I propose, a Cheann Comhairle, to make a statement on the European Council which I attended with Deputy Gerard Collins, Minister for Foreign Affairs and Deputy Bertie Ahern, Minister for Finance, in Maastricht on 9 and 10 December.
Because of the unusually late hour at which the Council finished its work, the Presidency conclusions only became available comparatively late yesterday. As soon as the documents became available, I laid before the House and circulated to party Leaders the texts of the draft Treaty which formed the basis of the discussions at the European Council, the Presidency conclusions, and the documents which set out the agreed changes to the Maastricht Treaty texts. I will, of course, see that definitive and consolidated texts are provided as soon as we receive them.
The discussions which have already taken place in this House — most recently on Thursday and Friday week last — and replies by the Ministers concerned and myself to Parliamentary Questions, cover well for Deputies the background and the subject matter of the Council. Essentially, we were discussing in Maastricht the form and content of a Treaty on European Union.
The Maastricht Council was a success. It can be described as historic. The outcome was that we established a new European union. It is a political union of the Twelve member states which will have a common foreign and security policy, unified economic and monetary systems, a single market, a charter of social rights, and Community competence in a greatly increased number of important areas. It will promote a new level of prosperity among the people who belong to it and improve the quality of their lives.
For Ireland the outcome was very satisfactory. We will share fully in the benefits of the new union, and our economic and social interests have been specially favoured and protected. The Treaty will, therefore, bring an ever closer union among the people of Europe; the promotion of economic and social progress based on free and open competition and the market system; measures to assert the identity of the Community on the international scene; and strengthening the protection of the rights and interests of the nationals of the member states through the development of the concepts of European citizenship, of cohesion and of social policy.
The new Treaty we adopted will provide the legal framework for the existence and continued development into the next century of a political entity of 340 million inhabitants, constituting the largest single trading bloc in the world. It is vital, in my view, that the competences exercised by this union, and its political capacity, should be coherent as between themselves and fully in balance with the economic strength of the union.
Indeed, we have already seen the potential of the existing Community as a force for democracy and as a continuing source of social and economic stability in Europe. The challenges facing us are in no way diminishing. Even as the Council was meeting in Maastricht, news of developments in the USSR lent emphasis to this point.
The Government will be setting out the proposals in the Treaty and the main considerations affecting Ireland in a White Paper to be published early in the new year. I should, however, at this point like to assure Deputies that the operation of the Treaty will be governed by the principle of subsidiarity. This means that the Community will take action in areas which do not fall within its exclusive jurisdiction, only if, and in so far as, these objectives can better be achieved, by reason of the scale or effects of the proposed action, by the Community than by the member states acting separately.
Much of the work in drawing up the draft Treaty documents has been done by the Intergovernmental Conferences on Economic and Monetary Union and on Political Union, first launched as a joint enterprise during the Irish Presidency in 1990. The Irish contribution to these conferences has been consistent and sustained.
I had, before the Maastricht meeting, discussions on matters of bilateral interest or of concern in the Community context, with the President of the Commission, Mr. Jacques Delors, with the President of the European Council, Mr. Rudd Lubbers, with the British Prime Minister, Mr. John Major, with Mr. Enrique Baron, President of the European Parliament, and with President Francois Mitterrand. My discussions with Prime Minister Major also covered Northern Ireland matters. I have placed copies of the communique issued after that meeting in the Dáil Library. I also had bilateral discussions, immediately before or in the wings of the Maastricht Council, with Prime Minister Cavaco de Silva of Portugal, and Prime Minister Gonzales of Spain.
I propose now to outline the issues and major decisions of the Maastricht Council.
First, on procedures: the Council was addressed, in accordance with what has become the practice, by the President of the European Parliament, Mr. Baron.
The President of the Council, Mr. Lubbers, set out the agenda which he had previously indicated as covering six major issues. These are: economic and monetary union, which has for its ultimate aim a single currency for the Community; economic and social cohesion, involving the application of the principle of Community solidarity in the distribution of the economic benefits of the union among the member states and regions; social policy, which has a similar objective in so far as individuals are concerned; foreign and security policy, which will assert the union's identity in the world; the global presidency package concerning the "democratic deficit" Community competence and solidarity and the perspective for the future development of the Union — focusing particularly on the question of how best to continue the process of European integration.
For Ireland, the major concerns in this agenda relate to certain aspects of the proposals for cohesion, economic and monetary union, social policy, common foreign and security policy and other questions which I will touch on.
Before going on to deal with these issues, I should like to emphasise again the commitment of the Government to the concept of European Union, both in its economic and monetary aspects and in its political purpose. In pressing to have our concerns accommodated, we underlined our fundamental adherence to the concept and principle of European Union, which we fully support.
Cohesion was an important priority for us in the negotiations in both Inter-governmental Conferences. An economic and monetary union which did not have firm provisions for sharing the benefits of the union with the less well-off regions would not be a union worthy of the name. In fact, without such firm provisions, an economic and monetary union would have the effect of concentrating the benefits of the union on the already well-endowed central areas of the union. This would be gravely damaging to the economic and social wellbeing of the less well-off regions particularly those, like Ireland, which are peripheral to and distant from the main economic centres of Europe.
We had a clear negotiating strategy, therefore, from the outset to ensure that the Treaty contained the fullest possible recognition of cohesion as a basic objective of the Treaty and that this recognition was accompanied by firm commitments to the measures, including financial measures, to achieve cohesion.
We took the lead, therefore, in tabling amendments to the Single European Act to ensure full recognition of cohesion as a basic objective of the union. We were extremely successful in our negotiations and, as a result, the new Treaty contains provisions which are highly satisfactory and a substantial advance on the provisions of the Single European Act. These provisions comprise: the inclusion of cohesion and solidarity between member states among the basic objectives of the Community; the addition of rural development among the basic cohesion objectives contained in the Rome Treaty; the requirement that the formulation and implementation of all other Community policies, such as agriculture and trade policies, policy on R & D and State aids, and the implementation of the Single Market, must take account of cohesion and must contribute to its achievement; the requirement that the Commission report every three years on the progress towards cohesion and on how the various Community policies and funds and national policies have contributed to it. These reports are to be accompanied, if necessary, by appropriate remedial proposals.
We were not satisfied with that, however. We made clear in our conference negotiations and in all bilateral discussions that, unless the Treaty were accompanied by firm commitments on practical measures to bring about cohesion, we would find it impossible to accept the Treaty, and we could not recommend it to the Irish people.
We decided that the firm practical commitments we sought should be contained in a protocol to the Treaty so that it had the highest legal status short of being in the Treaty itself, which would not be appropriate for details of practical programme commitments. It was for us a major success that a protocol on cohesion was adopted reflecting the concerns and commitments we wished to see reflected in such a protocol.
The Cohesion Protocol has clear new commitments which the union must now honour to assist the faster economic and social cohesion of the less well-off regions with the more prosperous regions. These commitments include two we were particularly concerned to obtain. The first is that the rates of Community intervention under structural funding can be modulated to avoid excessive increases in budgetary expenditures in the less prosperous member states. It will be evident to everyone in the House that that is a most valuable concession to have won as structural funding is not beneficial if the burden of the national matching contribution is excessive.
The second new valuable commitment is that the scope of the Structural Funds will now be extended beyond the traditional areas of funding in order to cover the specific needs of individual less prosperous member states. Again, it will be evident to all in this House that a widened scope for structural funding is a particular advantage and need for us.
These two new commitments will have profound significance in easing our budgetary difficulties in matching increased structural funding.
The protocol reaffirms the continued roles of the Structural Funds and provides that their appropriate size from 1993 onwards will be decided in 1992. This is also a firm commitment which can only be interpreted as presaging a further increase in the funds in view of its linkage to the task of the Community in the area of economic and social cohesion.
The biggest success we had, however, in the area of cohesion was the provision in the Treaty and the protocol that a Cohesion Fund will be established before the end of 1993 to make a financial contribution to action designed to promote cohesion in the fields of the environment and the trans-European networks. Our special need in relation to this new fund is acknowledged in the fact that it is provided that in the transport networks special attention will be given to island and peripheral regions. This new fund is confined to member states whose GNP per capita is below 90 per cent of the Community average and who fulfil the conditions of economic convergence under European Monetary Union or have programmes under way to do so. Ireland fully meets these criteria.
The fund will have special significance and application in Ireland. We suffer more than most countries economically from our peripheral location distant from our markets because we export equivalent of two thirds of our output. The deficiencies and inefficiencies in our transport communications with our markets impose a heavy economic cost which reduces significantly our competitiveness. This new fund designed for island, land-locked and peripheral regions will enable us to make dramatic improvements in our transport communications by improvements in national roads, harbours, airports, ferries, and transport facilities generally to increase transport speed and reduce transport costs.
As regards the environment, we have a huge environmental programme to finance in this decade in reducing water and air pollution and developing our water supplies and water purification systems. We know from our discussions with the Commission that our peripheral and environmental needs were specially intended when the fund was proposed.
It is notable that for the first time we have a significant fund that is specifically earmarked for the environment as one of its key objectives, as every one is agreed that environmental protection is an essential but costly task with important trans-frontier implications.
It is important to understand that this new fund will be additional to the Structural Funds so that one of our major concerns that there should be an increased flow of funds to assure and accelerate cohesion has been met.
Ideally, we would, of course, like to move towards more automatic transfer mechanisms. In the Programme for Economic and Social Progress we set this out as a longer term objective of our EC policy and we shall continue to work towards it. However, we recognise from the early stages of these negotiations that the degree of integration likely to emerge from the IGCs would fall well short of the degree of political homogeneity that provides the framework for such mechanisms in existing federations. There never was any prospect of getting agreement at this stage on initiating now such mechanisms, and suggestions that we should actively seek them were completely unrealistic.
The outcome of Maastricht, therefore, in regard to cohesion has been an outstanding achievement. We have secured a whole range of binding legal provisions in the Treaty and, in addition, have secured firm commitments in a legal protocol which far exceeds in status and certainty the Declaration on the Structural Funds adopted on the occasion of the Single European Act. Between the Treaty provisions and the protocol provisions we can expcect substantial increases under more flexible conditions than ever in the transfers of resources to aid our cohesion which was our fundamental negotiating position in agreeing to economic and monetary union.
Ministers for Finance attended the Council for the discussion of this time which was central to our consideration of the move towards European Union. Fortunately, the bulk of the Economic and Monetary Union Treaty provisions had been agreed before the European Council meeting, so this area did not take up much time at the Council, though Finance Ministers meeting concurrently in the same building as Heads of Government in Maastricht did have a busy time there.
The main item which had to be considered was the decision-making arrangements for the transition to Stage III of European Monetary Union, leading to a single currency for the Community. There was a great desire on the part of most countries, including Ireland, to ensure that the process being set in train would be irreversible and would lead within a reasonably short and certain period to the establishment of full European Monetary Union.
The agreement which was reached provides for two possible procedures. The first, which will apply at end of 1996, provides for a decision by qualified majority at that time to set a date for Stage III, if a majority of the member states fulfils the necessary convergence conditions for the adoption of a single currency and it is considered appropriate for the Community to enter Stage III.
If by the end of 1997 the date for the beginning of Stage III has not been set under this procedure, then the date of 1 January, 1999 will be set. This date will apply automatically, without the need for a further decision. However, a decision will be needed, by qualified majority, on which member states fulfil the necessary convergence conditions. Only those countries will move ahead to full European Monetary Union at that time.
The UK and Denmark sought and obtained special protocols which allow them to take a further decision on their participation in Stage III, at the time that the date for transition is being decided. This arose because of special circumstances in those countries. All the other member states, with the exception of the United Kingdom, are firmly committed to moving to Stage III. The United Kingdom at this point are not committed to such a move: neither are they committed against it. They say that the decision to go ahead or not to will be taken at the time.
I am fully confident that Ireland will be in a position to move to Stage III of European Monetary Union with the first group of countries. The convergence conditions which must be met are set out in the draft Treaty documents. They relate to price stability, a sound budgetary position, convergence of interest rates and a stable currency in the Exchange Rate Mechanism of the EMS. We are already in a better position than many member states to meet these conditions and intend to continue with the necessary policies to sustain and indeed improve this position over the coming years. I need hardly, of course, point out in this House that one of the reference values to be taken into account in assessing a country's ability to move to Stage III is a ratio of Government debt to GDP of not greater than 60 per cent — and this is very important — or evidence that the country's ratio is moving consistently downwards to that figure.
Overall, the European Monetary Union decisions now envisage that Stage II start on 1 January 1994, with the establishment of the European Monetary Institute.
Stage III will start anytime from 1997 onwards and at least on 1 January 1999. The European Central Bank will be set up just before the start of Stage III, and the single currency and single monetary policy will apply from the start of Stage III. The economic side of European Monetary Union will be characterised by close co-ordination of monetary policies and by provisions to avoid excessive budget deficits.
On social policy an important concern of the Community is to ensure that the union does not become simply an area or organisation concerned solely with the creation of wealth. It must be our concern also that the citizens of the Union, through its organisation and operations, benefit also from its progress. In this context, we stressed the overwhelming importance which we in Ireland attach to employment. Our proposal that the promotion of employment should be among the first objectives of social policy was accepted during the preparatory work for Maastricht.
The discussion in Maastricht on social policy was certainly the most protracted and possibly most difficult of all our work there. I do not intend to detain the House with details.
From the outset of the negotiations on social policy in the Intergovernmental Conference, Ireland negotiated constructively to achieve a sound basis for agreement. I approached the negotiations in Maastricht in this spirit and found the Dutch Presidency and partners willing to go as far as possible to find a compromise acceptable to all. Unfortunately, it did not prove possible to accommodate the very special concerns of the United Kingdom. In the circumstances, the other eleven decided to move ahead on the following basis.
First, the present Treaty text, beyond which the United Kingdom was not willing to proceed, remains unchanged.
Second, the other eleven member states have concluded an agreement strengthening the Community's capacity to act on social policy. This agreement is essentially the same as that contained in the Presidency's draft Treaty. This approach sets a series of objectives for the Community and its member states, including, as the first objective, as we had argued in the negotiations, the promotion of employment. It also modifies the decision-making arrangements which will apply to decisions in the social policy area. In particular, the areas covered by qualified majority voting are significantly extended. Certain sensitive areas are reserved for unanimity or are excluded from Community competence. The agreement also enables the social partners to play an important role in social policy formulation.
The text agreed by the eleven contains a definition of working conditions in the list of issues for qualified majority voting which is not as clear as we would have wished. Deputies will be aware of our concerns on this point which I expressed to the House on 28 November. However, as Ireland has always been committed to progress by the Community I did not see any scope for seeking, as the UK has been given, what is virtually a permanent derogation from a major common policy. This approach is in line with what we took in the past with the EMS, with the Social Charter when it was agreed in Strasbourg in 1989 and, of course, at Maastricht when we agreed with the overwhelming majority of member states on the irreversibility of the move to full economic and monetary union. It is, above all, in line with our refusal to accept a two-tier Community. Having agreed to join in the further progress to be made by the Community in the social area, we will be relying on several important aspects of the new Treaty to ensure that our particular concerns are taken fully into account.
First, the Community now has, as I have said, a strong and comprehensive definition of subsidiarity. This principle will have to be taken into account in the formulation of the social legislation in particular.
Second, there is provision that social policy directives must avoid imposing undue burdens on small and medium-sized enterprises in such a way that might inhibit their creation and development. Given the situation which now exists on social policy, we will be insisting that this requirement is fully and scrupulously observed by the Commission in its proposals.
Thirdly, there is a requirement that directives should have regard to the conditions in each of the member states. The UK, our major trading partner, is not party to the new social policy, and this could have implications for competition. Again we will expect that this factor will be fully taken into account by the Commission.
Fourthly, there is the provision, arising from an agreement between the European Trade Union Confederation and the European employers' body that was taken up by the Intergovernmental Conference, that before submitting social policy proposals, the Commission shall consult management and labour about the possible direction of Community policy and that if the Commission then decides to go ahead with Community action, it will obtain the opinion or recommendations of the two sides of industry on the envisaged proposal.
On the concerns which I have heard expressed about the effect of social policy on competitiveness, I need hardly point to the facts that some of the countries inside and outside the Community with the highest productivity and the highest standards of living have also the most advanced social legislation; and also to the requirement in the proposed Treaty, as it stands, that the very first sentence of the Social Chapter requires the Community and its member states to have as their objective the promotion of employment.
I regret that it was not possible for us to move forward as Twelve in this vital area. I understand the reasons behind the decision of the UK to remain with the existing provisions. But if we wanted to maintain social progress in the Community yet avoid a damaging breakdown in the Treaty negotiations, we had no choice but to adopt the solution that we did, with an agreement that is not formally part of the Treaty, but which will be implemented for all practical purposes as if it were. I cannot understand how anyone who claims the interests of workers at heart should advocate forcing a complete breakdown bringing progress on the social charter to a halt throughout the Community. For the reasons I have mentioned it was unthinkable that Ireland should refuse to join in a major step forward by the Community in an area to which member states attach a very high priority. I am sure that on the basis of the provisions which I have outlined our essential concerns in the area of working conditions will be understood by the Commission and by our partners.
The agreement on a common foreign and security policy is along the lines I described to the House on 28 November. All the main negotiating objectives I set out then have been achieved.
It was important that the negotiations should succeed on this issue. Faced with the remarkable changes in Europe and international affairs over the past few years, it is clear that the Community needs new and strengthened mechanisms for dealing with the world: indeed that is a fundamental principle on which the draft Treaty is based. Moreover, our international partners expect that a Community more united economically and politically will be able to deal with them in a more coherent and co-ordinated manner. I believe that the provisions agreed on a common foreign and security policy will equip the union to respond effectively to the major challenges ahead through strengthened and expanded co-operation and through joint action.
The principle issues I want to deal with now concern the provisions on majority voting and the agreement reached on security and defence, which were the major focus of discussion by Heads of State and Government on this chapter.
In so far as voting is concerned, I have previously outlined to the House our view that an immediate move to majority voting would be inappropriate in an area as sensitive as foreign and security policy. Our preferred solution to this issue — which was one of the more difficult in this Chapter of the Treaty — was for a procedure whereby the Council would by unanimity define those matters on which decisions are to be taken by majority. And this was what was agreed.
This procedure will admit the principle of majority voting in the area of foreign and security policy, allow the practice to be introduced gradually, but will provide the essential safeguard we require.
In so far as security issues are concerned, the main points of agreement from Ireland's point of view were: first, that the framing of a common defence policy, which might in time lead to a common defence, is a matter for future negotiation in another inter-governmental conference in 1996. We accepted this in line with our long-standing commitment to partners that we would be prepared to enter into negotiations on a defence arrangement for the Community. The scope and nature of a common defence policy will be matters for that future negotiation. And they will have to be agreed by unanimity.
Secondly, the Treaty provides that the policy of the union will not prejudice the specific character of Ireland's security and defence policy. This is a most important provision. It enshrines in Treaty language the achievement secured at the second Rome Summit last year which recognised our traditional position. This was a major objective in the negotiations and I am satisfied that our traditional approach to foreign and security policy is fully protected.
Thirdly, the Treaty makes it clear that joint action by the European Union will not extend to defence issues. All decisions and actions of the Union with defence implications will be matters for the Western European Union. And any requests made by the European Union to the Western European Union must be agreed by unanimity among the Twelve.
The nine members of the Western European Union have in a separate declaration set out their views on the future of European defence, including the practical organisational arrangements they intend to make to enable the Western European Union to implement issues referred to it from the European Union. The matters covered by this declaration are essentially for the members of the Western European Union. From Ireland's point of view what is important are the legal commitments we will enter into through the European Union Treaty itself. These are the only obligations that we will take on. And I want to emphasise these will not involve us in a mutual defence commitment. They will not oblige us to join an alliance. And they will not involve us in taking an obligation under the Western European Union Treaty or subscribing to policy platforms adopted by the Western European Union.
The provisions on the common foreign and security policy will enable the Community to play a fuller and more coherent role in international life commensurate with its standing in the world and its responsibilities. The Treaty sets out the objectives for the union's common foreign and security policy and gives the union the means to achieve them. This is an important outcome of the Maastricht meeting. But equally important will be the actual policies that the Twelve will pursue under the new framework. Already the Twelve have a basis for certain policies through European political co-operation. The Treaty on European Union will enable these to be expanded and strengthened and new policies added by unanimity. Ireland will play a full and committed part with its partners in developing policies for the European Union based on the values that have traditionally informed our approach to international issues.
The need to enhance the democratic legitimacy of the union has been a major issue of the negotiations on political union. While I am firmly of the view that in our country democratic legitimacy is guaranteed by this House and by our local government system, I do recognise the concern that, at the European level, certain deficiencies do exist. The role of the European Parliament and the powers which it has in the legislative process of the Community have been significantly strengthened as part of the agreements reached in Maastricht. The Parliament's position in relation to the legislative process has been strengthened, rights of petition and inquiry have been formalised and the appointment of a Community ombudsman has been entrusted to it.
The most important development, however, is in the area of decision-taking where Parliament will now have a right to reject the Council's position in a number of important areas of Community policy. This will allow Parliament to have a greater say and influence on the nature of future Community legislation. The areas which have been selected include education, culture, consumer affairs, research and technology, trans-European networks, environment and the Internal Market.
From what I have said, Deputies will gather that the discussions at the Maastricht Council were wide ranging, complex and detailed. The debate was conducted with force but always with a common objective so as to arrive as far as possible at consensus — for after all what we were discussing was the future for the Community both in its own right and a basis for stability in Europe and the world. The fact that the Council was conducted amicably despite the many contradictory or opposing views and that it was brought to a successful conclusion is due in large measure to the skilled and determined chairmanship of the Dutch Prime Minister, Mr. Ruud Lubbers — to whom I would like in this House to convey my appreciation of his work and thanks for his courtesy and hospitality.
Conclusion of the new Treaty on European Union at Maastricht marks a memorable epoch in the history of our Continent. The new Union Treaty will have immense consequences for the future development and prosperity of Europe as a whole. It has become evident over recent years that all European countries now look to the Community as an anchor of political stability and as an economic magnet, and that association with it and eventually in many cases the perspective of eventual membership offer a vital ray of hope, which encourages the recently liberated democracies of Central and Eastern Europe to persevere on what is in the short term the difficult path of creating a stable society based on a market economy.
The new union will create a higher level of cohesion and solidarity between the different member states. There is an increased determination to act together in common. There is increased acceptance of Community responsibility for the welfare and social rights of all the citizens of Europe, especially in the less developed regions. The irreversible steps towards economic and monetary union will encourage even before its completion a major effort to achieve both economic convergence and greater cohesion. Across the Community, we are striving to create a modern, enlightened, progressive society, that is both efficient and humane, prosperous and caring, committed to economic development, yet environmentally sensitive.
The new union will act together to promote the security, and common interests and ideals of the Community. It will become an increasing influence in the world.
In Maastricht, we had from the point of view of the Irish interest successful conclusions on cohesion, economic and monetary union, foreign and security policy, social policy and on the many other important but less fundamental changes proposed in the way in which the Community conducts its affairs. The conclusions of the Council will be embodied in a formal Treaty which will be drawn up and signed as soon as possible and will form the basis of a referendum here in 1992 after publication of a White Paper. I will, of course, ensure that Deputies and others will have full access to the formal Treaty text as soon as it becomes available here.
I recommend the conclusions, as they emerged in Maastricht, to this House and to the Irish people.