I propose to report on the outcome of the European Council at Maastricht on 9 and 10 December. The meeting was attended by the Taoiseach. He was accompanied by the Ministers for Foreign Affairs and Finance. The main issue before the European Council was the draft Treaty on European Union. The text of the draft Treaty which formed the basis for the negotiations at Maastricht and the documents which set out the agreed changes have been laid before the House. Consolidated texts will be provided as soon as they are available.
Senators will be aware of the main issues involved in the Maastricht discussions from the detailed debate which took place here nearly two weeks ago. I can report that the Maastricht meeting was a success. A new European union has been established. It will contain provision for greater Community involvement in an increased number of areas. It will involve eventual economic and monetary union. A common foreign and security policy will be established. There will be greater provision for social rights within the Single Market which is basic to the operation of the European union.
From Ireland's point of view the outcome is very satisfactory. We will play a full part in the evolution of the new European union. Its development will be to our benefit and in that development our economic and social interests are taken fully into account.
When the Treaty comes into operation in 1993, it will give concrete form to Europe's role in the world. Internally by creating an economic, monetary and political union it will reinforce the gains which have been made since the Community was founded. It will provide the agenda for development for the rest of this decade and into the new millenium. The new European union will reinforce the commitment of the Community to its people through a shared citizenship, economic and social cohesion and a stronger social policy.
The Community's role on the international stage has grown especially since the mid 1980s. With a population of 340 million, the Community now constitutes the largest single trading bloc in the world. Such a unit requires the instruments of a coherent internal and external policy to match its economic capacity. The new Treaty provides those instruments.
Already the Community has shown its ability to act on the international stage, especially in Europe. Within Europe it has provided an example to the countries of Central and Eastern Europe as they make the long — and often difficult — move away for totalitarianism. In this regard I would mention the fact that on Monday of this week the Community signed the first association agreements with states in that region — with Poland, Czechoslovakia and Hungary. Sweden and Austria have indicated their wish to become member states of the Community. It is notable that the Maastricht European Council declared that negotiations on the enlargement can begin after the discussions on future financing are completed in 1992. A Community which is about to be enlarged and which is establishing a network of associates elsewhere in Europe must be equipped with the strong instruments and policies which the new European Union Treaty will bring.
Turning to the main issues which were discussed at Maastricht, I would like to concentrate on the following points: first, economic and social cohesion which involves the principle of Community solidarity in distributing the economic benefits of the Union among states and regions; second, economic and monetary union with its ultimate aim of a single currency; third, social policy and the welfare of the individual citizen; fourth, institutional reform, in particular the so-called "democratic deficit"; and fifth, the common foreign and security policy which will embody the European union's identity in the world.
All of these issues are of vital importance to Ireland. We are fully committed to the concept of European union. This commitment applies to economic and monetary union and to political union. We welcome the fact that the links between these subjects are recognised and that there will be a Single Treaty bringing together the results of the negotiations which have taken place over the last year.
During the negotiations in both the European Monetary Union Inter-Governmental Conference and in that which examined the issues involved in political union, our negotiators were determined to ensure that Irish concerns were accommodated. This objective was achieved without in any way questioning our full adherence to European union.
I will now deal in turn with the five main issues which were discussed during the negotiations on European union. When I spoke in this House two weeks ago, I stressed that cohesion was an important priority for us in the negotiations in both Inter-Governmental Conferences. An economic and monetary union has to have firm provisions for sharing the benefits of the union with the less well off regions. Otherwise it would not be a union worthy of the name and would fail.
Without firm provision on cohesion, economic and monetary union would concentrate the benefits of the union on the already well endowed central areas of the union. This would be gravely damaging to the economic and social wellbeing of the less well off regions, particularly those like Ireland, which are peripheral to and distant from the main economic centres of Europe.
In the negotiations we had a clear strategy. From the outset we sought to ensure that the Treaty contained the fullest possible recognition of cohesion as a basic objective of the Treaty. We also ensured that their recognition had to be accompanied by firm commitments to the measures, including financial measures, to achieve cohesion.
At a very early stage of the Inter-Governmental Conference we took the lead in tabling amendments to the existing cohesion chapter to ensure full recognition of cohesion as a basic objective of the union. We were extremely successful in our negotiations. As a result the new Treaty contains provisions which are highly satisfactory and a substantial advance on the provision of the Single European Act.
These provisions comprise the inclusion of cohesion and solidarity between member states among the basic objectives of the community; the inclusion of rural development among the basic cohesion objectives contained in the EEC Treaty; the requirement that the formulation and implementation of all other Community policies, such as those on agriculture, trade, R & D and state aids, and the implementation of the Single Market, will have to take account of cohesion and must also contribute to its achievement; and the obligation on the commission to report every three years on progress towards cohesion and on how the various policies have contributed to it. These reports are to be accompanied, if necessary, by appropriate remedial proposals.
These provisions will ensure that the cohesion objective is complied with in the future. However, we were not satisfied with Treaty language alone. We made clear in the negotiations and in all bilateral contact with partners that the Treaty would have to be accompanied by firm commitments on practical measures to bring about cohesion. Without these commitments we would find it impossible to accept the Treaty and we could not recommend it to the Irish people.
Ireland was the first member state to advocate that these practical commitments should be contained in a Protocol to the Treaty. This was necessary to ensure that the commitments had the highest legal status short of being in the Treaty itself, which would not be appropriate for details of a programme nature. Thus it was a major success that a Protocol on cohesion was adopted reflecting the concerns and commitments we wished to see included in such a Protocol.
The Cohesion Protocol had clear new commitments which the union must now honour to assist the achievement of greater economic and social cohesion. These commitments include two we were particularly concerned to obtain. The first is that the rates of Community intervention under Structural Funds can be varied to avoid excessive increases in budgetary expenditures in the less prosperous member states. This is a very important provision to have gained as Structural Funds is not beneficial if the burden of the national matching contribution is excessive.
The second new commitment is that the scope of the Structural Funds will now be extended beyond the traditional areas of funding in order to cover the specific needs of individual less prosperous member states. It is quite clear that a widened scope for structural funding is a particular advantage to Ireland and on which will meet a need which has been very evident in the administration of the funds. These two additional commitments will be of major importance in easing our budgetary difficulties in matching increased structural funding.
The Protocol reaffirms the continued role of the Structural Funds and provides that their appropriate size from 1993 onwards will be decided in 1992. This is also a firm commitment which prefigures a further increase in the funds.
The most important achievement in the cohesion area, however, is the provision in the Treaty and the Protocol that a Cohesion Fund will be established before the end of 1993. This new fund will make a financial contribution to action designed to promote cohesion in the fields of the environment and the trans-European networks.
Our particular position in relation to this new fund is acknowledged in the fact that it is provided that in the case of transport infrastructure special attention will be given to island and peripheral regions. This new fund is confined to member states whose GNP per capita is below 90 per cent of the Community average and who fulfil the conditions of economic convergence under economic and monetary union or have programmes underway to do so. Ireland fully meets these criteria.
The Cohesion Fund will have special significance and application in Ireland. We suffer more than most countries economically from our peripheral location from our markets because we export the equivalent of two-thirds of our output. The deficiencies in our transport communications with our export markets impose a heavy economic cost which significantly affects our competitiveness.
As regards the environment, we have a major environmental programme to finance in this decade in reducing water and air pollution and developing our water supplies and water purification systems. We know from our discussions with the Commission that our peripheral and environmental needs were specially intended when the fund was proposed.
It is appropriate that this new fund should have the environment as one of its key objectives. The protection of the environment is an essential issue and one which more than most has transfrontier implications requiring action by the Community on an international scale.
One very important consideration about the new fund is that it will be additional to the Structural Funds. Thus, one of our major concerns that there should be an increased flow of funds to assure and accelerate cohesion has been met. Ideally, we would, of course, like to move towards more automatic transfer mechanisms. However, the result of Maastricht is not sufficient to achieve the degree of political homogeneity which would produce such a mechanism. An automatic mechanism will remain Ireland's long term objective and one which we will continue to pursue in future negotiations.
The outcome of Maastricht, therefore, in regard to cohesion has been an outstanding achievement. First, we have secured a whole range of binding legal provisions in the Treaty. Second, we have secured firm commitments in a legal Protocol. As a result of these provisions we can expect substantial increases in the transfers of resources, thus complying with a fundamental negotiating position which we adopted in the negotiations on economic and monetary union.
Ministers for Finance attended the Council for the discussion of economic and monetary union, which was central to our consideration of the move towards European union. Fortunately, the bulk of the Economic and Monetary Union Treaty provisions had been agreed before the European Council meeting. The main item which had to be considered was the decision-making arrangements for the transition to Stage III of the Economic and Monetary Union, leading to a single currency for the Community. There was a great desire on the part of most countries, including Ireland, to ensure that the process being set in train would be irreversible and would lead within a reasonably short and certain period to the establishment of full economic and monetary union.
The agreement which was reached provides for two possible procedures. The first, which will apply at end-1996, provides for a decision by qualified majority at that time to set a date for Stage III, if a majority of the member states fulfils the necessary convergence conditions for the adoption of a single currently and it is considered appropriate for the Community to enter Stage III. If by the end of 1997 the date for the beginning of Stage III has not been set under this procedure, then the date of 1 January, 1999 will be set. This date will apply automatically, without the need for further decision. However, a decision will be needed, by qualified majority, on which member states fulfil the necessary convergence conditions. Only those countries will move ahead to full economic and monetary union at that time.
The UK and Denmark sought and obtained special Protocols which allow them to take a further decision on their participation in Stage III at the time that the date for transition is being decided. This arose because of special circumstances in those countries. All the other member states, with the exception of the United Kingdom, are firmly committed to moving to Stage III. The United Kingdom at this point is not committed to such a move: neither are they committed against it. They say that the decision to go ahead or not to go ahead will be taken at the time.
I am confident that Ireland will be in a position to move to Stage III of the Economic and Monetary Union with the first group of countries. The convergence conditions which must be met are set out in the draft Treaty documents. They relate to price stability, a sound budgetary position, convergence of interest rates and a stable currency in the exchange rate mechanism of the European Monetary System. We are already in a better position than many member states to meet these conditions and intend to continue with the necessary policies to sustain and indeed improve this position over the coming years.
Overall, the economic and monetary union decisions now envisage that Stage II will start on 1 January 1994, with the establishment of the European Monetary Institute. Stage III will start any time from 1997 onwards and at the latest on 1 January 1999. The European Central Bank will be set up just before the start of Stage III and the single currency and single monetary policy will apply from the start of Stage III. The economic side of the economic and monetary union will be characterised by close co-ordination of monetary policies and by provisions to avoid excessive budget deficits.
Social policy was certainly the most difficult of the topics under discussion at the European Council in Maastricht and one, as Senators will be aware, where it did not prove possible to reach agreement among the Twelve. For our part, we were determined to ensure that the social dimension of the Community should not be ignored in the process of deeper integration. Our proposal that the promotion of employment should be among the first objectives of social policy was a clear example of this and was accepted during the preparatory work for Maastricht.
It is a matter for regret that the concerns of the United Kingdom could not be met in the course of the negotiations and that as a consequence the other 11 member states felt obliged to agree among themselves on language which was more in keeping with the aims and objectives of the Social Charter and to permit the UK to go its own way.
The outcome of the negotiations on this important subject is that the present Treaty, as amended by the Single European Act, remains unchanged. The other 11 member states have agreed to strengthen the Community's scope for action in the area of social policy by setting out a series of objectives for the Community and the member states. Of particular importance is the extension of those areas where qualified majority voting will apply. Areas of particular sensitivity, such as social security and social protection of workers, will be reserved for unanimity.
The definition of working conditions contained in the list of issues where decisions will be taken by qualified majority lacks the clarity which we would have wished. We will, of course, in any negotiations on draft legislation brought forward by the Commission seek to ensure that in relation to any additional financial burden which may ensure our concerns are taken fully into account. We will be relying on several important aspects of the new Treaty in this regard.
First, the Community now has a strong and comprehensive definition of subsidiarity. This principle will have to be taken into account in the formulation of the social legislation, in particular. Secondly, there is provision that social policy directives must avoid imposing undue burdens on small and medium sized enterprises in such a way that might inhibit their creation and development. Given the situation which now exists on social policy, we will be insisting that this requirement is fully and scrupulously observed by the Commission in its proposals.
Thirdly, there is a requirement that directives should have regard to the conditions in each of the member states. The UK, our major trading partner, is not party to the new social policy, and this could have implications for competition. Again, we will expect that this factor will be fully taken into account by the Commission.
Fourthly, there is the provision, arising from an agreement between the European Trade Union Confederation and the European employers' body taken up by the Intergovernmental Conference, that before submitting social policy proposals the Commission shall consult management about the possible direction of Community policy and that, if the Commission then decides to go ahead with Community action, it will obtain the opinion or recommendations of the two sides of industry on the envisaged proposal.
There will, understandably, be concern that if our major trading partner, the UK, is not party to the new social policy, this could have certain consequences for competition. We will look to the Commission to have due regard to this factor; but it is worth recalling that many countries inside the Community, and indeed beyond, are able to combine high standards of productivity with advanced social legislation.
I believe it was right for Ireland to join with ten of its partners in moving forward in an area of major importance for the Community and for its citizens. To have done otherwise would have led to the possible breakdown of the negotiations as a whole and would have sacrificed gains in other areas of fundamental importance to Ireland and to the Community as a whole.
The need to enhance the democratic legitimacy of the union has been a major issue of the negotiations on political union. I am firmly of the view that in our country democratic legitimacy is guaranteed by the Oireachtas and by our local government system. However, I do recognise the concern that at the European level some deficiencies do exist. The role of the European Parliament and the powers which it has in the legislative process of the Community have been significantly strengthened as part of the agreements reached in Maastricht. The Parliament's position in relation to the legislative process has been strengthened, rights of petition and inquiry have been formalised and the appointment of a Community ombudsman has been entrusted to it.
The most important development, however, is in the area of decision taking where Parliament will now have a right to reject the Council's position in a number of important areas of Community policy. This will allow Parliament to have a greater say and influence on the nature of future Community legislation. The areas which have been selected include education, culture, consumer affairs, research and technology, trans-European networks, environment and the Internal Market.
On 4 December the Minister for Foreign Affairs set out our overall approach to the negotiations on a common foreign and security policy, which was one of the most sensitive aspects of the negotiations on political union. We were anxious to ensure at Maastricht that the European union we were negotiating would have both the mechanisms and the mandate to address the challenges which we will face as a Community as the decade of the 1990s proceeds.
Under the new Treaty a common foreign and security policy is to take shape alongside other policies which took to the outside world, such as the Community's development policy and the common commercial policy. The common foreign and security policy will be based on stated objectives. These are set out in the first article of the Common Foreign and Security Policy chapter and conform closely to our own approach to international relations. The Common Foreign and Security Policy will be determined by the Council — Ministers will no longer wear a separate "EPC hat" when they consider questions of foreign policy. Although the Common Foreign and Security Policy will to a considerable extent take the form of an expanded co-operation broadly based on European political co-operation as now practised, there is also provision for joint action — essentially a more binding form of co-operation — in cases where the member states have clear common interests.
In his speech to which I have referred the Minister for Foreign Affairs set out a number of specific issues which were of concern to Ireland in the negotiations. It was our view that it would have been inappropriate to rely on majority voting in an area such as the Common Foreign and Security Policy, where member states continue to be inspired by different historical legacies and where issues of principle frequently arise. It is largely because of this factor that the Common Foreign and Security Policy is regarded as a separate pillar of the union, although one that stands close to the other pillars.
We have every reason to be satisfied with the Maastricht text on majority voting. Although the door is left open for recourse to majority voting in particular instances, this can only happen through a procedure under which the Council defines by unanimity those matters on which majority decisions are to be taken. Our own interests will be fully safeguarded. But we will be able under controlled conditions to acquire experience of whether and how majority voting can have a useful part to play in the foreign policy field.
Another area to which Ireland devoted particular attention in the negotiations is that of security. The parameters of our approach were first, our readiness to work with our partners towards defining common policies on a broader range of security issues than under the Single European Act; second, our longstanding commitmement that we would be prepared to enter into negotiations on a defence arrangement for the Community; and, third, our sense of the limits of what the Community should attempt to achieve in this field at the present time; it was our position that the scope and nature of a common defence policy would be matters for a future negotiation and would have to be agreed by unanimity. Our negotiating objectives in this matter have been fully achieved.
The Treaty provides that the policy of the union will not prejudice the specific character of Ireland's security and defence policy. This provision, in Article D of the Common Foreign and Security Policy chapter, reflects the recognition of our traditional position which was secured at the second Rome Summit last year. It is a formulation which demonstrates, I believe, the goodwill and understanding with which our Community partners addressed Ireland's concerns.
The Treaty also makes it clear that joint action by the European union will not extend to defence issues. As far as decision and actions of the union have defence implications, they will be matters for the Western European Union. Any requests made by the European union to the Western European Union must be agreed by unanimity among the Twelve.
It is envisaged that the security aspects of the European union will be reviewed in 1996 at a further inter-governmental conference. This too corresponds to our preference. It entails an evolutionary approach to the development of European union and an approach to which Ireland will contribute fully.
The background to the security provisions of the Maastricht Treaty is, of course, the major transition which is underway in European security affairs generally. I do not need to spell our those changes. They involve a recasting of NATO's role, a stronger western European identity in the security field, enhanced prospects for confidence building, arms control and, in general, for a spirit of mutual accountability and responsibility through the full range of security issues in Europe.
At Maastricht the nine members of the Western European Union have in a separate declaration set out their views on the future of European defence, including the practical organisational arrangements they intend to make to enable the Western European Union to implement issues referred to it from the European union. The matters covered by this declaration are essentially for the members of the Western European Union. From Ireland's point of view, although we understand their desire to proceed in this way, what is important are the legal commitments we ourselves will enter into through the European Union Treaty itself. These are the only obligations that we will take on; these will not involve us in a mutual defence commitment; they will not oblige us to join an alliance. The Treaty will not involve us in taking on obigations under the Western European Union Treaty or subscribing to policy platforms adopted by the Western European Union.
The advanced and stable societies of the Community — a Community which has such economic weight — have a responsibility to act coherently and positively on the international stage, not least where our European neighbours are concerned. The instability which threatens relations between the republics of Yugoslavia, the profound changes occurring across the territory of the Soviet Union, are illustrations of the urgency of this task.
The Common Foreign and Security Policy provisions of the Treaty give the Community the mechanisms needed to live up to its responsibilities. What is now important is to define the actual policies to be pursued. I believe Members of this House will share my satisfaction that in an enterprise so central to the future of Europe, and so important to the wider world, Ireland has an equal place at the table. We will not fail to bring to discussions under the Common Foreígn and Security Policy the values which have long been characteristic of our approach to international relations.
The outcome of Maastricht and the new Treaty which was agreed there will require careful and mature consideration in the months ahead. The Government are committed to encouraging the fullest debate on the issues involved. In advance of Maastricht we arranged detailed debates in both Houses. The Government will publish a White Paper on the new Treaty early in the new year. In order to permit ratification a referendum will be necessary and the Government intend to ensure that the people are fully aware of all of the issues involved before they are asked to decide.
In the course of next year, both the Dáil and the Seanad will have a series of opportunities to discuss the Treaty and related issues involving Ireland's participation in the new European union. I am sure that as a result of this deep consideration of the issues involved by the Irish people and by their legislators we will be able to renew the commitment to the European vocation which Ireland has espoused for three decades.
There can be no doubt that the new Treaty marks a historic step forward by the Community. It will have immense consequences for the future development and prosperity of Europe as a whole. The Community's role as a source of political stability and as an economic powerhouse has been reinforced. Its attraction to other parts of Europe is clearly evident. Ireland has participated fully in this historic development. Other coutries in Europe are now seeking to follow the path of membership which we took nearly two decades ago. They realise that in the Community they will find the support and solidarity which we have found since 1973. The new union will increase this solidarity. In its provisions on cohesion there is a clear indication of the very high degree of commitment to the less prosperous regions. The social dimension underlines the fact that the Community is not simply a monetary and economic entity but has a wider concern and duty to its citizens. The new chapter on Community citizenship is also relevant in this respect.
The Maastricht European Council represents a crucial step in the creation of a Community that is responsive to the needs of its citizens, that is conscious of its role in the world, that is equipped with the necessary economic and monetary powers to provide a stable and prosperous environment and a high degree of solidarity between its regions, that is conscious of the importance of the natural environment, the health and education of its citizens and, not least, of their culture, which has both a common heritage and immense diversity.
The Government are very glad to recommend the outcome of Maastricht both to this House and to the Irish people.