asked the Taoiseach if, in view of Ireland's exceptional unemployment level, he will seek special aid at the forthcoming EEC Summit specifically to reduce our unemployment rate to at least the average pertaining throughout the EEC.
2.
Ceisteanna—Questions. Oral Answers. - EEC Summit.
1.
asked the Taoiseach if, in view of the weakness of economic recovery within the EEC and the consequent need to stimulate investment, he will raise at the forthcoming Brussels summit the issue of demanding action from the United States to lower interest rates.
I propose to take Questions Nos. 1 and 2 together.
The matters to be discussed at European Council meetings and the order in which they are taken are settled at the meeting by the participating Heads of State or Government. The Deputy can be assured that at the forthcoming meeting in Brussels I will be pressing for full attention for all matters of relevance to Ireland and the Community.
I should like to suggest to the Taoiseach that considering that Article 104 of the Treaty of Rome specifically asks each member state to secure a high level of employment and that it was largely on this assumption, as was stated in the White Paper of 1972, that we joined the EEC, we have a strong case before the Heads of State of Europe to make a special plea in regard to unemployment. Is the Taoiseach aware that the convergence of member state economies, particularly the convergence in unemployment figures, is a major objective of the EEC? Considering that our unemployment rate is 17 per cent, and worsening by the day, while the European average is 11 per cent, does the Taoiseach hold the view that European action to assist us in this time of crisis is a legitimate request, not a begging bowl request, Ireland being one of the more difficult areas in Europe? On the figures alone, particularly those released in recent days, will the Taoiseach agree that Ireland now rates as a disaster area in Europe in regard to unemployment? Will the Taoiseach accept that it is legitimate for him to say to the Heads of State at the meeting that Ireland seeks special assistance to at least help get us down to the European average of unemployment, which is 11 per cent? We are sticking out in Europe as an absolute disgrace in regard to unemployment.
The Deputy must confine himself to putting a question.
The points made by the Deputy, even if not in order, are cogent ones. The fact is that the European Social Fund, the fund that produces resources of nearest relevance to this problem, is one from which we are already major beneficiaries, indeed to a greater extent than we anticipated when we joined the Community. Having said that, we would be concerned to secure, as far as possible, a reorientation of Community policies in the direction of unemployment, in the direction of dealing with the problems of unemployment specifically. I will not pretend to the Deputy that that will be easy, although there is a general consensus for a movement in that direction. I share the Deputy's concern that the Community should address these problems in a more thorough and effective way than it has done hitherto.
I should like to ask the Taoiseach if he accepts the view that convergence of economic policies is a specific aim of the EEC and that what is happening with regard to the employment policy in the EEC is divergence, that Ireland is totally out of line with virtually all its neighbours and most of the Western world? It is not just an economic recession. Ireland has special difficulties. Will the Taoiseach consider raising this point? Will be consider saying to the other Heads of State: "Look, Ireland has a particular problem and, although I know Ireland does well from the Social Fund, from the figures it can be seen that our country is a difficult area and will the community take account of that?" The Taoiseach should ask for that treatment if for no other reason than to even out the regional imbalances.
The Deputy is going far beyond the terms of the question.
Will the Taoiseach consider raising this as an item on the agenda?
I would not want to comment on that at this stage. These meetings have their own internal dynamic. The Deputy will be aware that this meeting is potentially a very crucial one for the Community and the issue that has to be faced is whether agreement can be reached on the continued expansion of Community resources, which at this point are effectively exhausted in relation to existing or new policies. It is towards that that we have to direct ourselves primarily at this meeting. That that should be the case and that we should be having to face an issue of that kind, and that the Community should not have the resources to tackle a problem like this, must be a matter of regret and concern to all of us. However, the reality is that this meeting is one which has to determine not only a specific issue of vital importance to Ireland, the super-levy, but also whether the additional resources will be available for the development of new policies or the expansion of existing ones. It is on that issue that we have to concentrate at this point in time. I do not wish to diminish the force of what the Deputy has said, with which I agree, although we have to be conscious of the fact in presenting our case in Brussels that we are in a way which is not true of any other country a major net beneficiary from Community funds. The Community is already providing us with resources to help to reduce our economic problems to a significant degree.
Will the Taoiseach consider my proposal, which is a positive one, between now and the meeting?
I accept the inherent reasonableness of the Deputy's approach. As to the way we approach this meeting, that has to be a matter of judgment as we move into what will be a very critical meeting.
I should like to put some supplementary questions in regard to Question No. 2.
The two questions were taken together.
I can only ask supplementaries one at a time. My supplementaries so far related to unemployment, which, as the Chair will appreciate, is a crucial area. Question No. 2 deals with interest rates. Is the Taoiseach aware that the official growth projection for the EEC is about 1½ per cent for the next year compared to about 5 per cent for the United States? Considering that and the need for investment — investment, as the Taoiseach will be aware, is something we do not get unless interest rates come down — will the Taoiseach agree that what is holding back employment and growth in Europe is the high level of interest rates? Will the Taoiseach ask his partners at the meeting of Heads of State to tell the United States that they will have to stop this lunatic interest rate policy they are adopting and try to bring down interest rates in America which will have a direct effect on us here and boost the economies of Europe?
The Deputy asks a question and then goes on to put flesh or feathers on it to built it up. He cannot do that.
I am availing of the generosity of the Chair. Considering the importance of interest rates to a recovery in Ireland, will the Taoiseach ask the Heads of State at the forthcoming Summit to tell the United States that they will have to change their interest rate policy which is a direct result of military spending in the US?
I do not think I need to ask my colleagues to press this issue because it has been a preoccupation of all member states and one raised consistently and persistently by the Governments of the Community countries with the United States over the past year or, indeed possibly two years. On this there is unanimity within the Community. Nonetheless we have to face two facts; one is that there is a connection between interest rates and the scale of the American deficit and that action to deal with the deficit could itself affect American growth. There is an interaction there of which we cannot be unaware. Secondly, we have to be and are aware of the fact that the United States at the moment is in the throes of one of its prolonged presidential election campaigns and that such election campaigns can have an impact on policy in the short-term.
Interest rates are of the order of 13 per cent base rate. Inflation is only 9 per cent. It is a ridiculous situation.
I am surprised at Deputy Brennan insisting on continuing to make speeches.
It is a very important matter.
It may be but there is a time and a place for everything. This is not the time for making speeches.
Could I ask the Taoiseach to ask the American Government to bring down interest rates because it is the people of Europe and, therefore, the people of Ireland who are paying in lost jobs for those high interest rates?
Deputy McCartin with one final supplementary.
We are badly placed from the point of view of asking the Government of the United States to change its policy.
The Deputy is making a speech.
I am asking a question. The policy pursued by the United States which is creating the problems we have is precisely the same policy we pursued ourselves of a budget deficit and a balance of payments problem——
That is not a question.
I am asking the Taoiseach if he will agree with me that we are particularly badly placed to preach to the United States. Secondly, if interest rates here are high because of American policy why are interest rates in Germany not high as well and have we not got in real terms much higher interest rates?
I am sorry, Deputy, but that is stretching the agrument.
If I may answer the point made, interest rates are not determined by one single factor but by a number of complex factors. One of these is the level of exchange with the United States which exercises a great influence. The other is the domestic inflation rate of the country concerned and disparities in interest rates within the Community reflect fairly accurately disparities in inflation rates. If we are to reduce interest rates here to as low a level as is practicable in the light of the American situation then we have to tackle the problem of inflation. That is what the Government is presently trying to do.