A special meeting of the European Council took place at my invitation in Dublin Castle on 28 April. I presided over the meeting with the assistance of my colleague Deputy Gerard Collins, the Minister for Foreign Affairs. A copy of the Presidency Conclusions and related documents has been circulated to Deputies for convenience of references and placed in the Library in the usual way.
We had a very successful meeting and a number of important decisions were made. Directions were given in areas of vital importance for the future of Europe: there was a warm welcome for German unity and procedures were agreed which will ensure the smooth integration of the territory of the German Democratic Republic into the Community; the end of 1992 was set as the target date before which ratification of the outcome of the Intergovernmental Conference on Economic and Monetary Union which will open in December 1990 should take place; the European Council made a firm commitment to political union, and asked the Foreign Ministers to prepare proposals so that a decision can be made at the June European Council in Dublin on the holding of a second intergovernmental conference to run in parallel with the Conference on Economic and Monetary Union, with a view to ratification by member states within the same time frame; the necessity for developing a wider framework of peace, security and co-operation for all of Europe was recognised, and guidelines were agreed for participation by the Community and the member states in all proceedings and discussions within the CSCE; the European Council expressed support for the fullest use and further expansion of close transatlantic relations and endorsed the arrangements for meetings at the highest and other levels agreed between President Bush and myself at the White House in February; and the Community agreed to extend the present aid arrangements to Poland and Hungary within the framework of the Group of 14 to the other five Eastern European countries, and to conclude negotiations on association agreements with the countries of Central and Eastern Europe as soon as possible.
Before looking at each of these areas in some detail, I would like to say a few words about the background to this special meeting of the European Council. We are living through a major formative period in European history; a time during which the future of the Continent and its people will be settled for a long time to come. The leaders of the Community have the major responsibility of providing the people of Europe with enlightened leadership at this time of decision.
It was with a clear awareness of these realities that we approached the agenda of this Summit, keeping clearly in our minds the central role and responsibility of the Community in the affairs of Europe. The Community is the focal point of stability in Europe, the principal source of hope for peace, democratic freedom and economic betterment for all the people of the Continent.
The dramatic pace of events in Eastern Europe, therefore, and especially the rapid progress towards German unity, led me as President to propose in February to my colleagues, the Heads of State and Government, that this special meeting of the European Council be held in April. This meeting would be in addition to the regular European Council meeting, which is scheduled in the normal way for Dublin at the end of June. Its principal task will be to consider the implications for the Community of German unification, and of developments generally in Central and Eastern Europe, and at the same time to reaffirm our commitment to the Community's own integration process.
As I stated in my letter of invitation sent on 16 February to my fellow Heads of State or Government, it was extremely important that the Twelve bring their collective voice to bear on the issues now arising, and that steps be taken to develop the Community's own integration process, and also that the demands that will be made on the Community in the new Europe would be taken into account.
I would like to review briefly some of the principal developments that have taken place since the beginning of the year. We began our EC Presidency with a comprehensive meeting between the Irish Government and the EC Commission to establish the agenda and the priorities for our Presidency. That meeting enabled Ministers to meet their counterparts in the Commission and develop an understanding on how best to co-operate in advancing the Presidency work programme.
At the special meeting of EC Foreign Ministers which we convened in January, the Community expressed support for the process of liberalisation in Central and Eastern Europe, and agreed in principle to a meeting of the CSCE later this year. A positive response was also given to requests for economic aid from Eastern Europe.
At the end of February, I visited Washington as President of the European Council with the purpose of seeking to strengthen the political relationship between the European Community and the United States. I am glad to say that I was able to reach agreement with President Bush for the holding, in each Presidency, of one meeting between the US President and the President in office of the European Council. In addition, there will be two meetings in each year between EC Foreign Ministers and the US Secretary of State.
At Ashford Castle at the end of March, the Finance Ministers of the Community had a first detailed discussion of the final stages of economic and monetary union. At this meeting, there was a considerable degree of agreement reached on the design of a future economic and monetary union, and on the general principles on which it should be based, including policies to promote cohesion.
Not just European, but international attention has been focused on events in Germany as they unfolded. Free elections have taken place in March in the German Democratic Republic and the first democratically elected Government there have now taken office. Practical steps have commenced to implement the economic and monetary union of the two German states, from the beginning of July. The impending unification of Germany and the incorporation of what is now the territory of the GDR into the Community have profound political and economic implications for all the member states, and for the Community as a whole.
In preparation for last Saturday's Summit, I undertook a tour of all the EC capitals over recent weeks to discuss with the other Heads of State and Government their priorities and their views on the agenda for this special European Council meeting in Dublin. Careful preparation and full consultation were essential if the maximum benefit was to be obtained from the special one-day meeting and if the real progress that was expected was to be achieved.
During these bilateral meetings I found broad agreement in regard to the unification of Germany, the developments in Central and Eastern Europe, and their implications for the Community. We discussed the need for the Community to move more rapidly toward political union, and many of my colleagues were anxious to see rapid progress in this area.
Arising out of this, President Mitterrand of France and Chancellor Kohl of the Federal Republic of Germany sent me a joint letter on 19 April, indicating that, in the light of the far-reaching changes in Europe, the completion of the Single Market and the realisation of economic and monetary union they considered it necessary to accelerate the political construction of the Europe of the Twelve. I have circulated the text of the letter to Deputies, and I would like to direct their specific attention to the exact terms of two aspects of the proposals by the Chancellor and the President, in view of some misleading comments which have been made in relation to the outcome of the Summit. Their letter clearly set out the procedure which the President and Chancellor suggested should be followed. Firstly, they suggested, and I quote: "The Foreign Ministers should be instructed to prepare an initial report for the meeting of the European Council in June and to submit a final report to the European Council meeting in December." That is exactly what the Summit last Saturday decided. The meeting did not sidestep elaborating proposals for political union, as it was never envisaged that it should do so. Similarly, the Summit did not shy away from fixing a date for the Intergovernmental Conference on Political Union, as this had not been suggested by anyone. On the contrary, what had been suggested was that the Intergovernmental Conference on Political Union be held parallel with the Conference on Economic and Monetary Union, when the date for that conference was fixed, in order that ratification by national parliaments of the economic and monetary union reforms and the political union reforms would be carried through within the same time scale. This was in fact agreed.
Approaching the Summit I had a strong belief that it was important that it should provide reassurance on the economic and financial consequences of German unity for the Community. This reassurance was necessary in particular for the business world and the financial markets, because of the speculation that had taken place, and the Council provided it.
The meeting began with a presentation by the President of the European Parliament, Mr. Enrique Baron. He stressed the urgency of completing the Single Market, the need for Community involvement in the process of German unification and of Europe-wide solutions to the consequences arising from it, and finally the importance of achieving genuine political union, including an enhanced parliamentary role, by a set date.
At the European Council, we expressed our deep satisfaction at the developments in Central and Eastern Europe since the Strasbourg European Council, and applauded the continuing process of change in these countries with whose peoples we share a common heritage and culture. We considered that the historic changes bring closer the realisation of a Europe emerging from a long period of ideological confrontation, which would be united in its commitment to democracy, pluralism and the rule of law, with full respect for human rights, and the principles of the market economy.
Europe now stands on the threshold of an age in which it can achieve new levels of economic growth and resume its world role of intellectual and cultural leadership, as it leaves behind the dreary barren years of the post-war period. A unique opportunity exists today to create a European family of nations sharing a common civilisation and values, but the transition will inevitably be difficult, and will require major political, economic and social co-operation between the Community and the countries of Central and Eastern Europe, as they seek to build a new future. The people of Central and Eastern Europe need every help and encouragement we can give. They need the anchor of stability that the Community can provide. It must also be appreciated that an enormous transformation has already taken place which would have been difficult to imagine even a short time ago, and that the pace may not always continue with such rapidity. We must do everything possible to encourage patient negotiated solutions to the difficult problems of relations between and within states.
The Council and the Community warmly and unreservedly welcomed German unification. We look forward to the positive and fruitful contribution that all Germans can make when the GDR is integrated with the Community. We are confident that German unification, which is coming about as a result of the freely expressed wish of the German people, will be a positive factor in the development of Europe and of the Community.
I consider this statement to be a very important one. First of all, it is an expression of solidarity by the Community with a member state at one of the most important moments in its history. The Federal Republic of Germany has played a key role in the development of the European Community, showing a commitment to European integration second to none. Indeed, we in Ireland are conscious of the many occasions that the Federal Republic has shown solidarity with smaller and less developed member states. It is my conviction that a united Germany will have the capacity to sustain the economic growth required to support the regeneration of the economy of the present GDR, but also at the same time to strengthen and deepen the cohesion of the Community and that it will make a key contribution to a new and closer European Union.
Our meeting was of special significance for the German people. At our joint press conference on Saturday evening in Dublin Castle, Chancellor Kohl called the meeting an historic occasion, and thanked the Presidency, the Commission and other colleagues for the warmth and friendship shown to the German people on this occasion.
The Council went on to say that a stage has been reached, where the continued dynamic development of the Community has become imperative, because it is a crucial element in the progress that is being made in establishing a reliable framework for peace and security in Europe. We therefore agreed to take further decisive steps towards European unity.
The Council expressed it satisfaction that German unification is taking place under a European roof. The Community will ensure that the integration of the territory of the GDR would be accomplished in a smooth and harmonious way. This integration will take place without revision of the Treaties, as soon as German unity is legally established. We expressed satisfaction also that this integration will contribute to faster economic growth in the Community, and agreed that it will take place in conditions of economic balance and monetary stability. This settlement I would regard as one of the most important conclusions to emerge from the meeting.
The Federal Government will keep the Community fully informed of measures being taken to align policies and legislation in the two parts of Germany, and the Commission will be fully involved with these discussions, so that transitional measures can be proposed to the Council and decisions taken quickly. The aim will be full integration as rapidly as possible, and in the period prior to unification, the GDR will benefit from a range of Community loan instruments, as well as Community support in the context of the co-ordinated assistance of the group of 24 countries for the emerging democracies of Eastern Europe.
I consider these arrangements to be highly satisfactory from every point of view. We are welcoming 16 million people into the Community, who, I am convinced, will make a very valuable contribution. No revision of the treaties or lengthy negotiations are required. The fact that the Community will be kept fully informed of agreements between the two German states, and that the Commission will be closely involved with the work ensures that practical difficulties can be dealt with. Transitional measures, taking effect from unification, will permit a balanced integration based on the principles of cohesion and solidarity, and on the need to take account of all the interests involved. Derogations from Community regimes will be permitted during the transitional period but they must be kept to the minimum required so that full integration can take place as rapidly and harmoniously as possible.
As Chancellor Kohl has made plain again and again both in Brussels, at my meeting with him in Bonn on 28 March, during the council meeting and at our press conference afterwards, there is no question of the EC's Structural Funds that have been committed to the peripheral and less developed member states being in any way diverted to East Germany. Naturally, when the GDR is fully integrated into the Community in due course, at that stage they will qualify to benefit from EC funds and programmes to the extent that they fulfil the objective criteria, and the necessary arrangements will have to be made without prejudice to existing commitments.
In our detailed discusion on the implications of German unity, both with regard to the timetable envisaged and the issues likely to arise, we had the benefit of an excellent Commission analysis based on very full information received from the German Government. The Commission President, Jacques Delors, identified three phases of the GDR's integration into the Community. Phase 1 would follow internal German economic and monetary union, the second, the transitional phase, would follow political unification, and the final phase would be the stage when Community law applied to all Germany without exception. The German Chancellor stated that he would ensure a constant flow of information, and stressed that the process towards European unity and German union are intimately linked, and in fact being addressed at the same time. He made it clear that the Federal Republic was not looking for aid, and certainly not at the expense of other countries' entitlements and that the best contribution the Community could make would be sensible transitional measures. There are obviously a number of important issues, such as access to GDR markets, the application of State aids, agriculture and fisheries, which will have to be carefully studied in order to find the most suitable transitional measures and adaptations.
With regard to the more general economic consequences of German unity, as I have remarked on a number of occasions, the Federal Republic has the strength and the resources, and of all the member States is perhaps most ideally equipped to take on a huge task of this kind. The German economy is in excellent shape with 4 per cent growth and the highest number employed in German history. The commitment of the German authorities to monetary stability, to low inflation, to the lowest interest rates consistent with that objective and to balanced economic development is well known. The fears that have been expressed about the economic and financial consequences of German unity are, therefore, misplaced.
A united Germany, for some time to come, will present an important market to its partners. Since 1987, the Irish Government have put in place a co-ordiating committee for Germany under the chairmanship of our Ambassador in Bonn to promote trade, investment, tourism and cultural exchange between Ireland and Germany.
Last year our exports to the Federal Republic increased by 18 per cent to £1.6 billion, with a trade balance of £500 million in our favour. The number of German visitors to Ireland increased by 37 per cent last year. The overall level of German investment interest in Ireland is in no way diminishing, indeed significant investment is taking place in the software and financial services sectors. There will also be new opportunities in Germany for Irish constuction firms,. The German Government have made it clear on many occasions that they welcome the participation by partners in the enlarged market that German unity and the process towards unification will provide. A dynamic united Germany will certainly add to the growth rate of the Community. The commission believe that it will be as much as ½ per cent a year. It is generally believed that in a relatively short time what is now East Germany will have a flourishing economy and that the entire EC will benefit as a result.
In parallel with the process of the unification of Germany, the Community is pressing ahead with its internal and external development. Work on completing the Single Market will continue. Some 60 per cent of the necessary legislation has been passed and we are generally on target. I would like to emphasise that the momentum of work on completing the Internal Market has been fully maintained during the Irish Presidency. The Internal Market Ministers meeting informally in March in Dromoland Castle agreed that "substantial progress has been made and the pace is still good". The European Council in Dublin expressed satisfaction with progress achieved so far towards establishing the Single Market. During the next few weeks, there will be two Internal Market Councils, and we also expect important decisions to be adopted in the area of energy procurement, air transport liberalisation, communications, insurance, clean cars, a public procurement enforcement directive, testing and certification of products, food standards, animal and plant health and right of residence.
The Council confirmed that the Community will establish in stages economic and monetary union, in accordance with the principles of economic and social cohesion and the conclusions of the European Councils in Madrid and Strasbourg. It was confirmed that preparations would be intensified, so as to allow the InterGovernmental Conference, opening in December 1990, to conclude its work rapidly. As I noted earlier, substantial progress has already been made towards EMU in the course of our Presidency, particularly at the Ashford Castle meeting, and the European Council took a further important step beyond the decision made at its meeting in Strasbourg in December by laying down a target date now for ratification of treaty changes before the end of 1992.
The implications of the Single Market and of EMU are enormous. I believe they can be highly beneficial for Ireland, provided we maintain tight economic discipline at home, and negotiate the necessary continuing measures to support the achievement of cohesion in the Community. A Community of 340 million people, without barriers or restrictions to trade and with a combined purchasing power of over £3,000 billion, will be the largest economic entity in the world, and is likely to be the most dynamic. As part of it, Ireland can be a successful and profitable location for industry and services, selling into the wider European market.
Membership of the EMS has enabled us to maintain below average inflation, and interest rates several points below those of our nearest neighbour, Great Britain. The different stages of EMU will lead to closer co-ordination of economic and monetary policies, and far from removing our responsibility for the sound management of our affairs it will reinforce it. The maintenance of strict budgetary discipline and low inflation will be essential for economic success in a united Europe. As a member of the Community we can take part in decisions affecting us internationally, which we would not be in a position to do outside it.
In many ways the most important result of our meeting was that the European Council confirmed its commitment to political union. This decision was taken unanimously. It seems to me that it derives from the proposition that economic and monetary union without a supportive political framework would be difficult to sustain.
The European Council agreed that the Foreign Ministers should carry out a detailed examination on the need for possible treaty changes involved in: strengthening the democratic legitimacy of the union; enabling the Community and its institutions to respond efficiently and effectively to the demands of the new situation; and assuring unity and coherence in the Community's international action.
The Council also asked the Foreign Ministers to put forward a range of proposals rather than one specific model of a structure for political union. The Council at its June meeting will discuss and assess these proposals. The Foreign Ministers in their report will obviously cover such matters as the respective role and functions of the Community institutions, the balance and coherence between them, ways of reinforcing the Community's voice internationally, and ways of strengthening internal cohesion.
Thus, we have succeeded in Dublin in establishing a parallel process whereby all the key decisions on the Single Market, economic and monetary union and political union will be taken before the end of 1992. Bearing in mind that German unification will be taking place at the same time, not to mention other developments which I will come to, we are talking about an unprecedented strengthening and transformation of the entire Community. This is clearly an exciting time which holds much for the future of the peoples of Europe. An enormous responsibility rests on all of us to ensure that it is handled successfully.
There is widespread support for the view that political union must fully respect the principle of subsidiarity. This principle is intended to ensure that those functions best carried out at national or regional level will continue to be dealt with at that level, with matters which require common action and which can best be dealt with at Community level being entrusted to the appropriate Community institutions and procedures.
I would also like to emphasise that our discussions at present relate to an economic, social and political Community. With regard to security, as I understand the position of our Community partners, it is that they wish the NATO alliance and their membership of it to continue. They also wish to have the US to continue to be involved in European defence through the NATO alliance. It is in that forum that they discuss defence and military matters.
The Community's relations with other countries and groups of countries have steadily grown in importance, in parallel with the internal strengthening of the Community. The Council stated that the Community will act as a political entity on the international scene, open to good relations with other countries and groups of countries. As the Council noted, the progress towards the restoration of freedom and democracy in Eastern Europe, and the prospects of a successful conclusion to arms reduction negotiations, make it possible and necessary to develop a wider framework of peace, security and co-operation throughout Europe. The CSCE provides such a framework and the Community and its member states will play a leading role in all proceedings and discussions within the CSCE and in efforts to establish new structures or agreements based on the principles of the Helsinki Final Act, while maintaining existing member states' security arrangements. I would like to draw attention to the explicit affirmation about the maintenance of the existing security arrangements of member states, which of course includes ourselves.
The Helsinki Final Act of the CSCE made a very significant contribution to the reduction of tensions in Europe and to the bringing about of a situation which has enabled the countries of Central and Eastern Europe to actively pursue political freedom and democratic government. At present, the CSCE represents a very important mechanism for the development of a new framework of security and co-operation in Europe. Every country in Europe, with the exception of Albania, along with the US and Canada are members of this 35 nation conference. Its primary role is to build confidence and co-operation, and within the CSCE framework, security has come to have a much broader meaning than just military armaments and defence. It embraces political and economic aspects as well. Ireland will play a full part along with its Community partners in the CSCE process and in whatever future arrangements for the security of Europe that can be agreed. We will, as a member of the European Community, take part in any security and confidence building arrangements embracing Europe as a whole agreed within the CSCE.
The European Council agreed draft guidelines on the Community's approach to the CSCE, and noted that there is wide agreement on the desirability of convening a Summit meeting of the CSCE participating states before the end of the year. The necessary decisions need to be taken, so as to ensure that the preparations essential for a successful outcome are completed in good time. The Twelve are proposing a Preparatory Committee meeting starting in July, and that the Summit itself take place in Paris. As the Foreign Ministers meeting in Dublin on 20 February stated, the Twelve envisage a balanced development of the CSCE, including the development of pluralist democracy, human rights, better protection of minorities, human contacts, security, economic co-operation, the environment, further co-operation in the Mediterranean and cultural co-operation. The Summit will enable consideration to be given to new institutional arrangements within the CSCE process, including the possibility of regular consultative meetings of Foreign Ministers and the establishment of a small secretariat. Already, there has been a positive outcome from the Bonn Conference on Economic Co-operation in Europe, which acknowledged the link between political pluralism and market economies, and a meeting will take place in June on the human rights dimension in Copenhagen. The Twelve also look forward to an early successful conclusion to the negotiation on Conventional Armed Forces in Europe. To sum up, the CSCE represents a very important opportunity to establish on firm foundations stable, peaceful and democratic government with full respect of human rights across the whole of Europe.
The European Council welcomed the wide range of measures through which the Community will assist the countries of Central and Eastern Europe; the establishment of the European Bank for Reconstruction and Development, the conclusion of trade and co-operation agreements between the Community and most of these countries, the Community's programmes on professional, trading or student exchanges which are soon to be finalised. It is obvious that the development of the Eastern European economies will greatly depend on the flow of private investment for their success. For this reason the European Council wished to encourage the transfer of private capital and investment towards these countries, and asked the Commission to study the implementation of the most appropriate accompanying measures. The Council agreed that action within the framework of the Group of 24 should be extended to the GDR, Czechoslovakia, Yugoslavia, Bulgaria and Rumania. Discussions are to start forthwith on association agreements with each of the Central and East European countries, especially tailored to the needs and circumstances of each individual country. The agreements will include an institutional framework for political dialogue. We fixed the objective of concluding those agreements as soon as possible, on the understanding that the basic conditions with regard to the principles of democracy and a transition towards a market oriented economy are fulfilled.
From these measures it can be seen that the Community has taken a leading role in supporting the emerging democracies of Eastern Europe so as to under-pin their political and economic structures.
The European Council reaffirmed that the Community attaches great importance to, and will work actively for, early agreement with our EFTA partners on the establishment of a European economic area. Negotiations with the EFTA countries, Austria, Finland, Iceland, Norway, Sweden and Switzerland, who are now seeking a new and closer relationship with the Community must not be overlooked in the excitement over other developments. These countries have a combined population of about 32 million, have firmly founded democratic institutions, and include some of the economically most developed countries in Europe.
The establishment of a new European economic area would undoubtedly both enlarge the market and create increased competition for the member states of the Community. The draft mandate for the negotiations is practically finalised by the Commission, on the basis of which negotiations can proceed. The EFTA countries attach great importance to this, but there are undoubtedly difficult issues to be resolved, particularly in the area of decision making.
The European Council affirmed that the Community would make the fullest use of and further develop its close transatlantic relations based on regular contacts at the highest levels. My colleagues expressed their satisfaction with the understanding I reached as President of the European Council with the President of the United States on the holding of a meeting at that level during each country's Presidency together with other regular meetings involving the Ministers for Foreign Affairs, and including meetings with the Commission. I believe we have, in this way, opened a new chapter in the relationship between the United States and the European Community, and that the meetings that will take place as a result of this agreement will in the future be of vital importance in maintaining a close transatlantic entente and enhancing EC-US political and economic ties.
The Community also confirmed that it would pursue and intensify its relations with the Mediterranean countries, with Japan, Canada and Australia and other members of the OECD, and with the countries of Asia and Latin America, and its special relationship with the ACP countries.
The European Council also expressed its serious concern about the threat posed by the illegal trade in drugs. It asked the high level co-ordinators group to report with a view to bringing before the European Council in June measures that would form part of vigorous action by the Community and member states against drug abuse and the illicit production, distribution and sale of narcotic drugs.
To sum up, the results of our special European Council meeting in Dublin were substantial and positive. I believe that the first 1990 Dublin Summit will be looked back on as a significant point of departure in the history of Europe. A feature of this particular Summit was the harmonious atmosphere that prevailed throughout and greatly facilitated the constructive and fruitful discussions that took place. A clear strategy has now been adopted for the integration of the GDR into the Community, the future development of the Community itself, for its relations with the other countries in Europe, with the United States and the other countries of the world. The Community now has an extremely ambitious agenda. It has committed itself firmly to political union and there are now firm grounds for believing that the way is open for the achievement of lasting peace and prosperity throughout the whole of our European continent.