Ireland would be able to tap its unlimited resources of talent and compete on an equal footing with its European partners. The question of our national debt and our status as a trading nation has come sharply into focus in recent weeks and days with the imminent collapse of the GATT talks, which will have the most serious implications for this country.
I put on record that I am fully supportive of the efforts of the Minister for Agriculture and the farming organisations generally to protect and maintain farming in this country. I come from a rural area where there is heavy dependence by the population on traditional beef and the buying and selling of stock. The implications for my part of the country and for many of the disadvantaged areas in Ireland are too horrendous to consider if agreement is not reached on these talks. They are germane to the discussions we are having today in that we are talking about European economic union and the elimination of trade barriers.
There are obvious concerns about the threats to our already less effective sovereignty. These are key questions to be addressed by our Government in dealing with our European partners. These decisions must be taken in the political arena. Left to economists, industrialists and bankers, Ireland could find itself in a new Europe as economically poor as North Dakota in the United States, a state which is often referred to in the context of European political union. Within the federal states of the United States there is an example of a state which is far from the centre and has not benefited heavily, if at all, from the attractiveness and advantages of free trade in the American context. I would hate to see Ireland becoming the North Dakota of western Europe. All these arguments strengthen our case that decisions on future fundings should be part of the political decision making process before 1992 and not after. The recent response by Dr. Karl Otto Pöhl of the Bundesbank should leave nobody in any doubt, when it comes to helping the periphery and to eliminating the regional disparities that are so obvious in our community, that left to bankers and industrialists there would be little hope for the future. Dr. Pöhl was asked how he saw the European Central Bank dealing with regional and social policy objectives and his reply was: "Why do you ask these questions of a banker?"
Doubts have been expressed as to whether the new bank, when and if it will be set up, would be able to pursue policies designed to reduce disparities between the richer and poorer regions of the community. Other commentators have taken the view that it would inevitably mean deflationary policies, constraints on public spending and more unemployment. These comments were made on debates in the European Parliament.
Concerns about our sovereignty have been with us since our accession to the European Community in 1972-73 and I do not wish in any way to diminish the sincerity with which many people in this country address the question of the erosion of our sovereignty in the European context. I welcome the debate which was initiated by the Taoiseach and the Government in the context of more powers being granted to either the Commission or the European Parliament or indeed to European structures generally, post-1992. I believe that the Government are correct in taking the stance that the national parliaments of member states should not in any way be superseded and that the question of granting extra powers either to the Commission or to the European Parliament should be treated with great caution.
Power rests with the Council of Ministers. Within that Council Ireland has an equal vote. Its power is greatly disproportionate to its geography and to its economic clout in Europe. It gives us an important vote on issues which directly affect us and ultimately the power of veto when those interests and that of the Commission are in direct conflict. Consider the situation if more powers were given to the Parliament or to the Commission or, alternatively, if powers were taken away from the Council of Ministers and given to other European structures. In the Parliament, Ireland has 15 members from the South and three from the North. Admittedly their interests converge, particularly in the area of agriculture and perhaps in other areas of the economy. Eighteen votes out of almost 600 is small potatoes. The Commission, on the other hand, is a bureaucracy and Ireland would have a limited power role if the Commission's powers were extended and enlarged. The idea which is being floated around by our Government for further discussion is to be welcomed.
The proposal — although I am not sure if it has been put as a formal proposal as yet but certainly the idea is being discussed increasingly — that there should be a second tier in Europe, a European Senate, is an idea which should be discussed as it would give each national parliament and its representatives an opportunity to debate issues of Europe wide interest and, of course, of national interest without the fear that when a decision is taken it would act contrary to individual interests and particularly Irish interests. I make no apologies for emphasising in all the debates and discussions on Europe and European political union that Ireland's interests must remain paramount. We have not benefited to the same extent from membership of the EC as was predicted in the early seventies. Agriculture went through a very successful period, a purple patch, but in recent years, let us be honest, Ireland has been up against it.
Concern was expressed about the military aspects of political union. I have no wish to underestimate the strength of feeling on this issue either, but I believe it is time that we had a definition of just what is meant by Irish neutrality. We are militarily neutral in that we are not part of, or wish to be part of, an alliance such as NATO or the Warsaw Pact. Surely as a nation state of the European Community we have an obligation to defend ourselves and if called upon, to defend European community interests.
