Developments in the European Community: Statements.

Minister for Social Welfare (Dr. Woods) for the Minister for Foreign Affairs

The Minister for Foreign Affairs is out of the country on business and I am making this statement on his behalf.

The pace of change throughout the continent of Europe over the past two years has been dramatic and inspiring. We, in Ireland, are privileged to be both spectators to these dramatic changes and, particularly, through our membership of the European Communities, active participants in the design and structure of the architecture of the new Europe which flows from them.

The impact of the collapse of the old order in Central and Eastern Europe and the determination of the members of the European Community to develop and strengthen their internal solidarity by progressing towards economic and monetary and political union are two key factors in any analysis of recent developments.

There are, of course, other elements, such as the negotiation with the EFTA countries on the creation of a European economic area and the Community's relations with the rest of the world which must be taken into account. Equally important are the economic and social issues which are as important, if not more important, to the peoples of Europe than debates about the final shape of the future European Union.

Ireland has emerged from these past two years with a greatly enhanced reputation within the Community and beyond. Our Presidency of the European Community came at a time when the member states were reacting to the fast moving events in Eastern and Central Europe, when the process of German unification was drawing to a close and when the next stage of European integration was being prepared.

We were able to use the period of the Presidency to encourage compromise and to lay out clear and useful guiding principles for the future preparatory work of the Intergovernmental Conference on Political Union. We were also able to put the Community's relations with the emerging democracies of Central and Eastern Europe on a sure footing. Several of the leaders came to Dublin for meetings with the Taoiseach and members of the Government. As a result of these contacts useful bilateral initiatives have emerged to enable us to develop our future relations with these countries.

The creation of a Single European Market in which goods, services, capital and people can move freely between the Twelve member states is well on the way to full realisation. The completion of the Internal Market remains a major objective of the Community and one which has acted as a kind of magnet to those European countries not members of the Community.

The economic and trading power which will be unleashed by the Single Market has already encouraged countries such as Austria and now Sweden to apply for full membership of the Community in order to ensure that they do not lose out in the future economic expansion of Europe. The solidarity of membership and the influence of the community in international negotiations is also seen as a major attraction for those outside the community.

There is a sense of opportunity prevalent in the new Europe. The Internal Market programme is now moving towards completion and its impact is already being felt throughout the Community where, despite the signs of recession in certain member states, there are clear indications that the process of restructuring and preparation undertaken by European industry is paying dividends.

It goes without saying that the successful operation of industry in Ireland depends, much as it does for the economy as a whole, on the prevailing economic environment in Europe and indeed in the rest of the world. The early recognition by the Government of the importance of preparation for the Internal Market together with the full co-operation of Irish industry has helped us to prepare fully to meet the challenges of the Internal Market. I am confident that the process of strategic planning which we encouraged industry to embark upon and the opportunities which we identified then and which we believed to be well within the reach of Irish enterprises, irrespective of size, are beginning to come on stream.

There is, however, no room for complacency. The markets in Europe are constantly changing and expanding and now include the fledgling economies of Central and Eastern Europe. The skill and ability which Irish companies have shown in their penetration of new markets will be continuously tested over the coming years.

The legislative programme for the adoption of the 285 directives which will create the Single Market is running on time. There remain, however, three key areas on which progress must be made this year to enable the member states to transpose all Community legislation into national law by the end of next year. These are animal and plant health, free movement of persons and taxation. No one can deny that these are extremely sensitive political issues and agreement on them will not be easy to reach. Yet, I am confident that the crucial importance of the Single Market for the prosperity of the Community and for enhancing its role and influence in the world will quicken the member states determination to find solutions to all outstanding problems.

For its part the Community is endeavouring to put in place policies which will complement the actions of industry. The moneys from the Structural Funds are making and will make a significant impact in the development of our local infrastructures and, over time, will contribute to the shrinking of the geographical as well as the economic gap which separates us from continental Europe.

The competitiveness of industry will depend on the development of new policies in the areas of research and development, transport, telecommunications and vocational training. Many of these are in place now and others will receive added impetus as a result of the work now under way in the two Intergovernmental Conferences on Political Union and Economic and Monetary Union.

In the course of the past 12 months, the population of the European Community has increased by 17 million as a result of German unification and, as I have described, the political face of Europe has changed beyond recognition. The unification of Germany and the arrival of democracy in all the countries of Eastern and Central Europe means that the international role of the Community, for so long a source of inspiration to the oppressed people of the other Europe, has changed too.

The Community is now the mainstay of the new Europe. It remains a symbol of prosperity and freedom and the values which it has long upheld, respect for human rights, democracy, the rule of law, economic freedom and social justice, are now shared by the emerging democratic States with whom we share a continent. With this new role come new responsibilities and burdens. If the Community is to fulfil the role which is expected of it, first by its own citizens but also by the rest of Europe, it must reinforce the network of links — economic, political and monetary — which binds it together, it must develop new policies and strengthen existing ones, it must enhance its action and influence on the world stage.

Since the beginning of this year work has been progressing steadily on the next phase of European integration. Two intergovernmental conferences working in parallel, on economic and monetary union and political union, are addressing issues which will be central to the way the Community develops and functions in the years ahead. New areas such as education, health, culture and energy are to be included for future Community action.

New policies in areas such as the environment and research and technology will be implemented and, of particular importance for Ireland, will be a renewed commitment to the principle of economic and social cohesion.

As the Community moves steadily and inexorably towards a fuller union, we must be constantly on guard to ensure that the economic benefits generated by the completion of the Internal Market and closer economic and monetary convergence do not gravitate unchecked towards the centre. The periphery of Europe must be seen to be as integral to the activities and the development of the Community as its centre.

Economic and monetary union will introduce new factors which may slow down, and possibly reverse, the process of reducing existing disparities within the Community. It is against that background and to provide an adequate protection against this eventuality that the Government tabled proposals at the intergovernmental conferences to strengthen the treaty provisions which refer to economic and social cohesion and under which the Structural Funds operate.

The specific treaty amendments, which the Government have tabled, have a number of objectives of which the main one is to construct a framework that will allow the Community the flexibility to develop instruments to support cohesion in a manner appropriate to the degree of integration achieved by it at any given time.

I am glad to report that this proposal has received a satisfactory level of support from the other member states with similar concerns to our own. A major objective of the Government has been to ensure that our partners are made fully aware that as far as we are concerned there can be no satisfactory outcome to the negotiations as a whole without progress on this issue.

I am confident that our concerns will be recognised by our partners and the Commission. Economic and social cohesion is already established as one of the principal aims of economic and monetary union and I am sure that there will be a renewed commitment to economic convergence in each phase of our progress towards economic and monetary union. We have stated repeatedly that true convergence can only come about through a more effective implementation of common policies. Strucural Funding by itself cannot do so.

We will continue to put our arguments forcefully and resist attempts to neglect the union's role in the development of its less prosperous regions. I should mention also in this context that the present scale of redistribution is very small in proportion to the total resources of the Community and I believe that the objective of cohesion cannot be achieved while redistribution has such a low priority. It is the Government's view that this framework must be underpinned by political commitment on the part of the Commission and the Council and that they will act positively within it.

The Intergovernmental Conference on Political Union is addressing other key issues where progress will be needed if the agreement on the part of all the member states is to be attained by the end of the year. The scope for improving the decision taking process is perhaps one of the most important and, consequently, one of the most problematic. It is certainly evident that we cannot hope to make political union work properly unless we streamline our operations and make the legislation we adopt and the decisions we take more effective.

We will, therefore, be looking at the way in which we take decisions. The success of the Single European Act has been measured not least in the way it enabled the vast majority of decisions to be taken by qualified majority vote. There now appears to be growing consensus that if the decision making machinery is to become more efficient and effective, more and more decisions will have to be taken by majority vote. Only in that way will it be possible for real progress to be made in equipping the Community with the kind of policies that will generate equal opportunities for its citizens and fair competition for industry.

The Community clearly operates more successfully when decisions are taken speedily and efficiently. There will remain nonetheless areas where it would be imprudent to abandon altogether the principle of unanimity as the ultimate protection for vital national interests. Such areas include taxation, aspects of social policy as well as decisions affecting the future constitutional framework for the Community. They must remain, as they are at present, the exception.

There has been a concern expressed chiefly by the European Parliament but also, in vaguer terms, by certain 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 permanently undermined.

The future role of the national parliaments is also important in this context and a meeting was held in Rome last year between the European Parliament and representatives of national parliaments to discuss the matter. I know that some very useful work is being done by our own Oireachtas Joint Committee on Secondary Legislation in this area.

It is in this context that the member states are examining in the negotiations on political union ways in which the European Parliament can be given an increased role in the legislative process of the Community. Full co-decision with the Council of Ministers is what the Parliament is seeking but is unlikely to obtain.

One important further consideration, and one which has governed our own response to this issue, is that any additional powers that are given to the European Parliament must be directly related to the overall shape of the Treaty reforms to emerge from the IGC and should be commensurate with the scale of any such changes. If one of the principal aims of the present reform process is to improve the quality and efficiency of the decision-making process, it would be counter-productive to allow the legitimate powers of control of the European Parliament to be transformed into an obstacle to that aim. Ireland is prepared to work towards a formula that would allow more attention to be given to the Parliament, perhaps through a conciliation mechanism.

The IGC is also discussing proposals that the 12 should adopt a common foreign and security policy, so as to enhance the Community's role and its contribution in international affairs. Ireland's view is that in these areas the approach must be pragmatic and assess realistically how far members states are willing to go in committing themselves to a genuinely common policy. We have accepted the objective of a common foreign and security policy. We have agreed to consider certain areas, such as disarmament and arms control, CSCE matters, UN peace-keeping, nonproliferation, arms export policy and industrial and technological co-operation in the armaments area, for inclusion in a common policy. These matters are being discussed further in the IGC.

The IGC has also been asked to consider the prospect of a role for the Community in defence matters with a view to the future and without prejudice either to the existing commitments of member states in this area, for example, in NATO or the Western European Union, or to the traditional position of other member states. This refers notably to Ireland's policy of military neutrality. As of now, widely divergent views have emerged on the issue of whether the Community should aim to develop a defence policy of its own.

It will, of course, be important to know how the new union would take decisions in the area of foreign and security policy. These areas are now to be made the subject of a common policy for the first time. It therefore seems clear to us that decisions will realistically have to be taken by consensus.

These questions are all under discussion in the IGC and it is not possible at this juncture to say what may finally be agreed. Our views are, of course, put forward fully in the negotiations.

The intergovernmental conferences have understandably captured many of the headlines over recent months and will continue to do so in the build-up to the meeting of the European Council at the end of next week. While it would be wrong to diminish the importance of these negotiations, there are a range of other issues which merit consideration and cannot be ignored.

The negotiations with the EFTA countries will result in a 19 state area throughout which goods, services, capital and labour would move freely. Accompanying horizontal policies have been developed and appropriate institutional and legal arrangements have been made. A cohesion fund has been accepted in principle which will allow the EFTA countries to contribute to the development of the peripheral parts of the Community. The establishment of the European Economic area is an undoubted strengthening of the solidarity of the European Continent at a crucial moment in its history.

With our neighbours in Central and Eastern Europe, the Community began by trying to give substance to the trade and co-operation agreements signed in 1989, opening up our markets, developing industrial co-operation and promoting direct investment. But as these countries moved to equip themselves with functioning and stable democratic institutions, adhering to the values on which the Community is based and beginning the task of adapting to the principles of the market economy, the Community has had to go further.

To begin with, the group of 24 industrialised countries gave the European Commission the task of co-ordinating the aid provided by them to begin the process of economic restructuring so essential in these countries after more than 40 years of stagnation. This complex effort continues successfully. A total of 23 billion ECU in grants and loans has now been provided by the G24 and is making a significant and valuable contribution to the economic and social development of the countries concerned.

Within the Community, our primary focus has moved from the trade agreement stage to the negotiation of the association agreements with Czechoslovakia, Hungary and Poland where negotiations with each of the countries have entered the crucial round. At the General Affairs Council in April the Community agreed that there should be a reference to the aspiration to Community membership for each of these countries.

There appears to be a very good prospect that the negotiations will conclude on schedule this summer. Ireland regards these agreements as a key aspect of the Community's external relations and a realistic alternative to premature accession applications from the countries concerned. It remains an objective of the Community to conclude similar agreements with other Eastern European countries when the economic conditions of these countries allow.

Another development which will be of considerable importance for the countries of Central and Eastern Europe is the proposed European Energy Charter. The charter was first proposed by the Dutch Prime Minister and is seen as a means of bringing together the desire expressed by the Soviet Union for a more efficient and profitable energy industry, and the need for Central and Eastern European countries to update their patterns of energy production and consumption with the western objective of obtaining a further reliable supply source which could be developed with the assistance of western capital and technology.

The Community's relations with the Soviet Union occupies a major place in our thinking and at the European Council in Rome in December last year, a package of support measures including food aid and technical assistance was agreed. The volume of assistance is of the order of 400 MECU in 1991. The priority areas for co-operation which have been identified include management training, financial services, energy, transport and food distribution. The Community will be watching closely as the Soviet Union begins the arguous process of economic and political reform and the Community will reflect on what further forms of assistance it can give.

Relations between the European Community and the United States were one of the priorities of Ireland's Presidency at the beginning of last year. It was essential that relations with the Administration of the United States should be placed on a more formal and structured footing. As a result of the Taoiseach's efforts in this direction, especially during his meeting with President Bush last year, in the autumn of last year the Transatlantic Declaration was signed which provides for regular contact at the highest level between the Community and the US and Canada. This contact which involves the Presidents of the European Council and Commission, the President of the United States and the Canadian Prime Minister should help to instil a greater sense of confidence in our relationship. It will also help to avoid the harmful and debilitating disputes which have been an irritant in the past.

I am happy to say that a similar initiative with regard to Japan is being negotiated and should be ready for signing in July on the occasion of the visit of the Japanese Prime Minister Kaifu to Europe in July.

Relations with the United States and Japan lie at the heart of the Uruguay GATT negotiations. Talks on this round commenced in February 1991. There has been less than satisfactory progress since then with major differences of opinion emerging over a number of key issues, in particular agriculture. Ireland attaches great importance to a successful and early conclusion of the round.

It is perhaps regrettable that there has been an undue emphasis placed on agriculture leading to unrealistic expectations on the part of some GATT partners, particularly the United States which is looking for the effective dismantling of the CAP. The Community's position is firmly opposed to the US view. While willing to subscribe to measures leading, on a mutually advantageous basis, to greater freedom of trade, it has made it clear that the fundamental principles of the CAP are not negotiable. It remains the wish of the Community that the negotiations should resume soon and conclude before the end of the year.

If agricultural issues can be said to lie at the heart of the GATT, they also continue to take up a very significant amount of the Community agenda in the months ahead as the member states and the Commission embark on an internal reflection on the functioning of the Common Agriculture Policy. The policy has already been substantially reformed in recent years in response to the budgetary and market consequences of the unsustainably high surplus stock levels of certain agricultural products which had accumulated as supply had increasingly outstripped demand due to open-ended price guarantees, improved productivity and technological progress in agriculture. This internal reform process, which is now essentially complete, has been directed at achieving improved equilibrium in agricultural markets through the application of disincentives to surplus agricultural production and, where necessary, the assumption by producers of responsibility for the cost of surplus disposal. There will be a need for some reorientation in the CAP and this is largely accepted by the member states. We will be anxious to ensure that any changes which have to be made should not undermine the competitiveness of the sector. We would also wish that the importance of the family farm to the well-being of rural society throughout the Community should be recognised. Reform must not run counter to the treaty objectives of reducing regional disparities and the income position of smaller scale and other vulnerable producers must be adequately protected.

Ireland should look to the years ahead in a spirit of confidence. Our commitment to Europe has deepened. We can face the challenges of the next few years confident in the knowledge that the benefits of membership for our industry will continue to provide opportunities to meet our aspirations. Our national development is now firmly anchored in the Community context.

The outcome of the two intergovernmental conferences which will now almost certainly be put to the Irish people in a referendum sometime next year, will mark another important step in the development of the European Community. The objective of European union to which Ireland is fully committed remains to be elaborated in all its detail but the policies which are now being formulated and the complex network of international agreements which the Community is concluding will constitute a firm and stable foundation for the final construction. Ireland will continue to play a full and active part in the elaboration of those policies and ensure that they serve not only the interests of the Irish people but the people of Europe as a whole.

Professor Raftery

I thank the Minister for coming here this morning and comprehensively covering events in Europe. I am saddened at the behaviour of some civil servants working in the EC, some of whom are over-paid, under-worked and over-privileged. They are not accountable to their masters. The Minister referred to the importance of quick decisions but how can we have quick decisions when these people, for some kind of alleged grievances, hold up the decision-making process?

The Minister is quite right in saying we have been through a period of very rapid and continuing change. There have been some changes of great significance not just for Ireland or the Community but for the world as a whole and some of these changes came upon us without Europe having any real say in the matter. I refer, for instance, to the events in eastern Europe and the Soviet Union. While all of us must welcome the ending of totalitarianism in the Eastern Europe and the Soviet Union and the reunification of Germany, we must be realistic and face the fact that it will not be without a price. It will cost Europe a substantial amount of money and significantly affect Irish interests in a number of ways. The cost of German reunification will spill over into the Community as a whole. It will result in reduced Structural Funds. It will affect us indirectly since interest rates will be pushed up in Germany. As most people know, if German interest rates go up, the rest of the Community must follow.

The inclusion of East Germany in the Community will affect our quotas in milk, sugar and so on. It is a substantial area of good, productive, agricultural land and with the use of western technology we can be assured that the quota for this country is likely to be diminished. Above all, it will affect our market access to the Community for agricultural produce. Eastern Europe and the Soviet Union have an enormous amount of productive agricultural land. Central Europe will be so concerned about stability that it will not hesitate to allow considerable access of east European produce into the Community. That means that a little country out in the Atlantic in Western Europe is likely to have a smaller share of the cake than it had in the past. That is the reality and we must take stock of it.

Last October I was a guest at a meeting in Budapest on agriculture and food in eastern Europe and the Soviet Union. The conference was attended by speakers from North America, including Canada and the US, Mexico and a number of countries in South America, from Australia, New Zealand and many African countries, India and other countries in Asia. The clear message that came through from the speakers from eastern Europe and the Soviet Union was that they wanted access to our markets. They made the very valid point that money, while useful, is not really at the end of the day going to solve their problems. Indeed, the Africans and other Third World countries also made the same point, and they made it very succinctly. They pointed out to the speakers from the west that hand-outs to the Third World countries may help to massage their consciences but giving them some money to improve their productivity and so on and then not allowing them access to the market is not the answer. We are facing a situation where there will be considerable uncertainty about our ability to get our produce into mainland Europe.

As a result of the fall in the standards of living of eastern European countries and the Soviet Union, there is the aditional factor that there is a huge drop in consumption of animal products in these areas. There is an overspill of milk and beef products into the Community with no attempt on the part of the Community to prohibit what is effectively at this time the illegal entry of these products into the Community. It is contributing to the huge surpluses of beef and dairy products which we have at the moment and we can expect that to continue. We can expect that these people will be unable to purchase the amount of animal products they were accustomed to purchasing in the past because of their changing economic circumstances.

I welcome the Minister's comments in relation to the economic area, which Jacques Delors has talked about for a long time, and his comments about the Single Market. As an exporting country we should welcome the idea of a single market. Many people have been afraid of it but the Single Market means the freedom of movement of goods, capital, services and people throughout the Community. Up to now, there were considerable costs and delays in the movement of goods. As an exporting country we should stand to benefit from getting rid of these delays and paperwork. We export more of our produce than any other country in the Community except for Belgium. Therefore, anything that makes exporting easier should benefit us.

There were restrictions on the movement of capital until recently. The freedom of movement of capital has helped to impose a discipline on our economy which we were unable to impose. If we do not behave properly while capital is free to move we will pay very high interest rates to attract capital back because capital will go where it is most secure, welcome and rewarded.

With regard to new members, it is very interesting to see the queue to join the Community. During the debate prior to the passing of the Single European Act the critics told us we would be better off outside the Community. Countries like Austria, Sweden and Finland were held up as examples, to illustrate we would be better off on our own outside the Community. Austria has already applied for membership and Sweden is about to do likewise. Norway, undoubtedly, will apply as will Finland later. Turkey has applied and, at a meeting in Budapest, the intentions of countries were expressed. Hungary said it would be applying for full membership shortly. Czechoslovakia and Poland expressed the wish to become at least associate members. There is a queue at the door. While that is welcomed we must face the reality that it will diminish our influence in Community affairs. It can, of course, increase our market a little and, on balance, we should welcome it. The larger the market the more efficient use will be made of resources.

The Minister referred to GATT and the CAP. The reaction in Ireland to talk of the GATT has been one of horror. The GATT has been around since 1947 and there are over 100 countries participating in it. The GATT has brought enormous benefits to the world, giving the longest period of sustained economic growth the world has ever known. However, the reason for the worry this time about GATT is that agriculture is being included for the first time. The Americans, in their typical brash way, are trying to impose their demands upon everybody else. The Americans must recognise that we are negotiating from entirely different economic circumstances. America, for instance, has four times the amount of farm land than the European Community has and less than one-quarter of the number of farmers. America will have to take cognisance of that and drop some of its more extreme demands.

Having said that, the reaction in Ireland has been too negative. The "no, no, not an inch" policy is not realistic or sustainable. There are two sides to the GATT negotiations where agriculture or any other item is concerned. There is the fact that we will have to face up to more competition but, on the other hand, it will mean opening up markets in other countries. The Community is not the biggest supporter of agricultural production nor is it unique. The levels of support for agriculture are higher in the following countries: Japan, Austria, Norway, Sweden, Finland and Switzerland. With successful GATT negotiations, those countries will have to reduce their support for agriculture to whatever level will be agreed upon. The fact remains that it will mean access for our produce to markets like Japan, Switzerland, Austria, Sweden, Finland and Norway provided, of course, we have the ability to go out an sell our produce in these markets. Our record to date in going abroad and selling is not one to be admired. It will offer windows of opportunity and I encourage our producers, processors and manufacturers to bear that in mind.

There is a much bigger threat looming over our textile sector as a result of the GATT negotiations than there is over the agricultural sector. We have approximately 23,000 people involved in the textile sector and there is the risk that if these negotiations are concluded successfully and if the demands of the Third World countries for freer access are met, our markets will be flooded with textiles from low labour cost countries like Turkey, Taiwan, Singapore, Hong Kong, India and our textile industry could be wiped out. These are matters we must face up to and do the best we can in regard to them in the negotiations.

The focus earlier was on agriculture and the GATT and very little thought was given to reform of the CAP. I would be very much more concerned about the reform of CAP than I am about the GATT negotiations. We have had non-documents, leaked documents and rumours of documents emanating from the Commission about the reform of the CAP. We are all agreed that the CAP is in urgent need of reform. It is many years since I said in the European Parliament that reform of the CAP need not be a tragedy for Irish farmers but failure to reform it certainly would be a tragedy. The reform is coming too late and the leaked proposals for reform of the CAP are little short of a tragedy for Ireland. In case people say that has nothing to do with them, that it is for the farmers, they had better think again. Reforms as proposed by the Commissioner will cost the economy between £500 million and £700 million. One cannot take that kind of money out of the economy without impinging upon all sectors of society. It will affect the PAYE sector, social welfare payments and unemployment.

Independent economists agree that it will take in excess of 20,000 jobs out of farming and an additional 16,000 to 18,000 jobs depending on farming. We need to be very careful about any kind of changes of that nature that will take up to 40,000 jobs out of an economy that has already got 250,000 unemployed.

I am saddened by the fact that we have heard nothing from our Government about these proposed reforms. What is the Government's stance? When I asked the Minister for Agriculture and Food in this House about the leaked proposals, he said he does not comment on leaked documents. I would point out to him that the Dutch Minister for Agriculture, the Danish Minister for Agriculture, the British Minister for Agriculture and the French Minister for Agriculture, had no problems about commenting on leaked documents. I would further suggest to the Minister that silence on his part could quite easily be interpreted in Brussels as approval.

Without going into the specifics, I can say without fear of contradiction that these proposals would bear significantly harder on Ireland than on any other Community country, not only because we depend more upon agricultural exports but also because of the specific nature of the proposals. Almost 80 per cent of our output in agriculture is from our grassland — milk, beef, sheep and horses. His proposals in one fell stroke would remove our comparative advantage with grass by making cereals 30 to 40 per cent cheaper. Not only that, but by reducing the price of feed for poultry and pigs, it would make poultry meat and pig meat roughly 20 to 25 per cent cheaper; and we already know the difficulties the beef and sheep people are under. Give the consumer poultry meat and pig meat 20 to 25 per cent cheaper than it is today and we will be without a cattle industry worthy of the name and the sheep sector will also be seriously hit. Just why an Irish Commissioner could stand over such a proposal is a mystery to me; and it is an even bigger mystery that we have a Government and a Minister for Agriculture and Food who are totally silent on the issue. No attempt was made, apart from a few independent economists and a few professors of agriculture and agricultural economics like myself, to inform the public of the general impact on the economy. That is a sad and serious situation.

I suspect that for political reasons the Government are staying rather silent in the hope that they will lose very little of the agricultural vote and gain something of the consumer vote, because the consumers are looking forward to a bonanza with cheaper food. They will get cheaper food, but not significantly cheaper. The loss to the economy will more than outweigh the cheap food. Of course, for countries like Germany it will be a real bonanza. It will cut the German contribution to the European budget significantly, it will open up further markets for Germany's industrial products and, of course, Germany has absolutely no problem about supporting its farmers — they have plenty of money.

Let me repeat that our great problem is not the GATT negotiations; it is the reforms proposed by Commissioner Mac-Sharry and the silence of our Government on the issue. As I have already said, it is not just an issue for farmers, it is an issue for the employed and the unemployed, for urban as well as rural people, for the taxpayer and the social welfare recipient, and I am sorry to say that we are getting no lead from our Government on the issue.

The Minister also made reference in his speech to social and economic cohesion, aspirations and so on. These are very desirable objectives. Nobody — except those paying for it, of course — could object to such objectives, but I am not sure that those paying for them are as free with the cash as they are with the rhetoric. The amount contributed at the moment in the European budget towards social and economic cohesion is derisorily small in relation to total Community GDP. If the Minister sits down and does a few sums he will find that social and economic cohesion is an objective I am afraid most of us will not see in our lifetime.

Let me give an example. If our economy grew at twice the average for the Community — which I think is a most unlikely scenario given our record in the past — if our economy grew at 5 per cent and the average for the Community was 2.5 per cent, it would take us 30 years to reach the level of GDP per capita of the Danes, 28 years to reach the level per capita income of the Germans and 25 years to reach the GDP per capita of the Belgians. So, while it is a desirable objective, I believe it is misleading and I am afraid it is not fair to the ordinary citizens to be holding out the hope that in the near future we can have the income of these countries I mentioned. It is a most unlikely scenario, as I said.

I also feel — reverting to the CAP and the GATT again — that we are most unlikely to get a lot of sympathy in the European Community in the GATT negotiations and I will tell you why. Agriculture is now less than 2.5 per cent of Community GDP and it is most unlikely, in my view, that industrial nations of Europe will risk a trade war in industrial products just for 2.5 per cent for agriculture. There are other reasons. The agriculture vote now in the Community is declining and, in fact, is so small that it is less than the unemployed vote in every single country in the Community with the exception of Luxembourg. The third reason I think Community countries will not make any great sacrifice for agriculture is that food has no longer the strategic importance it had when we joined the Community, because we have surpluses of food throughout the Community and in many countries outside of the Community.

To turn to economic, monetary and political union and the effects of these changes upon us, economic and monetary union has been an objective for some time and a worthy objective. There are many advantages associated with having a single currency. According to the Delors report, economic union has four basic components: a single market with the freedom of movement of goods, people, services and capital; a competition policy and other measure to increase their transparency; common policies to restructure industry, foster regional development and reduce regional and social disparities; and the co-ordination of macro-economic policy, including binding budgetary rules. In effect, with such changes we would be losing a considerable amount of our sovereignty. I am not regretting that; I just want to point it out, because it is not being pointed out often enough to people that with economic and monetary union the Government's soverignty in economic and monetary matters is gone and to hide that from the public would be dishonest.

Citing in its turn the 1970 Werner report, the same Delors report states that monetary union implies that the three conditions which must be met are (1) the guarantee of full and irreversible convertibility of currencies; (2) full freedom of capital movements and the complete integration of banking and other financial markets; and (3) the elimination of margins of fluctuation and the permanent fixing of exchange rates. Meeting these three conditions, particularly the third, implies a degree of convergence in the economic and monetary policy of the 12 member states, a degree which I think is rather Utopian, given the disparity that exists at the moment.

There would have to be considerable transfers of national powers to the Community on economic and monetary matters. Once this transfer has or can be achieved, a single currency should be introduced. As you can see from the sounds that are being made on a neighbouring island, that is not welcome by people hankering after the old empire. The benefits of monetary union are maximised when it is pushed to its logical conclusion through the bringing in of a single currency.

On this, I can remember the director of the Bundesbank Dr. Karl Otto Pohl, when he visited the European Parliament about six or seven years ago and talked to a small group of us who were discussing economic and monetary union — at a time when it was not popular to be discussing it — and he stated quite clearly that in his view there would be no single currency in the Community until countries brought their economic and monetary policies more into line. He went on to say that Germany would not risk the gains that it had made by bringing in a single currency before we had more convergence of economic and monetary policies. Of course, we have had a lot of convergence since then, but more recently in his opposition to a single currency he cited the case of German unification. I think, however, it was a rather extreme example; it has not been a happy experience for the Germans or indeed for the rest of us.

If there is only one currency, and therefore a common pool of currency reserves, the constraints imposed by the need to keep member states' balance of payments in equilibrium will disappear. This increases governments' room for manoeuvre in respect of economic policy. They can maintain growth policies which are not currently feasible under EMS. Here is one which could be of particular interest to Ireland. Governments will no longer be able to raise interest rates thus putting a brake on investment in order to stop capital outflows or to reduce imports. That would be particularly significant for us because in recent years we have suffered from having excessive high interest rates even when our inflation rate was low. We had that to protect our currency because without it we would have a flow of capital out of the country. With a single currency that problem disappears.

Under the market mechanism the member states will regain a freedom of action whose abuse may be penalised by an increase in the cost of borrowing money — in other words, governments will have to behave more responsibly and cease from buying votes and so on; otherwise they will have tremendous problems. However, the politically thorny problem for a Community authority of imposing fiscal and budgetary standards on states which jealously protect their sovereignty will not be an easy one. In a single currency European monetary union the member states would have greater budgetary freedom than is enjoyed by the Lander in Germany, or the individual states in the United States of America, since the Community budget represents only a tiny fraction of national budgets.

As regards the specific benefits, I think it is well to have a look at them. The first and most obvious benefit to the layman is the elimination of all transaction costs connected with the transfers from one currency to another in the Community. Let me give you a specific example. If you go down to your local bank manager with your £100 and ask him to convert it into the other 11 currencies and back into Irish púnts you will probably be lucky if you end up with 46 púnts leaving the bank. He has supplied you with nothing except the service of changing currency from one currency to another and you end up with more than 50 per cent of it gone. That is the reality. That is the cost the Community is continually suffering in doing business. You will probably end up with 45 or 46 per cent of what you started out with. Inter-Community transactions in goods and services cost annually about 600 billion ECU for the 12 member states, money that could do a lot of good to the Community if it were not being passed on to banks for changing from one currency to another.

The cost of one exchange transaction may vary from between 5 per cent for the tourist down to less than 1 per cent for very large commercial transactions. Given an average rate of about 1 per cent, this produces an annual cost of about three billion ECU without counting the cost of capital transactions, whose volume is much greater than the commercial transactions. The second and less quantifiable but equally considerable benefit is that generated by a reduction in speculative transactions between European currencies, which seek to exploit interest rate disparities and exchange rate fluctuations, even when the latter are within the bands laid down by the EMS.

I have to say that some finance houses would be very unhappy about this kind of development as they could not be living on or making money out of changing currencies around from one country to another. The third benefit, which is also difficult to measure, results from the uniformity of prices of goods and services throughout the Community enabling traders to profit from rising output, larger markets and increased mobility of labour and capital. The single currency produces greater transparency of costs and prices by making them comparable right across the Community and therefore increasing competition. That would be good for the consumer. We have all seen how competition has helped to benefit the consumer in a lot of ways.

The fourth economic benefit is the cost reduction resulting from the simplification of accounting operations. This is interesting and probably something the layman has not thought about — the cost of all accounting operations in all firms which keep accounts or which conduct transactions in several currencies. In the case of firms operating throughout the Community these costs represent not much less than 1 per cent of the overall administrative cost expenditure, quite a substantial figure. The most significant benefit of all results from the removal of major constraints on economic policy imposed by the need for governments to maintain balance of payments, price and exchange rate stability.

Of course, there is another factor which cannot be quantified too easily and that is that the disincentive that exchange rate risks imposes on enterprises. People are very often reluctant to make investments because of the risk of currency fluctuations. There is of course the amount of time that people in businesses have to spend watching how currency is fluctuating before they pay or buy and so on. They would be much better off producing something than playing the market.

Another benefit on the list of benefits arising from monetary union would derive from the ECU's elevation to the status of an international reserve currency potentially more solid than the dollar. The Community is much more an abundant source of savings than the United States. Its share of world trade and its currency reserves considerably exceed those of the United States. The ECU becoming a reserve and more stable trading currency could help international trade for Community producers. The establishment of an ECU area parallel to and as large as the dollar and yen areas — it would rapidly take in EFTA countries of course, and that is already happening now, and in future the countries of Eastern Europe — would greatly facilitate attempts to use international monetary policy instruments to stimulate the economy or at least make the co-ordination measures currently taken at G5 and G7 more effective.

In order, however, for monetary union to take shape, to survive and to be stable, it is essential that we must have an autonomous European central bank. In order for that central bank to be effective it must be completely free from political interference, in other words, it must be as autonomous as the Bundesbank or even more so. If you look at the economies of the world today which are most successful, they have all had the benefit of central banks which were largely independent of politicians. Take, for example, the Federal Republic of Germany, Austria, Switzerland, USA and, to a lesser extent, the Netherlands, Japan and Taiwan. They have all had the benefit of having the kind of discipline imposed on them which prohibited politicians from printing and distributing too much money which in turn caused inflation. I know that printing money is an addictive thing that happens to politicians, devaluing the currency; and it does give temporary relief in making goods and services more competitive, but the aftermath is fairly serious.

The Minister also referred to security and defence. We had another Minister in this House some time ago who referred to them also. I am glad to see that we are coming round to accepting a more realistic vision of our place in the Community; indeed, we are getting back to the thoughts expressed by the late Seán Lemass and President Éamon de Valera when he was in Opposition in 1948. We have no constitutional clause which says we must be neutral. Indeed, the late President de Valera said that in the event of a conflict affecting our interests we may find ourselves on one side or the other, or then again we might be neutral. The late Seán Lemass, when we were entering the Community, said we are prepared to give up even the technical label of neutrality which we have. Jack Lynch said we would be prepared to play our part and that we should play our part in a defence of Europe. The present Taoiseach, back in the 1960s, contributed in the other House and said we should be prepared, and asked what was wrong in getting into a defence commitment?

The Minister of State, Deputy Calleary, in this House had something to say, too. I believe it is time that we acknowledged our duties and responsibilities in relation to the defence of the Community. I was pleased to hear the Minister say at that time and I quote:

At the European Council in Rome 11 member states of the Community, including Ireland, were able to agree that these new developments required us to subscribe to the objective of a common foreign and security policy with a view to stengthening the identity of the Community and the coherence of its actions on the international stage.

I would have to agree. That is a move in the right direction. The Minister went on to say:

The position of the Government and successive Irish Government is that if the Community were at some stage to embark on arrangements for its own security concept, then Ireland as a fully committed member state would be willing to consider participation.

I am glad that we are getting round to that because we were in a rather peculiar situation in the Community. I presume this is reflecting Government policy on the matter.

I believe that if the European Community is to become a union or federation — whatever you would like to call it — four major objectives must be pursued — the word "federation" is causing a lot of friction in the United Kingdom at the moment, with two former Prime Ministers bashing it out in public, not a very dignified sight, calling each other liars and so on. Let us look at it from our point of view. As I said, four objectives must be pursued: first, balanced and coherent progress on all fronts; second, sovereignty for member states to the union and distribution of powers on basis of the subsidiarity principles; third, improvements in the Community's ability to take decisions and to act upon them, both within its boundaries and beyond; and fourth, a guaranteed democratic basis for the Community.

Much has been said about the democratic deficit, and there is reason to be concerned about it. As one who spent five years in the European Parliament, I can assure you there is reason to be concerned about the democratic deficit. I am extremely concerned about the amount of power that civil servants in Brussels can have. The Parliament got increased powers under the Single European Act and the Parliament were making a lot of amendments to directives. Where the Parliament got a majority — that is, over 260 on a Second Reading amending a directive — the Council of Ministers, provided that amendment was also supported by the Commission, could only stop that amendment going through on the basis of a unanimous vote, which was a most unlikely scenario in most situations. The problem for European parliamentarians was that they were being snowed under by paper from the Commission. The Commission's influence was overwhelming. Parliamentarians did not have anything like adequate back-up facilities in terms of research workers, advisers, etc.

Mrs. Honan

Just like here.

Professor Raftery

Even more so than here because the level of paperwork that was coming at you, and particularly in preparation for the Single Market, left one overwhelmed. When it got to technical matters, like genetic engineering and so on, the problem became even more acute and more dangerous.

There was another aspect which concerned me greatly and that was the power and influence of big corporations in the committees that mattered in that Parliament. I was a member of the Economic and Monetary Affairs Committee, which was the one primarily dealing with the Single European Act and the directives relating to business, etc. On that committee we had representatives — I say "representatives" deliberately; they were Members of the Parliament, but they were representing their companies. We had, for instance, the chairman of Klockner Steel. I do not think he was there for his MEP's salary. We had the late Basil de Ferranti, chairman of Ferranti Electronics. We had the former chairman of the British Overseas Board of Trade. We had a director from Volkswagen. We had a member of the staff of Mercedes. We had Pinon Farina from Italy. These are all wealthy people who were there to influence the legislation for the good of their own companies and not for their MEP salaries. That is a matter which should concern all of us. I believe there are dangers we have to be very wary of.

I believe that the MEPs do not have anything like adequate back-up service just, as Senator Honan said, we do not have in this House. If we contrast the European situation with that of the United States Congress we find each Senator and Congressman has £500,000 for staff for research work. In addition the Senate and Congress have the support of the Office of Technical Assessment and technical matters they do not understand — one cannot expect Senators, Congressmen and MEPs to be versed on everything — are sent to the Office of Technical Assessment who give an impartial and objective reading to them before they vote on an issue.

Our future lies in Europe but, for me, the political future of Europe must be all embracing and based on a balanced society in which all sections work together towards European union. For me, the ultimate aim of European integration, the first stated principle in the preamble in the European Community Treaty of 1957, is to establish an even closer union among the peoples of Europe, the sense of common purpose regarding the vital economic interests. However, economic success is not an end in itself but a means to creating a society based on individual freedom and mutual support.

European integration means more than economic integration. I hope that message will get through loud and clear, particularly to some people such as former Prime Minister Thatcher. I believe Prime Minister Major will be much more sympathetic to that view.

The Community has over the years intervened in areas which were not strictly economic in nature, a development which we should all welcome. Furthermore, the Single European Act has explicitly confirmed our strength in the Community's authority to intervene in social matters, technological development, the environment and regional balance. It has also established, and facilitated, European political co-operation. That is something to be welcomed by all.

In relation to social matters I would like to make reference to one danger, particularly where we have monetary union. With the Social Charter and monetary union we could find ourselves, and other countries could find themselves, in a situation where workers and salaried people would aspire to and, perhaps, achieve the levels of payments pertaining in countries that had significantly higher output per capita. That is the problem in Germany at the moment and we can see the outcome of it. Workers in former East Germany are aspiring to, and achieving, the levels of pay in the same currency as workers in former West Germany and, of course, the output is less than half that of the West German workers. This is not through any fault of the workers in what was formerly East Germany but the machines, tools and technology they are using are not up to the West German standard. We have to be realistic. If we get a single currency we should not expect to get the same pay as a German on day one. If we do that then I am afraid there will be very serious consequences because industry will simply move out of the country to where productivity is much higher.

As economic and monetary union gradually draws closer, whilst renewed efforts are being made towards whatever form of political union we will have — that is happening at present — I stress the urgent need first to promote a model for social development in Europe. We will never have a successful political union unless some of the disparities which exist are ironed out. That necessitates a determined effort despite the resistance of people like former Prime Minister Thatcher.

Secondly, steps must be taken towards having a common foreign policy and a combined European defence. Let us be honest about it, if we are going to have a federal Europe it is unlikely that we can have two armies, the Irish Army and the rest. It would be illogical. If we have political union we have to be part of the whole process not just having it on an a la carte basis.

Thirdly, we must give the Community's two founding principles, political and cultural co-operation, a leading role in European integration. Political union on federal lines must protect Europe's characteristic and historically derived richness and diversity while at the same time, when circumstances require it, have a common approach to solving problems. I do not want to see us getting rid of the richness of diversity we have while trying to solve our economic problems. It would be a sad day for the Community if we were to have a uniform Community destroying the richness of diversity which makes Europe so colourful and interesting for us and, indeed, for non-Community members.

These days no crucial question can remain a purely national matter. To carry out their duties at home the member states will in future need European solutions more than ever before. That is a fact and we have to face up to that. I believe we are beginning to face up to it.

I do not want to dwell on this topic too long but I stress that if we do not get more convergence, and if we do not get more redistribution of wealth, with peripheral regions particularly benefiting from it, we will have the result of a very unstable Community. It behoves us, in the interests of Ireland as a whole — I stress as a whole — to ensure that regional disadvantaged areas are looked after not just in Ireland but also our poorer members of the Community, particularly Greece, Portugal, parts of Britain like the north of Scotland and the south of Italy, otherwise total political union will be based on very shaky foundations. Our best hope of having a stable political union is to have better distribution of wealth throughout the Community.

We need, however, to have something beyond that. We need to have a better vision of what Europe will be in the future. Our aims and objectives, worthy though they are, seem to be confined almost exclusively to what we can get out of the Community. We have to think a little bit beyond that. Despite Margaret Thatcher's protestations the European Community is already a federation. I am afraid it is one with an unsatisfactory constitution. Decision-making at the centre lacks democratic accountability, a clearly defined executive and a proper balance of power. It is not a satisfactory situation that is evolving at the moment.

The division of powers and functions among its levels of Government lacks a clear and compelling definition and objectives. This is not unimportant. As the European Community's powers grow its constitutional defects are becoming even greater.

The European Community needs some clear constitutional thinking. It has instead an Intergovernmental Conference on Political Union, more like a political circus at times, and a Parliament going around like a circus in a triangle between Brussels, Luxembourg and Strasbourg.

Some argue about loss of sovereignty. In any federation one has to accept loss of sovereignty but, at the end of the day, if Governments have the right to secede then the Government are the ultimate authority. If the British feel very strongly about their sovereignty we should remind them they have the right to secede. It would be a bad day for Britain if it seceded, it would be a bad day for the Community and a bad day for us. To argue that all authority is going to Brussels or Strasbourg is a nonsense.

One of the objectives we should aim for is decentralisation. We are not giving a very good example at home. This century has not been kind to multi-ethnic, multinational and multilingual political entities. As the European Community redistributes more income and intervenes more in national decision-making so is it more likely to attract the resentments attendant upon all governments. It will do so without being able to draw on the shared language, history and culture that legitimise each member state to a different extent. You have different languages and different cultures surviving reasonably well in a country like Spain. The Community does not have that history behind it so it needs only to take those decisions at Community level, which are better taken at Community level or which have to be taken at Community level, and to leave as many of the decisions as possible to national governments.

The European Community should have powers to act collectively only where demanding criteria for federal action are satisfied. Foremost among them ought to be when the effects of the actions of member states spill materially on to others, when harmonisation is needed for free economic interplay among citizens of the member states, when a unified external policy is a corollary to the centralisation of power and when member states can obtain, through collective action, more of what all of them want from the world. The code word commonly used by the Community now is "subsidiarity". That concept is very subjective and certainly is far too subjective to be applied to a constitutional doctrine. More specific division of powers is required.

The second principle we must have is majority voting. Where the case for European Community decisions is granted qualified majority voting should be the norm since in its absence European Community policy would be paralysed. We have that now to a large extent but I would agree with the Minister that the right to have unanimous decisions in certain areas must be maintained.

The third principle we should aim for is greater democracy. At present the European Community has neither a parliament nor a government worthy of the name and has a Commission that has too much power and is too undemocratic. It is trying to be both parliament and civil service. The fourth principle is liberalism. The heart of the European Community's success has been the protection of grants to individual economic freedom against the encroachment of the member states. Only freedom of movement of goods, services, capital and labour can, in the end, give the European Community a unified economy and create a European consciousness. Look at what a single currency would do for consciousness of being Europeans. A welcome consequence of such freedom is regulatory competition, the basis of the internal market programme. In this respect I pay tribute to the former Commissioner, Mr. Sutherland, who really took competition policy and made something worthwhile of it. It had been there languishing under-utilised or unutilised and suddenly competition became one of the key matters for developing the Single Market.

Finally, the European Community must be open. Liberal principles should apply to external economic relations if the European Community is to contribute, as it should, both to wider international order and rapid development of its immediate neighbours. As I said already, there is a price we have to face up to for that but the rewards in the longer term will be worthwhile. The European Community is open to enlargement and should be open to enlargement. Interestingly, in a survey carried out last year among European Community citizens, there was a very strong indication that the ordinary citizen is in favour of enlargement and surprisingly — I say "surprisingly" because politicians are very much against it — more than 50 per cent of the European voters voted for a half-European half-Asian country, Turkey, to be a member.

I have gone on long enough. There are other things I would like to say but I know Senator Honan wants to get in before lunch. I hope that the draft we get from the intergovernmental conference will try to rectify some of these imbalances of power and the undemocratic structure we have in the Community. The Commission's power, I repeat, must be limited and checked. Also important is greater transparency of decision-making within the Council. That is a very disturbing matter. Ministers from the 12 countries sit down to make decisions and nobody knows how they arrived at those decisions. We need transparency in that area.

We certainly need much more accountability from the commissioners and their civil servants to the European Parliament and to the Council of Ministers. I believe the intergovernmental conference on political union represents a great opportunity not so much to turn the European Community into a federation as to give the present federation a satisfactory constitution because we have, in effect, a federation at the moment and Margaret Thatcher or John Major arguing about it is to ignore the reality. What it is promising instead is a transfer of broad and often unjustified powers that are to be guided and in part, exercised by a thoroughly undemocratic body, the Commission.

A fundamental analysis must now be made of the future functions and structure of a democratic, effective and decentralised liberal European Community. That will not come from horse trading over paragraphs. The intergovernmental conference should send for new draftsmen. That is what is needed now to give us a vision and a objective and not horse trading over dotting the "i" s and crossing the "t" s.

Mrs. Honan

I warmly welcome this discussion on developments in the European Community. Like my colleague, I have frequently asked that we should have regular debates on European affairs to try to keep ourselves and the people, familiar with what is going on there. The Minister indicated that we could be facing a referendum here after the outcome of the two intergovernmental conferences in Europe. That is one reason why more information should at all times be given so that politicians and the people who will be voting will be aware of what is going on.

I listened with interest to Senator Raftery's contribution, as I do always. He has the advantage of having served in Europe and, I presume hopes to do so again. The European Community was set up in 1957 and much has happened since them. As a nation we have been a success and we are now committed Europeans. Those of us who felt we should keep Europe close to our people may have played our own small role in that being so. The fathers who set up Europe decided to turn vision into action. That is what it is all about. We have always been in favour of a strong political centre and we see that now as a member of the European Community. Of course, there are tensions. As with people of different nations and, indeed, of countries and of parties, there are tensions all the time and they are bound to exist in Europe as well.

I have a contribution to make on different items that are relevant to us so I will take them as I put them down. As Senator Raftery said, we do not have the back-up expertise to draft speeches for us. In any case, I believe that even if I had, I would probably put the pen through the text, not use it and go down my own road.

Structural Funds have played a major role in tourism and in that sector where it is possible to create jobs very quickly. I understand that a recent announcement by the Minister, Deputy Brennan, of £71 million in grant-aid approved under the operational programme for tourism, 1989-93, to date is worth £225 million in developments. I have seen at first hand the results of the Structural Funds aid. I hope they will continue to be used in the present sensible way and with positive and good results.

The Single Market, a market of 320 million people, without barriers or restrictions to trade, with a combined purchasing power of over £3,300 billion, represents big money and a very large population. I know it has created problems for people and there are reservations and worries about it. I noted in a paper on the Single Market, dated 16 June 1991 the following comment:

Few things can be stickier than negotiation agreements with 12 nation states to the European Commission's Single Market programme and naturally the EC has adopted the standard procedure. Now, with 18 months left to the deadline for completing the Single Market, 31 December 1992, some 75 per cent of the 282 components of the Single Market plan are in place. To the optimists the programme is almost there, to the pessimists the Community is behind schedule and with the political contentious matters left until the end, the programme is almost certain to miss the deadline.

That is an interesting comment. I must say that at times I am concerned about the job creation directly arising from membership of the EC. I do not understand why we do not have more jobs coming onstream in view of size of the European market.

Senator Raftery referred to the agricultural area and I will leave that matter as he is an expert. It was interesting this morning that the head of the IDA, Ciaran McGowan, stated we do not have the correct statistics regarding job creation. He said clearly there were more jobs created in industry and that he did not see them reflected in the statistics on the live register. I do not understand that. He even gave an example of 5,000 jobs created and he said when he looked at the statistics on the live register a fortnight or three weeks afterwards, those 5,000 jobs were not shown. That is somebody else's problem. They should look into that matter and check it out with the head of the IDA.

It is no overstatement to say that European economic and monetary union will involve the most fundamental change in the economic relationships between member states since the original Treaties. No Member here today underestimates the enormous importance and the gravity of the task. The founding fathers resolved to create the basis for a broader and deeper Community among its people "long divided by bloody conflicts" and create a Europe under the banner of unity and peace.

This country under this Government is strongly committed to all things environmentally correct. I noted the comment of a Dutch delegate in Europe and Strasbourg stated at a meeting of the Association of Local Authorities in April 1991: "We have to co-ordinate the co-ordination of co-operation programmes with the countries of Central and Eastern Europe". It simply reflects the scale of the problems facing all of those who wish to make an active contribution within the member states of the Council of Europe in the local authority field. As somebody very strong on local government, it would be wrong of me not to refer to local government in my address here.

The Minister for Foreign Affairs said within the last fortnight:

We have already made it clear that we accept the objective of a common foreign and security policy and are prepared to work towards it on the understanding that the institutions in the Community and of the Twelve, as we now develop them, would be the primary forum for the working out of such a policy.

I have referred to Structural Funds. Up to quite recently there was also the Social Fund from which we got a substantial amount of money. I said at the time — and I have been proved correct — that some of the social funding that came into this country in a particular field was not carefully spent. Even with the protection of this House, I am careful not to criticise a person or a unit of service. Because we have become more conscious that we are Europeans we are taking a harder look at the moneys coming in and how they are spent.

A man very much in the firing line these days is Jacques Delors. It would be wrong if I sat down today without paying a tribute to him and the extraordinary role he has played in Europe. From my knowledge, he has been a good friend to this country. He said:

To put it bluntly, we have to start thinking about a simple but very basic question: if the Community is going to set itself great ambitions, will it have the means to achieve them? For no new venture will fire the imagination of our old nations unless it involves our political commitment to the universal values that have always inspired the great moments of our history.

I never met the man but I am impressed by a lot of what he has said and I certainly think he has been a friend to this nation.

We are fast approaching the point at which we will have to define precisely what policies we are to adopt in future under the headings of defence and neutrality. During the recent Gulf War we heard frequent lectures on our obligations as members of both Europe and the United Nations. There was a somewhat sinister implication that membership of these bodies obliged us to become involved positively in the Gulf conflict. This would have been in total contravention of the policy of neutrality to which we have adhered down the years.

To my mind, there is a clear distinction between neutrality and defence. In the context of the European Community, the current debate refers solely to defence. As it stands at the moment, there is absolutely no obligation on any member to become part of a military alliance. Such a thing was not envisaged when the Treaty of Rome was drawn up. However, we have now reached the stage where political union is firmly on the agenda. As recently as last Monday, a majority of the Foreign Ministers endorsed a draft treaty which states that it should be "a new step in the gradual process leading towards a future union with federal aspirations". It mentions the formulation of a common foreign and security policy with an aspiration towards a common defence policy at some future date.

Some people may have difficulty in differentiating between a common security policy and a common defence policy. Perhaps the Minister might clarify this point because the time-table seems to assume that there will be quite a considerable delay before the latter policy is agreed. Whatever the time-scale is to be, however, I think it right that we should encourage debate on what our attitude to a defence policy should be. Here I do not have any blocked up views any more. It took me a long time to politically mature on a lot of things but my policy now, as a senior Member of this House, is that anything that is good for this nation and for our people I will support. I would find no difficulty in defining my position on the matter.

I have always been strongly in favour of neutrality as we have practised it. Indeed, it was precisely our refusal to become involved in a military alliance which has made Ireland so acceptable to all parties in our many contributions to United Nations peacekeeping forces over the last 30 years. Our role has always been seen as an effort to prevent or minimise war and I hope this may long continue. Far from shirking our international obligations our record has been an exemplary one. Many of our young men have given their lives and as Government spokesman on Defence in this House, I would like to pay a tribute to the men who have died. I have strong, supportive feelings for people who don the uniform of the Irish Army or any of the Corps. I pay tribute to them and I hope what I said before it will not go unnoticed.

It is the right and obligation of every sovereign State to defend itself against outside aggression or against subversion from within. Apart from our United Nations commitments, this has always been our policy as far as our Defence Forces are concerned. In spite of many attempts at pressurising us to join NATO, we stood our ground on this issue, even when we found ourselves totally outnumbered by fellow members of the European Community who were already part of the military alliance. We were acting strictly according to our rights. However, we are now facing what could become an entirely new situation. It stands to reason that if the EC does form a political union which eventually could evolve into some sort of federation, then it would be right and proper that such a grouping should be prepared to defend any part of it from outside attack. This would certainly not imply a situation, a far as we are concerned, in which our forces could be deployed in any outside conflict, such as the recent Gulf War. Furthermore it would be inconceivable that any member state would become involved in conflict against another member state and it is with this in mind that I fervently hope the talks which have commenced in the North will be successful.

While I am on the subject of the North, down the years I often did not understand why membership of the EC did not bring us more peace and lessen the trouble between North and South. We saw the Berlin Wall coming down and still we have the sadness and the conflict on this one small and great island. I thought Europe might have brought us closer together but that was not to be. Some of my colleagues this morning wished the Chairman of the Strand 2 talks success. All of us hope that this will bring the sadness and the bitterness to an end and bring us all closer together as a nation.

Political union to some people conjures up a nightmare of Ireland as a small nation being directed to as how we should conduct our affairs politically, economically and even morally. We have already had the experience of directives being handed down from Brussels in one form of another which give some people the impression that we are to be bound by all of them, regardless of our deeply held convictions. We must always be on our guard that developments in the Community do not lead to a significant loss of sovereignty, or a diminution of our right to legislate according to the wishes of our people. At times I have had this worry about directives and, I would go so far as to say, dictation to us as a sovereign nation from Europe. Perhaps I say that because I do not understand the deep, long, protracted negotiations that go on all the time in Europe. Maybe you have to be out there to fully understand what is happening, but I think there should be more debate on major issues being decided for this country which will affect our people long after we are gone. If the eventual solution of our North-South problem were to involve the setting up of two federal Irish States I would certainly not envisage the new federal government having the right to dictate to either of the two States in the manner I have mentioned. Much less could I imagine a similar situation arising in a European context.

I want to pay a tribute to our Taoiseach who is meeting President Mitterrand this morning and Prime Minister John Major. I want to put on the record that the Taoiseach as President of the Council brought a new dimension to the relationship between Europe and the United States. The Minister in his address this morning said:

Relations between the European Community and the United States were one of the priorities of Ireland's Presidency at the beginning of last year. It was essential that relations with the Administration of the United States should be placed on a more formal and structural footing. As a result the Taoiseach's efforts in this direction, especially during his meeting with President Bush last year, in the autumn, of last year the Transatlantic Declaration was signed which provides for regular contact at the highest level between the Community and the US and Canada. This contact which involves the Presidents of the European Council and Commission and the President of the United States and the Canadian Prime Minister should help to instil a greater sense of confidence in our relationship.

That might have gone unnoticed at the time. We have problems with the Americans and CAP and certain members have trouble about their support for America in regard to wars in other parts of the world. I understand all that, but we must not let the good things we do be clouded or pass without recognition.

There is another section in the Minister's speech on defence. He said:

We have agreed to consider certain areas such as disarmament and arms control, CSSE matters, UN peacekeeping, non-proliferation, arms export policy and industrial and technological co-operation in the armaments area, for inclusion in a common policy. These matters are being discussed further in the ICG. The ICG has also been asked to consider the prospect of a role for the Community in defence matters, with a view to the future and without prejudice either to the existing commitments of member states in this area — for example, in NATO or the Western European Union — or to the traditional position of other member states. This refers notably to Ireland's policy on military neutrality. As of now, widely divergent views have emerged on the issue on whether the Community should aim to develop a defence policy of its own.

I know two of my colleagues want to come in and maybe I have gone on too long but this is of enormous importance. The Taoiseach spoke about the unity of Europe earlier this year. Let us start talking to each other about it tomorrow, leaving everything else aside. If we could work together to develop the resources of Ireland as a whole, all the people of this island could have a bright future in the European union which will be formally in place by the end of the century.

In the early days I did not understand the importance of Europe. If I do not understand something I have no trouble in saying so. I do not pretend I understand it. I agree that there are problems about the role of this House and its importance. If we are facing a referendum in this nation next year there is no better place for a regular debate on Europe. Some of my colleagues and myself feel strongly that this should be so. I think if the Taoiseach were asked he would agree with my request and that would get our people talking about Europe. What is happening there affects all our people. We should have more discussion in our two Houses of Parliament before major decisions are made relating to Europe which affect all our people. It would be irresponsible for us as elected people to this House not to be more positive and to ask different Ministers when making major decisions on European affairs, which affect every family in this nation to come here and debate them. There could well be most important debates on many things, particular on our stand in relation to defence and our role in the future of Europe. I welcome this, a Leas-Chathaoirleach, and I thank the Minister for being present.

Mr. Norris

I would like to deal with questions of principle regarding human rights because many other people have taken up economic and cultural aspects. I was struck by the fact that my colleague, Senator Honan, indicated her interest in tourism and the use of Structural Funds. I am aware of a distinguised member of her family who is director of a very important theatre group in County Waterford which demonstrates the strong and activity participation, not just of Dublin which currently the city of culture, but also of other parts of this country in maintaining our very strong profile in cultural matters. I am also aware that we are in danger of losing some Structural Funds because of the collapse of applications as a result of the BES situation, but I am sure the Minister will be relieved to hear that we expect to be on target for our allocation from the Structural Funds in the James Joyce Cultural Centre with the assistance of Members of this and the other House.

I wish to concentrate principally on issues of principle. There are two that I wish to deal with in particular. One is the question of torture and the other is the question related to it, the harmonisation of asylum policy within the European Community. I have a number of concerns there.

The third and final strand is to put down a marker about the case of Raoul Wallenberg because I am in possession of a parliamentary report adopted by the Parliamentary Assembly of the Council of Europe which places on the record, for the first time, significant and substantial factual information to confirm what a number of us have been saying for the last ten or 15 years, that there is substantial evidence of the survival inside Soviet Russia of that great, outstanding humanitarian, Mr. Raoul Wallenberg, former diplomat of Sweden.

Before I enter into these areas, however, I would like to echo what has been said all around the House about the importance of debates on foreign affairs and particularly on European affairs in this House and the distinguished role this House has played in this area. It is unfortunate that at the moment the question of a foreign affairs committee appears to be in limbo. I am not going to open that up apart from simply remarking on it. I wish to place upon the record of the House the existence of the Institute of European Affairs which, as I am sure the Minister is aware, was opened earlier this summer in a house in North Great George's Street that was acquired by Mr. Brendan Halligan, and some other distinguished people from, an all-party and non-party background for the study of European affairs, in particular in the light of moves towards the completion of the Single Market. That body will be sponsoring study groups, workshops, seminars, conferences, lectures and so on and will engage in publication of detailed analyses and information briefing documents to people in public life on questions of European affairs.

The initial work programme deals with three key issues which are relevant to this morning's debate, economic and monetary union, political union and the Common Agricultural Policy. That is all I wish to say on the Institute of European Affairs apart from congratulating those far-sighted people who detected the necessity for a sophisticated and informed approach to our position in Europe.

I would like now to bring up the question of torture because it is something that affects all persons of conscience and goodwill who believe in fundamental human rights. First, I would like to address a question not in a hostile or hectoring manner to the Minister with whom I have had the pleasure of debating many different issues, always in a good humoured way although sometimes trenchantly, in this House. The question I would like to ask is, why Ireland has not ratified the European Convention on Torture and if we can have an indication of an early process of ratification? I do not want to sensationalise matters but I attended a meeting two days ago which was addressed by Helen Bamber who is the director of the medical foundation for the care of victims of torture in London. In the briefing material I received from Dr. Bamber I was struck by one particular phrase which came from a survivor of Auschwitz who said: "Those who have suffered torture continue to be tortured". It does not stop with the immediate application of pain.

It is a horrifying thought, as I am sure the Minister will agree, that there are now many countries throughout the world for whom torture is a preferred instrument of policy even though they may deny that. The deliberate calculated, cynical and medically assisted application of pain to the human individual both physical and psychological is an instrument of government in many countries with whom we still co-operate in the full knowledge that they do this. One of the cases that was brought to my attention was the case of a women called Nura Mohammed, a 36 year old Somalian who was arrested when she was nine weeks pregnant, not because of anything she had done but because her husband was engaged in military activity on behalf of the Somali Liberation Front, or some such group, against the Government. She was subjected to electric shock, was placed in an isolation cell and was perpetually beaten. She cannot remember the exact sequence of the torture because it has become a blur. Sometimes she got a crust of bread, occasionally, a precious glass of water. She urinated on the floor. Guards urinated on her. She was tied inside a sack and half drowned until she actually believed she was going to die.

Acting Chairman (Mr. Fitzgerald)

Senator Norris, you are going away from what is before us today: Statements on Developments in the European Community. It does not have anything to do with torture.

Mr. Norris

May I say that one of the instruments of the European Community is the European Convention on Torture which we have not ratified. What I am dealing with is the reasons why it is important we should ratify it. I am sure that having made this explanation the Chair will agree that it is appropriate for me to raise it.

Acting Chairman

I would appreciate it if the Senator could keep more to statements.

Mr. Norris

I am making a statement about this and if you allow me to complete what I am saying you will see precisely the relevance because I am coming to a point about harmonisation of asylum policy. I accept that being the decent person he is the Acting Chairman is squeamish about these details as we all are. It is no pleasure for me to read them on to the record and I am sure it is no pleasure for anybody to listen to them but they happened and they are going to happen more frequently if we do not do something about the harmonisation of asylum policy. May I tell the Minister that after all this — I am not going to go into any further details about the torture — this woman escaped but her four children had to be left behind? They are in Ethiopia in a refugee camp and she has been granted permission by the British authorities to be reunited with her family but this has been prevented by a mass of bureaucratic red tape.

I refer the Minister to an article in The Lancet in 1984 about the examination of a teacher from El Salvador who was tortured using acid. In other words, torture exists. The complications of torture exist and the rescue trust in Ireland, and the medical foundation for the care of victims of torture, attempt to deal with the repercussions for the individual from this but very often their attempts to do so are frustrated by attitudes on the part of the European Community.

I would like to turn now to something that I am sure the Acting Chairman will agree is exactly within the realms of his discussion, the question of the harmonisation of asylum policy. Again, this is the kind of thing that is preventing this woman from being reunited with her children. I am concerned because under this harmonisation what we will be doing is accepting the lowest common denominator of criteria for accepting people into the position of asylum here. There have been, up to now at least, a variation of criteria between the member states but it is now proposed that we accept the lowest common denominator under European Community policy, its harmonisation of asylum policy. Procedures at the border are different. It has been indicated to me by Amnesty International that we need, for example, border officials to be required to refer all asylum seekers to the refugee determination authority. The border officials should be properly trained to identify and to refer to the refugee determination authority anyone who may not expressly request asylum but who may be at risk if turned away. The border officials should be instructed to take into consideration the particular situation of the asylum seeker, including difficulties in articulating or presenting a request for asylum and should bear in mind in particular that such a person may feel apprehensive of authority and unable to speak freely.

Asylum seekers should be given the necessary guidance about the procedures to be followed and the full information about his or her procedural rights. He or she should be allowed access to free legal representation and to the service of a competent interpreter. A decision or claim on refugee status and, in particular, any decision that an asylum seeker's claim is manifestly unfounded or abusive should be made only by the refugee determination authority and not by a frontier or local authority.

May I draw this back to the centre of our concerns. There was some hesitation about placing on the record of this House details about torture. As Senator Honan said, we have all been very concerned about developments in the Middle East and, in particular, about that most unfortunate group of people, the Kurds, caught in the middle of the situation, about whom there is genuine concern among the ordinary people of many countries including, I have no doubt, the United States of America and, certainly, this country. But what happened to the Kurds? We saw recently that Kurdish interpreters who had been helping United Nations troops are not being facilitated in seeking refugee status outside their country and they have clearly identified themselves as vulnerable targets. There is no doubt that they will be destroyed once they again fall into the clutches of Saddam Hussein.

In May and June 1989, 3,500 Turkish nationals — mostly Kurds — came to the United Kingdom and applied for asylum. Amnesty International received reports that as many as 100 Kurds, possibly many more, were returned to Turkey after only a cursory examination by immigration officials at the airport without their applications for asylum being referred to the central refugee determination authority. Two common features of the allegations were that the individuals concerned were not allowed to contact UNHCR or refugee agencies which might have been able to provide assistance or advice and their applications for asylum were not passed to the refugee determination authority for proper examination and determination.

Lawyers acting on behalf of 23 of these so expelled obtained a judicial review in the High Court in London. In each of the 23 cases the United Kingdom authorities subsequently conceded that the border officials acted illegally in expelling the individuals concerned without referring their cases to the central refugee determination authority. They acted illegally in Britain by denying proper procedures to people seeking asylum. There are worse countries than Britain. Yet we are proceeding with the harmonisation of asylum without any full public discussion. Is it proposed to have a full discussion on this? I am sure the House is as concerned as I am to know that the detailed proposals for the harmonisation of asylum policy are being worked out by a non-elected, non-representative group of community officials, entitled the Group of Co-ordinators, set up at the Summit Meeting in Rome. I would like to have as much information as possible on the question of the determinations that have been made by this group of co-ordinators.

I could put some further cases on the record but it would be tedious and I do not wish to hold up the business of the House or to make it more awkward for other people to speak. I place on the record Article 31.1 of the 1951 Convention which I do not wish to see superseded by any harmonisation policy. It states:

The Contracting States shall not impose penalties, on account of their illegal entry or presence, on refugees who, coming directly from a territory where their life or freedom was threatened..., enter or are present in their territory without authorisation,

An Cathoirleach

The Senator gained considerable time after 1 o'clock because we were trying to establish whether the statements were to conclude at 1 o'clock. I have established that statements were to be made from 10.30 a.m. until 1 o'clock and the Motion on the Adjournment would be taken at 1 o'clock. I know Senator Harte wanted to contribute but there was some confusion and I regret that Senator Harte, who has been waiting here all morning to contribute, has not had the opportunity to do so because of what was agreed.

Mr. Norris

I regret that.

An Cathaoirleach

I have checked it with the Acting Leader and the Leader of the Opposition Party. It has been confirmed satisfactorily and sufficiently that the business was to conclude at 1 o'clock. We allowed Senator Norris to continue——

Mr. Norris

I was unaware of this because I checked and was given different information. I would otherwise have made provision——

An Cathaoirleach

I feel badly about Senator Harte but that is the situation.

Mr. Harte

It is the rule of the House. The House made the decision this morning.

Mr. Manning

Can the debate be adjourned, rather than concluded so that Senator Harte could be in first the next day on this debate?

An Cathaoirleach

We have confirmed that the record of the House states that the statements would be interrupted at 1 p.m.

Mr. Wright

To take Senator Manning's suggestion, in view of what was said on the Order of Business today that with on-going negotiations within the European Council it could well be the month of July before we would have another opportunity to extend the debate when Senator Harte, following Senator Norris, would be the first speaker.

Mr. Harte

If that is the ruling of the House, I accept it.

An Cathaoirleach

I thank Senator Harte for his co-operation. We can do nothing about it.

Mr. Norris

I would have made provision if I had——

An Cathaoirleach

It was beyond the Senator's control and I appreciate the difficulty everyone found with it.

Mr. Norris

I would like to finish the sentence I started on because I will have another day, I hope, to raise the harmonisation of asylum policy and the question of Raoul Wallenberg. Medical records are now apparently available which indicate that Mr. Wallenberg was examined by a named Soviet doctor, Elena Butova in 1980 and received further medical treatment in Siberia in the Blagovechtchensk Clinic on 22 December 1986. There is a good case for believing he is still alive.

An Cathaoirleach

When is it proposed to sit again?

Mr. Wright

It is intended to sit on Wednesday, 3 July 1991, at 2.30 p.m.

Seanad Éireann debate - Thursday, 20 Jun 1991

Developments in the European Community: Statements.

Acting Chairman

Seanad Éireann debate -
Thursday, 20 Jun 1991