I call Deputy Flynn, who has 20 minutes.
Maastricht Summit: Motion (Resumed).
The following motion was moved by the Taoiseach on 28 November, 1991:
That Dáil Éireann, convinced that the welfare and prosperity of the Irish people can best be advanced through Ireland's membership of the European Community,
satisfied that full and balanced integration of the Community will lead to greater economic growth, social progress and increased employment,
believing that the community should have an enhanced voice in international affairs, to which Ireland can contribute,
persuaded of the need for the work of the Intergovernmental Conference on Political and Economic and Monetary Union to be brought to a successful conclusion at the European Council in Maastricht in December,
fully supports the Government in their determined and constructive efforts to ensure that the new Union is firmly grounded in economic and social cohesion and solidarity between the member States and that all will share fully in the fruits of its economic and social development.
Debate resumed on the following amendment:
After "development" to add to the motion the following:
"conscious of the positive contribution the creation of a Europe without internal barriers can make to the creation of additional employment, calls on the Government to adopt the following negotiating position at the summit in Maastricht:—
1. to fully support moves towards a single European currency in conjunction with support for the Spanish insistence that a new Treaty contain a legally enforceable guarantee of adequate continuing financial support for poorer regions and states along the lines that already apply within the Federal German Constitution;
2. to support the democratisation of the European Community by giving extra powers to the European Parliament including the appointment of the President and membership of the Commission, and the introduction of a directly elected Upper House of that Parliament with equal representation of all Community states along the lines of the United States Senate;
3. to support proposals for the extension of majority voting in the Council of Ministers in order to speed up the Community decision-making;
4. to simplify the proposals for co-decision making between Parliament and Council, which are so complicated in their present form as to constitute a potential barrier to progress;
5. to insist on a commitment by Heads of Government at Maastricht to revise the current proposals to reform the Common Agricultural Policy so as to guarantee continued support for those forms of agriculture which, by using locally produced raw materials, guarantee the security of European food supplies in all contingencies;
6. to support the development of a security and defence competence within the Community Treaty, so as to ensure that all states in Europe have a say in matters affecting their future and the preservation from external threat of the political union that is to be created;
7. to support the vigorous development of the Council of Europe as a means of allowing all European states, including those not yet ready for full Community membership, to participate in the building of a `Common European Home';
8. to demand that the European Treaty contain a commitment to the goal of full employment and a commitment to provide the means of achieving it; and
9. to support devolution and regionalisation within member states of the Community, including Ireland with involvement of elected representatives."
We are well aware that moving towards economic and monetary union is a long and difficult process. There was a great deal of planning and of negotiating and now it seems that we are due for a great number of decisions from Maastricht.
I am not here today to grapple all the technicalities in relation to matters such as the formation of the European Central Bank, the proposed European Monetary Institute as an interim measure, or the composition of the ECU — whether it be hard, soft or otherwise. What is important is that economic and monetary union is coming and that it will mean big changes for all of us. I should like to take a ground level consideration of some of those changes. There are many other changes that cannot be dealt with in the short time available; they are for another day.
As I understand it, economic union will have four main effects: it will mean freedom of movement for people, goods, services and money — namely, the internal market; it will mean competition policy to protect free markets; we will have a common policy for structural and regional developments; there will be a shared set of rules governing national budgets.
To make that happen, the Delors report stated, economic and monetary union must go hand in hand. Monetary union will mean, irrevocably, fixed exchange rates and ultimately, a single European currency. It is a stagewise process, but already there is fairly free movement of capital and by the end of next year Ireland will really have said goodbye to its exchange controls. So it is happening, and next month at Maastricht some more of the practicalities will probably be ironed out, moving us closer to the transitional second stage.
As most people would understand it, Ireland stands to gain from further integration into Europe. The general thrust of the Delors approach to union — more growth and more stability — is probably in everyone's interest. The Delors report also proposes a kind of union that will promote balanced development and reduce regional disparities. That is exactly what we are looking for.
However, the reality of pre-Maastricht Europe in that there are still big regional disparities. From the point of view of the smaller player, such as ourselves, Greece or Spain, it is still a matter of too much integration and not enough cohesion. Let me spell out that distinction. The larger member states are more concerned with monetary matters, achieving convergence of inflation and interest rates and of budget deficits. The less well off countries want a policy that will help create real convergence or cohesion among all EC countries in terms of economic growth, employment and standards of living. But the Commission always has shared the larger members' view that existing cohesion mechanisms are adequate. In part that is an attempt to alleviate the fears of the larger member states about how much this process will cost them. But it has led to a lack of real debate about what a united Europe could mean ultimately and has left us with a very restrictive model of European Monetary Union. If the spirit of the Delors report is to remain intact, this split between monetary and economic policy, between the haves and have nots has to be addressed at Maastricht.
A lot of studies on the possible impact of the proposed convergence criteria suggest that European Monetary Union will not contribute to the raising of relative living standards in the less developed regions like Ireland. The debate has been dominated by the larger member states. Indeed there is a marked reluctance by them to enter into binding commitments on economic and social cohesion measures for the one obvious reason, that it will cost them more. We must not be deterred from pursuing our objectives — there may be an ultimate cost on those best able to bear it — but how can the basics of European Monetary Union be achieved without commitment of support and resources to the less well off?
Our objectives can be easily summarised. I see them as twofold: first, the commitment from the Council and Commission that they will act positively within the framework to develop cohesion mechanism to satisfy Community integration; second, a commitment to concrete measures to be taken now in favour of cohesion — for example, improvement of the Structural Fund, new Community programmes and a different attitude to the Community resource system. There can be cause for legitimate concerns this time. Maastricht is the place and time to address these concerns.
President Delors is reported as saying that work will begin in January on the detail of enhanced Structural Funds, but Structural Funds are part only of the answer. We are looking for increased cohesion. They are a very small part of the Community budget, which budget itself accounts for 1 per cent only of Community GDP. The reference in the Cecchini study to Structural Funds as compensation for victims of the single market does not sound much like a commitment to positive regional decelopment. Ireland, backed by several other member states, has already, proposed stronger provisions for social and economic cohesion for consideration at Maastricht.
Under the proposed convergence criteria, as they stand, Ireland and other countries with high debt levels could be disadvantaged. It is certainly the case that without a lot of hard talking about more concessions we cannot expect European Monetary Union to improve relative living standards in the less developed regions. We must be actively involved in monetary union. Opting out is not a choice for us and would not save us from a shift of industrial investment to the centre as the single market is completed.
In the report of the Commission "One Market, One Money", the costs and benefits of European Monetary Union could be partially estimated only. EC simulations suggest that the global impact should be positive. They indicate also that Ireland will benefit, but not as much as the EC as a whole. One sector that should gain from European Monetary Union is that of manufacturing industry. A single currency would mean that companies would not have to hedge their bets on shifting their exchange rates or pay for foreign exchange transactions with the EC. We must remember that 75 per cent of our exports and 67 per cent of our import trade is with other EC countries, which would entail large savings all round.
Integration of financial markets would make life easier for investors and commercial borrowers as competition in the financial services sector increases. Even with the ERM the possibility of devaluation will keep Irish interest rates at a premium. Of course, all the other members states stand to benefit also. That is as it should be. Greater access to the European market should be good for most of Irish industry, but we had better be ready as well for the increased competition it will bring. It is also a hard fact that the manufacturers' gain could be the bankers' loss in that they would lose on foreign exchange. They could also lose business to the Pan-European banking conglomerates, cashing in on economies of scale.
Under the terms of the present draft Treaty, conversion to a single currency could be a two-speed process. If by the end of 1996 there are seven member states who are both willing and eligible in terms of their economic health, then the process of monetary union could move into a third and final stage. It would be in our interests not to get left behind at that point. That is one of the key provisions of the Dutch proposal. If at a certain point in time, namely, 1996, there are seven countries willing and eligible, I have to say to the House that implies acceptance of the concept of the two-speed European Community. I do not think that is desirable for us. Certainly it is desirable that we be part of the fast track; to be anywhere else certainly would be to our disadvantage. The concept of a two-speed Europe could be a very dangerous one for some member states, particularly for the less developed regions of the European Community. For example, it could reduce the focus on economic convergence and lessen the resolve to increase the impetus for the less developed regions to catch up with the richer EC member states. I would prefer that the figure were eight rather than seven. With six well off member states, it should not be too difficult to attract one further state to come on side. But if circumstances prevailed in which more than one of the less well off states had to be brought on side to accept the whole package of stage three going ahead, that would be a better safeguard for states such as Ireland.
Our rates of inflation should not be a problem, but our Exchequer borrowing might be against us. The GDP/debt ratio is set to be at 60 per cent; ours does not look that good at 97 per cent at present. But then neither does Italy's at 93 per cent or Belgium's at 128 per cent. What it boils down to again is that we must fight for concessions; I mean fight, not plead. Ours is a debt accumulated during the late seventies and early eighties and has very little to do with our present economic capacity.
I hope that the Maastritch Summit will set about ensuring that countries like ours, with a falling GDP/debt ratio, can qualify. Under the present draft Treaty that is very much a matter for interpretation. Much depends on the interpretation of the proposed words: "If the ratio is sufficiently diminishing and steadily approaching" this value of 60 per cent. If strictly required to get that ratio down to 60 per cent of GDP by 1997 Ireland would have to run a budget surplus of the order of 2 per cent of GNP over a period of years. Obviously, that would be very onerous and fiscal policy would exert a contractionary influence that would offset all of the estimated benefits of European Monetary Union. Our current plans envisage a borrowing reduced to 1.5 per cent of GNP by 1993. That policy would see our GDP/debt ratio fall steadily. At the pace envisaged we would still be over the target of 60 per cent, but I suggest that the target would be in sight. We can take it that we would qualify, but can we be so sure that the borrowing pattern will be in accordance with our stated objectives? Recent statements seem to undermine the possibility of achieving those stated objectives.
The current proposed convergence terms could place Ireland and other high debt countries at a serious relative disadvantage. The need to reduce high debt ratios would entail a restrictive fiscal stance. The end result would be fewer benefits from European Monetary Union than for the EC as a whole. We need to get flexibility agreed in that area to help us in our transition to the proposed GDP-debt ratio. There is also some uncertainty with regard to the criterion of Government budget deficit, put at 3 per cent of GDP. An unusual alliance of Britain and the Commission appears to have won the argument for looser sanctions on excessive budget deficits foreseen for EC states after European Monetary Union. Sanctions, including fines, denial of access to EC funds to help the lesser developed regions catch up and bans on borrowing from the European Investment Bank, seem almost certain to be dropped. We do not know. It is the kind of important information that should be shared with us in this debate.
Let us be clear about one more thing. We are not asking for gratuitous handouts, and we are not expecting any. Economic policies under European Monetary Union will remain largely decentralised, but in the interests of coherence two binding rules have already been agreed: there will be no monetary financing of public deficits, or privileges for public authorities in the placement of their debt; and member states with budget difficulties will not be bailed out automatically. What constitutes an excessive deficit and what sanctions should apply will need to be worked out at Maastricht.
If we are serious about making our case at next month's Summit we have to be seen to take responsibility for ourselves. We have to accept that under European Monetary Union a better standard of living will not just happen. We have to make it happen. That means more productivity, stimulating more investment for more job creation. We need to be making changes that create that kind of climate. We need changes in our taxes, and we need to think hard about any increase in capital or corporation tax as the competition for new investment hots up.
Under the present terms of the draft Treaty conversion to a single currency could be a two-speed process. If by the end of 1996 there are seven states who are both willing and eligible, in terms of their economic health, then the process of monetary union could move into a third and final stage. I still recommend to the Taoiseach that it should be eight rather than seven states. It would be in our interest not to get left behind at that point.
To enable the benefits of European Monetary Union to be distributed fairly it will be necessary to have the parameters of the distribution process clearly committed to the Treaty proper. The practical benefits promised by the union cannot be left to post-Treaty consideration or decisions to be taken at some future meeting. I suggest that a declaration of support is not the way forward. A declaration is simply a political aspiration. We need a protocol to the Treaty amendment because it would have legal standing. I recommend that such a protocol be pursued by our delegation at Maastricht. It should include the following points. The financial resources allocated for economic and social cohesion objectives should be significantly increased. Significant increase should also take place in real terms as regards Structural Funding. Special funding should be provided for the environment and for trans-European networks programmes. The eligibility of what attracts support in objective I countries should be widened. There should be a concentration of more support for cohesion in less developed regions. That means that there should be a greater percentage for the peripheral states.
The intervention rates should be changed and there should be more flexibility. At the moment they run from 75 per cent to 50 per cent, but they should be gauged at 100 per cent and thereby relieve the need for the additionality demand on our Exchequer. That additionality causes very great difficulty. It is contrary to the spirit of European Monetary Union to say that you can have half the price of the project while at the same time the provision of the other half from Exchequer resources causes considerable disruption to the budgetary system. The system of own resources should be made more progressive, taking better account of the relative wealth in contributions to the Community budget. It is the same situation as the rates support, but in reverse. In strict equity a relatively poor economy should not have to give the same percentage as the richer countries, who are giving from their surplus. I am not talking about the begging bowl mentality. It is our entitlement in the context of cohesion and convergence.
The protocol should provide that State aids to the productive sector should be monitored to achieve a balance in assistance. The richer countries in the Community are giving 60 per cent State aid. How can we expect the IDA to compete? State aids are an integral part of cohesion and competitiveness and should be provided for in the protocol attached to the Treaty to enable us to compete and thereby achieve better convergence and cohesion in all our interests.
The debates which are taking place around Europe in various countries have a number of features in common. The Europe to which Maastricht turns has been irrevocably changed in recent times and there are social characteristics now which did not exist a few years ago. It is a Europe of far more unemployed people, with dislocated rural regions, with millions of poor people, with migrant workers who as long ago as 1973, when Dr. Hillery was a Commissioner, could have looked forward to a draft charter of rights for migrants. It is a Europe filling more and more with hate towards migrant workers. It is a Europe of people, something we should remember.
I want to make a point that is very important to me. It is reflected in a way in the first paragraph of the Labour Party amendment, which states that we deplore the fact that this Parliament has no Foreign Affairs Committee to discuss matters of international policy. It has no fully fledged European Affairs Committee. It has a Committee on Secondary Legislation with limited terms of reference. There is a sense of impotence in what we say here.
Anybody who travels in Europe is aware of a growing alienation of all Europeans from all parliaments, all politics, all civilised expression of opinion and difference. I would argue that Maastricht will open without there being a consensus on the future of Europe but rather a moral acquiescence in something that might happen. That raises a number of questions. The greatest problem facing the European Community is this widening gap between language and reality. We have listened to so much of it. Many writers have written about this. Political scientists refer to it as banalities. When a word means nothing, you can bring in lots more words and they need not mean anything either. An example is the phrase "firing snow at the wind."
In this gap between language and reality, certain fundamental principles begin to slip away. People might not be willing to accept from me a suggestion that there is a serious set of issues which flow from what I have described but it is in the works of Bridget Laffan, Rory O'Donnell and others where, for example, they raise questions about an old fundamental in economics — how can a free market deliver a regional policy? It is no wonder the language has an abstract quality because this has never happened in human history, anywhere, in any political system during any period of history. I will come to this in a moment.
If you want to understand this point it is very simple; you can have an integrated market and gain the benefits of economies of scale, location of industry, higher volumes of output and sales and concentrated costs of distribution — they are certainly there — but you do so through concentration. After that you can say there are social costs associated with all of this and you propose to pay for them by distributing a kind of compensatory payment to the regions you have robbed of people, resources and infrastructure.
The difficulty is that Maastricht will open with a broken promise. Maastricht which is structured on a set of rhetorical pillars and which is very shaky as to what its precise agenda will be, will have immediately before it the broken word of the Single European Act debate which said that the integrated market would take place coterminously with a social Europe, the social action programme and the whole question of social policy. It was explicitly asked of those who drafted it and argued in favour of it: are you saying that the social policy will come as a corrective or residum of economic benefit? They said no, it occurs at the same time and it is to correct the intergration of the market and benefits, at the risk of suggesting something that was unattainable. The public of Europe know that the social provisions of the Single European Act have slipped further and further into the distance. Trust was broken in a contract made with the citizens of Europe. A new offer is now being made to the citizens of Europe with a new set of terms and new pieces of language, cohesion. The Taoiseach regards his experience at Maastricht as so important for survival into the political future that he has included some unusual things in his speech about what he aspires to on behalf of Ireland.
Preparing for Maastricht in this country is a kind of rhetorical excursion, a ritualised presentation of spectacle and a manipulation of anxiety and reassurance. It draws on the kind of now well developed dramaturgy we have come to expect from the Taoiseach, Deputy Charles J. Haughey. It is that you create a kind of anxiety in the country that we could do dreadfully badly at Maastricht unless we have our usual man going there. Fianna Fáil put it to us that they saved not only themselves but all of us by saving the Taoiseach to go to Maastricht for us. I am sure this relieved anxiety in every village in Ireland. There was also the reassurance of the speech by the Taoiseach this morning which I have in front of me. It is the same kind of speech we have come to expect for a long time.
Why do I use this language? I was not simply throwing this in for effect; it is not new. I once attended and exhibition of Leonardo da Vinci's drawings in Florence in which it was very clear that when he was working for the Medicis the people who were in favour of the drawings and those who were not were in a different part of the ceremonial order. This is what is happening in regard to Maastricht. We will be told it may all fall apart but then it will be saved and anxious heads of state going into the Summit will be replaced by a peaceable photograph afterwards of the heads of state jostling each other to make sure that no excessively tall person is alongside a person of the same stature as me.
I want to go back to where I began. This exercise in dramaturgy and rhetoric purports to speak about the life chances of people in Europe, employment, investment and monetary, when the Taoiseach and the other people who speak here know that nothing they will do at Maastricht will contain investment or make people, guided by the marketplace, want instinctively to go for the sake of being "communitare" to the most remote regions of Europe. For the millions of unemployed in Europe this will be a further exercise in alienation, a language with no consequences or moral action, which is simply guff.
Maastricht will become, as we will see it unfold on television and as it will be handled by the media, a manipulation of symbols presented on the point of failure, rescued at the last moment for success, the return home — the last stage of the heroic journey — and statements in the House. Will one job have been created? Will one principle of social policy have been advanced? Will there be a single new principle of foreign policy towards aid, trade or debt? Will women feel more equal to men? Will people who did not have access to education suddenly be allowed to advance themselves? Will there be a new advance in European culture? Will people on farms who do not know where their children will work know what their future will be in agriculture? The first delegations to Europe used to say we are a small but proud country. Would they be proud to have a 19 per cent unemployment level travelling in front of them now?
The Labour Party amendment is deliberately couched to cut through this kind of exercise in dishonesty, symbolic manipulation, abuse of language, vanity, alienation and action which has so driven the public to despise politics. When I worked in America I used to wonder why black people in poor districts used to put up with it and not revolt. Some of them burned their houses to the ground and left but many did not.
Why do people put up with this? They do so because they are beaten into a kind of acquiescence by this abusive language in which nothing can be described any more. They keep hoping that if a person is good for himself he might be good for the country and is the kind of man we should be sending abroad. Perhaps he is the right kind of man to send abroad. It is pathetic, hopeless, alienated, divided and disorganised. For example, the Irish National Organisation of the Unemployed have written an open letter to the Taoiseach, a copy of which I received this morning. This asked the Taoiseach whether, if as expected, he signs a new European Treaty, the Irish Government will be asking for a commitment to full employment in that Treaty. Did it occur to anyone to make such a demand? We could define unemployment in terms of a certain percentage level. I want to be practical as well. I want to pay tribute to the Institute for European Affairs for its publications, for listing the issues and encouraging public debate in a way the Government did not. The previous Government were not of much help in preparing for the Single European Act either. Can the Taoiseach tell us what the Irish Government are seeking to compensate for the effects of the integrated market since they have acknowledged that the existing instruments — regional policy, social policy and the European Regional Development Fund — have failed to bring about any effective convergence in recent times between the rich regions and the poor regions? It is rather silly to say that a doubling of the resources for instruments that do not work will achieve an even greater compensation and effect the greater integration being proposed.
In relation to my point about the location of industry, if you want to have a balanced Europe, economically and socially, you need not only to provide incentives in the regions but, rather like what was done with RTE, you need to cap incentives in the centre so as to drive funding towards the regions. There is no statement from the Irish Government that this will happen. There is the usual good old Fianna Fáil flirtation that if there is money in it any principle can be up for auction, such as that in relation to the Western European Union which we slithered off in recent times without any accountability to this House.
In his contribution this morning, the Taoiseach said:
Some partners see the Western European Union as an integral part of European Union with organic links to the Union. Others would prefer it to stand in an autonomous relationship but taking guidance from the Union. Some have concerns about the implications of all this for NATO. The different approaches have not been reconciled to the point where we have a clear view of what might go into the Union Treaty. But I do not think that we should rule out a relationship between the Political Union and the Western European Union. I am thinking, for example, of cases where the Western European Union could have a peacekeeping or humanitarian role, where, as was agreed in regard to humanitarian aid to the Kurds, Ireland and other non-Western European Union members could act separately, in parallel and in co-operation with those partners who are in Western European Union.
That is a rather meaningless statement because I do not know whether he is talking about after or before enlargement of the Community. But whatever way he means it, he should read the basic statute of the Western European Union which requires it to consult with NATO before it does anything. The Western European Union, founded in 1954, is required by article 4 of its Treaty to consult NATO in all military operational matters. Therefore, an organic link between the EC and the Western European Union could involve Ireland in an organic link to NATO.
There is a continual vagueness and I want to speak about the irritating part of it. I find it unconvincing when people speak about a Europe of the people. We are able to read census data, we know how many people were in different countries before we talked about Treaties. But people are concerned with participation in Europe. For example, people want to be involved in institutions and decision-making about their lives, job, farms, the quality of the environment, culture and so on. However, domestic parliaments are alienating their publics from politics. In this House we do not have a Foreign Affairs Committee or a European Affairs Committee. When the Taoiseach stands up and speaks for 45 minutes we are given the impression tht he is thinking somewhere in the recesses of his brain that perhaps Western European Union might not be a bad thing. The arrogance of it all, the lack of democracy. After Maastricht what there should be is this. Decent people who stand for values which assist the unemployed and the poor, who believe you can have economics and a social policy but that you must specify your social policy and make your budgetary economic union instruments the instruments of achieving that, should be able to make progress. However, what is involved is a con job — the idea of suggesting that the broken contract of the SEA can be upgraded to a full grade bogus European suggestion and that with economic and monetary union you can almost, with a prayer and a wink, get the social benefits the people are seeking.
Sorry, Deputy, I must interrupt you and advise you that one minute remains.
The man who wrote the letter to the Taoiseach on behalf of the unemployed had something to say. I know the association of the unemployed in this country of economic failure are not regarded as a social partner and they will not be invited to Government Buildings. They have their equivalents all over Europe. If I were going to Maastricht I would be asking for a clear employment creation strategy; for new directives for instruments of regional policy; for an industrial policy that cost the rich countries something; for job creation initiatives built around ecologically responsible projects; and I would be advancing a foreign policy that used the concept of security, that took into account the changed nature of international politics and its shift from an east-west axis to a north-south one. I would be responsible in relation to overseas development aid and I would have a different view on GATT and on trade. Instead of that, we are dragging ourselves along to Maastricht and coming back imagining that we are a kind of a Napoleon limping home to the village, which would be as good as description I could think of for the Taoiseach's return.
First of all, I was very interested in the contribution by Deputy M. Higgins who is an eminent lecturer in UCG.
A successful conclusion to the work of the Intergovernmental Conference on Political Union will, I am sure, have a beneficial effect on the business life of this country. Specific new areas of competence are being proposed for inclusion in the new Treaty which will result in the development of Community policies in a number of areas of economic importance.
In the new Treaty the Community will, inter alia, be committing itself to the harmonious and balanced development of economic activities, to the maximum convergence of economic performance and to the raising of the standard and equality of living.
In the area of Community external trade policy new Treaty articles will have the effect of streamlining the operation of EC trade policy vis-à-vis third countries. Ireland has benefited greatly from its Community status in the world trading environment.
It is particularly important that we are being represented at this vital meeting by an experienced Taoiseach who has immense parliamentary and political knowledge acquired over a very long period in public life and who has a knowledge of the needs and requirements of the Irish people. The needs of the people are very evident in the points put forward by Deputy Michael Higgins and I know of them also from my representation of a rural constituency in Roscommon. In developing Europe special consideration must be given to the most peripheral part of Europe, the west of Ireland.
As an integral part of an economic Community of more than 320 million people — significantly increased in a business sense recently by the establishment of the European Economic Area, which joins the peoples of the EC with the member countries of the European Free Trade Association in an economic grouping — Ireland is a member of the largest trading bloc in the world. The opportunities for trade and for overall economic development which arise from such membership have been substantial and will greatly increase from the dynamism which will result from a more closely integrated economic Community.
One particularly important new area of infrastructural development which will be covered in the new Treaty is the commitment to the establishment of Transeuropean networks. The intention is for the Community to plan, foster and assist in the development of EC-wide infrastructures in the areas of telecommunications, transport and energy. Ireland has participated in the drafting of the Treaty articles in this regard with the particular aim of ensuring that the needs of the peripheral regions are to the forefront when projects are being developed in these sectors. It is likely that the agreed text will indeed reflect this approach and that there will be a commitment to the provision of Community support for network projects.
The draft Treaty also lays considerable emphasis on the need to strengthen the scientific and technological bases of Community industry to enable it to become more competitive at international level. The intensification of this kind of Community activity is something that Ireland welcomes very much.
We have been to the forefront of research activity in many areas of scientific and technological activity and this expertise has been a significant plus factor in the development of indigenous industry and is an important element in attracting foreign investors to establish here. I am particularly happy to see that the draft Treaty focuses on the encouragement of research and technological development activities in small and medium-sized undertakings, research centres and universities. It is in these areas that Ireland can derive maximum benefit from Community support. The Government's programme for science and technology development is now well established and well placed to complement Community activity. These are just some examples of the impact which the results of the EPU negotiations will have on Irish business and the Irish economy.
Over the past months media attention has focused, naturally enough, on the major political developments which will shortly be coming to a head in Maastricht. One might be forgiven, therefore, for not remembering that 1992 is fast approaching. However, I can assure the House that work has been continuing to ensure that none of those, whether politician, businessman or man in the street, within the Community or outside it, who view the internal market as an irreversible process, a reality, will be disappointed.
For over 30 years the European Community has been striving to abolish the physical, technical and fiscal barriers that separate each member state from the others. This process was substantially accelerated six years ago with the establishment of a legislative programme designed to eliminate specific obstacles to the free movement of goods, services, capital and people within the Community and complete the internal market by 31 December, 1992. That deadline is now 13 months away and agreement has been reached on 75 per cent of the internal market programme of 282 measures. Areas where major progress has been made include technical harmonisation and standards, the opening up of public procurement and of air transport, merger control, insurance and the liaberalisation of capital movements.
With just 399 days left to the 1992 deadline, the Community as a whole is increasingly aware that there is very little time left to adopt finally the remaining 78 White Paper measures and to implement them and the measures already in place. The Community clearly has a major task ahead of it if the remaining measures are to be agreed on time, but I am confident that the commitment and the political will are there.
When the 6th Report of the Commission on the implementation of the internal market programme was published in June last, there was a total 89 measures awaiting adoption. Of those measures, 11 have since been finally adopted, one has been partially adopted and common positions have been agreed on five.
The measures finally adopted include: a Regulation setting up a permanent system for the collection of statistics on the trading of goods between member states to operate from 1 January 1993; a Directive on the control of the acquisition and possession of arms; a Directive eliminating barriers to trade in machinery, together with several Directives relating to animal, fish, and plant health.
The progress in these last areas is particularly reassuring given that at the time of the June progress report they accounted for almost one third of the outstanding measures. Furthermore, while there have been no new formal adoptions in the area of indirect taxation, work on those proposals is progressing apace. I can assure the House that further significant achievements will be recorded before the end of the year, bringing to fruition the considerable efforts of all member states over the past 11 months.
The huge patchwork quilt of regulations necessary to remove the barriers to the movement of people, goods and services is now almost complete. Ireland has played its part in bringing about this transformation and I am glad to see that Irish industry has made considerable efforts to face the challenge of this new market place and to seek the potential benefits that will exist in it.
Turning now to Economic and Monetary Union, the forthcoming European Summit in Maastricht will make a further significant milestone in the political and economic integration of Europe. The decisions taken at Maastricht will bring to fruition a concept that has been in gestation for more than 20 years — since the six Heads of State and Government of the EEC, as it then was, decided that a plan be prepared to create, in stages, an Economic and Monetary Union. The objective then was to underpin the achievement of full customs union and the establishment of the Common Agricultural Policy at that time.
It is interesting to note that the steps being put into place at present to move further along the road to Economic and Monetary Union derive their momentum in part from the evolution taking place in moving the Community from a Customs Union to a Single Market and from the reform of the Common Agricultural Policy now underway. The first plan for Economic and Monetary Union was prepared and published in the Werner report of 1970. Tentative steps in the early 1970s along the road set down in the Werner report included the establishment of the "Snake" in 1972 to provide a framework within which the exchange rates of the currencies of member states could be managed with less uncertainty and the establishment of the European Monetary Co-operation Fund in 1973.
The international oil shocks of the 1970s, however, to which Community countries reacted in a defensive, protectionist rather than in a more far-sighted co-operative manner, postponed further decisive action in creating a region of economic and monetary stability until the establishment of the European Monetary System together with the European Currency Unit in 1979. By that stage Ireland was a full, participating member of the EC and was fully and enthusiastically involved in the establishment of the European Monetary System and in becoming full members of the system from the outset. We decided then that it was in our full national interests to participate in developing a more economically integrated and cohesive Community. The stance we took then has been vindicated by subsequent developments and we have a chance now to build on what has been achieved in considering the further steps to political and economic union.
As I have indicated already, the European Single Market programme, officially adopted in 1988, was another significant step on the road to economic integration. The programme has as its objective the removal of all barriers to trade — both direct and indirect — within the Community, by the end of 1992.
Up to the start of this year the progress made in implementing the programme had already given a major boost to investment and employment creation throughout the EC.
Together with the very sound fiscal, income and structural policies adopted by the Government from 1987, it has contributed greatly to a rate of private sector employment growth in this country over the period to April 1990 which the Governor of the Central Bank recently referred to as "one of the strongest ever recorded in the history of the State".
The other major contribution to this performance was the exchange rate stability and associated low inflation rates which, combined with complementary economic policies under the Programme for National Recovery, resulted from our membership of the European Monetary System.
The contribution of these factors to Ireland's good economic performance in recent years are particularly significant in the context of the present debate on European Monetary Union. Associated with the Single European Act, which laid the legislative basis for the achievement of the Single Market by 1992, were two other factors which are of major significance for Ireland in the context of the present debate in the House on the issues that will come forward for decision and discussion at Maastricht.
The first of these was the fact that, under the Act, economic and social cohesion was established as a primary objective of the European Community. The Act defines the objectives of economic and social cohesion as the harmonious development of the Community, the reduction in disparities between the various regions and the backwardness of the less-favoured regions. This is of vital importance for our region in the west which is the most peripheral in Ireland and in Europe.
It incorporates the ERDF (European Regional Development Fund) into the EEC Treaty for the first time and defines the task of the fund as helping to redress regional imbalances. Under the new draft Treaty these provisions will be significantly strengthened.
The second significant factor associated with the Single European Act in the context of the present debate was the decision to double the level of Structural Funds to be made available to the least developed regions of the Community, including Ireland by 1992.
The decision to provide additional financial resources to help the less-developed countries of the Community provided concrete evidence that the more developed countries of the Community are prepared to provide significant resources to help the less developed regions of Europe to help themselves.
It was, perhaps, also a recognition that the removal of the barriers to trade which the Single Market will bring about may contribute to the further centralisation of investment in the richer, central regions of the Community unless countervailing measures are taken.
It is important to recall at the present time that, five to six years ago, the member states of the Community decided to adopt the Single European Act in advance of any commitments to the doubling of the Structural Funds. That significant increase in resources for regional development purposes came after the terms of the Act had been agreed by member states.
Ireland, of course, has done exceptionally well from the additional EC resources provided for development purposes. We have done so because we took the attitude that the solutions to our social and economic problems lay in our own hands and that EC support, while important, was complementary to our own efforts.
Our destiny remains in our hands. This approach was spelt out in detail in our National Development Plan 1989-1993 which set out a comprehensive range of development measures which aimed, with the aid of Structural Funds support to help this country to close the gap in living standards with the richer Community countries.
Arising from it, we agreed a Community support framework with the Commission — in essence a broad strategy for development — which together with additional developmental initiatives supported through the Structural Funds, provides for a total of some £9 billion of development expenditure over a five year period to the end of 1993.
Over £3 billion of this investment will be provided through the Structural Funds. Development programmes have been developed for each of seven regions in the country with full local participation and form an intrinsic element of the national programmes prepared.
Ireland has done well from the increased level of EC transfers under the Structural Funds. We account for some 5 per cent of the less developed regions of the Community but have been allocated some 10 per cent of Structural Funds' commitments over the period to the end of 1993. This will amount to some 2 per cent of Ireland's GDP over that period.
The transfer of EC resources at such a substantial level is a practical recognition and a reflection of the very serious unemployment problems faced by Ireland compared with other member states at present. Further initiatives in this area can be expected.
In the case of industrial development, a five year investment programme of some £1.5 billion, including related training and educational investment, was agreed with the Commission and is now well under way. EC financial transfers will account for over 50 per cent of the total cost of the programme.
The improvement of the marketing performance of Irish firms is receiving specialist attention under the programme. The scope for such improvement has long been recognised. A major boost will be given to investment in marketing activity by firms by doubling the financial resources available annually for market development purposes through An Bord Tráchtála.
Over £100 million of expenditure on supporting the marketing development plans of firms will be supported by the Structural Funds at the highest contribution rate over the period to 1993.
This will represent the highest ever level of State support for the development of marketing in Irish firms. The objective will be to achieve an 80 per cent increase in the exports of indigenous firms by the mid-nineties.
Among the measures that have been developed are: a special development programme aimed at identifying new commercial opportunities for Irish firms in selected regions of the Community which are showing above average economic performance; a new programme to develop the marketing capability of a limited number of firms which demonstrate the potential to break into new markets — the programme, through the use of consultants, assists in devising appropriate marketing plans for firms and will provide substantial financial assistance towards their implementation; and an intensive marketing development programme for small Irish firms concentrating on the domestic market at present. These firms will be helped on both a group, regional and sectoral basis to consolidate their positions on the domestic market and lay the foundations for moving them on to become exporting firms.
A special effort is being made under all the Structural Funds-supported programmes in Ireland to help develop our own less-developed regions such as the west of Ireland.
These regions are faced with very severe difficulties in the context of a Europe moving towards greater economic integration. They are at the very western periphery of a Europe in which economic political forces are increasingly directing investment towards the centre and further east.
The rich tapestry of community life in these regions cannot simply be left to the unabridged vagaries of the market-place. The Government will not allow this to happen; adequate account will be taken of the external forces associated with development.
At present, the various operational programmes in areas such as industry, tourism, transport and rural development are placing special emphasis on putting developmental investment into those regions. More is required and we will need to ensure that the resources made available for regional development purposes after the Maastricht Summit continue to place emphasis on the development of our less-developed regions.
On balance, Ireland welcomes the moves towards economic and monetary union now being put into place. There are a number of reasons for this. First, the completion of European Monetary Union will provide, in due course, exchange rate certainty within the Community. In the past, widely fluctuating rates of exchange have significantly damaged the growth prospects of Irish business and have contributed to a trading environment which has been hostile and uncertain. This will change under European Monetary Union.
Secondly, it is also likely that, as exchange rates become irrevocably fixed, interest rates will converge and reflect the influence of the stronger EC states.
I wish to take this opportunity of wishing the Taoiseach and the Minister for Foreign Affairs, Deputy Collins, every success in these vitally important discussions in Maastricht. I have great confidence in the competence of the Taoiseach to ensure that we get the best possible deal in the best interests of the Irish economy.
I wish to divide my time with my colleague, Deputy Owen.
Is that agreed? Agreed.
I genuinely believe that agriculture has been relegated to the out-patient department at the Maastricht conference next month. The intellectual debate has gravitated towards the creation of economic and monetary union, political union, the internal market and so on. The proposed reform of the common agricultural policy has been sidelined, and unless there is a very strong farming/rural flavour injected into the proceedings in Maastricht, nine million EC farmers, including our own, will have cause to remember this conference.
I believe Ireland has a much better future inside an integrated Europe than outside it. However, we must assess our strengths and weaknesses as a nation. Europe has utterly changed since we first joined the Community. The jigsaw is larger and the component parts are smaller. Hence the great fear that many people have that Ireland and other poorer EC member states like Greece and Spain will be smothered in the expanded integrated Europe.
In my short speech I wish to draw attention to the stated reluctance of the European Community to agree to the transfer of a specified amount of wealth from the rich countries to the poorer peripheral regions. I should like also to retrace the steps back to the time the Treaty of Rome was signed when millions of words were spoken and tons of paper used to emphasise the commitment that peripheral regions would enjoy an increase in prosperity consistent with the expected rise in living standards on mainland Europe.
I wish to make it perfectly clear that the first and most fundamental prerequisite for the development of the peripheral regions is that the so-called centre expands and grows because crumbling debt-ridden economies in, for instance, Germany, France, Italy and the Netherlands would be the kiss of death for the poorer regions. The Treaty of Rome contains an implicit commitment to reduce the disparities in living standards between the rich and poor regions, but I have to confess that did not happen. This imbalance must be redressed at the Maastricht Summit and it will be a failure if this objective is not achieved.
To simplify my argument on a day when there has been little simplicity, the European Community intended that membership of the Community would confer benefits and responsibilities on participating nations in more or less the same way as an ordinary group water scheme is constituted. Once participants are accepted into such a scheme, irrespective of whether they live one metre from the main pipeline or one mile down a boreen, the capital costs are divided equally amoung all members.
The European Community's regional policy must confer additional benefits on areas on the periphery of Europe. This aid should be of prime influence on specific regions. Onerous responsibilities should also be placed on local committees, communities, development groups and national governments to ensure that this aid is well spent consistent with the objective of maintaining an adequate population in remote areas.
There is no such thing as a free lunch. This does not mean that we should pay people to do nothing. People, irrespective of where they live, are entitled to an opportunity to develop their God given talents in pursuit of an aspiration to live meaningful lives in a modern society.
The dynamics of regionalisation are complex and quite difficult to understand. The United States of America is highlighted as a successful nation of states which can shift resources to its weaker states with some success. This is done by means of an automatic trigger mechanism which ensures that financial resources are transferred to a particular region without an application having to be made or negotiations having to take place. However, on the other side of the equation we have the Soviet Union which would appear to be going in the opposite direction to the current European Community proposals.
Some Irish people believe that European integration will mean that Ireland will become the County Leitrim of Europe, with no disrespect to that county. Many in the west believe that their region will become the Achill Island of Europe if specific guarantees are not given to transfer financial resources from the rich to poor regions.
(Wexford): What about the south-east?
The Government should support the Spaniards on this issue of Maastricht. The management of the new Europe must be one thousand times more efficient and effective than anything we have seen before. There is a growing fear in less well off countries that even if the new regional policy is weak wealthier national governments will subsidise their own poorer regions. This procedure, if allowed, would catapult Ireland back to the third division and we would soon have the status of a Third World country. A Community policy on cohesion is vital for Ireland.
I have made reference to bad EC management. EC management of the Common Agricultural Policy was nothing short of scandalous. Intervention aid was given across the board. For instance, a farmer near the port of Rotterdam could feed 4,000 head of cattle on cheap cereal substitutes from outside the European Community without the cattle ever having to eat a blade of grass. This Dutch farmer received the same benefit per animal as my neighbour in County Galway who had only 20 cattle. A sheep farmer in Norfolk in the United Kingdom with 10,000 ewes received the same ewe premium per animal up until very recently as a farmer in County Roscommon with 100 sheep.
Intervention stores were allowed to be filled with produce the consumer did not want and the taxpayers of Europe were reluctant to finance them. However, the new Common Agricultural Policy reform proposals would penalise the guilty and the innocent. For instance, it was not the production of the small farmers of Ireland which overburdened the intervention system. The most repressive proposal of all is to limit compensation in the poorest areas of Ireland and apply a stocking rate level of 1.4 livestock units per hectare. This would mean that for many small frmers with a stocking rate above this level the choice would be a stark one. Either they would have to do without the compensatory payments or sell part of their herd so as to become eligible for grant-aid.
For the Irish commercial farmer the future is very bleak. It appears that there are no proposals to curb the importation of cheap cereal substitutes from outside the European Community. Therefore, European Community farmers living within a short distance of huge intervention ports, such as Rotterdam, will have a decided advantage over Irish farmers. We have decimated every conceivable research and advisory function for farmers that one could imagine despite the fact that we do not have the expertise to produce the food products required in Europe.
I shall now turn to what I call the European Community waffle industry where the European bureaucrats go out of their way to ensure that no ordinary person understands what is happening. There has to be a better and more meaningful way of explaining what is happening to the people for whom this is intended.
I issue a word of warning to all those who believe in European union that the referendum to ratify whatever is agreed at Maastricht will not be a cake walk. Even now, at a time when there are 260,000 people out of work, high income tax and interest rates and poor housing conditions, many ordinary people are asking what has Europe done for them. It is very important, therefore, that a new deal is concluded for Europe.
I have said many times before that the Government have no clear-cut strategy for Maastricht. That said, however, I wish the Taoiseach and the Government well. This conference is as crucial as any of those in which we are likely to participate.
This debate is not and should not be about the past. Surely we can learn from the past and our past relationships with many of the countries in the European Community. This debate is primarily about our present and future. The question we should be asking today is how can we shake the tides of history rather than hold them back. We can make two choices in our approach to the Maastricht conference which, when we get rid of all the Eurospeak and jargon to which Deputy Bruton made reference this morning, can be put quite simply: we can embrace fully the opportunities and challenges opening up for us as a small country in a positive, non-whingeing, begging bowl at the ready way, or we can pretend to ourselves that the European Community and membership of the European Community should be treated like a large cash and carry business out of which we take what cash we can get and for the rest of the time allow ourselves be carried along by our wealthy partners.
Debate adjourned.