Léim ar aghaidh chuig an bpríomhábhar

Dáil Éireann díospóireacht -
Friday, 30 Oct 1992

Vol. 424 No. 7

EC Agreement with Hungary.

Acting Chairman

In accordance with the Order of the House made today. Items Nos. 4 and 5 will be taken together.

I move:

That Dáil Éireann approves the terms of the European Agreement establishing an association between the European Communities and their member states, of the one part, and Hungary, of the other part, done at Brussels on 16th December, 1991, copies of which were laid before the Dáil on 16th June, 1992."

Dáil approval of the terms of these agreements is necessary in accordance with Article 29.5.2º of the Constitution which stipulates that: "the State shall not be bound by an international agreement involving a charge upon public funds unless the terms of the agreement shall have been approved by Dáil Éireann".

A note which outlines the provisions of the agreements has been prepared and circulated to Deputies for information. Copies of the agreements were laid before the Dáil on 16 June 1992.

The Government do not intent to proceed for the time being with ratification of the Europe agreement with the Czech and Slovak Federal Republic pending an examination of the implications for the agreement of the decision by the republics to form two independent states.

The European agreements are due to come into effect on 1 January 1993 following ratification by all the States concerned. Meanwhile the trade provisions of the agreements, which allow for a gradual abolition of customs duties and quantative restrictions over a ten year period, entered into force on 1 March 1992 by means of interim agreements. In the event that all parties are not in a position to meet the deadline for ratification, arrangements will be made to ensure that the provisions of the interim agreements remain in force until the Europe agreements are ratified.

Over the past 40 years the European Community has helped to transform Western Europe into a heaven of peace, stability and prosperity. It has buttressed democracy and encouraged the growth of friendship and partnership between peoples who had long suffered from mutual suspicion and hostility. It has also made an enormous contribution to the economic development of its member states.

The EC became a pole of attraction for the emerging democracies of central and Eastern Europe in 1989. It was looked on as an anchor of stability, a source of inspiration for the necessary political and economic changes that had to be put in place. The Community has always sought to encourage peaceful evolution towards democracy in these countries and responded rapidly to bolster the political and economic reforms which were instituted, in Hungary, Poland and the other countries of the region. In June 1989 free elections were held in Poland for the first time since World War II. A radical programme of economic reform was launched in January 1990. Similarly, constitutional reform in Hungary in October 1989 paved the way for free elections in March 1990.

The European Community has been centrally involved in the international response to these historic changes which have transformed relations between European states in the past few years. It has been faced with both an opportunity and a challenge — an opportunity to demonstrate its enhanced international standing and its role as a centre of stability in Europe and the challenge of mobilising the necessary resources in Europe and beyond to meet the needs of the central and Eastern European states in transition.

The Community's actions were along two broad lines: the provision of assistance, in a variety of forms, to support the linked processes of economic and political reform and the development of contractual relations between the EC and the states of central and Eastern Europe.

The EC played a leading role in providing aid to the emerging democracies. Following the Western Economic Summit in Paris in July 1989 it moved centre stage in leading and co-ordinating the Western aid effort for Poland and Hungary undertaken by the 24 OECD countries. The EC and its member states were the key contributors to the G-24 process. EC and G-24 assistance was made conditional on political and economic reform based on the principles of democracy, pluralism and the rule of law. The EC was quick to give its support in November 1989 to setting up a stabilisation fund of one billion dollars for the Polish currency and a bridging loan for a similar amount for Hungary. To date, EC and its member states have contributed 1.340 million ECU in grants and around 3,000 million ECU in loans to Poland. A total of 870 million ECU was made available to Hungary in two tranches in 1990 and a further 375 million ECU was agreed in 1991. These countries also became eligible for loans from the European Investment Bank and from the newly established European Bank for Reconstruction and Development.

The Community also rapidly completed the web of trade and co-operation agreements with the Central and Eastern European countries as they moved to political reform. Bilateral trade and co-operation agreements were negotiated with Hungary and Poland and the EC took initiatives to increase market access by accelerating the timetable for the removal of national quantative restrictions on imports, by extending the generalised systems of preferences (GSP) to Poland and Hungary in 1990 and by forging sectoral agreements on textiles and steel.

The European Community is encouraged by the positive developments in the reform process in Poland and Hungary. In these countries, bold reform programmes have been successfully implemented, aiming at the opening up of trade, the liberalisation of prices and the introduction of currency convertibility. Structural changes have also been initiated.

The rapid pace of events as well as the desire of the countries of Central and Eastern Europe for considerably closer relations with the Community resulted in the decision at the Dublin European Council in April 1990 to strengthen bilateral arrangements further by concluding association agreements which subsequently became known as Europe Agreements. These were intended to be very wide-ranging, to provide for phased movement towards free trade in goods and services, for continuing economic assistance and for regular political dialogue in an institutionalised framework. The agreements were conditional on the understanding that basic conditions with regard to democratic principles and transition towards a market economy are fulfilled.

Negotiations were accordingly initiated in December 1990 with the three countries most advanced in the process of reform, namely, Poland, Hungary and Czechoslovakia. Negotiations were completed late last year and the agreements were signed in Brussels on 16 December 1991. Similar agreements are currently being negotiated with Bulgaria and Romania and are expected to be concluded by the end of this year.

The agreements with Poland and Hungary aim at establishing close and lasting relations with these countries. They reflect their wish for ever closer ties with the Community and acknowledge their desire for eventual membership of the Community. The agreements are concluded for an unlimited period and provide for the phased establishment of a free trade area between the parties over a ten year period.

An important and novel dimension of the association agreements with Poland and Hungary is that they provide a framework for political dialogue with the Community. This dialogue has as its objective the strengthening of traditional links and common values shared by the Community and its partners in central Europe. It reflects the common commitment to the political as well as economic freedoms upon which the Community's association with Poland and Hungary is based.

The preambular section of the association agreements recognises the progress made by Poland and Hungary in establishing new political orders based on the rule of law and human rights, including multi-party systems with free and democratic elections. The commitments of the Community, Hungary and Poland to the CSCE process and to the full implementation of all CSCE provisions and principles — for example the Helsinki Final Act and the Charter of Paris — are reconfirmed.

Article 1 of each of the agreements defines the objectives of the association between the Community and Hungary and Poland, which includes the establishment of an appropriate framework for the Community's political dialogue with these States in order to facilitate closer political relations.

Title I (Articles 2-5) of each of the association agreements formally establishes, in similar terms, the objectives of political dialogue with Hungary and Poland and the form and level for this. Article 2 indicates that political dialogue is to facilitate the full integration of these countries into the community of democratic nations, with political convergence following on economic reapproachment. This dialogue is to foster greater mutual understanding and convergence of positions on international issues and to create an obligation on the part of the contracting parties to take account of each other's interests in their decision-making processes. The enhancement of the security and stability of Europe is defined as a major objective of political dialogue.

Articles 3 and 4 set out the levels at which political dialogue should take place, namely the highest political level between Presidents of the European Council and the Commission with their Polish and Hungarian counterparts, ministerial level within the framework of association councils and senior official level. This political dialogue is to be supplemented by full use of diplomatic channels for briefings, and by consultations at international meetings and in third countries. Hungary and Poland will be informed of developments within European political co-operation. Article 5 provides for political dialogue at parliamentary level within the Parliamentary Association Committee, involving members of the European Parliament and members of the Hungarian and Polish parliaments.

Although the agreements are not yet in force, the first ministerial level meeting involving the foreign ministers of Poland, Hungary and Czechoslovakia and their EC counterparts took place in Luxembourg on 5 October, a meeting which I was proud to attend. The Ministers welcomed the occasion as marking a significant development in the process of strengthening dialogue and co-operation between them. The Community and Visegrad countries, as they are known, agreed that the implementation of the Europe agreements should help the latter to achieve their final objective, namely accession to the European Union. The Community reaffirmed its willingness to assist the Visegrad countries in this direction. In the meantime, it was agreed that the dynamic nature of the Europe agreements should be fully exploited. The first summit level meeting between the Presidency of the European Community, the President of the Commission and the leaders of Poland, Hungary and Czechoslovakia took place in London two days ago. At that meeting the Community indicated its determination to make a success of the Europe agreements and to develop and improve them in order to help the Visegrad countries prepare themselves for eventual membership.

The Visegrad countries have indicated clearly that their ultimate ambition is full membership of the European Community and the Europe agreements acknowledge this aspiration. The Lisbon European Council in June reiterated its will to develop partnership with these countries and assist their efforts to prepare for the accession to the union which they seek. The Commission will report to the Edinburgh European Council on the development of closer co-operation.

The Europe agreements provide for the establishment of a free trade area in industrial goods over a maximum period of ten years. However Poland and Hungary have a longer period in which to phase out trade barriers — up to nine years — than the EC — up to five years. This is in recognition of their stage of development and their need to develop their infant industries. Special arrangements are envisaged for sensitive products namely textiles, coal and steel where trade barriers will be eliminated according to special schedules and for agricultural products where the parties have agreed to grant each other mutual concessions on a reciprocal basis.

The growth in trade between the European Community and the countries of Central and Eastern Europe is striking. The ECs exports and imports grew on average at double digit rates over the past four years. Figures for trade performance in 1991 are still incomplete, but according to the UN Economic Commission for Europe, Hungarian and Polish exports to the West rose by 18 per cent and 12 per cent respectively in the first half of the year. This imports grew even faster, by 79 per cent and 23 per cent respectively. The establishment of the free trade area provided for in the Europe agreements is expected to provide an even growth spur to growth in trade between the Community and three associated countries. Irish exports to Poland have almost doubled since 1989 although the balance continues to be in Poland's favour. The level of trade between Ireland and Hungary, though low, has also increased in recent years. The implementation of the Europe Agreement will open up greater opportunities in these countries for Irish goods and services with consequent economic benefits to Ireland from enhanced trade.

Because of the sensitive nature of agriculture a more restrictive regime was applied than for trade in industrial goods. Complete liberalisation is not envisaged. In general terms, the agreements consolidated the concessions previously granted these countries under the Trade and Co-operation Agreements and the Generalised System of Preferences (GSP). In addition greater market access by way of reductions in import charges and increases in volumes exported to the EC for a range of agricultural products including meat, live cattle, dairy products and fruit and vegetables were agreed. For these products tariffs will be reduced by 20 per cent in year one, 40 per cent in year two and 60 per cent in year three to five; quotas will increase by 10 per cent each year for five years.

Ireland had some concerns during the negotiations regarding the agricultural concessions to be included in the agreements in particular for the sensitive products of beef, sheepmeat and live cattle. However, concessions for these products are limited and are subject to safeguard clauses which will allow trade protection measures in the event of serious injury to Community producers or serious disturbances in any sector of the economy.

Recourse to such measures is not precluded even before the agreed import quotas have been fully used up. In addition, the increased import levels for beef and sheepmeat will be reduced to the extent that quantities of these products are channelled from Poland and Hungary to the former Soviet Union and other food importing countries in the region with the aid of Community financial support. Furthermore, the current annual ceiling of 425,000 for imports of live cattle is not affected by the arrangements in these agreements. Further protection will be afforded through improved co-operation between Poland, Hungary and the EC on customs matters, fraud prevention and veterinary checks.

The agreements also cover the movement of workers within the Community, Poland and Hungary. Where nationals of Poland and Hungary are legally resident in a member state they and their family members are entitled to base claims for health and social welfare benefits on the aggregate entitlement from periods of insurance, residence and employment in the member states of the Community. As a result of this, extra costs could arise to the social insurance fund and the Exchequer through the provision of old age, invalidity and death benefits and for medical care purposes. It is considered however, that such costs will be negligible. The majority of those most likely to be affected would be Polish and Hungarian citizens who may have worked in Britain prior to coming to Ireland. Such persons are already covered by the provisions of existing bilateral agreements on social security between Ireland and Britain and the Europe agreements will not therefore confer any additional benefits on such workers in the social security area. The only persons who would benefit, therefore, are migrant workers from Poland and Hungary employed in Ireland and EC member states other than Britain and who would claim benefit in Ireland on the basis of aggregated social insurance. The numbers involved are not likely to be significant.

In regard to eligibility for health services in this country, the position is that eligibility is decided on the basis of normal residence and not on insurance payments or citizenship. Accordingly, any foreign national legally resident in Ireland would, for the purposes of establishing entitlement to health services, be regarded as being normally resident and this provision of the Agreements will not have any practical effect for legally resident Hungarian or Polish citizens.

There is provision in the Europe Agreements for the negotiation between the parties of separate agreements to cover air transport and inland transport. In the meantime, the parties are obliged not to introduce any new restrictions or discriminatory provisions in relation to air and inland transport. Ireland has concluded air transport agreements with Poland and Hungary. A good transport agreement has been concluded with Hungary and is likely to come into effect shortly. The terms of these bilateral agreements will continue to apply pending the conclusion of agreements between the EC and Hungary and Poland.

The Europe Agreements provide for economic co-operation in a wide range of sectors, for example, industrial standards, investment promotion, agriculture, energy and nuclear safety, financial services, tourism and public administration. In the area of financial co-operation the Agreements provide for a continuation of the PHARE project aid programme, for the possibility of continuing EIB loans and the possibility in defined circumstances of balance-of-payments-type assistance. The Agreements also allow for greater freedom in movement of capital. The Europe Agreements also will enable Irish state-sponsored and private companies to further exploit business opportunities in Poland and Hungary. Aer Rianta have already secured a contract to manage Warsaw Airport, while Telecom Éireann is engaged in a joint venture with the Hungarian Telecommunications Company.

There are provisions in the Agreements for fair competition and for gradual approximation of the legislation of the association partners to Community legislation. Association councils at ministerial level are to oversee the implementation of the Agreements. At official level an association committee on which there will be member state representation is to prepare the work of the association council. Parliamentary co-operation is also envisaged through a committee composed of members of the European Parliament and the parliaments of Poland and Hungary.

In line with the commitment to give political and economic support to the reform process in Central and Eastern Europe, Ireland has played an active and constructive part in shaping the general approach to the development of contractual relations and in the negotiations. There have been certain areas of difficulty, for Ireland as for our community partners, but acceptable compromises have been struck, for example, on the question of access to the EC market for Polish and Hungarian agricultural products. I am confident that the agreements and the concurrent assistance programme offer a stable perspective for the development of economic and political relations in the changed European area.

Before I begin my contribution I should like to acknowledge the presence in the House of the Hungarian Ambassador, Dr. Pataki, who has worked ceaselessly and tirelessly on behalf of his country since he came here to Dublin. He has made many friends here.

The stark reality of the profound changes in Central and Eastern Europe in the past few years is really brought home to us today by the motions before the Dáil to approve the EC Association Agreements with Hungary and Poland.

We should recall that the most recent general election in Ireland was held just three years ago in 1989. It was only in that year that Solidarity was legalised in Poland and in June of that year that free elections were held there. Similarly, it was not until June 1991 that the withdrawal of the last remaining Soviet troops from Hungary was completed, leading to the restoration of full national independence and sovereignty in that country. Therefore the changes that have taken place in recent years are dramatic. That we are debating Association Agreements today in the Dáil seems a very normal and natural thing to do now, but such a debate would have been unthinkable at the time when we first came into the Dáil. Today is very historic in that sense.

It is proper to say that all of us who believe in the principles of democracy rejoice the establishment of a special relationship between the EC and its member states and Hungary and Poland. This special relationship reflects not only geographic proximity but also, now, shared values and increased interdependence. It is also a recognition of the steps that have been taken in both countries in the establishment of the rule of law, respect for human rights, the holding of free and fair elections with a multi-party system and economic liberalisation leading to free market economies.

It is very important that we give proper signals to the governments of both Hungary and Poland and to their peoples. There should be no question of any grudging acceptance of these Association Agreements with the EC. On the contrary, we should make it clear that we welcome Hungary and Poland into association with the European Community with a full heart and, furthermore, that we share with both countries their hopes that these Association Agreements are merely a step on the road towards their eventual accession as full members of the Community.

These Agreements, which have been concluded for an unlimited period, provide for the phased establishment of a free trade area between the parties over a ten-year period. Quite properly and quite rightly, concessions have been given to both countries, giving them a longer time to phase out trade barriers as a protective measure for their infant industries. I accept that agriculture was bound to be a sensitive area, and the arrangements agreed take into account the desire of both Hungary and Poland for greater market access while at the same time the safeguard clauses should allow protective measures to be taken in the event of serious injury to Community producers.

The arrangements for political dialogue are very important. It is good that there should be consultations and meetings at ministeral level at the Association Council. It is also right that there be such contact at senior official level. If I had one criticism of the Agreement it would be that at parliamentary level Article 5 provides for political dialogue as between the members of the European Parliament and members of the Hungarian and Polish parliaments. The Agreement is not only an agreement between the EC and Hungary and Poland but it is also an agreement between the EC and its member states and those two countries. It is an omission not to include in the Agreement for contact at political and parliamentary level between members of the parliaments of those two countries and members of the national parliaments of the member states. That is a serious omission and in any review is one that should be noted and remedied.

The need for bilateral dialogue at political level should be reinforced by more economic and trade contacts. In many ways we take the EC system for granted. There are so many complexities involved in it that there are very few experts who fully understand all the ramifications. The system which we take for granted is very strange indeed to the peoples of Hungary and Poland. There can be no better learning process than economic, trade, cultural and political contacts and all member states should follow up the ratification of these agreements by broadening and increasing these contacts at all levels.

It is interesting to note that though we consider Hungary to be an emerging democracy parliamentarianism in that country can boast traditions which stretch back many years. It goes back almost to the days of Daniel O'Connell because popular representation was first introduced in Hungary under laws passed during the 1848 War of Independence. While the 1990 election, to which I referred, was the first free election held since 1947 — we all know the reasons they could not have had them in between — that election was the 34th time voters went to the polls in Hungarian history. We are building on an old tradition of democracy and it is clear the Hungarian people have no difficulty, in readjusting to the mantle of democracy.

It might also be noted that Poland was the first country behind the Iron Curtain to have a non-communist Government, following the elections in 1989. There are many historic associations between Ireland and Poland. In many countries people make Irish jokes or Polish jokes which I think are interchangeable. There must be a recognition of common characteristics between us. We share one unfortunate very common characteristic that of an appalling level of unemployment. Poland is one of the few countries where the level of unemployment is as bad if not worse than in Ireland. As I understand it the figure for unemployment is approximately 3.5 million which proportionately would be as bad as in Ireland.

I hope the financial co-operation aspects of the agreement will be of assistance to the Polish Government and the Polish people in coping with their economic difficulties. It is clear from the Minister's speech that so far there has not been a great deal of trade with Poland and Hungary but already there are signs that this will expand. I am glad to see Irish companies involved in providing technical assistance and training. It is clear that further opportunities for the development of such contacts will follow on the completion of the association agreements. I have no doubt that friendly co-operation between Ireland and both Hungary and Poland will develop considerably in the years ahead. This development will be assisted by the completion of the association agreements for the mutual benefit of all of us. On behalf of Fine Gael I heartily endorse the agreements with Hungary and Poland and confirm my agreement to their approval by the Dáil.

I should like to make some comments on the Minister's speech. He said we were debating this motion because of the provision in the Constitution which requires us to do so. In the earlier debate Deputy Garland asked whether this item would be debated were it not for the requirement in the Constitution. That leads me to the Minister's further comments in relation to the establishment of a foreign affairs committee, the need for which I stressed in my earlier contribution. I share the Minister's hopes and expetations that at last we will have a foreign affairs committee. Now that we have agreement in principle the main obstacle is whether we will have a Dáil in the short term to establish such a committee. In line with my earlier remarks I can give a commitment that in the event of the collapse of this Dáil, earlier than Members on the other side may wish, there will be a foreign affairs committee under the next Fine Gael led Government.

It is proper also to comment on the note which was circulated to Deputies for information. I should like to record our appreciation of the excellent information briefing prepared by the officials in the Department of Foreign Affairs who, as usual, have been most helpful. Also, the officials in the office of the EC Commission in Dublin should be complimented as they too were helpful.

I understand, though it is on the Order Paper, that the agreement with the Czech and Slovak Federal Republic cannot be ratified today. They have their difficulties and a break up is under discussion which is a common subject in these troubled times. I am not sure whether the break up of those republics will be completed although it appears they will not be one country in the years ahead: perhaps that is an omen for things closer to home.

It is important to bear in mind that both Hungary and Poland have as a priority in their foreign policies, their desire to join the European Community. I accept — and they accept — that this will take some time during which membership criteria must be fulfilled. We should give them the right signal at this stage and encourage both countries along the road towards membership of the Community. Furthermore, we should make it clear that we will not raise unreasonable obstacles to their ultimate membership of the European Community. On that basis what we are now approving is a half-way house arrangement which will ultimately lead on to a Community in which we will be glad to have as members, both Hungary and Polland.

The Labour Party also welcome wholeheartedly the association agreements signed by the European Community with Poland and Hungary. Recent events which have taken place in the countries of Central and Eastern Europe have resulted in a call by these countries for closer links with the European Community. The European Community has responded to this call in the form of a wide-ranging association agreement, subsequently named Europe Agreements, with those countries on the understanding that basic conditions with regard to democratic principles and transition towards a market economy is fulfilled.

I should like to place on record my dealings and associations with parliamentary representatives from both countries on the Council of Europe, where they participate fully. This year Hungary was the host country for the Parliamentary Assembly of the Council of Europe. One could not but be impressed with the centre of democracy that is now visible in Hungary. One can only admire the provision of facilities and services in a country which obviously goes back to the bedrock of democracy. There has been tremendous co-operation between Ireland and the members of parliament of the countries to this Agreement, particularly the Hungarian Government and members of that country's parliament who have played host to members of parliament from Ireland and visited this country.

Recently we had the opporunity to discuss with some Hungarian representatives their attitude to the reemergence of democracy in their country. I am delighted to see the Hungarian Ambassador in the distinguished visitors' gallery. I am glad he is here to listen to this debate, which continues the dialogue we have had with representatives of the Hungarian Government. All political parties in the House welcome the closer links these agreements will establish between the European community and the countries of Central and Eastern Europe.

The European Community and its member states signed association agreements with Poland, Hungary and Czechoslovakia in Brussels on 16 December 1991. These agreements are not due to come into effect until 1 January 1993. However, following ratification by all parties, the trade provisions of the agreements came into force on 1 March 1992 by means of interim agreements. As the previous speaker said, unfortunately the status of the agreement with Czechoslovakia has been thrown into doubt following the decision of the two republics to form independent states. Consequently the ratification of this Agreement is not being proceeded with for the time being in either the European Parliament or the parliaments of the member states, pending clarification of the terms of the separation of the two states and examination of its implecations for the Agreement with the Community. The Labour Party are particularly anxious to see this Agreement ratified without delay. Closer links with the two republics of Czechoslovakia are imperative to the wellbeing of the new Europe. I believe that negotiations with Romania and Bulgaria are under way and are expected to be concluded before the end of the year. I look forward to a fruitful outcome to these negotiations.

These agreements are very important on a number of fronts. They are aimed at establishing close and lasting relationships between the parties concerned. They reflect the aim of all concerned to establish ever closer ties with the Community and acknowledge the aspiration of these countries of eventual accession to the European Community. The next step after membership of the Council of Europe is membership of the European Community.

The agreements have a common framework, adapted to the specific situation in each country. They cover an unlimited period and provide for the phased establishment of a free trade area in industrial goods over a maximum of ten years. The Central and Eastern European countries have a longer period — nine years — in which to phase out their trade barriers, than have member states for whom the period is five years. This is in recognition of the stage of development of these countries and their need to develop their industries, which are still at the infant stages.

Because of its very sensitive nature, a more restrictive regime was applied for agriculture than for trade in industrial goods. Complete liberalisation of agriculture is not envisaged in these agreements. In general terms, the agreements consolidated the concessions previously granted to these countries under the trade and co-operation agreements and the generalised system of preferences. In addition greater market access by way of quota increases is envisaged and tariff cuts for a range of agricultural products was agreed. These concessions are subject to safeguard clauses which will allow trade protection measures in the event of serious injury to Community producers or serious disturbances in any sector of the economy. Nobody understands those problems better than the people in Poland and Hungary.

The agreements have an important political dimension. They provide for regular political dialogue which is seen as enhancing security and stability in Europe and underlying the strong linkage between the economic and political aspects of relations. There is provision for regular consultation at the highest political level as well as between Ministers in the Association Council and at senior official level. The association agreements with the countries of Central and Eastern Europe are intended primarily to support the economic and political transformation of these countries. They form part of the evolving new pattern of relations between European states in the wake of the enormous changes which have taken place in recent years. These changes have been welcomed by all of us. The provision of a framework for systematic dialogue on all matters of mutual concern should be an important contribution to European stability. These objectives are fully supported by the Labour Party.

The ratification of these agreements and the gradual development of the economies of these countries will place Ireland in a favourable position through our semi-State bodies — our links with Russia and, in particular, the efforts of Aer Rianta prove this — to provide technical assistance and training in both Poland and Hungary. I am sure these countries would welcome our assistance and would benefit from the technology we have developed over the years. We can be proud of the training given to our young people which has enabled them to take their place in important sectors of technology development. Several Irish companies have received consultancy contracts under the PHARE programme and it is expected that more companies will receive contracts in the future.

Industries in my constituency have established relationships with Hungarian companies in terms of trade in leather goods, etc. It is wonderful to see products produced by companies in my constituency being sold at reasonable prices in Hungarian shops. It is only right that we admire some of the infrastructural development in Hungary. Even though this country was behind the Iron Curtain, it still believed it could trade with countries in the west. Companies in Hungary established a wonderful relationship with companies in Austria. Hungary had moved forward prior to this agreement. It has been preparing for the agreement and it is anxious to play a role within the European Community, whenever it becomes a member. I believe all Irish political parties are in favour of this country becoming a member of the European Community.

The Labour Party wish to highlight the importance of any agreement which allows western Europe to invest in Eastern Europe. Similar agreements between the United States and other countries have given rise to political debates about whether jobs are being exported out of the United States into South America and Mexico. People in western Europe with a cosmopolitan outlook regard as their neighbours the people in emerging democracies in Eastern Europe. It is essential that we recognise this and recognise our responsibilities in relation to the development of economic and political stability in Eastern Europe. We cannot allow what is happening in Yugoslavia to continue without some intervention and help. Thank God that did not happen in Poland or in Hungary and that they are now part of the democratic process with free elections and so on.

Any agreement that assists our neighbours in Eastern Europe is to be welcomed. I have no doubt that my party, as part of the political process here, will play an active role in assisting those countructura tries who have made the break and want to join us. I hope they will find in us a welcoming neighbour, that they will find us willing to give technological and other forms of assistance. We should give them every assistance so that they can be restored to an important position in Europe and that this will be part of the process of bringing together all countries of mainland Europe.

I am glad to have the opportunity to contribute to this debate for many reasons, some of which have been outlined by the previous speaker. In 1987 I had the privilege of meeting the man who forged the first trade agreement between Hungary and the EC. That looked to the future and was a sign of things to come. What were then straws in the wind have now come to fruition.

Like Deputy Ferris I wish to congratulate the Polish and the Hungarian people on emerging from a totalitarian system into democracy with relative ease despite pressures which could have been extremely disruptive. We should take this opportunity to wish them continued success but not on the basis that it will be easy and that everything in the garden will be rosy because it will not be. Life is tough, regardless of what regime one operates under. However, the democratic system which both countries have embraced is certainly more amenable to allowing people to use their intelligence and initiative to their advantage and that of their countries. I welcome this proposal and extend our good wishes to all concerned.

This agreement is of special significance at present because of the volatility of Central and Eastern Europe in general. From the point of view of the European Community, and the rest of the world, it is important that Eastern Europe, now emerging almost from isolation, be given every encouragement by the rest of Europe to continue along the road they have embarked upon.

There is a counterpart to this from the point of view Ireland, one of the less developed countries in the EC. Whenever Eastern Europe is mentioned here people will say, almost in the same breath, that the entry of these countries to the EC will mean less assistance towards the development of our infrastructures. I accept that there may be a certain slowing down but we should not, for one moment, forget that the stabilisation of Central and Eastern Europe is as important economically for this country, Great Britain and other member states as it is for the people of Central and Eastern Europe. If we do not have peace and stability, if we do not have democracy then all our aspirations in regard to the development of Europe will become unstuck. We should therefore look at the pros and cons and try to achieve a balance that will allow us, as members of the European Community, recognise that in order to achieve what is hoped for there must be some sacrifices. We are making those sacrifices now in rural and urban Ireland.

Too many people in the European Community take the attitude that we should go no further for the moment on the basis that doing too much too quickly will cause problems. I would point out that doing too little and too late is likely to cause even more serious problems. Therefore it is essential that we fully endorse and support the Agreement before us and offer our encouragement for continuation along those lines.

Let me dwell for a moment on how far we should go and how soon. This question will obviously arise fairly often in the weeks and months ahead. It will arise fairly quickly for some of our immediate neighbours. I do not want to become involved in the megaphone diplomacy that has become the norm in recent times. However, what may be palatable and acceptable for domestic political reasons in any country at any time may well have an adverse impact in terms of European cohesion. We should never lose sight of that. The saddest thing I have seen over the past few months is the tendency for fairly senior European politicians to lay blame on their European colleagues for difficulties that arose and presented obstacles for them in their own bailiwicks. It is not in the long term interests of the Europe that we aspire to that people would sound off in that fashion and blame each other for things that can only be resolved by co-operation. If they decide not to co-operate and go off on their own then the possibility of co-operation becomes more remote. That is not in the interests of Europe.

I have dwelt on this at some length because I observed on my visits to the countries concerned that there is a great willingness among Europeans to avoid repeating the mistakes of the past. This is particularly so in places like Germany, France, The Netherlands and countries in the centre. It is particularly so of the generation that is old enough to remember the most recent horrendous occurrences when the peoples of Europe divided.

Abraham Lincoln, in a biblical reference, once said "a house divided against itself cannot stand". That was very true and it is true to this day. The people of the United States had one bloody conflict to resolve their differences and it seems that they have learned their lesson because they have since stayed together through thick and thin. By contrast the peoples of Europe — I referred to this in the earlier debate — on the grounds of parochialism or misguided nationalism have down through the centuries availed of every opportunity to divide.

In the earlier debate I posed the question why Europe is not the most influential bloc in world affairs at present and the answer is, as I have said, that the peoples of Europe have divided at every possible opportunity, very often for short term gain. Indeed it appears that some European leaders are less than committed to the European concept which was promoted with enthusiasm up to about two years ago. I hope that this problem can be overcome and that those who remember the difficulties caused by the mistakes made in the past will use their influence and encourage the present generation to moderate their aspirations and views because they are in the best position to evaluate the pros and cons of taking a particular course. I do not want to be too specific but we are all aware of the problems that have arisen recently and that are likely to arise in the future.

Deputy Ferris has already referred to the importance of trade links with emerging countries. Long before the advent of totalitarian regimes and the Iron Curtain, the countries of Europe traded with each other. While this trade may have been interrupted by wars etc. that is all they were, interruptions. It would obviously be of benefit — Deputy Ferris also referred to this matter — if investment could be attracted to Europe. I have said many times in the House that we have not attached sufficient investment to this country to achieve the objective of cohesion which is now considered to be the ultimate aim of the European Community.

I should point out in this regard that multi-national companies have a tendency to relocate in South-East Asia where labour costs are cheaper, having first achieved their marketing targets from a base within Europe, while maintaining their right of access to the European market. I contend that we should not make it easy for them to do this given that this matter has particular significance for Ireland having regard to the fact that we are an island nation on the periphery of Europe.

In relation to trade agreements we tend to accept that the United States sets down and are inclined to meet its deadlines as opposed to our own. At present there appears to be a desire to complete the GATT talks before the American presidential election is held. I do not know why this should be an all-important date, we have had our own important dates and the United States did not rush over and agree to help us so that we could complete our trade agreements and then meet our targets.

If we can encourage the unification of Europe it can be an influential bloc in world affairs and can lead to a better quality of life for the people of Eastern, Central and Western Europe. The important point is that we will only be able to achieve this if we work together. No one country, no matter how strong or powerful, is capable of achieving this on its own. If the leaders and politicians of other countries want to bushwhack or intercept those who are attempting to achieve this, they will hinder progress and this is unacceptable.

Let me make one or two further points in relation to the impact of trade agreements on economies. I cannot understand why anyone in Europe would suggest that we should defer taking steps towards a single currency. Indeed, I cannot understand how a small country could suggest this. I put it to the House that it is in the interests of all member states to proceed as quickly as possible towards a single currency to prevent speculation which has caused much trauma during the past few weeks and months. The only way to "hand-off" the speculators, those greedy people who for whatever reason pursue weak currencies, is not by way of regulation but by removing the peaks and valleys which make it attractive for them to engage in speculation.

It is important and timely that we have agreements such as the ones before us today with countries outside the European Community. Without doubt it would be of benefit to the Community if these countries were to become full members. We should also examine the structures of the Community and ask ourselves if they are satisfactory or if they need to be streamlined.

It is essential in moving towards a united Europe, politically, economically, and socially that we have a single currency. Taken together they should lead to benefits far beyond what was envisaged by Europe's founding fathers, who had considerable foresight. The people who set Europe on its present course of integration are the people who experienced war, turmoil and disintegration within Europe. Based on their experiences, not necessarily in 1945 nor in the immediate preceding years but in the 40 or 50 years before them, they recognised that Europe's weaknesses lay in its internal division, and that by laying the foundations for a single Europe, not by denationalising people but by breaking down barriers and making way for greater consultation, discussion and integration, there would come a time when Europe would speak, think and act as one. That possibility still exists, but it will only be realised by a sharp reappraisal of the current trend whereby leading nations are talking openly about a two speed Europe.

I congratulate the Minister for introducing this motion, thereby giving us an opportunity to speak on this issue, and I wish the parties concerned every success.

I note the Minister left the House before he had the opportunity of listening to my address. He has been sitting here since 10.30 a.m. and he is entitled to a break. However, I intend to send him a copy of my speech least he misses anything.

The Minister has an able deputy.

Indeed, but Deputy Kitt is a constituency colleague of mine and I was particularly anxious that he hear my views. I would like to put on the record of the House that Democratic Left have not taken up their entitlement to speak. Perhaps this is due to fatigue at the end of a long week or perhaps it indicates something more sinister. Perhaps it is an indication that this party are no longer funded by and take their orders from Moscow and that they no longer have an interest in the affairs of Eastern Europe. However, I will leave it to them to comment on that.

I would like to refer to some of the remarks made by Deputy Durkan. He sought to widen the debate by commenting on the ECU. With the greatest respect to Deputy Durkan, the throwaway remarks he made on this subject were unworthy of him. The matter of the ECU is very serious and is worthy of a separate debate. There is something attractive about having a single currency and not having to change money. Deputy Barry makes great play of the fact that you lose out by having to change money every time you travel from one country to another, that it is a burden and only the banks benefit. These are valid points, but Deputy Durkan and Deputy Barry have missed the whole point about the ECU and European monetary union, that is, that by accepting a common currency we would be giving up the last vestige of control over the way we manage our money.

We have given it up already.

The Central Bank have some authority in this regard, albeit not very much, but in the event of European monetary union all authority would be lost. I accept the point made by Deputy Durkan about speculators. There will always be speculators and even with the existence of the ECU there will be speculation in regard to the dollar, the yen and so on. It is very naive of Deputy Durkan to think that European monetary union would put an end to speculators.

To revert to the motion before the House, the agreement will allow for Poland and Hungary to integrate their economies more closely with those of other countries in Europe. I would not stand in the way of the creation of closer links between Poland and Hungary and the EC in general. However, I would question whether they are right in this regard. As sovereign nations they have a right to make decisions as they see fit. East European countries experience great difficulties. I would differentiate between Russia and other Eastern European countries in that the bringing to an end of Communism will be less difficult for East European countries. Fortunately for them, they never experienced communism and State control to the same extent as did Russia. Nevertheless they have had, and continue to have, serious economic problems. In common with Russia they have a rising crime rate and increasing unemployment.

It sounds like home.

There are unacceptable methods of privatisation in East European countries, particularly in Russia. A great opportunity has been missed in these countries to have a cold, clinical look at the way Western countries handle their affairs. They seem to view us through rose tinted spectacles. They think that everything we do in the West, the way we organise our economic system and so on, is right, but that is clearly not so. There are many problems with capitalism in the West. While everyone in the House welcomes the demise of Communism, the free for all capitalism espoused in the West is not ideal.

It was of great disappointment to the Green Party although Green parties are emerging in all these countries and they are represented in most parliaments in Eastern Europe, that there has not been a sufficiently strong "green" influence to find a way of allowing for the conventional freedom enjoyed in the capitalist world and to protect the economic rights of the poor and the under-privileged. For example, a basic income could have been introduced in these countries whose social welfare systems are rudimentary. Some system was necessary to prevent people falling below the poverty line. Having studied the social welfare system obtaining in the Western world, with its poverty traps, inequities and bureaucracy, one would think these people would have decided that this system was not for them, that they would have adopted the more forward looking methods of the Green Party by introducing a system of basic income for all. However, this did not happen and they will inevitably repeat the mistakes we made in this area.

Another area which should be of great interest to us as a country which is still, to some extend, rural based, is land reform. The compulsory collectivisation of farms did not take place to anything like the same extent in Eastern Europe as in Russia. Let us be quite clear about this, there is nothing wrong with a collective or co-operative farm, it is just a bad word. What do we think of when collective farms are mentioned? A commissar giving orders and keeping everybody in their place comes to mind; that is exactly how collective farms worked in Eastern Europe and why they were wrong. Collectivism or co-operatism should be freely entered into. In this country we are a land of smallholders, which in many ways is a good thing, although we are now reverting to having larger estates which we succeeded in getting rid of in the late 19th century. Nevertheless, we should not stand in the way of co-operative effort. I should like to remind Members of the House of the very interesting Ralahine experiment in County Clare in the 1820s where a collective or co-operative farm operated very successfully for three or four years. An unfortunate series of consequences, outside the control of the co-operative, led to the demise of this very interesting experiment.

There is another way forward, apart from cut-throat competition, the weakest to the wall and putting your competitors out on the road with their wives and families. That is what capitalism in this country is all about. The way forward is through co-operation, the principle of a meitheal, which is still present in rural life but rapidly disappearing. These are just some thoughts on how Eastern Europe will come to terms with the West.

It used to be said by Left wing parties that the capitalist world exploited the environment because of the weight of big money and because it meant power over political parties. I am the first to admit that there is a good deal of truth in that but it is apparent that the converse is not true. When Eastern Europe was opened up to the media and when there was freedom of speech the appalling environmental depredation was clear to everyone. There is no correlation between an economic system and the state of the environment, the correlation is really in the levels of democracy. Although there are many defects in Western democracy and, as I have said, it is very much subject to the pressure of big business, public opinion in Western Europe demanded higher environmental standards. That did not happen in Eastern Europe until recently, hence the appalling environmental depredation which caused deaths and serious ill health to thousands of people in poland and Hungary, particularly in Poland.

Unfortunately, for quite some time to come, we will see sweatshops of all kinds setting up in Eastern Europe, paying very low wages. There will be tremendous exploitation as big business and multinationals move in. I can see many problems for industry in this country, much of our export led industry, which by its nature is mobile and fickle, will set up in Eastern Europe. I wonder if Waterford Glass will still be in operation this time next year. It is very doubtful: even if it is, it will be a much smaller operation. While we must welcome what is happening in Eastern Europe, for ourselves, the free world and the people of Eastern Europe, the road will not be an easy one. There are many problems but, on balance, it is to the advantage of the House to agree the motion.

Question put and agreed to.