Vol. 402 No. 4
1 Mr. Noonan (Limerick East) asked the Minister for Finance the steps, if any, he has taken to implement the European Court decision which declared illegal the 48-hour rule on cross-Border shopping; and if he has any proposals to put in place an alternative to the 48-hour rule.
The Government unequivocally accept the ruling of the European Court that, through the operation of the 48 hour rule in relation to travellers' allowances without a specific derogation, Ireland failed to fulfil its obligation under the EC Treaty. However we cannot accept a situation in which there is extensive abuse of the travellers allowances regime to the serious detriment of Irish businesses and the general taxpayer.
Accordingly, since the European Court's ruling we have proceeded on two fronts. First, in order to safeguard the important financial and economic interests involved, the 48-hour rule has been maintained in operation, pending detailed consideration of the judgment and its full implications, and pending the outcome of consultations with the EC Commission.
Second, we are seeking the consent of the EC to a temporary derogation in respect of very short duration travellers. Discussions in regard to our request are continuing. As both member states and the Commission have reacted positively, I am confident that a mutually satisfactory solution can be agreed shortly.
(Limerick East): I thank the Minister for Finance for his reply. Would he not now agree that we are acting illegally in not implementing the ruling of the European Court? Would he not further agree that the fine visionary speeches of people such as the Taoiseach and himself on European monetary union and a united Europe from the Atlantic to the Urals become very hollow indeed when arrangements cannot be made domestically to allow people from Dundalk do their shopping in Newry?
I do not accept the second part of the Deputy's question, because the way in which one proceeds in relation to derogations is clearly understood throughout the European Community. Full consultation is taking place at both Council of Ministers and Commission level. It is not unusual for a period of grace to elapse before decisions of the European Court are implemented. While I do not have any specific details on action which has been taken, some examples clearly stand out. For example, the Italians did not implement a decision of the court and were taken back a second time. In other cases periods of up to 43 months elapsed before action was taken. Therefore it is going too far to suggest we are on our own standing out like a sore thumb. It is quite clear that the period of grace I have referred to is being usefully availed of by the Government. I expect further discussions and negotiations on this matter. It will be on the agenda for the next meeting of the ECOFIN Ministers.
(Limerick East): Would the Minister not accept that the decisions of the European Court can only work if implemented by national governments, since the court cannot police its own decisions? Would he not further accept that the Government are acting illegally given that we have not been granted a derogation despite the implication of the Minister's reply to my supplementary? There is no derogation, yet we are still applying the 48 hour rule even though it has been declared illegal and anti the provisions of the Treaty by the court.
The Deputy will appreciate that we are in the process of seeking a derogation and that it is not all one-way traffic. We have shown a clear distortion of trade existed before the introduction of the 48 hour rule which brought about clear results. In relation to the principles governing trade between member states, no aspects of Community policy should lead to a distortion of trade which is the case between North and South, and for this reason, as I said, we have received a positive response from both the Council of Ministers and the Commission. I hope this matter will be finalised at the next meeting of ECOFIN.
A final supplementary from Deputy Noonan.
(Limerick East): Would the Minister inform us if the Government now intend to substitute the 48 hour rule with a 36 hour rule and, if so, how can this subsidiary arrangement be squared with our commitments and the decisions, in which the Taoiseach and Cabinet Ministers are participating in Europe, to complete the internal market by 1992, to have full economic and monetary union, including a European Central Bank, by 1994 and to participate in the issuing of a single currency by the year 2000? If we cannot fulfil little obligations——
I did ask for a brief question.
(Limerick East): How can we be faithful in great things if we cannot be faithful in little things?
It should not be taken that every single obligation has to be met overnight. That is not the position and I am sure the Deputy will agree that the only real solution to the problem of cross-Border trade is to reach at the earliest possible date an approximation of taxes between the two sides. That is the only real long term solution to the problem. I took the first steps in that regard in this year's budget. The question of the harmonisation and approximation of taxes is continually discussed by the Commission and the various member states. The Council have decided that final decisions will have to be made by the end of 1991. We are considered to be very good members of the Community even though Deputy Noonan seems to think otherwise.
(Limerick East): I will follow that up on Question No. 3.
