With the permission of the Ceann Comhairle, I wish to make a statement on the European Council which the Minister for Foreign Affairs and I attended in Paris on 12 and 13 March 1979.
The meeting was concerned with:
—the economic and social situation in the Community and relations with Japan;
—employment and social policy;
—energy;
—Euro-Arab-African relations;
—Convergence of the economies of the Nine; and the Common Agricultural Policy.
I have arranged to lay the Presidency conclusions before the House, for the information of Deputies, in accordance with normal practice.
The agenda items on the economic and social situation, and employment and social policy were taken together. With 6 million people out of work in the Community, unemployment is obviously one of the most serious and difficult problems facing Europe. In 1978, unemployment increased in Belgium, Denmark, France, Luxembourg and the Netherlands. In the United Kingdom the level remained more or less the same. It decreased only in Germany, Ireland and Italy; and on our estimates of economic growth for this year, it is likely to decrease further here, if we observe the proper disciplines. There is little likelihood of a reduction in the numbers out of work in the Community as a whole if the Commission estimate for economic growth in 1979 is realised: and oil shortages could aggravate the problems.
I emphasised the need to get economic growth in the Community moving again, as an essential prerequisite to the elimination of unemployment.
There was considerable emphasis on the need to reduce inflation, which the Council stressed must be the first objective of economic policy. The Council noted that growth is currently strongest in those countries with the lowest rates of inflation.
Apart from general measures to sustain or stimulate growth, without increasing inflation, the Council stressed the need to improve relations with the social partners. A full understanding of the problems and opportunities is essential to economic progress. The Council also asked the Council of Ministers to study a number of specific measures, including:
training better adapted to employment, particularly for young people;
limiting the systematic use of overtime; and improving employment conditions for women.
I emphasised the need for measures to develop youth employment. As is well known, the rate of increase in Ireland in the labour force due to the inflow of young people is at a much higher rate than obtains in the Community generally. The rate of inflow of young people to the labour force here is three times the Community average. The Council accepted my proposal and confirmed the importance it attached to youth employment.
We can sustain economic growth and reduce unemployment only if energy policy is right. Our dependency on external sources—more than 80 per cent— for coal, oil and other materials makes us dangerously vulnerable to any interruption of supplies. And it is essential for our own security that we, like the rest of the Community, reduce this dependency. The Council discussed the difficulties created by the Iranian situation in relation both to supplies and to economic growth generally. A number of specific measures were adopted—including emphasis on conservation, New sources of energy, including in particular nuclear energy, and measures to ensure directly a reduction in the consumption of oil by the Community.
I indicated the need for Community assistance for exploration, in particular for hydrocarbons in areas off the west coast of Ireland which have promise but which, because of deep waters, are expensive and difficult to explore. Even a small find by world standards would enable us to meet our own needs and leave a surplus for Community use.
There was a great deal of discussion on the use of Community finances to advance convergence of the different economies, with particular emphasis on the Common Agricultural Policy. I said that only a small part of the Community resources, in total, are spent on agriculture. It is, in fact, of the order of 0.5 per cent, or half of 1 per cent of the combined GNP of the member countries or less than 3 per cent of total Community spending on food. And what is perhaps even more relevant, the Community spending is only half what national governments themselves spend on agriculture. I urged the need for an improvement in structures policy, particularly for the less favoured areas of the Community: and this point was accepted by the Council. On prices, there was considerable pressure for a complete standstill this year. I said that a complete standstill was a blunt instrument which should not be used. Farmers' costs, like those of everybody else, are rising and the Community must have regard to them—as well as to the need to moderate inflation. At the same time, the problem of surpluses is real and must be tackled. I supported the Commission's general approach in this area.
The Council recognised the importance of adhering to the principles of the CAP and decided that there would be continuing review of these principles with special regard to security of supply, a reasonable standard of income for farmers and to distortions in the market.
On the European Monetary System, technical difficulties were raised in Community institutions as to the method of transfer of resources to Ireland. The House will recall that the Brussels Council last December decided on a resolution providing for loans of up to 1,000 million EUA per year to less prosperous member countries on special conditions. These loans were to be concentrated on infrastructural projects and programmes. The resolution provided for interest rate subsidies of 3 per cent for the loans, to be capitalised in annual tranches of 200 million EUAs over a period of five years. These decisions were supplemented by a further decision that if Ireland and Italy both decided to join the system, the interest subsidies would be allocated as to one-third to Ireland and two-thirds to Italy.
Following discussion at the Council, the difficulties to which I have referred were resolved. What is involved is the transfer to Ireland of the capitalised value of the subsidies on loans to be advanced to us from the European Investment Bank.
There are still uncertainties in the way of the subsidy payments. These uncertainties are not due to any act or omission on our part. They concern differences between Community institutions. They are:
(1) the difference between the Council of Ministers and the European Parliament as to the budget for 1979. Until these difficulties are resolved, it will not be possible to enter the amount of the subsidies in the Community Budget; and
(2) differences between Parliament and the Commission on the formalities for the making of the subsidy regulations, and as to the nature of the subsidies in Community terms, that is, whether they are obligatory or nonobligatory expenditure.
I have no reason to believe that these questions will not be resolved, in time, but it is well that the House should be aware of them. When the questions are resolved the subsidies will, on present Commission proposals, be paid on loans made available from 1 January 1979. While the difficulties to which I have referred may delay payments, they are not insurmountable. The subsidies can be paid in 1979 and subsequent years according as we raise the necessary loans.
We also had a general exchange of views on some world current political problems, including the situation in the Middle East, the Euratom Treaty, nuclear proliferation, and Turkey.
There is considerable concern among the Nine about the growing tendency towards the use of force and the lack of respect for the principle of territorial integrity—as set out in the UN Charter and the Helsinki Final Act. This is evident in various world trouble spots—in Asia, in Central Africa, as between the two Yemens and so on. President Giscard expressed the general concern of the Nine on this question at the Press Conference when he presented the Presidency conclusions. We also discussed East-West relations and proposals by the President for a Euro-Arab-African Conference.
Foreign Ministers met separately on Monday night and discussed a number of current issues. I understand that in their discussions they covered the situation in Southern Africa (including the prospects for a settlement in Rhodesia and in Namibia). They also exchanged views on the situation in South East Asia. However, they decided not to issue a formal statement on any of these questions.
When the idea of the European Council was first developed in Paris in 1974, the French emphasised that their purpose was to bring together the Heads of Government of the Nine for informal contacts. Councils are important for this purpose and can do much valuable work. At the Paris Council the utmost goodwill was shown by all Community countries towards Ireland. There was complete understanding of our unique problems and of the measures we are taking to tackle them. I would like to record here my appreciation of that support. We are members of the European Community and believe in co-operating fully in working to advance its objectives.