Dáil Éireann díospóireacht -
Wednesday, 18 Jun 1980

Vol. 322 No. 6

European Council Meeting: Statement By Taoiseach.

The Taoiseach

With the permission of the Ceann Comhairle, I propose to make a statement on the European Council held in Venice on Thursday and Friday, 12 and 13 June 1980, which I attended with the Minister for Foreign Affairs, Deputy Brian Lenihan. The discussions at the Council covered economic and political co-operation subjects. I have had the Presidency summary of the proceedings and certain other documentation laid before both Houses in the usual way.

We discussed the general economic situation, energy, relations between the northern countries and those in the less developed part of the southern hemisphere, the Community's trade with Japan and the United States, international monetary questions and the recycling of petro-dollars. There was a brief discussion of the Report of the Three Wise Men which is to be considered again by the Foreign Ministers in Council.

We spent some time discussing the role of the next President of the Commission who is due to take up office in January 1981. During his term, the incoming President will have to deal with the system of financing the Community, which, as Deputies will be aware, is likely to reach its limits by 1982, at the latest. The prospect, which is of very real concern to Ireland, is, therefore, for a radical appraisal of the whole range of Community policies, expenditures and receipts, including the common agricultural policy and regional and social policies. The incoming President will also have to deal with the enlargement of the Community and with many of the problems facing western society, including the impact of new technologies and relations with other countries and with the oil-producing States. It is clear that the task of the incoming President will be formidable and his capacity to deal both with internal problems and with the role of the Community in a rapidly changing world will be of great significance for the future of Europe. The Council decided that the discussion should be regarded as a preliminary review of the question and that the Italian Presidency should consult further with the Heads of State or of Government with a view to securing an early decision.

The aftermath of the settlement of the British budgetary problem was very much in evidence during our discussions. The House will be aware from documents laid before it by the Minister for Foreign Affairs earlier this month of the nature of the solution reached tentatively by the Council of Ministers at their meeting on 30 May and afterwards confirmed by governments. In brief, their decision was to provide for a reduction in the net contribution of the United Kingdom to the Community by an average of about £866 million a year for 1980 and 1981, with a pledge by the Community to resolve the problem for 1982 by means of structural changes. The Irish contribution to the £866 million will be of the order of £8 million a year.

This additional contribution by us must be looked at in the light of our overall position. Recent Commission estimates show net receipts to Ireland from the budget as being of the order of £360 million in 1980. Though we have a comparatively small population, we are the second highest net recipients from the budget and these receipts will increase in 1981 by a figure which is estimated to be up to 30 per cent.

The settlement of the British problem enabled certain other difficulties to be dealt with. These included clearing the increased farm prices for 1980, with an understanding on future years, the west of Ireland package involving an expenditure there from Community funds of about £150 million over the next ten years, progress with the development of common policies for fish and sheep, and a possible way forward towards larger regional and social funds. The settlement could, in fact, result in the release to Ireland of Community finances amounting to an extra £75 million in 1980. We had, therefore, a very immediate and direct interest in having the British budgetary problem solved quickly. The funds flowing to Ireland as a result of the settlement and the other benefits which could result are of an altogether different order of magnitude from the extra cost to us.

We also had a much more fundamental interest in a solution which far outweighed any short-term financial benefit. The British problem and the intensity of feeling it evoked, at times seemed to call into question the very foundations of the Community. The settlement means that the Community can go about its business once again in an orderly manner and grow and develop in a way that will promote the welfare of the people of Europe.

The real pity is that the British problem generated an attitude which could be detrimental to the future development of the Community and which must be countered. It has focused attention on the Community budget to an altogether disproportionate degree. The budget is, indeed, an instrument of Community policy but it is only one instrument and not by any means the most important. It is often forgotten that it is, in total, less than 1 per cent of the gross national product of the member countries.

The common agricultural policy which absorbs an important part of the budget is also one of the few policies which have developed a Community relevance. The common agricultural policy is not just a policy for agriculture. It has a strategic importance in that it guarantees food for the people of Europe in these uncertain times. It has an economic value in the extent to which it keeps families on the land, prevents rural depopulation and unwelcome and unnecessary additions to urban unemployment registers. Furthermore, a thriving agriculture contributes considerably to general industrial and economic prosperity.

The cost of the policy is perhaps 0.5 per cent of the gross national product of the member countries. The cost—and the benefits—are not distributed in direct proportion to budgetary flows. A fundamental principle of the CAP is the unity of the market—so that, in fact, benefits are related more to agricultural production in a particular country than to the size of budgetary transfers. There is the further point that contributions to the budget often take the place of national expenditure on agriculture —they do not, in fact, represent a net extra burden to national Exchequers.

I mention these qualifications because of the dangers which any review of Community policies confined simply to the budget must carry. In fact, concentration on the budget to the extent that has been in evidence over the past year means that other aspects of the Community tend to be overlooked. Benefits or costs cannot be measured simply in budgetary terms and to imply that they can is totally to misconceive the nature and the working of the Community.

The industry of the member states, and of some of the stronger economies in particular has flourished in the Common Market behind a common tariff. The benefits of this to the countries concerned, which are immense, are not measured in any budget figures. Neither can the budget measure the benefits to a particular country from the encouragement of industrial investment and modernisation through the application of common laws, common standards and common procedures in a single market of 260 million people.

Furthermore the Community gives the countries of Europe a standing in the world which they would not otherwise have. The Community, acting and speaking as such, has far greater economic and political status than any loose combination of member states.

Following on the discussion of the future of the Community after the British settlement, we looked at the economic prospects facing Europe. The tone of this discussion was sombre. We considered, in particular, the general impact of oil price increases. While these increases are affecting standards in the developed countries, they are damaging the less developed countries to a devastating extent and they are also impeding the ability of the industrialised world to help the less well off regions. The price increases cannot, in the view of the Council, be justified by any objective consideration and their repetition constitutes an obvious threat to international stability.

Changes in energy policy over time will lessen dependence on depleting resources. In the shorter term, however, it was agreed that a constructive dialogue with the oil producers was called for and should be sought. At the meeting, I stressed, in particular, the need to develop institutions and mechanisms at Community level so as to enhance our ability to recycle the finance flowing in such volume to the oil producers.

The Commission's assessment of other aspects of the European economy was equally disturbing. The momentum of inflation is now of the same order of magnitude as in 1974-75 when, as Deputies will recall, the rate here rose to over 24 per cent in a year. Unemployment in the Community is forecast to reach 6 per cent on average in 1980, with a strong increase likely in 1981. There are great problems for young people entering into the larour force. Low growth, higher inflation, large budgetary deficits, interest rates often at a crippling level, and general uncertainty are all combining to create an extremely difficult outlook. The Commission see the restoration of better financial balance in certain countries as a priority for these countries. Against this background, the Commission say that there is no alternative to maintaining broadly restrictive budgetary and monetary policies. It proposes no common programme of action on unemployment. These assessments are very relevant for us in Ireland, depending, as we do to such an extent on the level of world trade, in general, on European trade, in particular.

The plain fact is that growth in the largest market for our goods this year—the United Kingdom—is forecast to be negative and we will be selling there in a contracting market. Furthermore, economic growth in Europe as a whole is estimated to be of the order of 1½ per cent in 1980.

Our economic prospects at present are overwhelmingly influenced by the price of oil. Last year about one-sixth of all the goods we exported went to pay for oil. This year the proportion will probably be higher. It is vital that everyone should clearly understand that increases in the price of oil mean a real transfer of resources away from Ireland; and that this transfer cannot be corrected by increases in money incomes here. Our European partners have accepted this reality and have acted upon it. They have settled their economic and incomes policies accordingly in their efforts to defeat inflation.

When some of the countries with the strongest economies in the world are trimming their sails in this way, it would indeed be foolish, if not dangerous, for us to try to act differently. Our partners believe that inflation must be tackled as a first priority because unless it is, it will sap the strength of their economies and make the achievement of growth and lasting employment impossible.

Ireland has a sound economy. Our population is, perhaps, the youngest in Europe. The potential of our agriculture and of the new industries which are coming here is great. But we will realise that potential only if our economic policies are right and all those concerned in the key areas accept the reality of what is happening in the world, the intolerable burden which energy costs and inflation are imposing, and what this must mean for us.

As Deputies might expect, the tone of our discussion on international affairs, in the context of European political co-operation, was no less sombre than that of our exchanges on economic matters. We met at a critical point in world affairs against a background of continuing violation of basic international principles and of continuing threats to peace.

The declaration on the Middle East which, as a statement of a common European position, breaks new ground, has attracted the greatest attention. This reflects the recognition that growing tensions in that region constitute a serious danger to world peace and that it had not been possible by the date originally foreseen to make worthwhile progress towards agreement on the outstanding matters arising from the Camp David agreements. We are of course, anxious not to prejudice whatever prospects remain for progress and this has been recognised in the reception given to our declaration by the United States Secretary of State.

The declaration is carefully balanced. It recognises the need for the Palestinian people to exercise fully their right to self-determination. It recognises as well the need for guarantees of security for Israel. It also stresses that only the renunciation of force can create a climate of confidence and that such renunciation is a basic element for a comprehensive settlement.

I have necessarily omitted some elements in the declaration which I commend to Deputies. It concludes by indicating the Community's decision to make the necessary contacts with all the parties concerned. The objective would be to determine in the light of the results of this consultation the form which a Nine initiative could take.

The declaration on the situation in the Lebanon is satisfactory from an Irish viewpoint.

We expressed our deep concern over the situation in Afghanistan and we agreed that it was now advisable to hold a meeting at political level of the two sides in the Euro-Arab dialogue. In relation to Southern Africa, we noted the positive developments in Zimbabwe and expressed support for the efforts to secure implementation of the Security Council Resolution on Namibia.

When in Venice I had the opportunity of a separate meeting, for about half an hour, with the British Prime Minister, Mrs. Thatcher, during which we discussed a number of subjects of common interest.

The Venice meeting was valuable in that it provided the leaders of the Community with an opportunity to have a detailed review of the international scene and an exchange of views on the many serious issues facing us. It also enabled the Community to co-ordinate its position for the forthcoming Economic Summit to be held in Venice on 22 and 23 June.

I would like, in conclusion, to put on record, my appreciation of the quality of the facilities, with which we were provided by the Italian Presidency in the incomparable surroundings of Venice.

Dr. FitzGerald

I will refer first to the declaration on the Middle East which was in many ways the essential feature of the meeting at which no significant decisions of an economic nature affecting the Community were taken. This declaration treads a narrow path for the Community by the desire on the one hand to make a contribution to resolving the problem in view of the growing dangers of a situation in which tensions are rising rapidly and on the other hand the concern of the US to retain the initiative and be seen to do so, especially in an election year. The declaration emanating from the European Council was probably the best that could be expected in those circumstances.

In paragraph 4 the declaration states the classic position of the Community stressing on the one hand the right to existence in security of all the states in the region including Israel and on the other hand the need for justice for all the peoples which requires the recognition of the legitimate rights of the Palestinian people. Paragraph 5 refers to guarantees in terms which may raise some cynical doubts in the light of what guarantees were seen to mean in the case of Cyprus and in the light of what is happening to the UN position in the Lebanon. The significance of the brackets which surround the word "guarantees" in the closing line of the paragraph is not clear. It says:

The Nine declare that they are prepared to participate within the framework of a comprehensive settlement in a system of concrete and binding international guarantees, including (guarantees) on the ground.

Those brackets are very esoteric indeed and I cannot imagine their significance.

We have to face the reality of Israeli concern, in view of the nature of the legal borders of Israel, which at one point narrow that country to no more than nine miles in width, and the long history of conflict with its neighbours. These things require the certainty that any solution arrived at will not endanger the security of Israel. Unfortunately, a possible part solution to this problem which could involve Israeli strong points being leased from the sovereign power, whoever that power might be in the areas beyond Israeli's legal frontiers, for a period of a decade or two, has been seriously prejudiced by the Israeli settlement policy in these areas which has weakened the possibility of longer term Arab acceptance of such a solution which some at least in Israel have advocated. I had the opportunity to discuss this with the Israeli Government when on a visit there some years ago. The failure to persuade Israel to abandon this settlement policy, so dangerous for its long-term interests, is a serious matter and I agree with what is said in paragraph 9 on this point.

I also agree with paragraph 8 concerning Jesusalem. Neither Christians nor Arabs can accept the unilateral solution based on conquest and occupation. We are no longer in the time of the crusades and any solution to the Jerusalem problem must be acceptable to the people of all three great religions to whom Jerusalem is a sacred city. Paragraph 11 deals with a renunciation of the use of force. It is very relevant at a time when the PLO are moving back to a hard line position from which de facto, if not in their formal statements, they had previously been moving away under the leadership of President Arafat. This backward movement by the PLO is to be regretted and deplored and whatever justification the PLO may feel they have on the Israeli settlement policy, they must face the fact that the way they have moved on this issue can only make a solution more difficult and can only weaken the support which has been growing for securing their rights to the Palestinian people.

Paragraph 6 deals with the right to self-determination, a concept which has emerged at Community level relatively recently in supplementation of the more traditional expression of the Community's position with regard to the problem in the Middle East, Israel and Palestine. Irish people must support this concept of self-determination so much in line with our traditions. It would certainly be difficult for us to accept the idea that the future of the Palestinian people in a state within the occupied territories should be determined not by ourselves but by Israel which asserts the right to determine.

The Palestinians may have a role within a federation with Jordan but not in their own right in that part of Palestine left to them after the wars of the forties. It is not even a sensible policy. The Palestinians in a federation with Jordan are as likely to take over Jordan eventually and find themselves in control of a much larger area as they are to be kept under control by the Jordanians. Having discussed this particular matter with the Israeli Government a few years ago I found their answers unconvincing on this issue of insisting the Palestinians must not have a state of their own but only operate within some framework such as a federation with Jordan.

I regret that, for reasons which still remain obscure and will do so until the relevant papers in the Department of Foreign Affairs are published, the Minister for Foreign Affairs moved so far ahead of the position of the Nine in Bahrain with his recognition of the PLO, unqualified by reference to the unacceptability of the claims in the PLO charter and without any public assurance of full recognition of our State and rejection by the PLO, on behalf of itself and all associated bodies, of aid to terrorists who seek to overturn our State and murder our fellow citizens in the North. It is my policy, as the record adverted to by the Minister in this House at Question Time some weeks ago shows, to press for these assurances as an integral part of any process of recognition of the role of the PLO. I regret that this Government have abandoned the diplomatic approach, important to our interests, which I believe could have yielded results, and have also expressed support for a recognition unqualified by any reference to the unacceptability of the claims in the PLO charter.

As regards Afghanistan, to which the Taoiseach referred, there is understandable disagreement about the policy in relation to the boycott of the Olympic Games. It is inevitable that this should be a cause of disagreement. When we in our party took up our position in January—and the Government very belatedly followed, after apparently months of agonising consideration, in May—we knew in taking up this position, and I am sure the Government were also aware of it that it would be an unpopular decision with many people. Sport is something which for most people is nearer to them than the problems of a country so far away. However, we were justified in the position we took up. We had no other weapon to hand with which to put pressure on the Soviet Union. We do not have credits that we could cut off, or a technological contribution to make which we could cease to provide. The only weapon Ireland had to help the Afghanistan people and to try to put some pressure on to prevent the massacre of that people by the Soviet Union, the shooting down of schoolchildren in the streets and so on, was the Olympic boycott. Had the boycott been more successful and secured more support in other countries following the lead which we among others gave, it could have had—it may still have, although it is more doubtful now—a significant impact on Soviet policy through its impact on Soviet public opinion to which the Soviet Government are eventually sensitive. The problem that has always existed is for us to get through to Soviet public opinion and the Olympic Games provided a unique occasion for that.

It should be emphasised, and the Government should emphasise as I have done in speaking on this issue, that on this matter there is no question of following the lead of the United States blindly as some propagandists have alleged. That seems to be widely believed in this country. It could be argued, and the case is a strong one, that our Government and the EEC as a whole, have done this in the case of Iran. That is a matter we will be debating briefly in this House next week. In the case of Afghanistan those who argue to this effect are ignoring the fact that of the 40 countries which in January last were committed to this boycott 35 of them were non-aligned countries, mostly Moslem countries, and only four or five were members of NATO. To put this down to the United States and say we are following their lead in regard to Afghanistan is to ignore completely the reality of world opinion, the support of 104 countries of the United Nations and the support given by many Moslem countries and other non-aligned countries to the boycott and the efforts being made by Islamic countries to try to pressurise the Soviet Union to withdraw from Afghanistan.

We as a small country have a duty to another small country to do what we can to help. It is obviously a matter on which there will be legitimate disagreement and it is a matter for the athletes to decide whether they will go. It should be seen by both sides that it is a matter of legitimate disagreement and it does not help to have propaganda arguments which are fallacious and ignore the extent and scale of the support among non-aligned countries on this issue with whom we are identifying, as some of these critics often ask we should do on other issues.

In the Taoiseach's speech there is no reference to the part of the communique which deals with North-South issues. The numbering of the pages is peculiar because of the odd way in which these communiques are put together. However, paragraph 6 deals with North-South dialogue. They do not say very much and perhaps that is why the Taoiseach did not concern himself with them. It states:

It is intended that a further boost should be given to co-operation with the developing countries. This should contribute, on the basis of interdependence and mutual advantage, to creating the degree of economic expansion required, in the context of a restructuring of international economic relations, to enable the developing countries to make rapid progress.

There is no hint as to how this boost is to be given, nor am I aware of any commitment to increase development aid. Admittedly not all countries involved are doing what we are doing in abandoning our commitment to these countries and cutting development aid brutally as we have done this year, effectively disrupting our bilateral aid programme. Few countries have been as mean and brutal in their onslaught on aid to these countries as we have been under this Government this year despite the commitments entered into by the previous Minister for Foreign Affairs in opposition and which he continued to refer to in Government. Nonetheless, the other member countries do not seem to have committed themselves to any increase in assistance to these countries which could be regarded as a further boost or have the effect stated in the communique. This has an air of window-dressing more than anything else. The same must be said of the reference to the Brandt Commission. It states that the report of the Brandt Commission could make a particularly interesting contribution to the successful outcome of the eleventh special session of the United Nations General Assembly. It is hard to be more non-commital than that even in a bland communique from the Council.

What the communique and the Taoiseach have said about world economic prospects must concern us. The use of words like "sombre" and "disturbing" must be a matter of concern. There are in the communique all the usual platitudes which no communique from this august body is ever without. At one point the keenest concern is expressed at the hardening inflationary pressures and there is talk of doing something by means of "appropriate monetary and fiscal policies". The word "appropriate" is not confined to this House where we had it several times yesterday in different contexts; it seems to creep in in other places too. Stress was laid on the importance of action to ensure that the risk of a general recession in demand is averted, although from what the Taoiseach said in his speech he has no confidence in that meaning anything or that there is any prospect of anything active being done. There was re-affirmation of the priority need in some of the member states for short-term structural measures in the context of an active employment policy to help young people in employment. We know that that means nothing.

The hope was expressed that all the industrialised countries would do their utmost to confront and resolve the outstanding trade problems. It always puzzled me as a participant at these meetings, and it still puzzles me, as to what those who draft these documents think can be achieved by them and the failure to appreciate that the continuous repetition of platitudes simply undermines confidence in those who assume their authorship when they adopt them without any discussion at the end of these meetings. It is odd that that lesson has never been learned.

It is unfortunate that we are so badly placed after the last three years of Fianna Fáil government to face the strains which, as the Taoiseach made clear, will be imposed upon us by the deteriorating world economic situation. We are entering this period with a growth which is now estimated to be less than half that of the rest of the Community in the current year as against being almost three times that of the rest of the Community when we left office. There is no common programme of action in the Community on unemployment. Indeed, the whole situation with regard to unemployment is a terrifying prospect for us and, above all, for school leavers in the current year with unemployment rising now at an accelerating rate reaching 4,200 in the single month of May.

The Taoiseach referred to Ireland as having a sound economy and said that the potential of our agriculture and of the new industries coming here was great. He said we will realise that potential only if our economic policies are right. That is certainly true but I do not think it is for a Fianna Fáil Taoiseach, either the present holder of the office or his predecessor, to say that considering how wrong their economic policies have been and how damaging to our prospects in the face of the oncoming world recession those policies have been. I agree with the points made by the Taoiseach in relation to the Community budget. He referred to the agricultural budget as being different in character from the rest and being in large measure a substitute for national budgets. So the propaganda about its scale in relation to the rest of the Community budget, and about its distribution between different countries, is, in some cases, unrelated to GNP per head although not in our case because we are the main beneficiary and also the poorest member state. I agree with what the Taoiseach said on those points but it is a pity that he did not succeed in convincing his colleagues of this. I accept that that is not an easy task.

There is, however, a very real problem facing us now in this area because of the gradual disappearance, it would seem, of what had hitherto been a clear consensus among all member states, other than Britain, on the maintenance of the acquis communitaire, what has been achieved already in the Community. We must insist upon this and I urge the Taoiseach that, in relation to the choice of the new president of the Commission, we should be above all concerned to ensure that no candidate is accepted by us or becomes president who is not committed to the maintenance of what has been achieved within the Community and to the existing policy structure. Regardless of what support any candidate may have from the larger countries, we should insist on that. There are none of those countries now on whom we can rely in relation to our interest in the Community. In the past a coincidence of interest or of ideals has ensured the support of France and Germany for positions involving the maintenance of existing Community policies upon the basis of which we entered the Community. There have been disturbing signs recently of a shift in France away from insistence on the preservation of the CAP and the acquis communitaire in general towards the idea of a juste retour, of France getting back what it puts in. If France is going to abandon its traditional policy then we shall have to fight very hard to maintain it. There have also been some signs of a shift in Germany, perhaps in relation to the German elections. We shall have to wait to see. It may not be as serious as it looks but we must be on the alert in relation to this.

It is true that in the past Chancellor Schmidt on several occasions moved to make changes in relation to the common agricultural policy but when it came to the point he failed to do so either because internal political considerations in Germany prevented this or because his ingenious Minister for Agriculture has, as occurred on more than one occasion, successfully sabotaged his efforts. We cannot necessarily rely on that continuing and after a German election the pressure group represented by German farmers, relatively inefficient by our standards, which led originally to the Germans insisting on a high price policy in the Community and has led them to continue to seek to maintain that, may be less potent than it is at other times. In those circumstances we must use every weapon to hand to maintain the present policy structure in the Community. We have one potent weapon at present, our agreement to a new president. Our vital national interests are now at state as they are not often at stake in the Community. We can exaggerate the number of times when the national interest is at stake. At times other countries—we generally avoided this—have used the argument about the national interest in relation to matters that are of relatively minor importance. However, what looms ahead of us is of vital national interest to us and we should be prepared, therefore, to use the veto power we have in regard to a new president unless we are satisfied that he is committed to Community policies.

That should be the aim of our policy on this matter of the presidency and, with respect, it is much too important for us for an extension of the public relations exercise the Taoiseach is giving all his time to in the domestic forum to be allowed take precedence over it. I should now like to refer to the contribution to the British Exchequer which we are being asked to provide. We had been given assurances that whatever solution was reached we would not have to pay. Indeed, that was being reasonable. There is something totally lacking in reason, or logic or common sense when this country, the poorest in the Community, with an external payments deficit twice as large in relation to our GNP as any other member country, should be asked to pay sums of money for the benefit of our neighbour. While there has been a relative decline in the British economy over the years and while our growth has been much faster than that of Britain we are still a good distance behind that country. A decade or so will elapse before our prosperity will be such that we could reasonably be asked to contribute to help Britain. The proposal that we should do so is one which we had assurances would not be put to us. It has now been put to us and we on this side of the House find that unacceptable. We are not in a position to contest it but it should not have been agreed to. There must have been great weakness in arguments on our part to allow ourselves to be argued into a position, with a GNP per head 25 per cent or so lower than that of Britain in real terms and with a balance of payments deficit which is the highest in the Community, to have to contribute to a country which is that much better off than us and which, in fact, has a balance of payments surplus because of its oil. What kind of negotiation on our part could lead to our being landed with that commitment is difficult to conceive and certainly nothing in my negotiating experience in the Community enables me to envisage what kind of mess of negotiation it would be necessary to make in order to arrive at that conclusion. Even recognising the Taoiseach's legitimate concern to maintain good relations with the UK at present, what has been agreed goes too far.

Moreover, looking at it in a broader context in terms of the burden it imposes on the Community as a whole, insufficient account has been taken by our Government, and other Governments, of the effect of this commitment to the British Exchequer on hastening the time at which the critical point will be reached when the 1 per cent VAT will be inadequate to provide for the financing of the Community. When one watches the decisions being taken and the manner in which they are taken with something less than a full sense of responsibility by the member countries and their governments, one cannot but feel that we are on a very slippery slope indeed. We are speeding up the process by which we will reach a stage where the 1 per cent limit is reached and there is not the slightest indication that there is a willingness to agree on the part of any Government —apart from our own, I hope—that the 1 per cent figure should be modified. It would require unanimous agreement to achieve that and, yet, we are moving to a point where we are now perhaps within 18 months of that limit being reached. The existing policies of the Community may become inoperable by virtue of there being no way of financing them and no prospect of securing that because there is no unanimity on the point.

It remains important for us to pose this issue and insist that it be answered before we enter into commitments that will hasten a situation so much to our disadvantage. There is here once again a weakness in regard to what is the vital national interest of the country which is disturbing and which has been a feature of the negotiating pattern of the Government since taking office but, to an increasing degree, in recent times.

Finally there is another point or query I want to put although I recognise there may be a problem about the Taoiseach replying to it but I raised it the other day and I did not get—this will be no surprise to the Taoiseach—any very clear or convincing answer from the Minister for Foreign Affairs. The Taoiseach has known the Minister for Foreign Affairs as long as I have and he will not be surprised at that. The council declaration on the common fisheries policy dated 30 May arising from the Foreign Affairs Council meeting which preceded the European Council has the following statement in paragraph 1:

The Council agrees that the completion of the common fisheries policy is a concomitant part in the solution of the problems with which the Community is confronted at present. To this end the Council undertakes to adopt, in parallel with the application of the decisions which will be taken in other areas, the decisions necessary to ensure that a common overall fisheries policy is put into effect at the latest on 1 January 1981.

That policy contains features which to us would be important such as fair distribution of catches having regard most particularly to traditional fishing activities, to the special needs of regions where the local populations are particularly dependent on fishing and certain other matters. This is a very far cry from the coastal band which the Taoiseach personally and his colleagues in Opposition told us was to be had for the asking and which we did not have for the asking but which we were on the verge of securing by negotiation, as I briefed the Minister for Foreign Affairs when the Government was on the point of handing over prior to the new Government. What we have here is very weak compared with that but it is all we have got.

What I would like to be clear on and what the Minister could not answer satisfactorily is the meaning of these phrases, "concomitant part in the solution of the problems with which the Community is confronted...." and adopting "in parallel with the application of the decisions which will be taken in other areas, the decisions necessary to ensure that a common overall fisheries policy...."

Does this mean, as from its wording it would appear to mean and as it has been interpreted recently in the press, that what has been agreed in regard to the British contribution is dependent and conditional upon agreement being reached on the common fisheries policy and that unless Britain is willing to withdraw its veto in this area the agreement about the British contribution will come into question? It has been suggested in the press that that is the position of other Governments. I should like to know if it is the position of our Government or are we on this also so weak-kneed that we are unwilling to stand up for our interests?

Mr. Cluskey

I wish to thank the Taoiseach for his statement on the Venice Summit meeting but I must also reiterate my view that the European Council has lost much of its meaning. One of the most important issues before it in recent times was the British budgetary crisis, and it was not capable of solving that on its own and that issue went back to the meeting of Foreign Ministers who solved it at an ordinary meeting held either in Brussels or Luxembourg.

We should look a little closer at the main issues dealt with by this Summit. These were the economic situation, the presidency of the Commission and the Middle East crisis. I do not think it required the summoning of a solemn meeting of prime ministers to define the present economic crisis but what would have been worthwhile would have been some indication that they had something useful to say about solutions. As the recent communique of the OECD Council of Ministers commented, the economic situation remains bad: "Unemployment has remained unacceptably high; inflation has remained deeply entrenched in many countries, and progress towards better balanced and less inflationary growth has been interrupted by a rise in world oil prices."

The economic circumstances with which we are confronted are of a very serious nature. In particular the prospects for employment creation and a reduction of the general levels of redundancy and unemployment are bleak indeed and the latest survey of the business climate within the Community showed a marked weakening and a widespread pessimism. That flood of pessimism extends particularly to the Irish economy. We have had reports from the ESRI and the Central Bank: "Inflation of 20 per cent, unemployment rising to perhaps 100,000 by the end of the year, continuing credit curbs, a tough deflationary budget again next year." That is what the ESRI have to say and it reflects the overall view of the European economic scene.

In the face of such economic forecasts some positive policy proposals might have been anticipated from the Summit. Yet, all we have to show for yet another meeting of the Summit is a mass of documentation which will perhaps protect employment only in the Scandinavian paper mills and the printing industry. The other issue, the question of choosing a president for the new Commission again proved to be too much for the members attending the Summit. All that the events of last week brought about is a new definition of our Minister for Finance; he is now very definitely a lame duck Minister for Finance. He is sitting around waiting on the call to Brussels. God knows if any member country of the Nine needed a Minister for Finance who would concentrate on the economic problems facing him, ours does. Possibly our needs to concentrate a little more than most.

Failure to choose the new president is quite a serious failure. Consideration of a few of the major issues with which the new Commission must get to grips underlines the need for a strong president. There are a number of controversial issues, the question of enlargement and all of its political, economic, social and institutional implications. There is need to deal positively with the findings of the two recent expert reports on the future running of the Community and of course the energy crisis and the whole question of North-South relationship which has been so graphically put into perspective by the Brandt commission. There are only a few of the political challenges with which the new president must be capable of dealing in a sustained way.

The Community initiative on the Middle East has already run into trouble and there has been a quite predictable reaction from all sides. I believe the whole issue has been very badly handled and that its basic motivation is questionable. Here again we are faced with the outcome of the secret deliberations of socalled political co-operation. What goes on at this level of the Community's working is not brought out into the open for proper debate in the democratic forums of our member states. We are fully entitled to speculate on the motivation of the latest initiative. Status, opportunism or oil could all underlie such a move just as much as any more worthy motive. We do not and cannot know what decisions are made in secret and what we do not and cannot know is hardly likely to unite us.

Were there to be any real hope of success for a Community initiative in the Middle East a number of clear principles must be seen to be honoured. First, Israel's right to exist freely, peacefully and within secure borders must be recognised. Second, the right of the Palestinian people to self-determination and to a state must be given equal recognition. Third, the Sadat initiative must be given every chance to move on to a further stage in the search for peace. There can be no settlement without an end to the cycle of violence, an end to PLO guerilla action and Israel's policy of counter-terror must also be brought to an end. I believe there must also be an end to Israeli provocation such as the extension of settlements and the arbitrary arrest and deprivation of Arab community leaders.

Both sides must give practical evidence of the desire of each for peace. Negotiations depend on the removal of existing obstacles of a permanent kind. Israel must accept the Palestinians' right to self-determination and must end the pretence that the Palestinians do not exist. The PLO and all the Palestinian militants must accept Israel's right to exist. The recent Fatah congress gave absolutely no reason to hope nor does Mr. Begin's continuing intransigence and insensitivity. I believe there should be no question of recognising the PLO unless they renounce those articles of their charter which call for the total destruction of Israel. In the absence of such a change I believe there will be no negotiations and there will be no peace. Ireland's attitude and her ill-judged action in Bahrain has made absolutely no contribution whatsoever towards a solution and simply calls into question the maturity an the capacity of the Government in dealing in that whole area.

I do not believe the recent summit gives much scope for discussion within the House unless one wants to concentrate on a series of failures. There are one or two issues I would like to comment briefly on. The first is the question of the settling of the difficulties of the UK in regard to their budgetary problems. The Taoiseach was asked in the House after the Dublin summit whether or not this country would be asked to contribute in monetary terms towards a solution of the UK's budgetary problems. He gave a categoric commitment to the House that there would be no agreement arrived at as far as a solution of the UK's problems at our expense was concerned. That positive statement in the House by the Taoiseach has not been honoured.

The Taoiseach in his statement today puts it into the context of our net receipts from the EEC. We are talking in terms of £16 million over the two years, according to the Minister for Finance yesterday. The point is that a change has taken place from a very clear position which the Taoiseach assured the House was the Government's position. The only thing I can say about this is that it is consistent with the Government's policy. The Government's policy domestically has been the same where they have consistently transferred resources within our national community from the less well off to the better well off. That philosophy has been extended to the international field by the Taoiseach at the meeting of the heads of state. I would accept the desirability of good relations and co-operation up to a point between the Prime Minister of the UK and ourselves. But we come to political co-operation and unilateral discussions, which the Taoiseach had with the British Prime Minister, I am inclined to think that £16 million is an expensive tête-á-tête and I do not think we should have agreed to it.

There is very widespread concern among a lot of people—most Deputies in the House have received letters about this—regarding our commitment to alleviating distress, poverty and famine in the Third World. The cut-backs in this area of aid to the Third World by the Government have stirred the conscience of many Irishmen and women. This probably will not be a very popular thing to say. I notice that members of the hierarchy have taken out newspaper space to carry on a campaign to encourage people to put pressure on political parties, political leaders and on the Government in particular, to live up at least to the undertaking we have given to the Third World. I agree with that and I consider it is a shameful thing that we have not contributed. It strikes me very forcibly that there does not seem to be among the same people the same commitment in or awareness of poverty and want within our society. They should, without diminishing in any way our activities and concern for the Third World, which I support fully, also show a little more concern for and be a little more active regarding the 20 to 24 per cent of our people who are living in poverty and put a little pressure on in regard to those people.

The question of Afghanistan was mentioned in the Taoiseach's statement and it has also been mentioned by the leader of the Fine Gael Party in his address and also the question of support or non-support for the boycotting of the Olympic Games. My party have been consistent in their approach. We condemned unequivocably, without reservation, the invasion of Afghanistan by the Soviet Union. There seems to be some confusion with regard to the 104 votes of the United Nations on the question of Afghanistan. They were in total compliance with the Labour Party's point of view, the condemnation of the invasion of Afghanistan. But nowhere am I aware was the question of the boycott of the Olympic Games included in any resolution which gained the support of the 104 nations which condemned the invasion of Afghanistan.

First of all, my party do not believe that it is effective in achieving its objective—the withdrawal by the Soviet Union from the invasion of Afghanistan. Secondly, there is a high degree of hypocrisy in this whole area. Our Government made noises, publicly and otherwise, in January and February giving a clear indication that, irrespective of what their political view might be, they would not confuse politics and sport in this particular area. I recollect the Minister of State at the Department of Education going on a television programme with a Member of the other House and chastising him for bringing sport into the area of politics. I do not want to do him an injustice but I think I can nearly quote him verbatim as saying that this was not the Soviet Union, that we did not impose those things on our sportsmen and that we did not confuse sport with politics. The Labour Party are not prepared to confuse sport with politics and we are prepared to stay consistent on that line.

I have one other comment. I must talk about people giving in to pressures from the US administration. I have no doubt that this Government changed their mind in relation to our participation in the Olympic Games because of pressure from the US. In fairness to the US, they made no secret of the pressures they were putting not only on us but on every other country where they thought they could apply pressure. They made the proper assessment as far as this Government were concerned and the Government yielded to the pressure. That yielding was not in the best interests of anyone, least of all the people in Iran who are being held there as hostages, an action which any civilised person or nation must condemn. However, this will not help and I do not think that it will help in the withdrawal of the Soviet troops from Afghanistan.

Again I thank the Taoiseach for his statement on the Summit. I will finish by urging upon him that he and the other Heads of State should have a close look not at the usefulness of these meetings but at the potential damage that these repeated failures at that level are doing to the whole Community.