The European Communities (Amendment) Bill, 1993, which is before the Seanad provides for certain amendments to the EC Treaty concerning the Statute of the European Investment Bank; for the incorporation into domestic law of the European Economic Area Agreement; for the transfer of the statutory functions of the former Joint Committee on Secondary Legislation to the Oireachtas Joint Committee on Foreign Affairs and for the retrospective confirmation of ministerial regulations previously made under the European Communities Act, 1972.
There is a growing awareness in the Community that action must be taken to stimulate growth and promote employment. This awareness is not limited to the Community. The Tokyo Summit of the most economically powerful countries last week accepted that economic recovery had to be a top priority.
In addition, and this has a bearing on other aspects of this Bill, the Community has established close co-operation with the EFTA countries within a wider European approach on economic recovery.
The European Council at Edinburgh in December 1992 launched a "growth initiative". Among the elements included in this initiative is the setting up of a European Investment Fund. The European Investment Bank will be a major shareholder as well as the Community itself and other major financial institutions.
This Fund will provide financial guarantees for borrowings and so facilitate private financing of infrastructural projects. The Fund will have an endowment of 2 billion ECUs, about 40 per cent of which comes from the EIB and 30 per cent from the Commission on behalf of the Community, the remainder being contributed by major financial institutions.
As a result of the prudential ratios, the 2 billion ECUs are expected to cover approximately 5 to 10 billion ECUs in guarantees. This impetus to infrastructural investment in the Community will help stimulate economic activity and jobs.
Infrastructural works in Ireland are eligible for grant funding under the Cohesion Fund and the Regional Funds. The European Investment Fund, which is a loan or guarantee instrument rather than a grant instrument, will be available to Ireland, It will also apply in areas of the Community where the Structural and Cohesion Funds are not available for such works.
To enable the European Investment Bank to be a shareholder of the Fund, it is necessary to amend the Protocol on the Statute of the European Investment Bank, which is part of the EEC Treaty.
The agreement between the member states making the necessary amendment was signed by the member states, including Ireland, on 25 March, subject to ratification. With a view to ratifying this amendment to the EEC Treaty, it is proposed to add this instrument to the list of Treaties constituting the European Communities in section 1 of the European Communities Act, 1972.
Early ratification by Ireland of the necessary change to the Statute of the European Investment Bank will be an indication of the urgency with which this country views the need for European and world action to stimulate the international economy and employment.
It is also proposed to add to the list a purely technical Treaty signed in 1975. It was not considered necessary to add this to the list at the time. However, in the interests of clarity and completeness, we considered that we should now add it, along with the 1993 amendment.
The Bill now before the House will also enable Ireland to ratify the EEA Agreement which was signed by the EC and EFTA states in Oporto in May 1992.
This agreement, which was approved by the Dáil last October, was due to come into effect on the 1 January this year. However, following its rejection by the Swiss people in a referendum last December, an adjusting Protocol was negotiated to take account of Swiss non-participation. It is hoped that the agreement and adjusting Protocol will come into effect in the near future following ratification by all the parties.
The EEA Agreement will establish a significantly closer and more structured relationship between the EC and the EFTA countries. Its objective is continuous and balanced strengthening of trade and economic relations in conditions of equal competition and based on the same rules. At its heart is the achievement of the free movement of goods, services, capital and people. The agreement sets out the competition rules that will apply and provides for strengthened co-operation in areas such as the environment, research and development.
The EEA is an important element in the new European architecture emerging following the dramatic geopolitical changes in Europe since 1989. It is intended to give fresh impetus to the special relationship which links the European Community and the EFTA states which is based on their proximity, the importance of their economic relations, their common values of democracy and a market economy and their European identity.
The EEA Agreement is not directly concerned with the question of EC enlargement and is not neceessarily a prelude to membership for the EFTA states.
In a separate development however, a number of these states have applied for membership and negotiations are currently taking place with a view to early accession by Austria, Finland, Norway and Sweden. The accession negotiations for these countries are undoubtedly facilitated through the work already done in the EEA on much basic Community legislation.
I attach considerable importance to the early entry into force of this agreement. This is because of the significance to our relations with the EFTA states and because the agreement itself is advantageous from an Irish point of view.
The agreement establishes closer and more intensive relations between the EC and the EFTA countries with which Ireland has always enjoyed excellent relations and which share a similarity of outlook with us on a range of international issues. It represents a market opening by both sides and Ireland's already strong export performance towards EFTA can be improved with the further removal of barriers.
The special fund to be established under the Agreement to help reduce economic and social disparities in the EEA will also be of benefit to Ireland. It will involve for Ireland the provision of 50 million ECUs in grants and 150 million ECUs in soft loans over five years.
I turn to the issue of the Oireachtas Joint Committee on Foreign Affairs and the proposals in this Bill to transfer the statutory functions of the former Joint Committee on Secondary Legislation of the European Communities to the new committee.
The work of the Oireachtas Joint Committee on Foreign Affairs since its recent inception is most impressive. As I have already made clear, I warmly welcome the establishment of this committee. It provides an opportunity for regular and reflective discussions across the entire range of foreign policy issues.
I attended the Dáil Select Committee on Foreign Affairs, along with the Minister of State, Deputy Kitt, on 18 June for the examination of the Foreign Affairs Estimate. I found the open debate that took place on foreign policy issues by members of the committee — many of whom have considerable expertise in this area — has been a positive contribution to the quality of our political culture.
I also attended the joint committee on 29 June to discuss Irish participation in the UN operation in Somalia and to hear the views of the members prior to the debate on the motion to dispatch the Irish contingent to Somalia. Officials of my Department have appeared before the joint committee and briefed it on a wide range of issues including Bosnia, East Timor, the reform of the United Nations and enlargement of the Community.
The new committees are, in terms of Irish Parliamentary tradition, an important innovation on which we should build and the current Bill transfers the legislative scrutiny functions of the old joint committee to the new Foreign Affairs Committee.
The new committee will be able to monitor fully all aspects of Irish foreign policy of which EC affairs are such an essential component. With the powers transferred to it under this legislation the committee will be able to revive and continue the vital task of monitoring secondary legislation as its predecessor was empowered to do under section 1 (1) (b) of the European Communities (Amendment) Act, 1973.
It is important to reflect on the powers being given to the committee in this area. The powers now transferred will enable the committee to recommend to Houses of the Oireachtas the annulment of any ministerial orders made under the European Communities Acts subject to a resolution in both Houses to that effect. This power ranges over the entire spectrum of ministerial orders made under the Acts.
The old joint committee was diligent in the use of these powers and reported regularly to both Houses on regulations made by ministerial order. The most recent committee, which sat between 1989 and 1992, made 14 reports to the Dáil and Seanad. The main failure in the existing system was the fact that the Dáil and Seanad did not debate or discuss these reports.
I hope that they will respond more readily to reports from the new committee. I would urge them to ensure that this is the case at the very least when the Dáil and Seanad come to debate the annual report of the committee as provided for under section 13 of its terms of reference.
Apart from its power to examine and recommend the annulment of ministerial orders, the Foreign Affairs Committee has extensive powers to examine proposals made by the EC Commission which form the basis for implementing national legislation after they have been passed by the Council of Ministers.
Paragraph 10, sub-paragraph 1, of the terms of reference of the committee permits it to consider:
such programmes and guidelines prepared by the Commission of the European Communities as a basis for possible legislative action and such drafts of regulations, directives, decisions, recommendations and opinions of the Council of Ministers proposed by the Commission.
My Department sends copies of all Commission proposals to the committee and to Dáil Library.
My officials and officials of other Departments are available to assist the committee in implementing this part of its mandate and in advising the committee in regard to the subject matter and implications of the issues under examination. I am prepared to look sympathetically at any proposals the committee may wish to make arising out of its experience of this task for additional help in examining measures. Other interest groups, such as the social partners, also have an interest in advising the committee in their specific fields of competence and I would welcome their participation in the task of ensuring that the committee has the fullest range of expertise possible at its disposal in its work.
If Commission proposals are considered in good time then the committee will have an opportunity, after consulting the various interests, to put on record its views on these proposals for the information of the Minister concerned, before they come to the Council.
If this is not enough, I am prepared, as I have said, to look again at the arrangements for the scrutiny of EC legislation in the light of the committee's experience to ensure that the most comprehensive arrangements possible are in place to facilitate it in its on-going work, not only after the legislation has been adopted by the instances of the Community, but also in the formative process.
In the meantime the State must continue the process of implementing European Community legislation. The present Bill is intended to do so in respect of the three elements it contains, as well as to ensure, in advance of the Supreme Court decision in the Meagher case, that existing ministerial regulations under section 3 of the European Communities Act, 1972 will in so far as necessary be validated retrospectively as from the time when they took effect. The effect of the High Court judgment in this case was to declare part of the regulation-making powers in section 3 (2) of this Act to be unconstitutional.
Subject to the outcome of the State's appeal to the Supreme Court this judgment creates a serious defect with implications not only for the present and the future, but also for the past in the State's implementation of its obligations under the EC Treaties. I am advised that such implementation depends to a considerable extent on regulations made under the 1972 Act as from the time when we joined the Communities. Furthermore, I am advised that as the State is about to accede to the EEA Agreement the implementation of our obligations under that Agreement would also depend to a considerable extent on regulations made under the 1972 Act as adapted pursuant to section 4 of the Bill.
The three measures contained in this Bill represent a number of important aspects of our Community membership.
First, the Bill will enable the European Investment Bank to enhance its capacity to provide finance for development. While the European Investment Fund may be a relatively minor aspect as far as the Community's development effort in Ireland is concerned, it is nevertheless an important indication of what the Community can contribute to our development. The current negotiations on the Structural Funds and the Government's clear determination to maximise the allocation of these funds to Ireland underlines the importance of the Community in our strategy to tackle unemployment and stimulate economic recovery and growth.
Second, in an increasingly interdependent Europe the advent of the European Economic Area is an aspect of Community policy that will impact favourably on our relations with other European EFTA countries with whom we already have important economic and political links. We look forward when the current negotiations are complete to welcoming four of these countries, Austria, Sweden, Finland and Norway, as members of the Community and of the European Union. The Irish economy can only benefit from these developments.
Third, the transfer of the legislative scrutiny functions from the old Joint Committee on Secondary Legislation to the new Foreign Affairs Committee will facilitate the scrutiny of EC legislation which will henceforth be consolidated in the new committee, which with these transferred powers will be able to continue the essential task of monitoring the secondary legislation of the Community.
I commend this Bill to the Seanad.