Dáil Éireann díospóireacht -
Wednesday, 19 Jul 1989

Vol. 391 No. 6

European Council in Madrid: Statements.

The Taoiseach

I propose, a Cheann Comhairle, to make a statement, for the information of the House, on the meeting of the European Council in Madrid on 26-27 June where I was accompanied by the Minister for Finance, Deputy Albert Reynolds and Minister of State, Deputy Máire Geoghegan-Quinn. The Presidency Conclusions on the Madrid meeting have, in accordance with established practice, been laid before the House.

Before the meeting I had useful preparatory discussions, in Dublin, with the Spanish Prime Minister, Mr. Felipe Gonzalez. I am glad to avail of this opportunity to put on record our deep gratitude to the Prime Minister personally for the skilful and untiring efforts he made to ensure a successful summit, his generous hospitality and helpfulness, and to record our appreciation of the commitment, organisation and skills of the Spanish Presidency.

The European Council in Madrid was an exceptionally important meeting, and may even in historical perspective be regarded as an epoch-making one. It was the moment the Community began to embark in earnest on the process leading beyond the single market towards economic and monetary union.

The main subject discussed at Madrid was the Delors Committee Report on Economic and Monetary Union. This committee had been established at the meeting of the Hanover European Council in June 1988 and included all the Central Bank Governors of the member states as well as a number of distinguished experts. Their report provides a clear analysis of the stages needed for the establishment of economic and monetary union.

As was to be expected, our discussions on the report were contentious, to an extent economic and technical in nature, but the question of national sovereignty was very much at the core of the debate. We eventually reached agreement to begin stage one of the process contained in the Delors Report on 1 July 1990 — the date when the directive on the full liberalisation of capital movements comes into force for eight of the member states.

This stage is limited in scope and will essentially involve a strengthening of existing procedures within the existing EC treaties framework for the co-ordination of the economic and fiscal policies of the member states. One of the provisions on the monetary front stipulates that all Community currencies should participate in the EMS exchange rate mechanism. Given our important trade and economic links with the UK, sterling's participation in this mechanism is of particular importance to this country. On this issue, the British Prime Minister indicated a more positive affirmation of her country's intention to join but, at the same time, indicated a number of prior conditions which would have to be met before joining.

The second and later stages of EMU will involve fundamental changes, involving amendments to the EC treaties. For this purpose, we agreed the preparatory work for the organisation of an inter-governmental conference would be started. The holding of and the timing of this conference turned out to be one of the most contentious issues, with some member states pressing for a definite date to be settled. However, we eventually agreed on a compromise formula, which stated that the conference would meet once the first stage had begun and would be preceded by full and adequate preparation. Given the timing aspects, an important part of this work is likely to fall into our EC Presidency during the first half of next year.

In the discussions, I indicated our strong support for the principle of EMU on the phased and balanced basis as outlined in the Delors report. This will, of course, involve a further pooling of economic and monetary sovereignty, but this will be offset by a corresponding input by member states into economic and monetary policy formulation at Community level. In today's world member states especially the smaller ones, have only a limited capacity to determine their rate of economic progress because of their susceptibility to changes in international economic and financial developments. A strong integrated Community will be in a much stronger position to decide and control its own economic progress, to a large extent independently of whatever the international circumstances may be.

Since the foundation of the State all Governments have found it to be in the best interests of this country to have our currency linked to a larger currency area. Originally this was sterling, but in the past ten years we have been linked to the European monetary system, which has been centred on the strength of the Deutsche Mark. If we can manage our domestic affairs in a disciplined fashion, as we have been doing over the past two years, the advantages are clear. EMS membership enables us to sustain lower inflation and lower interest rates, keeping speculative movements to a minimum. This, in turn, has helped lay the foundations for strong economic growth and an improvement in employment. Sound economic management at home linked to a tightly controlled monetary regime in Europe has, therefore, already proved its value to us. Clearly integration into a strong Europe in a more broadly based economic and monetary union is clearly in our interests, subject to certain necessary safeguards.

I drew particular attention to the emphasis in the report on the need for a balance between economic and monetary aspects of integration and on the need to promote the development of the Community's less developed regions. I also made it clear that I could not possibly accept the notion that reliance on the operation of free market forces alone would be sufficient to spread prosperity throughout the Community. Indeed, it could certainly have precisely the opposite effect.

I am particularly pleased to report that our concerns have been accepted with the reference in the Presidency Conclusions to the "economic and social aspects of cohesion", the acceptance of the parallelism and balance between economic and monetary aspects, and the need to take account of "the diversity of specific situations in the member states".

I would like to comment briefly on the suggestion in the recent ESRI review that the existing Structural Fund programmes under the national development plan might cause excessive demand pressures leading to higher inflation, with the implication that our ability to absorb EC transfers may be limited. While it is of course entirely legitimate to point to possible dangers from excessive short-term stimulation, it will be the Government's responsibility, working in close consultation with the social partners, to take prompt action to prevent any overheating of the economy should this danger arise. We have a backlog of structural deficiencies that will take us many, many years to clear. Rapid but controlled progress is needed if we are to succeed in catching up with our more prosperous EC neighbours. We will need significant EC assistance for many years to come and it is up to us to make the adjustments that may be necessary in order to accommodate it.

On the harmonisation of indirect taxes, we were also successful in having recorded in the Conclusions that the further work in this area must have regard to the problems involved. As the Minister for Finance has already underlined in the Community discussions, the new proposals from the Commission do not address the enormous budgetary impact — equivalent to 3 per cent of our GNP — that harmonisation would cause for this country. However, I am satisfied that as a result of recent discussions and contacts there is now a greater understanding of our difficulties and we will be insisting that this will be addressed by the high-level ad hoc group which is to report to the ECOFIN Council in the autumn. Our objective is to negotiate a solution, whereby tax approximation can take place with our full participation, on a basis that causes least disruption to our public finances, to our trade position, and that can be implemented without causing social hardship or adverse social consequences.

On the social dimension, I fully supported the draft Presidency Conclusions that social aspects should be given equal weight with economic aspects in the Community's programme on the internal market, and that the creation of more jobs — estimated to be 5 million between 1988 and 1990 — must be given top priority. This is necessary, if economic progress is to redound to the benefit of the people of the Community. Already in 1988, 1.8 million jobs overall were created at Community level, when the Community experienced its highest growth rate for 12 years and its highest level of investment for 21 years.

I was also able to give full support to the related concept of a Community Charter of Fundamental Social Rights — covering such rights as freedom of movement, equality of opportunity, vocational training etc. — and to encourage further detailed examination of the preliminary draft Commission text on which the Social Affairs Council had prepared draft conclusions, accepted by 11 member states including this country, at their meeting on 12 June. Our supportive approach for the social dimension is in keeping with the spirit of co-operation that we have developed in this country between the social partners, which brings us more in line with continental European practice.

However, it is particularly important that the principle of subsidiarity is respected in the social area and that a proper balance is maintained between what is dealt with in Community legislation, what is for decision by the individual member states in keeping with their different traditions and practices, and what is for negotiation between the social partners. The House will note that this principle is endorsed in the Presidency Conclusions.

On the completion of the internal market, the increasing tempo of decision making since the adoption of the qualified majority provisions of the Single European Act has been maintained under the Spanish Presidency with recent decisions in a number of priority areas, such as public contracts, banking and financial services and the approximation of technical standards. Recent decisions on the liberalisation of banking services will provide a major boost in our development plans for the International Financial Services Centre at the Dublin Custom House Docks and will be particularly helpful in our campaign to attract further US and Japanese companies.

I raised the slow pace of progress on the liberalisation of air transport. Indeed the phenomenal growth of traffic on the London-Dublin route, which has seen a doubling of passengers since 1986, was cited as a perfect example of the benefits of liberalisation. I reiterated our full backing for air transport liberalisation which we strongly supported at European level during the lifetime of the last Government. We have directly experienced the cost to our tourism of maintaining artificially high fares and of bureaucratic obstruction of new routes.

Deputies will note that the Council also highlighted a number of other areas such as taxation of savings, audio-visual matters, free movement of persons, environment, research and development and a people's Europe. On these we emphasised the need to sustain and strengthen the momentum for decision making in the relevant Community fora.

I would like to draw the attention of the House particularly to the proposal to set up a European environmental agency. The agency would essentially be a scientific body, which would assist the Community, member states and participating third countries to implement environmental action programmes as well as carrying out an invaluable monitoring role. I expressed the view that the new body is a response to the real need for redoubled efforts on environmental matters by the international community. It is at Community level that we in Ireland will best be able to respond to frightening global problems such as depletion of the ozone layer, the greenhouse effect and the problem of the tropical rain forests, as well as more specifically European problems of marine pollution, carbon emissions and nuclear safety.

The decision in our joint programme for Government to set up an independent environmental monitoring agency goes in the same direction, and will ensure that we are able to make a full national input into efforts co-ordinated by the European agency to protect and improve the environment. It also anticipates the call by the group of seven leading industrial countries at their meeting in Paris at the weekend, when they urged all countries to give a new impetus to environmental issues.

At the European Council we also reviewed developments in relations between the Community and its main trading partners, including such issues as the current GATT — Uruguay — Round, the negotiations with the ACP States and the problem of indebtedness in Latin American countries.

In the areas of European political co-operation, the Council issued declarations on China and the Middle East peace process and adopted conclusions on a variety of world issues.

The Declaration on China condemned the brutal repression in that country, called for a halt to the executions and urged the Chinese authorities to take into account the people's hopes there for freedom and democracy. As normal relations cannot be maintained in the present circumstances, we announced a series of measures restricting co-operation which are intended to exert pressure for greater respect for human rights.

Deputies will note that the conclusions stressed the priority of arms control and disarmament, and of respect for human rights, in the context of an improvement in East-West relations. We called for a just solution of the Lebanese problem, appealed for the release of hostages and expressed full support for UNIFIL. We also expressed concern at the situation in Central America and confirmed the Twelve's support for the regional peace process.

In the wings of the Madrid meeting, I had a separate meeting with the President of the Commission, Mr. Jacques Delors, when we discussed a number of aspects of the internal market, with particular reference to the Community's policy of economic and social cohesion as well as the EC Structural Funds. We reviewed progress in the Commission's examination of our National Development Plan 1989-1993 and the development of the increased resources of the Structural Funds.

I also had a meeting with the British Prime Minister, Mrs. Thatcher, during which we reviewed the successful completion of the three-year review of the workings of the Anglo-Irish Conference. We also exchanged views on current issues in Anglo-Irish relations, in the Community and on world issues such as the situation in China and the Soviet Union.

The conclusions on economic and monetary union represent the most notable success of the Madrid meeting, particularly when seen against the background of what seemed at some stages to be almost irreconcilable differences. While the outcome is not as far-reaching as we would have wished, there is now an unstoppable political momentum towards the Community's further integration and development. The potential benefits are such, I believe, as to encourage us all to overcome the difficulties and problems involved.

Mr. Dukes

At the conclusion of every European Council meeting the Presidency issues a very up-beat statement, the President of the Commission usually makes a somewhat less up-beat statement and occasionally goes as far as chiding the Council for not proceeding quickly enough towards the goals proposed by the Commission. If Mrs. Thatcher deserves credit for nothing else she deserves some for talking bluntly about the problems remaining unresolved, usually as a result of her obduracy.

For those who can interpret "Euro-speak" the document on the Presidency Conclusions sometimes can be revealing. That is certainly the case on this occasion. A close reading of the Presidency Conclusions shows very clearly that, on topic after topic, the European Council has failed to measure up to the clearly expressed and understandable ambitions of the Commission.

This morning the Taoiseach has given us his usual rather glossy presentation of what happened at the Council. Indeed it might have been even more glossy. There were reports, just after the Council meeting, to the effect that the Taoiseach had contributed, with the then Greek Prime Minister, to finding a formula of words which got the Council over one of its many sticky patches with Mrs. Thatcher. Subsequently it appears that the gaisce achieved by Mr. Papandreou and the Taoiseach together amounted to no more than a colon; or was it a semicolon? Whatever it was, the fact of the matter is that the Madrid European Council made very little progress indeed.

The central issue before the Council was the achievement of economic and monetary union as provided for in the Single European Act. The Presidency Conclusions state:

The European Council decided that the first stage of the realisation of economic and monetary union would begin on 1 July, 1990.

In addition the European Council asked the Commission, the Committee of Central Bank Governors, the Monetary Committee, the Finance Ministers and the General Affairs Council to:

carry out the preparatory work for the organisation of an Intergovernmental Conference to lay down the subsequent stages;

There is a semicolon there which I gather was the one that the Taoiseach and Mr. Papandreou put in. To continue the quotation:

that conference would meet once the first stage had begun and would be preceded by full and adequate preparation.

That means that the Intergovernmental Conference will not meet until the first stage has begun, that is some time after 1 July, 1990. No date has been fixed for that conference because Mrs. Thatcher would not have a date. She made it quite clear that Britain would attend such a conference only because she did not believe in leaving an empty chair. That hardly augurs well for the atmosphere at that conference whenever it takes place.

The only thing agreed by the European Council in Madrid was that the first stage of economic and monetary union would begin on 1 July 1990. Beyond that nothing has been agreed. That is hardly the notable success to which the Taoiseach referred in the last paragraph of his remarks.

We come then to look at what is involved in stage one of economic and monetary union. The best source of information on that is the report of the Delors Committee itself. I might quote from paragraph 50 of that report which says:

Stage 1 represents the initiation of the process of creating an economic and monetary union.

No time limit is set for stage 1. A number of objectives are set but no time limit is attached to any one of them. To look beyond the completion of stage 1 today would require the talents of a clairvoyant. An appreciation of the outcome of the Madrid Council requires a brief reference to what follows after stage 1. The Delors report itself points out in paragraph 55 that the second stage could begin only when the new treaty had come into force. Sometime during the course of stage 1 something else has to be done, a new treaty has to be drawn up.

Further on in the report there is a discussion of what the content of that new treaty might be. There we find there is as yet no clear view as to whether a new treaty would be needed for each stage, or whether a single treaty would suffice. In practical terms, stage 2, and indeed the treaty which has to be negotiated during stage 1, is totally uncharted territory.

There is, of course, a very substantial agenda for stage 1. In the economic field there are three main components. The first is the completion of the internal market, accompanied by a strengthening of Community competition policy. Indeed, very little work has been done so far on the strengthening of competition policy. The rest is well underway as the Taoiseach has pointed out, but there is not an awful lot on the competition policy side. Very little has been done in member states and particularly here in relation to that aspect of stage 1.

The second component is the reform of the Structural Funds and the doubling of their resources, which we are all happy to note is underway. We expect to see results beginning to come from that during the course of this year.

The third component is the institution of a new procedure to strengthen economic and fiscal policy co-operation, a revision of the agreement of 1974 that covers the way member states co-ordinate economic and fiscal policies in order to reinforce the effect of national policies and to get the Community growing on the kind of track on which we would like to see it. That process in itself would provide many opportunities for disagreement among the member states.

We come then to the monetary side of stage 1 and there we find four principal elements. The first is the achievement of a single financial area with monetary and financial instruments and financial services being traded freely throughout the area. We are not at that stage yet. With her usual delicacy, Mrs. Thatcher pointed out that some of the other partners had a long way to go before they got as far as the UK. The second component is the inclusion of all Community currencies in the EMS exchange rate mechanism on a uniform basis. This is part of stage 1 and is something which has to be done in order to get the ground work done. The third element is the removal of all impediments to the private use of the European currency unit. The final element is the definition of a new mandate for the Committee of Central Bank Governors.

In at least two of those areas, it is difficult even now — only a year before the first stage begins — to see where we are going. We have not the slightest idea when sterling might join the EMS, or at what rate. The Taoiseach and his Ministers must know that the timing itself is going to be important for us and for the rest of the Community. The rate at which sterling comes into the EMS, if and when it does, is going to be a matter of some considerable concern for us. Only a year before the beginning of stage 1 we have no clarity, we have no knowledge about what is going to be done about that essential element of stage 1. I have not detected any great enthusiasm in either the political or the financial establishment in the UK to move in that direction.

We do not know what feelings are about the definition of this new mandate for the Committee of Central Bank Governors. They are very exalted people but they have exactly the same difficulties as Ministers in coming to conclusions. As far as I can judge and as far as I can find out, there is at least as much disagreement between the Central Bank Governors on what that new mandate should be as there is between Ministers. By and large, it seems that the differences between them work out along the same general lines as the differences between Ministers. I am not quite sure and it has always been something of a mystery to find out whether the Ministers are following the Central Banks or whether the Central Banks are following the Ministers. It seems to be the case that they tend to disagree on the same kinds of things and in broadly the same way.

Indeed, the Delors Committee itself ran into a number of disagreements among its members on the central banking aspects of stage 1. A group of the central bankers want to set up a European reserve fund and there is another group who do not want to have anything to do with it. Again, an essential part of what is involved in stage 1 beginning in July of next year has not been properly tied down and has not been properly mapped out.

It is clear that even the achievement of stage 1 objectives is some considerable distance down the road. The real prospect facing us is considerably more daunting and demanding than the view that has been publicly expressed, either by the current Council Presidency or by the Taoiseach. I do not believe for a moment that there exists in this House, or even less in this country, a clear appreciation either of the difficulties or of the opportunities that face the European Community. There is certainly no clear appreciation in this country. We have recently missed one opportunity for a vigorous and clear public debate on these issues. It was missed because the Taoiseach made a gross political misjudgment on 25 May, plunged the country into a general election campaign and thereby drowned out any discussion of these issues in the context of the European election campaign.

This House is not properly informed about the issues facing us, the Irish public is not properly informed about those issues, and one person above all bears the responsibility for that — the Taoiseach who conspired, whether it was deliberately or accidentally I am never quite sure, but he certainly brought about a situation where all debate on all of these European issues was drowned out because he decided — wrongly as it happened — that it would be in his interest to have a general election on the same day.

The Madrid Council talked about taxation, including the harmonisation of indirect taxation. The paragraph dealing with that issue in the Presidency Conclusions is a masterpiece. I will quote the paragraph as follows:

The European Council welcomes the fact that detailed discussions had now begun in the field of the approximation of indirect taxation on the basis of the new approaches proposed by the Commission and taking account of the member states' suggestions, and that a procedure for the continuation of those discussions had been laid down. The European Council emphasised the need to reach agreement on the broad lines of a solution in this area before the end of the year, having regard to all the problems involved, in order to ensure that the internal market came into operation on schedule.

When that paragraph is translated from Euro-speak into English, it amounts to a cry of despair from the Commission which, having been pushed off its original proposals by a combination of hostility on the part of some member states and active indifference on the part of others, has been reduced to putting forward a set of very woolly and ill-defined aspirations.

The last Government here failed to measure up to that situation. The present Coalition Government, if we are to believe the Fianna Fáil-Progressive Democrats programme for Government 1989-1993 — that document which is disavowed in here every day thrice before the cock crows — does not seem to offer anything concrete either. As far as I can seem, there is a grave danger in relation to the indirect taxation area that the Thatcher doctrine will prevail, that the devil will take the hindmost, and there is more than a fair chance that we will be the hindmost.

There is a proposal for a European Community charter on fundamental social rights. As far as I can discern, the Madrid Council made no attempt to get conclusive agreement on this charter: it contended itself simply with nothing that draft conclusions had been agreed by 11 delegations at a Council Meeting on Social Affairs on 12 June. I should like to know who, if anybody, represented the Irish Government at that meeting——

The Taoiseach

The Secretary of the Department of Labour.

Mr. Dukes

——and what particular line was taken in relation to the European social charter. Have there been comprehensive discussions between the Departments most concerned about the content of that charter, for example, the Department of Social Welfare, the Department of Labour, the Department of the Taoiseach and the Department of Finance — which will have more than a passing interest in it? Was there a real effort to navigate a way that would be to our benefit into a European social charter? I have not seen any evidence of that.

A great deal of attention has been given to the proposal by the Commission for the creation of a European environment agency and we have all welcomed the fact that the European Council has shown a much keener awareness of the importance of these serious issues of the environment to which the Taoiseach has referred. I note also that this present Coalition Government, or perhaps the Taoiseach, intend to have a corresponding agency and to give a corresponding job to a Progressive Democrat junior Minister. Neither intention impresses me. As far as the European Community is concerned all that has happened is that the Madrid Council called upon the Council of Ministers "to examine this proposal at the earliest opportunity". They have not decided anything. They have put forward the idea and it is to be examined at the earliest opportunity.

At national level, this House yesterday passed an Estimate for the Department of the Environment which contains no provision for an agency at national level, indicating that no concrete action can be taken here unless and until a Supplementary Estimate is passed next autumn. It appears that the prospective junior Minister in question may find herself twiddling her thumbs for quite some time because she will have nothing to do.

We now come to the traditional reference to the Taoiseach's meeting with Mrs. Thatcher, which gets a six line paragraph in the Taoiseach's speech. We were told that during the meeting, the Taoiseach and Mrs. Thatcher reviewed the "successful completion of the three year review of the workings of the Anglo-Irish Conference" and "exchanged views on current issues in Anglo-Irish relations, in the Community and on world issues such as the situation in China and the Soviet Union." It appears that the meeting was relatively brief. It would also appear from the working agenda that Anglo-Irish issues did not figure very large in that discussion. I wonder what is meant by the phrase which describes the Anglo-Irish part of this meeting —"during which we reviewed the successful completion of the three year review of the workings of the Anglo-Irish Conference". Did the Taoiseach and Mrs. Thatcher meet to review Anglo-Irish relations, or to review the review of Anglo-Irish relations, or to review the completion of the review of Anglo-Irish relations? I think the word processor merchants in the Taoiseach's Department could have found a more felicitous phrase than that to express what happened. Let us be quite blunt about it, I found this review of the workings of the Anglo-Irish Agreement carried out some time ago to be the most disappointing non-event. As far as I could see, that review did nothing more than would have been done at a normal averagely laid back meeting of the inter-governmental conference. It certainly did not give any new impetus to any of the work that needs to be done under the Anglo-Irish Agreement.

I note also that the Taoiseach compliments the Madrid Council on having had a number of discussions about issues such as brutality and repression in China; arms control and disarmament. That is very valuable and those parts of the work of the European Council have an importance that is often not recognised. I was very interested yesterday to note that the Foreign Ministers had followed up on some of that work and that our own Minister for Foreign Affairs, in a reference to the Austrian application to join the European Community spoke about Austrian neutrality and Irish neutrality — he was a member of that last Government that put together this phoney and empty declaration that accompanied the lodgement of our instrument of ratification of the Single European Act, this jingoistic bit of paper that was supposed to be the fig leaf for all the backwoods men in Fianna Fáil who think that any involvement with anybody else anywhere compromises our neutrality or our independence. However, the Minister for Foreign Affairs was moved to say that there was a difference between Austrian neutrality and Irish neutrality, because no Irish Government had ever said that Ireland would always remain neutral in the context of progress towards European Union.

Minister for Foreign Affairs (Mr. Collins)

I think the Deputy would do well to read all the newspapers.

Mr. Dukes

I will read all the newspapers, but I would much prefer to hear what the Minister actually said, if he would say it in the House.

Mr. Barry

Was the Minister misquoted?

Mr. Collins

Yes.

Mr. Dukes

Because if that quotation is accurate, then I want to commend the Minister for at last having understood what the Single European Act is all about.

An Ceann Comhairle

I am sorry to interrupt the Deputy, but the time available to him is exhausted.

Mr. Dukes

I beg your pardon, Sir. The Minister may be getting a bit exhausted by that type of questioning.

Mr. Collins

The Deputy is exhausted.

Mr. Dukes

Not at all. I could go on for the rest of the day. We should get away from accepting the bland assurances that come out of the press machine of the European Council and have more direct talking about what goes on at the Council, what the difficulties are and what the confrontations were so that we, at least, can play some part in shaping the course of events at the European Council. As I have said, the results were very meagre and I regret having to say that because I am a committed advocate of European Union and all that it entails. The Taoiseach's presentation this morning and the Presidency Conclusions do nothing to convince me that we are proceeding at anything more than a snail's pace towards the objectives we should be seeking.

Mr. Spring

I welcome the opportunity to comment on the report given by the Taoiseach this morning arising from the meeting of the European Council in Madrid on 26 and 27 June. It highlights the difficulties confronting the European Council and also the difficulties of the Members of this House and the members of the Government in getting to grips with the many issues that confront the European Community. One of the difficulties the report highlights is that there is a very limited opportunity for input into the discussion that takes place at the European Council. In the light of this, perhaps when the Taoiseach is considering setting up committees of this House he would consider having a committee on foreign affairs, or a committee on European affairs to give Members an opportunity to be constantly briefed and to have an input in to the European Community. In my humble opinion there is a weakness in that respect.

We should also consider providing a facility so that our Members of the European Parliament would be able to report back to this Parliament, even if it was only on a one day per month basis. I believe we must have a co-ordinated and highly efficient approach to the European Community, otherwise we will not maximise either our input to the development process of the European Community or the benefits which this country will achieve. I ask the Taoiseach to consider this suggestion when he is setting up committees of this House. When it comes to reporting back to the House on these issues, I would ask the Taoiseach to establish a procedure whereby the leaders of the other parties could get the content of the statements 24 hours in advance of the report to the Dáil to give us an opportunity to consider in detail the issues that will be raised in the House.

The meeting was obviously difficult and I would say there was limited progress, but obviously large wheels turn slowly. Some progress has been made and credit should be given to all the leaders where progress has been made. The first major difficulty was the British Prime Minister's attitude to economic and monetary union. She has taken a very anti-European attitude at home during the past 12 months to two years whereas prior to that she seemed to be encouraging all and sundry to be pro-European. I believe the British Prime Minister is very adept at playing what the market requires at any particular time in domestic politics and is quite capable of doing otherwise on the European stage.

The fact that she has agreed, despite being enormously reluctant, is progress. We should be grateful for that. At least the stage is set for developments to take place. I would be worried about the timing because there is less than 12 months to go before the beginning of stage 1. The Taoiseach, in the lead up to his Presidency of the European Council, should take the initiative and ensure that the committee which has been agreed as a compromise formula should have a very high profile, with the highest possible input from the Irish Government's point of view. Obviously it will be a very important committee and it is very important from our point of view that we have the highest possible level of input.

The Taoiseach mentioned that he drew particular attention to the emphasis in the Delors report on the need for balance between economic and monetary aspects of integration and the need to promote the development of the Community's less developed regions. I would like to feel that the Taoiseach made his views known on this in the strongest possible terms because it is obviously of major importance to this country.

If we do not achieve positive discrimination in favour of the less developed countries, we are literally wasting our time in the European Community. We have to have every assistance available to us to ensure that this country's level of income and development is brought into line with that of other European countries. We are so far behind in terms of transport facilities and development generally that we must, on a weekly and indeed a daily basis, ensure that there is a balance between the less developed regions and the centre of Europe and that our voice is very strong in relation to this. I hope the Taoiseach will constantly outline to this House as to what he is doing along those lines.

Obviously the Treaty of Rome will have to be revised and the Inter-governmental Conference which will meet next year will have to consider the whole question of a single currency and the European Central Bank. I would like to think that we and other less developed regions will get the assurances we require and which are very necessary in relation to the extra Structural Funds if we are to go along with the single currency and the European Central Bank. We are very vulnerable in this area. Despite a lot of publicity about the development of our financial services, I believe we are still very far behind what has been happening in the European financial sectors. We will need guarantees in relation to what would happen here if the single currency and the European Central Bank are developed as is set out.

Obviously we must encourage the Taoiseach in his efforts in regard to the social aspects but I would have to express grave disappointment regarding the weakening down of the conclusions as they relate to the charter of fundamental social rights. We have to look at our own involvement in the Community since 1973 and the history of the development of labour legislation in this country. We should accept the fact — I believe the case is well proven — that we have benefited and that we have been led by Europe in this regard at a pace much faster than would have been the case if we were not a member. The leaders in the European Council on this occasion accepted the UK position, that is allowing for the dominance of the individual countries in relation to the changes to be made. I believe what is in this document is a direct code — the UK code — for the local states to avoid EC directives. That is the conservative position. I believe we would be failing and slipping backwards if we did not make provision for EC directives to be implemented because only in that way will we have the progress that we will certainly be looking for in terms of workers' rights and worker participation. I believe the Conservative Government of Britain has won out on this issue. Perhaps that was the sacrifice the other leaders had to make to get the British Prime Minister's agreement in relation to economic and monetary union. It is a matter which we should discuss again in this House and one the Irish Government should come back to because we must accept that we have benefited from the extensive labour legislation which was implemented through EC encouragement and directives from the mid-seventies onwards.

The proposal for the European Environmental Agency is one which I welcome. Perhaps at this stage the Government could publicly admit their mistake in abolishing An Foras Forbartha. I would like to think the present Government will do something positive in this regard. It has been widely reported that Deputy Harney from the Progressive Democrats will be given responsibility for an environmental protection agency — on the basis of the document which was published last week, a document which will be implemented by the Government, but one has to question that already. I would like the House to receive clarification as to where the money will come from and how much money will be provided for an environmental protection agency. There is little point in appointing a Minister if that Minister is not given the authority and the resources to go about undoing the damage caused by the last Government when they abolished An Foras Forbartha. That was a very serious mistake but one which the Government now have the opportunity of rectifying and they should get on with doing that. There is little point in continuing to defend the indefensible in a situation like this.

The discussions in relation to world matters at the European Summit are obviously to be welcomed. A statement was made there on China. I would like to know if the Irish Government considered calling in the Chinese Ambassador to this country to make known to him the strong views of the people on what has happened in China and which has set that country back decades. I wonder if the Government should take stronger action in this regard. I understand there are restrictions and restraints in relation to working with our European partners but on matters like this we should have no hesitation in making the strong views of this country known to the resident Ambassador in this country.

The meeting which took place with Jacques Delors is obviously to be welcomed but I would like the Taoiseach to be more forthcoming in relation to the review that has taken place at that meeting of the Commission's examination of our national development plan which was submitted to Brussels some months ago. I would like to think that the plan can be supported in Brussels because obviously it will be of major importance to us in the coming decade and right to the end of this century. I have to admit reluctantly that my impression is that Brussels was not enormously impressed with the manner in which the plan was submitted and with the attempt by Ministers to go——

The Taoiseach

That is not correct.

Mr. Spring

I am giving you my impression. You have your contacts in Brussels and I have mine but perhaps they are on different sides of the House. Certainly the impression in well-informed circles in Brussels is that they were not impressed with the efforts of the Irish Government.

The Taoiseach

The exact opposite is the case. It is being held up as a model to other countries.

Mr. Spring

That is not what is coming back and I can elaborate on that in due course. I will not comment on the position in relation to the Anglo-Irish Agreement as the matter is down for Question Time today and I believe it will be more appropriately dealt with at that time. The meeting was obviously a very brief one. In regard to Deputy Collins' statement in Brussels on Monday in relation to neutrality, all I can do is quote from The Irish Times in which Deputy Collins is quoted as saying — as far as I can see he has not made any attempt to state otherwise since the question has been raised——

Mr. Barry

He said it here a minute ago.

Mr. Spring

He said that Austria's neutrality "was a different case from Ireland's as no Irish Government had said that they would always remain neutral as the EC advanced towards political union".

Mr. Collins

Perhaps I can tell Deputy Spring that I did not say that.

Mr. Spring

I welcome the Minister for Foreign Affairs and I wish him well in his new portfolio. I welcome that statement from him but I feel that instead of an ad lib reply to my request for clarification in the House, what is warranted is a full statement from the Minister. He will appreciate that there will be a major discussion in relation to Austria's participation in the European Community, and perhaps in due course that of the Swedes who are somewhat reluctant to get involved in full membership. It is very important that we outline in detail the fundamental principle of Irish neutrality. When one is misquoted in a reasonable paper like The Irish Times, the Minister for Foreign Affairs has a responsibility to clarify the Government's position on our neutrality. I would be very reluctant to conclude that what is not stated is that Ireland will move with European political union, which is the obvious conclusion that the writer intended but whether the Minister for Foreign Affairs intended that is another question. I would ask the Minister to issue a statement at the earliest opportunity.

Mr. Collins

Which will be Question Time tomorrow.

Mr. Spring

I look forward to that and I welcome the progress that has been made. Obviously there will have to be a lot of discussion in relation to the effects of EMU on an economy such as ours. A great deal of progress and work has to be achieved in relation to the social charter. I hope the Taoiseach will give some cognisance to my remarks in relation to providing a facility in this House whereby through a committee system or some other method the Members of this House are in a position to have an input and be better informed in relation to European affairs. We have to accept that our future is intertwined with developments at European level and we should be doing everything possible to ensure that our contribution is positive and meaningful.

Proinsias De Rossa

I welcome broadly the Taoiseach's statement and the communiqué from the Madrid meeting of the European Council. The Madrid meeting seems to have been one of the more positive European Council summits of recent years. In particular, The Workers' Party welcome the clear commitment given in paragraph 2.2. of the communiqué that social cohesion as well as the completion of the internal market and economic integration were the priority objectives of this new chapter in the history of the Community.

Without social cohesion there can be no real community of interest. We must not, under any circumstances, allow progress on economic integration and the free market, without simultaneous progress on social issues for all citizens. It will require more than statements of intent to ensure that this happens. It will require positive steps by the Community at all levels, and by our own Government. Already organisations in this country, like the FUE, have made it clear that they believe that the proposed social reforms, which would, for instance, stop the sweatshop exploitation of workers and which must be an integral part of the 1992 process, should not be fully implemented in this country. Let me say here that I am a little concerned that the Taoiseach appears to be calling on the principle of "subsidiarity" to allow a loophole here for the FUE to pursue this approach. It is clear that while the FUE want to enjoy the commercial benefits of 1992, they do not want to meet the obligations to their employees that go with the completion of the internal market.

We intend to ensure in as far as we can that the FUE are not allowed to veto measures to extend to Irish workers the sort of protective legislation that protects their colleagues in most other EC countries. The FUE's thinking is totally in line with that of Mrs. Thatcher. They want economic benefits for big business, but no social benefit for workers. To allow the completion of economic integration without parallel progress on social issues will simply give us a capitalist free market which will further benefit the already privileged and drive ever increasing numbers into poverty.

There is a major agenda for action facing the Community, and especially this country, to ensure common social standards in such areas as social security, protection for women, the right to consultation and participation by workers in enterprises, the right to proper protective legislation and freedom to join trade unions, as well as proper health and safety standards.

The Workers' Party reject any concept of a "two speed" approach to European integration, with rapid progress being made in the economic and monetary areas, while social matters are put on the long finger. It is inevitable that moves towards complete free trade by 1992 will cause major difficulties for people in the peripheral economies such as Ireland and there must be definite progress in the social area to compensate for this.

Unfortunately, no specific proposals in the social area were agreed at the Madrid meeting and until they are the commitment to make social cohesion a priority will simply remain a pious aspiration. Everyone is aware of the hostility of the British Prime Minister, Mrs. Thatcher, to initiatives for social progress but she must not be allowed to hold back the development of the Community in this area.

I note from page 5 of the communiqué that detailed discussions have now begun on the approximation of indirect taxation. I would ask the Taoiseach to clarify what steps are being taken to protect the interests of the PAYE sector and the lower income groups in this area. We have persistently warned of the dangers of tax harmonisation for Irish workers and their families. The Taoiseach should say quite clearly if his Government are going to accept VAT on food, if he is going to accept a tax régime which will result in reduced taxes on expensive cars but greatly increased taxes on many essential items which people have to buy on a regular basis.

I welcome the emphasis given by the heads of Government to environmental issues and the commitment to take steps on a range of areas. I hope that consideration of the proposed European environment agency will be rapidly concluded and the agency made a reality. Throughout Ireland and the rest of Europe people are becoming more and more aware of the need for a clean environment, not only for recreation but also to safeguard our health and our resources. The names of Sellafield, Chernobyl, the Brazilian rain forests, and the ozone layer have become part of our daily conversation as tragic symbols of the destruction of our living environment.

People are understanding that the seas and rivers, the air and the land are not a bottomless pit into which an endless amount of waste can be dumped. They recognise also that the environment is an economic issue. Pollution costs jobs as well as lives. The converse is also true — an enlightened approach to environmental protection can create jobs and protect lives. Indeed the only Community institution which is based in this country, the European Foundation for the improvement of Living and Working Conditions, should be upgraded to play an extended role in the environmental area, and the question of having it expanded to become the proposed European environment agency should be urgently examined by Government.

Mr. Barry

That is a good idea.

Proinsias De Rossa

The Workers' Party welcome the principle of European monetary union, and there must be a major role for a European Central Bank which could control and direct currency and capital movements within the Community. Such a bank would, however, need to be structured democratically, with representatives from the European Parliament, national governments and trade unions, as its powers would be too important to be left in the hands of private interests. It would be intolerable for EC states to lose the controls they now exercise through their Central Banks unless these controls are established at Community level in a democratic form.

There appears to have been a fairly comprehensive discussion at Madrid on international affairs and we welcome the positive tone of the declaration on such areas as southern Africa and the Middle East. Like most people, I deplore the recent developments in China, and urge the Chinese Government to radically rethink the course they have embarked upon recently. I deplore in particular the loss of life in China whether through military action or through execution.

The most significant development to have taken place since Madrid has been the official application for membership of the Community by Austria. I note and welcome the positive tone of the comments made by the new Minister for Foreign Affairs, Deputy Gerard Collins. However, I think the Irish Government should go further and become enthusiastic proponents of Austrian membership of the EC. The admission of another neutral country to membership would afford additional protection to Irish neutrality. If the Community is to be truly European, then it must be open to all democratic European countries. The attitude of the Belgian Government, which is threatening to block the Austrian application and which seems to see the EC simply as a political wing of NATO must be challenged.

The objective of this country should be a Europe which is militarily non-aligned, a Europe in which all weapons of mass destruction have been eliminated. We do not accept that it is in the interests of Europe or of world peace that military matters should be part of the EC's remit. The aim of all those who want to see a genuinely peaceful world must be to secure the dismantling of military blocs such as NATO and the Warsaw Pact.