With the permission of the Ceann Comhairle. I will make a statement on the meeting of the European Council which I attended, together with the Minister for Foreign Affairs, in Brussels on 29-30 March. As I indicated before the Easter recess, I regret that the pressures of business prevented me from reporting to the House, as I would normally wish to do, as soon as possible after the meeting.
Deputies will recall that the dates of the meeting were close to the 25th anniversary of the signing of the Treaty of Rome. This silver jubilee was marked by a ceremony to commemorate that historic event. This took the form of an academic session, for which the members of the European Council were joined by the members of the other institutions of the Community, as well as by persons who formerly held office in the Community, or who otherwise made a signal contribution to its development.
The commemoration was marked by satisfaction with what has been achieved, tempered by preoccupation with current difficulties in the Community and a keen awareness of how much has yet to be accomplished in pursuit of the Treaty's declared objective of "an ever closer union among the peoples of Europe". I avail of this occasion to reiterate our commitment to that goal, at once noble in itself and essential for the welfare of the European peoples, in a world where peace seems increasingly fragile.
In his address at the academic session, the President of the Council, Mr. Leo Tindemans, mentioned how far the European citizen takes for granted the advantages of the Community's existence. He also underlined how the choice of economic integration as an objective necessarily led to the position where Europe, as perceived by our citizens, is a complex of technical and often confusing elements. These considerations led Mr. Tindemans to stress again the importance of giving the Community a human face and of helping individual Europeans to gain a greater knowledge and appreciation of the priceless heritage we share. An important part in this vital task will be played by the new European Foundation, which we formally agreed to establish at the jubilee celebration. The foundation will promote mutual understanding and will give form to European solidarity, in particular by stimulating the exchange of ideas, fostering contacts across frontiers among individuals and schemes for the exchange of young people and scientists, as well as a whole range of cultural activities. The seat of the foundation will be Paris and its programme and modes of action will be further elaborated over the coming months.
I now turn to the meeting of the European Council itself. We had an intensive discussion of the economic and social situation in the Community and in the world, including trading and economic relations between the Community, on the one hand, and the United States, Japan, Eastern Europe and the developing countries. We heard an explanatory statement from the Greek Prime Minister. Mr. Papandreou, about the memorandum his Government has circulated on the position of Greece within the Community and a progress report from Mr. Tindemans, the President of the Council of Ministers, on the mission entrusted to him and Commission President Thorn by the last meeting of the European Council in relation to the Mandate of 30 May 1980. In the sphere of European Political Co-operation, the discussions ranged over Europe-US relations. East-West relations, including events in Poland, and the Madrid meeting to review the operation of the Helsinki Final Act, Afghanistan, the Middle East, Central America and Turkey.
My primary objective, in approaching the meeting, was to ensure that it led to the initiation, at both national and Community level, of a co-ordinated programme of specific measures to deal with unemployment. As we met, the number out of work in Europe was expected to increase for the ninth successive year. By the middle of this year, their number will reach 11 million with a strong possibility that, in the absence of worthwhile action, this could reach 12 million by the end of the year. The average percentage rate for the year as a whole may be about 9 per cent, with rates for Ireland and the UK of over 11 per cent and a rate in excess of 13 per cent for Belgium. In Ireland, we are regrettably no strangers to rather high rates of unemployment but the rates now prevalent in other member states reflect very substantial year-on-year increases in the numbers without work — by 49 per cent in the Federal Republic of Germany, 42 per cent in the Netherlands and 24 per cent in the UK and Belgium up to February last compared with 15 per cent in this country over the same period.
This situation is a result of the depth and duration of the recession which has affected all our economies in recent years. Last year, there was a decline of 0.5 per cent in Community GDP. For 1982 the commission had forecast a slight upturn, an increase of 1.6 per cent but this is precarious and highly dependent on international developments affecting interest rates, exchange rates and world trade.
Looking further ahead, a major source of disquiet is the low level of investment in the Community. Our own high rate of around 30 per cent of GNP is exceptional and the Community average is less than 20 per cent. Failure to raise the low rate of capital formation will condemn Europe to economic decline.
Concern on the counts to which I have referred was registered in the paper submitted to the meeting by the Commission which also suggested certain guidelines for a Community response. I am happy to say that the general thrust of these proposals was along lines which we could support.
At the meeting itself, I reiterated my concern that concerted practical measures be instituted in order to tackle the critical situation we face, with due regard for the correction or avoidance of insupportable imbalances. I described how the policies being pursued by the Government are contributing to achievement of these objectives in Ireland's case, through adoption of a budget which cut sharply the current budget deficit; through the implementation of necessary taxation in a manner which minimised price increases; through the establishment of moderate patterns of wage settlement; and through the maintenance of a high rate of publicity supported investment.
I supported the Commission view that higher investment is the key to increases in employment and that new incentives to invest must be introduced. Referring to the high cost of funds for investment at present. I called for Community action to reduce these costs and suggested, inter alia, that the proposed increases in the capacity of the Community's credit instruments should be complemented by greater provision for interest subsidies, in the case of loans extended for investments in the less prosperous parts of the Community. I also proposed that in their application to these regions, the credit instruments should make loans available for social capital, pointing out that in many cases the urban structures in these regions require renewal and rehabilitation if they are to play an effective role as centres of economic and social development. I also stressed the need for Community action to increase the pace of technological change and innovation in the Community.
In relation to employment and unemployment. I expressed the view that future reports on the economic and social situation in the Community should include analysis of developments in the agricultural sector, having regard to the fact that in some member states the progress or otherwise of agriculture can have significant effects on the level of unemployment and to the pre-eminent position of the CAP in the array of Community policies. While welcoming moves to enlarge the scope and capacity of the European Social Fund, I emphasised that this cannot be done at the expense of the priority now given to the less prosperous regions in the administration of the fund's resources. I proposed that the Commission be asked to prepare further proposals on specific action to deal with unemployment, based on an examination of all the practical suggestions advanced at the Council meeting. Finally, I pointed out that new action, on a worthwhile scale, cannot be taken within the financial restriction imposed by the existing limitation on Community own resources. Additional resources are required and the need to modify the 1 per cent VAT limit must be faced.
At successive meetings of the European Council I have pressed these views and while progress was made on some individual issues on those occasions, my predominant feeling was one of disappointment at the apparent lack of will to act with decision and vigour at a Community level. I am happy to say that reactions in Brussels and the conclusions of last month's meeting which I have had laid before the House some time ago represented a welcome contrast. While there were certainly differences of emphasis on some issues, I found that my approach was widely shared and I was satisfied that with proper follow-up the outcome would lead to a concerted attack on the economic problems that beset us all.
I turn now to the areas of international economic policy and the Community's economic and trading relations with the United States, Japan and the developing countries. The European Council met against the background of some strains in trading relations between the Community and the United States and of concern about the effects on the European economies of very high interest rates in the United States, with their significant influence on rates in Europe. The continued widening of the trade gap between the Community and Japan has lent urgency to the efforts to put trade relations on a more balanced and harmonious basis. More recently, concern has extended to Japanese macro-economic and exchange rate policies. The Community has also been anxious about the persistent failure to make progress in the North-South dialogue between the developing countries and the industrialised world. All of the matters I have mentioned will come up for discussion at the Summit meeting of industrialised countries in Versailles in June and the Brussels meeting afforded an opportunity for the Heads of State or Government of the Community countries to have a useful exchange of views in preparation for the Versailles meeting. Preparation of the Community approach is continuing in the General Affairs and Ecofin Councils.
Ireland's position, as a small economy heavily dependent on trade, gives us a major interest in defence of the open multilateral trading system and in resistance to moves towards protectionism. The concept of reciprocity in trade must be interpreted in a broad global manner and not in a narrow bilateral and sectoral way. As I indicated in my speech last month to the Economic Club of New York, the Community and the United States need to discuss and resolve, as friends, whatever difficulties we may have in the various international fora which have in general served us well in the post-war period. In any such discussions the Community must show itself to be united and the need for such an approach at Versailles should be manifest in a strong and united defence of the Community's right to a fair share of the world market in agricultural produce. Unity is also strength in economic dealings with Japan and has led to an encouraging start in the opening up of Japanese markets, a trend which the Community must seek to reinforce.
Because the issue had been remitted to a special meeting of the Foreign Affairs Council which it had been intended to hold shortly after our meeting, we did not discuss the issues arising in connection with the mandate of 30 May 1980 in any detail. We heard a brief progress report from the President of the Council, Mr. Tindemans, following completion of an exploratory mission undertaken by him and President Thorn. As noted in the Presidency's conclusions, the European Council asked the Council to do all in its power to enable decisions to be taken as soon as possible.
As Deputies will be aware, the meeting fixed for 3 April did not take place because of the Falkland Islands situation. The subject was taken up again at the meeting in Brussels yesterday.
I can tell the House that progress was made at that meeting. For the first time figures are on the table. Nine delegations agreed on a figure for 1982 which should underlie an appropriate rebate agreement for Britain. This figure was not regarded as adequate by the British side. They have been asked to reflect on the situation and Foreign Ministers will meet again within ten days. Ireland, along with eight other delegations, expressed the strong views that no link should be made between the farm price negotiations and the mandate. The British Foreign and Commonwealth Secretary, Mr. Pym, agreed to report this view to his Government and to indicate their response today.
At one stage there were suggestions that the Agriculture Council commencing today might be postponed. These were of considerable concern to us and strong pressure by the Minister for Foreign Affairs ensured that the Agriculture Ministers are in fact meeting to day and that negotiations are continuing on the prices package. I understand that in the response promised yesterday the British are talking about the need for paralles.
I wish to say that the Government here would regard it as a very serious development if there were to be further delays in fixing farm prices, especially if these arose from a link with the question of budgetary rebates for Britain. This would in fact run directly counter to one element in the agreement which provided for the original budgetary settlement for the UK, under which that country was a net beneficiary from the Community budget in 1981.
As Deputies will recall, in the conclusions of the Foreign Affairs Council on 30 May 1980 all member states undertook, particularly during the period when the mandate review for 1982 is under way, to do their best to ensure that Community decisions are taken expenditiously. We would like to see that undertaking honoured in the letter and in the spirit. Community solidarity is indivisible and must apply, in particular, in the annual arrangements under the Community's principal operational policy — the Common Agricultural Policy.
As is usual at meetings of the European Council, the heads of state and Government also considered a number of important issues in the framework of political co-operation.
All of the Community member states have close and extensive links with the United States and it is right that at a time when the industrial democracies face serious international economic and political problems, the European Council should stress its desire to strengthen these links and to develop consultative arrangements. The Council expressed its appreciation of President Regan's friendly remarks on the development of European unity made on the occasion of the 25th anniversary of the Treaties of Rome.
On Afghanistan the Council reiterated its position expressed at earlier meetings and called for a political solution that would entail complete withdrawal of Soviet troops and respect for the independence, sovereignty and non-aligned status of Afghanistan.
Developments in the Middle East were also considered by the European Council. The Heads of State or Government called for an end to the unilateral measures taken by Israel such as the dismissal of the democratically elected West Bank mayors and appealed for an end to violence and repression in the occupied territories of the West Bank and Gaza. They also urged the parties to respect fully the sovereignty and territorial integrity of Lebanon where dangerous clashes have occurred recently. The Council reaffirmed the wish of the Ten, as expressed on previous occasions, to contribute to the establishment of a just and lasting peace in the Middle East.
The situation in Central America was also discussed by the European Council. As Deputies are aware, the Dáil has expressed the deep concern felt by many Irish people at the continuing tragedy in El Salvador and at the grave violations of human rights there. The problems which affect El Salvador in so far as they are rooted in the gross social and economic inequities and under-development, are also present in other countries of Central America.
For this reason, I welcome the attention given by the European Council to the conflict in Central America and in particular its desire to see an end to violence and the restoration of peace through dialogue and respect for democracy and human rights. A number of important initiatives have been put forward to help reduce the appalling social and economic difficulties in the region and I am glad that the Community member states intend to intensify their own economic assistance to the region.
The Belgian Foreign Minister and current President of the Council, Mr. Tindemans, reported on his recent visit to Ankara where he spoke with the Turkish authorities on their timetable to restore democratic conditions and on the problem of human rights in Turkey. The Council trusted that Mr. Tindeman's visit would bring about the improvements desired by the Ten.
In the margins of the meeting, I had a short informal discussion with the British Prime Minister. It is not customary to disclose details of conversations of this nature but I can inform the House that we had an exchange of views on a number of matters of mutual concern. It was arranged that the Minister for Foreign Affairs would meet the Secretary of State for Northern Ireland in London on the following day for a full briefing and exchange of views on the proposals of Mr. Prior which have since been released.
The meeting of the European Council in Brussels was moderately satisfactory. It afforded an opportunity for a valuable exchange at head of state or government level on a range of important political issues at a time of considerable international difficulty. In the economic sphere it marked the beginning of a process which, if followed through vigorously, could put the economic weight of the Community behind a programme of economic recovery. The House may be assured that the Government will do all in their power to see that process carried forward for the benefit of our own people and of all the people of Europe.