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Dáil Éireann díospóireacht -
Thursday, 16 Dec 1993

Vol. 437 No. 4

European Council Meetings: Statements.

I attended the meeting of the European Council in Brussels on 10 and 11 December last accompanied by the Tánaiste and Minister for Foreign Affairs, Deputy Dick Spring, the Minister for Finance, Deputy Bertie Ahern, and the Minister of State with responsibility for European Affairs, Deputy Tom Kitt. Apart from attending the Council, I had the second of three meetings with Prime Minister Major in the margins. I reported on the overall outcome of these yesterday.

I would like to take this opportunity to pay tribute to the work of the Belgian Presidency, whose term of office ends on 31 December next, and which can point to a very solid record of achievement.

The discussion at last weekend's European Council concentrated on the economic situation in the Union with particular reference to combating unemployment. As Taoiseach, I have placed the need for co-ordinated action to retain and create jobs at centre stage in my approach to EU affairs.

The Commission's very substantial White Paper on Growth, Competitiveness and Employment received a unanimous welcome from the Heads of State and Government as "a lucid analysis of the present economic and social situation of the Union and a reference point for future work". The White Paper stated that there was no miracle cure for unemployment, but it pointed the way forward, and its policy prognosis was broadly accepted by the Council.

Taking the view that a joint approach will be the most effective way of implementing the White Paper, the Heads of State and Government decided on an action plan aimed at significantly reducing by the end of this century the currently unacceptable level of 17 million unemployed. This action plan has three main planks which are a general framework for the policies to be pursued at member state level, to promote employment; specific accompanying measures to be conducted at community level and a follow-up procedure.

The key aspect of the first plank is, the guidelines for economic policy broadly approved by the European Council and agreed by the Council of Finance Ministers on Monday last. These guidelines encompass a stability-oriented monetary policy, low inflation, curbing excessive budget deficits, and moderate incomes growth. This is the prescription to deliver low interest rates, thereby generating economic growth, without which we cannot achieve the required employment increases.

The European Council accepted the White Paper's view that getting the economic fundamentals correct is not sufficient, and that member states must be prepared actively to pursue structural measures to help create jobs. The Presidency conclusions sets out such measures, including improved education and training systems, greater labour market flexibility, economically sound reorganisation of work at enterprise level, targeted reductions in the indirect cost of labour, especially low-skilled work, with particular reference to statutory social contributions and better use of public funds set aside for combating unemployment through more active policies to help job-seekers.

The Government has taken decisive action in a number of the areas identified in the White Paper, for example, in regard to education and training. In other instances, the Commission's views accord closely with priorities identified in our Programme for a Partnership Government. The Government will carefully consider whether there are further policy changes that would help to improve Ireland's performance. We are fully aware of the obstruction which structural barriers to employment creation can pose. It is essential that the right balance be achieved between the need to foster social protection and the rights of employees and the need to create an environment conducive to employment creation.

One further theme in the domestic framework for job creation mentioned in the White Paper and the Presidency conclusions, which warrants attention, is the notion of solidarity between those with jobs, especially those fortunate enough to have a very high degree of job security, and those without jobs. Our conclusions rightly point out that one expression of such solidarity is to allocate part of productivity gains, on a priority basis, to investment and job creation, in particular through wage moderation. I also welcome the recognition by the European Council that there must also be solidarity across the regions in the context of economic and social cohesion.

The second plank of the strategy approved by the European Council is a series of Community measures. The Council decided on action to fully tap the potential of the Single Market, including the creation of a better environment for small and medium sized enterprises. In this context, the Council asked the Finance Ministers to adopt before the end of the year the system of interest rate subsidies amounting to 3 per cent for small sized enterprises decided upon at the Copenhagen and Brussels European Councils. The Council resolved in the infrastructural sphere to speedily complete the programme of trans-European networks in the transport and energy fields and to advance infrastructures in the key sphere of information. On funding, we agreed that the Union's main task is, by reducing financial risks, to support the decisive role of private investors. We noted that some 12 billion ECU per year both from the Community's budget and from the European Investment Bank and the European Investment Fund are available for this purpose. We agreed that additional funding will be provided as far as is necessary to lever the target investment and called upon the ECOFIN Council to study procedures which would enable the mobilisation of up to an additional 8 billion ECU per annum in loans for operators involved in setting up networks. The European Council stressed the importance of the research framework programme for 1994-98, in areas such as information technology, with a budget not less than 12 billion ECU.

These initiatives add up to a significant investment package with the potential for direct and indirect employment benefits for Ireland.

The third plank of the action plan provides for direct involvement of the European Council in follow-up on the action plan adopted, with an annual stock-taking of results, starting in December 1994.

This European Council placed jobs at the top of the European Union agenda, and has set out a realistic and credible plan of action. The Government will ensure that this country will play its full part in helping to achieve the employment goal set out in the action plan. Through the boost that it together with the successful completion of the GATT negotiations will give to the European economy, it should help significantly to reduce our own unacceptable level of unemployment.

Our meeting took place as the negotiations on the GATT Uruguay Round were reaching a conclusion. I greatly welcome the successful conclusion of these negotiations which will certainly, over time, give a tremendous fillip to trade and economic growth internationally. Estimates of the global welfare benefits vary but they are generally in the range of $200-500 billion annually.

As a country very dependent on trade, Ireland will be set to make a significant net gain. A study commissioned from consultants estimated that the net annual gain in output to the Irish economy would be of the order of IR£1.7 billion and that the direct employment gain would be in excess of 20,000 people. Those estimates depended on a wide range of assumptions and have to be regarded as orders of magnitude. They were net of foreseen loses for Ireland. The result will also be good for consumers in the long run.

The consultants' assessment was based on the Dunkel draft Final Act of 1991 and the original, unmodified form of the Blair House Agreement on agricultural trade. Since the estimates were made some months ago, there have been very significant amplifications of the Blair House Agreement which make the modified agreement less problematic for Ireland. There have also been significant improvements, in other areas, on the draft Final Act. Thus, the effects on Ireland will be considerably more favourable than the consultants' assessment.

Quite significant improvements to the Blair House Agreement were secured in the course of the recent negotiations between the European Union and the US, gains which have now been multilateralised in the final GATT outcome in Geneva. The concern about front-loading of commitments in regard to reductions in subsidised exports has been met by agreement to change the base from which the reductions are to start. The revised arrangements mean that over the full implementation period, the Union will be able to export substantial additional amounts, as compared to the unmodified Blair House Agreement. These additional amounts include 362,000 tonnes of beef, 102,000 tonnes of cheese and 44,000 tonnes of other dairy products. Irish exporters will be able to avail of these quantities on the same basis as all other EU exporters, and it is for the Irish interests involved to secure the maximum amount of this additional business with the support of export refunds. These arrangements, coupled with a start date of 1995 for the new GATT arrangements, should also enable the Community to make significant progress in disposing of accumulated stocks.

In addition, the duration of the peace clause was extended by three years, to a total of nine years; continuation of this clause will be included in the overall review of the agreement which is to commence in its fifth year. On another important European concern, that we should be able to participate in the normal growth in world trade in agricultural products, the agreement is that the US and the Commission would consult annually. The US also accepted the EU position on market access, something that is very important for Ireland, as well as other aspects of the European position. The position on South East Asia markets for beef was that the European Union can discontinue at any stage on a unilateral basis the Andriessen understanding, which excluded the European Union from those markets. It is not and was not part of GATT. In return for these concessions, the European Union agreed to grant only limited further US access to some agricultural products.

At the European Council, we secured further important commitments on the implementation of GATT within the Union. It had always been the Government's position that commitments in a GATT agreement should be compatible with the reformed CAP; and that implementation arrangements within the Union would have to take into account both the relative importance of agriculture in the economics of the different member states and also the Treaty provisions on economic and social cohesion.

At the meeting of the European Council, I put our position on these matters strongly on four separate occasions. In the guidelines adopted by the European Council for the conclusion of the round, we took note of the Commission's prognosis that the emerging GATT agreement was compatible with the reformed CAP. It will be several years before the actual outcome on this is clear.

Our conclusions state that if additional measures were to prove necessary they should not increase the constraints of the reformed CAP, nor affect its proper operation. It was further agreed that the Union would take the requisite steps for the application of the reform, while respecting the financial decision of the Edinburgh European Council. Thus, there is a basis for obtaining compensation for producers, if any steps were to be taken beyond those under CAP reform.

Overall, the European Union has been remarkably successful in retaining the essential elements of the Common Agricultural Policy, especially when at one stage the US was seeking a 90 per cent reduction in European exports benefiting from export refunds.

In the area of the Common Foreign and Security Policy — CFSP — the European Council had successful discussion in three areas. The common factor in each case was the willingness to bring the influence of the European Union to bear in a sustained and coherent manner on the shaping of external events.

First, the European Council decided to launch the diplomatic process which should lead to the adoption of a "pact for stability" in central and eastern Europe. This is an exercise in preventative diplomacy aimed at avoiding unstable situations which could lead to conflict in the future.

Secondly, the European Council had a detailed discussion of the Bosnia negotiations which began in Geneva on 29 November. Last Saturday's declaration from the European Council is both firm and detailed. It considerably narrows the room for manoeuvre of the parties, and especially of the Serbs, if they hope to have their good faith accepted by the European Union. As a further encouragement, the parties have been invited to meet the Council in Brussels on 22 December.

Thirdly, in relation to the Middle East, the framework for joint action agreed at the European Council is an overview of the political steps and concomitant economic measures to be taken in support of the Middle East peace process. I indicated to the chairman of the PLO, Yasser Arafat, this morning that we would strongly support, through the European Union and bilaterally, aid and other measures necessary to underpin the stability of the new arrangements for the Palestinian people arising from the accords with Israel.

There was also discussion at the Council on the place of the applicant states in the institutions and my colleague, the Minister of State with responsibility for European Affairs, Deputy Kitt, will deal with this aspect in his reply.

My assessment of the meeting is in line with a very widespread reaction in the media across Europe, that it was a workmanlike Summit that set out a worth-while programme of action that with the major bonus of a GATT agreement, should provide a major injection of confidence into the world and European economies, with consequent benefit for all, starting in 1994. For Ireland and its people, it has, therefore, been a good week's work, in the economic, as in the political, sphere.

What is the position in regard to the National Development Plan? As the Taoiseach is aware, the new Structural and Cohesion Funds come into effect on 1 January 1994, and to my knowledge our plan has not yet been approved. When does the Taoiseach expect the plan to be approved?

I want to raise a number of queries in regard to whether our plan complies with the EU rules laid down for such a plan. The Union's regulation of 20 July in regard to the principle of additionality states that the proposed EU expenditure may not replace public expenditure on structural or comparable expenditure and that the member state should provide relevant financial information to the Commission at the time of the submission of its plan to show that is the case. The Government's plan does not contain anything to show it complies with that EU regulation. Furthermore, I am concerned that it does not comply with the rules set down by the Community in regard to money spent by the European Social Fund on human resources.

In Article 4 of the relevant regulations it is stated that in the plan the Irish Government must supply figures concerning imbalances between demand and supply in employment, including female employment, the nature and characteristics of unfilled vacancies, employment opportunities which exist on labour markets, the types of measures to be implemented and so on. I read the relevant part of the Irish plan as submitted to Brussels and it does not comply with those regulations. It does not contain such detailed figures.

The Government decided to include provision for the building of a hospital in its plan. The relevant regulation of 24 June 1988 states that investment under Objective 1 must contribute to increasing economic development or structural adjustment of the region concerned. I understand that the Government's inclusion of the building of a hospital in its plan has been queried by the EU. I understand also that there is a query in regard to the procedures the Government proposes to adopt in regard to environmental protection and its various investments in that regard. Therefore, to my knowledge there are at least four main areas under which the plan is being questioned. First, it has not supplied the necessary figures to prove additionality; second, it has not complied with the regulations in regard to the operation of the labour market; third, it has not complied with the environmental regulations and, fourth, the inclusion of a hospital is being questioned. I want to know if that is true and whether the plan will be revised. If the plan has to be revised it will involve another launch, Dáil debate, and press conference in Dublin Castle. If this is not the real plan we wasted a great deal of time in this House. Is this the real plan, will it be approved and will we receive the £7.2 million, or less? I understand there is a doubt about the figure of £7.2 million at this stage.

The Summit communiqué states that the rules on competition and control of State aid must be applied vigorously. I am particularly concerned that is not happening and that Ireland is losing out as a result. There is no way we, through the IDA, can compete with what the Germans can offer in an industrial location in North Rhine Westphalia or Hamburg or with what the Dutch or British can offer in regard to various areas, because they have more financial resources than we have. It is vital that the rules are properly enforced to prevent over-bidding of poor countries by rich countries in regard to industrial investment. That is not happening at present and declarations such as those contained in the Summit communiqué have been adopted many times before with no effect. I would like assurances from the Minister of State who will reply to the debate that this time it will be different.

I was very enthusiastic about President Delors' proposals for major infrastructural investments and I regret the Summit did not agree to give him the right to issue European bonds to finance that. It is regrettable the Commission is not being put in the driving seat in regard to such major trans-European networks and that it will be left to the member states to apply to the European Investment Bank on an ad hoc basis for funding for individual projects. That is not good enough. For example, less than half the money agreed at the Edinburgh Summit one year ago has been taken up and I am concerned the same will happen in this case.

I am disappointed also at the Community's response at the Summit to the drugs threat and crime problem on a worldwide basis. There is a proposal to set up a Europol drugs unit and we are told there will be a comprehensive anti-drugs strategy with the possibility of renewing the existing tariff preferences for Andean countries.

The drugs problem and the ensuing violence is posing a major threat to European civilisation. The Loyalist terrorist organisations in Northern Ireland are already heavily involved in the drugs trade and if the IRA continues its campaign — please God, it will not — I have no doubt that it will get involved in the drugs business also to finance its operations. Drugs are at the heart of violence in Europe. Yet, even though there is a crying need for action, this issue is not being addressed by the European Union on a European basis, rather it is being dealt with under the token part of the Maastricht Treaty relating to intergovernmental action under which Governments can agree to declarations and do little about it. Responsibility in the war against drugs should be transferred from departments with responsibility for home affairs and given to the Commission to deal with the issue on a federal basis and ensure action is taken.

There is no better example of the ineffectiveness of the intergovernmental approach to justice matters than the record on asylum policy. The Government is breaking EU law by failing to enact legislation dealing with refugee protection. This is causing acute embarrassment for our Commissioner, Mr. Flynn. He has told me he is embarrassed by the fact that the one Government not acting in this area is the Government of the country which he formerly represented, namely, Ireland. The fact that we are so far behind in implementing legal changes in this area shows that in the justice area one cannot leave the matter to member governments.

The same could be said about money laundering. In recent times the Minister for Justice trumpeted that she was dealing with this problem as part of her campaign to tackle the crime problem but she failed to point out to the House that we have been in breach of European law for the past two years for not implementing this legislation. Despite the fact that we are two years late we are taking the credit for implementing that legislation just as eventually we will probably take the credit for making provision for refugee protection three or four years late. This shows that national civil services do not work. On the issues of refugee protection and money laundering our Civil Service and Government did not work. It is essential therefore that responsibility for dealing with the drugs problem should be transferred to the European Commission to be dealt with on a Community basis under the first pillar of the Treaty, not the second.

I would like to refer to the stability pact to be implemented under the heading, foreign and security area — the so-called Balladur pact. Eastern European countries are not happy with this; they see it as a sop in keeping them out of NATO. Europe does not want them; it does not want their imports of fruit and food, rather it wants to give them some money to keep them quiet. It does not want to include them in any security arrangements under which they would have real guarantees. They are not going to be admitted into NATO and, in turn, the Balladur pact is being thrown at them as a sop.

This so-called stability pact will not be underpinned by any institutional arrangements. It will duplicate the work done by the CSCE, the Council of Europe, NATO and the Western European Union. It will be a new body but without the ability to do anything about any problem. Essentially, what the countries in Eastern Europe are being told is that we will do just as much about any problems they may have, particularly in Russia now that it is more of a worry as a result of the new political landscape following the recent elections, Lithuania, Estonia and Latvia, as we did in the case of Bosnia which was not much. The Balladur pact is a sop; it will be a big meeting to be held in Paris where all the meetings which lead to little take place——

It is a lovely city.

That is about it, it has a soporific atmosphere. The people from Eastern Europe will hear many speeches but will be given precious little assistance to deal with a threatening situation. The right in Russia is, apparently, in communication with the right in Germany and both are in the ascendant while Poland feels extremely threatened. What is Europe offering them? Europe is offering the Balladur pact which amounts to nothing. Europe is not as safe a place as we might like to think and I do not think this Summit represented an adequate response.

We should not console ourselves by saying, "well, it could never happen"; some things have happened which no Member expected. I remember objecting to a trade deal with Russia in this House when I raised the question of Latvia and Lithuania and a Member now present made fun of it — those places did not count, they do now. Things can change and we should not assume that they necessarily change for the better.

I am disappointed with the provisions relating to agriculture. In his speech the Taoiseach mentioned compensation for farmers for the losses which have definitely accrued as a result of the GATT deal. The relevant addendum to the minutes of the Council, which I read, states:

If, however, additional measures were to prove necessary the Council agrees that they should not increase the constraints of the reformed CAP nor affect its proper operation.

There is no indication of any commitment to provide additional money. So far as I am aware, there is no room for additional expenditure on compensation for farmers. It is obvious that the Taoiseach who may have tried to secure such a commitment in Brussels failed because there is no indication of any firm commitment to provide compensation in the Summit declaration. The time to secure this was before the deal was struck when the Taoiseach was in Brussels. I am afraid that it is now too late and this will prove to be a major disappointment.

I would like to refer to the commitments that the European Union gave in Rio de Janeiro in regard to the environment. It seems that the proposed carbon tax is dead in the water and going nowhere with the result that Europe will be unable to fulfil the commitments it gave in Rio de Janeiro in regard to global warming. It seems that Europe's leaders have no replacement strategy in mind in regard to the commitments given at Rio de Janeiro in relation to the environment now that the carbon tax seems to be going nowhere.

I would like to refer to the Government's shabby performance in regard to the regional committee established under the Maastricht Treaty. The fact that we could appoint nine people to this body when we do not even have regional bodies from which to appoint them indicates that we want to send nine extra politicians on the expenses trail to Brussels where they are not representing anyone or, indeed, any entity. Neither do they have any commitment to regional development in Ireland. This reflects anxiety to send a few more Fianna Fáil and Labour Party politicians on frequent trips to Brussels so that they can draw their expenses and enjoy a few good meals.

The significance is obvious when we see that four members of Fianna Fáil, three members of the Labour Party and one member of Fine Gael have been selected. Not one member of the Progressive Democrats or the Democratic Left—

The figures are six Fianna Fáil, two Labour Party and one Fine Gael. This represents a figure of 70 per cent.

They are all in a haze on the other side of the House and gradually merging into an indistinguishable dough.

That is the operative word.

The recipe is equally indigestible no matter how one mixes it.

The Deputy's tie is very colourful.

I hope the Minister of State's reply will be adequate.

It will probably be colourful also.

He is a colourful character.

Will he deal with Eastern Europe?

I am also disappointed with the White Paper produced by the Commission on employment. I will quote from it: "Between 1970 and 1992 the US economy grew in real terms by 70 per cent, somewhat less then the Community's growth of 81 per cent. Yet employment in the US rose by 49 per cent compared with only 9 per cent in the European Community". That is the crucial conundrum, the crucial question that this weighty tome poses. Those who are looking at it can see that there is print on both sides of these pages.

I hesitate to interrupt the Deputy but I must do so in order to advise him his time is almost up.

I have almost come to a conclusion. This White Paper, long as it is, does not explain why the performance of Europe is so bad. It does not analyse it properly and does not come up with answers.

I want to refer to another matter that was dealt with in the Summit, that is, the situation in the Middle East. I have had the opportunity of meeting Chairman Yasser Arafat of the Palestine Liberation Organisation today, as have other Members of the House, and there are three things he is concerned about that were not dealt with at the Summit. First, Israel appears to be revising understandings in regard to the boundaries of Jericho which is the proposed Palestinian State. They are also proposing essentially to retain the principle of "hot pursuit" into the Palestine-controlled area. We certainly would not accept hot pursuit by British troops into this State from Northern Ireland and I do not see why the Palestinians should accept it any more than we would. Finally, the entries to the area are to be controlled not by Palestine but by Israel rather than an international force of any kind. I hope those three issues will be dealt with more adequately at European level and that the Minister will be able to give us some assurances on these points when he is concluding.

I do not believe this Summit has measured up to expectations and the main reason is that the Maastricht Treaty is wholly inadequate. It is not adequately federal; it does not provide federal methods for dealing with the three issues people want dealt with in Europe — unemployment, drugs and crime.

The European Council meeting on 10 and 11 December was attended by Ireland, and the report given to this House by the Taoiseach is a testimony to the poor performance of the Irish Government on issues of central importance at that Council meeting. It is, of course, welcome that the European Community should address itself collectively to the issue of unemployment and that in the White Paper there was some evaluation by the European Union of its failure in creating jobs in the last decade or so. That apart, merely talking about or issuing papers on the question of unemployment will not suffice.

The Taoiseach's approach to reporting to this House what happened at that Summit is complacent, smug and completely inadequate, bearing in mind this country's particular problems in relation to unemployment. I need not point out to this House that we have one of the highest unemployment rates in the European Union and that this Government has done nothing substantial to counter that except fiddle at the margins in relation to the definition of unemployment and use social welfare changes and the like to deflate figures artificially and manipulate statistics with a view to preventing an explosion from being perceived by the public.

If things go on as they are over the period of the National Economic Plan, and if emigration does not provide a safety valve for our economy, the unemployment rate will up towards 400,000. That is a fact, and there is nothing in the activities of this Government which indicates any willingness to confront the issue. It is a sad irony that the Taoiseach should report to this House on the unemployment proposals of the European Union and ignore what the Council meeting decided ought to be done at national level about it.

The fourth decision in principle as to a method and a strategy for tackling unemployment on a national level was to deal with the tax wedge. In Euro-speak, targeted reductions in the indirect cost of labour's statutory contributions and particularly of less skilled work in order to achieve a better balance between the costs of the production factors, fiscal measures possibly relating, inter alia, to the environment, could be one of the means of offsetting a drop in social contributions within a general context of stabilising all statutory contributions and reducing the tax burden.

That is the most important central issue as far as this economy is concerned. Let us put on the record yet again, because it always has to be repeated to the Labour Party in particular and to Fianna Fáil, that since they came into Government they have increased the tax wedge, despite the fact that they are paying lip service to the Culliton report analysis that the tax wedge is the single greatest area for potential improvement in employment in this country. The Fianna Fáil-Labour Coalition, in its first budget, increased taxes on work.

The effect of the 1 per cent income levy was effectively to drive up the lowest rate of taxation by 2 percentage points, from 27 per cent to 29 per cent in real terms. This was deliberately done by a Government of all the talents, this new broom that was to sweep clean. This was done by the group of dewy-eyed idealists who met in the National Concert Hall and told us that a new era was at hand. What did the Labour Party do with its first grasp of the levers of power in this community? It slapped taxes on work and drove the tax wedge further into the heart of the economy. That is what the Labour Party did. That is what this Government stands for. Now we have pathetic bleating from the Minister for Finance that he cannot afford to undo the damage he did in his last budget.

What is all this expenditure aimed at? It is not aimed at the little frills of wasteful public expenditure that we have seen. It is aimed at creating a ramp of tax-and-spend policies which is designed to sustain Fianna Fáil and Labour popularity in the country. We have suffered enough high taxation on work. This country has been told by every independent body that has ever examined it from outside, and by every independent body that exists inside, that if we do not tackle the tax wedge we can kiss goodbye to even approaching any kind of solution to unemployment.

The European Union Council has a meeting on the subject and it determines that national measures must be taken to tackle unemployment. But the Taoiseach comes back in a waft of euphoria because of what he has done in London. He comes before this House and does not even mention his own national and governmental responsibility in relation to unemployment. The time has come to stop accepting Government waffle about unemployment. If the Government is concerned with unemployment and really does believe that the tax wedge is the problem, let us see some action in the next budget. If this budget does not begin a radical transformation of a pro-employment pro-jobs kind in our tax system then the measure of this Government and the extent of its failure will be apparent for all to see.

We are now in a position to draw some preliminary conclusions about the tendencies of this Government. This Government is one for optics and PR trickery, but when it comes to the basic fundamentals on which we have been expertly advised, both externally and internally, as to what we must do to tackle the root causes of unemployment in the economy, we find that this Government not merely has done nothing but has actively worsened the situation. I do not apologise to anybody for dealing with employment in terms critical of national measures here because the European Council zeroed in on the national measures that must be taken.

I have to part company with Deputy Bruton on the proposal that the European Union should develop a competence in borrowing money and spending it on major infrastructural products in order to boost employment. The convergence criteria of the Maastricht Treaty in relation to a single European currency and the restrictions placed on national borrowing in that context should not be exchanged by the European Union for Keynesianism on a global basis. Our experience is that the European Union is a poor evaluator of investment projects and that, at Commission level, it is not in a position to get good value for money or a good return on investment. Some kind of new competence in borrowing and Keynesian economic intervention by the European Union is not the answer to our problems. We have seen on a nation by nation basis the folly of that policy and doing the same things collectively will not prove to be any more efficient in delivering jobs. It will be less efficient. I beg to differ with the analysis of Deputy Bruton in relation to that. Borrowing on a Commission level will not help us in the slightest.

I agree with Deputy Bruton about the European drugs issue. The EUROPOL initiative is completely inadequate to deal with the problem which Europe is now experiencing in relation to crime, organised crime and the drugs problem. The time has come for this country to take an initiative in that regard. Recently, the seaways off our coast have been used to bring drugs into this country and, thereafter, into other EU member states. Ireland should propose, at international level, the establishment of the equivalent of the US coastguard by a European agency and we should be willing to participate in and provide bases for such a service. I am sure the Irish people would accept this. We should take an initiative and propose at European level that the equivalent of a coastguard service should be established on the Mediterranean and Atlantic coasts of the European Union and this country should indicate its willingness to play a full part. There would be spin-offs in terms of employment and training of young Irish men and women to participate in such a service. The time has come for the Government to take an initiative on that front rather than hoping that an agency such as EUROPOL will deal with the drugs problem. It is evident that what is happening off our coasts is as a result of a vacuum in security for which we are partially to blame. If it were not for the vigilance of a French trawler captain the largest catch of drugs that has ever been seized in European waters would have gone unreported and would probably have been imported later into the European Union.

The Summit on which the Taoiseach reported to the House was one in regard to which there was a good deal of talk, but little decisive action was taken. It is welcome that the employment issue was discussed. It is better that it should be talked about than that it should be the matter of a respectful silence. In order to match the performance of the European economy with the American economy the fundamentals which stand in the way of employment creation within the European Union must be addressed. How could we talk about labour market flexibility when last week this House passed a Bill placing on employers, irrespective of their size, yet another bureaucratic requirement to furnish employees with statutory information? How will that requirement work in a factory or workshop employing five to ten people? It is an additional layer of bureaucracy which is not designed to bring about labour market flexibility. It is designed to make the activity of employment all the more difficult. It is time that we began to look to freeing up labour practices, as the Union's communiqué suggests, there is no willingness on the part of the Government to tackle inflexibilities and obstacles to mobility in our labour market. The Government is committed, wherever possible, to driving up the tax wedge. The thrust of the Government's policy is in direct contravention of the recommendations made for action at national level by the Union members states. The Taoiseach's speech was effectively an annotated set of minutes of a Council meeting which any Member who was slightly interested would have found more concisely covered in the Presidency Conclusions which have been published and circulated, even though they are in "Euro-speak" and the Taoiseach's speech is in "Taoiseach-speak".

Nothing has been said in this House which gives any Member any basis to trust or hope that this Government has finally decided to face the unemployment issue. The issue does not relate only to the tax wedge. There are three parts to the drive against unemployment. First, is the issue of tax, social insurance and the poverty trap and second, the issue of the remainder of the Culliton agenda which relates to the thrust of industrial policy and freeing up the current obstacles to economic growth here. Very little has happened in regard to those issues. Third, unemployment must be dealt with in a manner which is radical and inclusive.

We must forget about the idea of economic exclusion of those for whom the market fails. We must replace unemployment exclusion by a system of community employment for those who are in long-term unemployment. From a number of points of view it is essential to have an inclusive response to the unemployment problem which has now grown to its present proportions. It is essential to say to people whom the market has failed that the State will assist them in participating in the economy rather than compensate them on a human set-aside basis for being excluded. People in the suburbs of this city are faced with massive poverty traps which do not make it worth while for a person who is married with four children to take a job at less than the average industrial wage. We must give those people an opportunity to participate in the economic life of the country for a number of days each week and complement their earnings by allowing them the liberty to work in their free time.

I do not condemn anybody who, trapped on present welfare levels, does something in his or her free time to crawl out of the trap, even if it is a technical breach of social welfare regulations. Somebody who is in that position must do something to help themselves. I make no moral judgement on them but I make a firm and stern moral judgement about a Government such as ours that promised so much so recently and has done everything possible to implement policies opposite to the political goals it has set itself. The Taoiseach's account from the report from the European Council meeting in Brussels is a monument to smugness and complacency and is something which this House should firmly reject.

The European Summit in Brussels was billed as a jobs summit. Employment, we were told, was to be top of the agenda. Delor's White Paper, so eagerly awaited, would point us on a new path; the European Union was determined to create 15 million new jobs by the end of the century; things were about to change; the socially excluded would be brought in from the margins. The high hopes culminated in a fudge; a missed opportunity wrapped in the familiar Eurocratic jargon which says little and means less. Seventeen million people queueing for a living throughout the European Union were once again left wondering when their turn would come.

In the final commmuniqué, the statement of 15 million new jobs to be created by the end of the century was replaced by a mere aspiration to provide employment for "most of the 17 million unemployed in the Community", an unobjectionable aspiration, but one which gives little hope to those likely to lose their jobs next year or the year after, or to European schoolleavers entering the labour market.

Jacques Delors has predicted that 30 million Europeans may be unemployed by the end of the decade. A mere aspiration to provide employment for most of those currently out of work gives little hope to our young people whose increasing apathy and cynicism is manifesting itself in political extremism and social instability throughout the Union.

At the Copenhagen Summit in June Jacques Delors produced some radical and far-reaching proposals which, while not perfect, would have helped inject a much-need shift of emphasis into our economy. At Copenhagen Delors proposed a fundamental tax reform, shifting the tax burden away from labour to taxes on energy, natural resources and consumption. My party has long demanded such a fundamental shift, arguing that only by reducing taxes on labour and increasing taxes on pollutants, energy, non-renewable resources and the profits of consumption can we hope to preserve the environment and create sustainable economic growth and jobs. The proposals put forward in draft form at Copenhagen deserved serious consideration, but Jacques Delors was beaten by the combined forces of political apathy and neo-liberal orthodoxy, the latter ably represented by John Major and his Chancellor of the Exchequer.

While lip-service was paid to the needs of the environment — are we not all green nowadays? — the final communiqué omitted any mention of a CO2 tax, confining themselves to mentioning the Objectives of the Rio Convention. As Deputy Bruton pointed out, unless we deal with the question of CO2 tax the objectives of the Rio Convention will not be met.

Nevertheless, although Jacques Delors proposals have been considerably watered down, I welcome some of the conclusions emerging from this Summit. The so-called Eurobonds, if properly used by member countries, could have a positive impact on job creation. European funding is only as good as the policies of the countries concerned, and the Irish experience in this regard has not been a happy one. I would welcome a statement from the Minister for Finance as to whether he intends to draw on the Eurobonds, and what projects he envisages financing from this source.

In Copenhagen Jacques Delors emphasised the need for an efficient, ambitious and well-targeted research programme, properly funded at both national and Union level, and I am delighted that this proposal made its way into the Brussels Summit conclusions relatively unscathed. The research programme from 1994 to 1998 is to be funded by a minimum budget of 12 billion ECU. The potential benefits to Ireland of this programme are enormous, and I hope the Government will do everything in its power to strengthen our research and development programme which has been sadly underfunded to date. We have just recently seen the concrete benefits of science and technology parks such as that at Plassey; the programme announced last weekend provides the potential for more such initiatives.

I am also delighted to see the importance attached to the role of small and medium enterprises, and the establishment of an interest rate subsidy system of SMEs. I hope the Government will reflect these measures in its own policies: small businesses rooted in the community are vital to our economy and to job creation, and they deserve more attention than they have received.

I am, however, especially worried about some of the Summit's conclusions regarding the labour market. References to improving flexibility within enterprises and on the labour market by removing excessive rigidities resulting from regulation are hardly reassuring for Europeans who already see their social protection under threat. A de-regulated labour market generally equates with low pay and a minimum of social protection, hardly a recipe for either a healthy economy or a healthy society.

When reading the Presidency conclusions, I was reminded of much of the verbiage in our national plan. The information, motivation and guidance of job-seekers has a nice ring to it, but is of little use when there are no jobs at the end of it. Training, emphasised in the Summit proposals, is both economically necessary and socially desirable, but all too often ends in schemes which are a poor substitute for real, sustainable employment.

With unemployment across the Union predicted to reach 20 million next year, and up to 30 million by the end of the decade, it remains to be seen whether the decisions taken at the summit will result in the necessary job creation. I fear that the end result will be one of containment or, to use the odious phrase, maintaining unemployment at an acceptable level.

Our economic fortunes, both nationally and at European level, are closely tied up with the monetary policies pursued by the Union, and in this context I was surprised to read in the Presidency conclusions that, "the European Council note with satisfaction that all the conditions are fulfilled to allow the second stage of European Monetary Union to start effectively on the agreed date, i.e. 1 January 1994." What of the currency crises and near crises experienced during the past 18 months? It seems they have been airbrushed out of the EU's collective memory, and with them the need for regulation and controls on the money markets.

Democratic Left has argued for the introduction of a transaction tax to inject some element of risk into the profitable business of currency speculation. This concept is gaining wide support throughout the Union, one which could profitably be considered by the Council and one which should be promoted by the Government given that we were one of the victims of this horrendous crime in the past 18 months.

While the economy took centre stage last weekend, there were a number of side shows, some played out in the glare of publicity, such as the GATT negotiations. With regard to GATT, Democratic Left welcomes the declaration that any compensation for the loss of farm export subsidies would not be permitted to exceed the ceiling placed on the CAP budget. European taxpayers and consumers are already weighed down by agricultural expenditure and subsidy, and we cannot afford any watering down of the hard-won CAP reforms.

Democratic Left has supported the conclusion of a world trade deal, and we believe that the agricultural element of the deal will in the long term benefit the Irish agricultural and food industry sectors, leading to diversification and a more market-oriented production. The shadow boxing which occupied the national airwaves over the past months largely ignored the real benefits of GATT as well as the real dangers.

The national discourse on GATT concentrated on the agricultural element to the exclusion of other aspects equally vital to our economic interests. In particular, the textiles element could have adverse consequences for that sector. It was therefore amazing to note that, while our Government scrambled onto the French bandwagon with regard to farm export subsidies, we did not follow the Italian lead in pressing equally vocifereously for a modification of the textiles element. Of course, as was evident at the time of the VAT hike, the textiles industry does not constitute nearly as powerful a lobby as farming interests.

The debate on GATT was largely uniformed, which is no surprise, since the Government chose not to publish the vital Fitzpatrick report at the time, despite repeated demands from many quarters, including Democratic Left. Strangely, it appeared in this morning's post to all Deputies the day after the GATT was signed.

Very useful.

Extraordinarly useful. No less important than GATT were the discussions and resulting conclusions in the areas of justice and home affairs. I welcome certain steps, such as the immediate start-up of the EUROPAL Drugs Unit and — I accept the comments of other Opposition spokespersons that it is anything but adequate, but nevertheless it is an advance — and the application of a comprehensive anti-drugs policy. Increased European co-operation to combat drug-trafficking is vital if we are to apprehend the packages of death; the hard drugs being continually unloaded at our ports and airports.

In this context also I welcome the statement that the Council will consider the possibility of renewing the existing tariff preferences for Andean countries and I urge the Government to push for such a renewal. The drug problem is, after all, rooted in economics at both ends, the poverty of the small peasant producer and the poverty of the addicts, both richly rewarding the middleman.

However, I have serious reservations about the application of common policies in regard to asylum seekers and illegal immigrants. There is a thirteenth member of the European Union who had no seat at the table last weekend. That thirteenth member is made up of those countries which did not acquire that much vaunted European citizenship on 1 November.

Racism and xenophobia are on the rise throughout Europe. The basic rights of emigrants, whether legal or illegal, are under attack in countries such as France and Germany.

The Deputy has two minutes left.

I thought each speaker had 15 minutes.

I understood I had five minutes left.

Each speaker has 15 minutes.

I started at 5.30 p.m.

I am afraid our views of the Deputy's commencing time vary slightly.

Be generous, A Cheann Comhairle.

In view of the time of year, I will be.

Thank you very much. As I was saying, the right to asylum, a basic right which defines civilised society, is under threat throughout the European Union. Some countries such as Germany have recently adopted draconian new asylum laws which are likely to send thousands of refugees back to their homelands to face an uncertain future, or indeed no future at all. Of course we in Ireland have yet to see the asylum legislation promised by our Government.

I want to refer briefly to the Bosnian conflict. The European Union's declaration on the former Yugoslavia gives little hope to those facing another winter of discontent, hunger and death in that troubled region. While I welcome the European Union's determination to ensure the convoying of aid, the people of the former Yugoslavia demand and deserve more than mere palliative measures — they deserve the wholehearted political commitment of the Union, a commitment which should go beyond mere pious aspirations and which must realise that centuries old ethnic conflicts will not be resolved by simply imposing an ever tighter ring of sanctions.

At this stage I believe the arms embargo must remain, but it must be accompanied by protective and innovative initiatives to find a political solution to the conflict, a solution which reconciles different aspirations and which at all costs must avoid legitimising the acquisition of territory through force. Nearly 50 years after the Second World War ended the European Union cannot afford to endorse such a dangerous precedent. It is becoming clear that there are increasing tensions between European Union Foreign Ministers and Lord Owen to the point where a press conference due to be held by Lord Owen at the Summit, was, I understand, abruptly cancelled. I would have serious reservations regarding Lord Owen's approach to the conflict. It is vital that a mediator be seen as impartial by all parties concerned, and this is clearly not the case.

I would have welcomed a commitment by the European Union to take more refugees from the former Yugoslavia. Although we have taken some refugees, our record in that regard is abysmal. A few months ago members of the Union indulged in an undignified scramble to take medical refugees when their plight was highlighted by the television cameras. However, ordinary refugees, those individuals whose mundane fate does not make exciting copy, have been forgotten by the media and governments.

Since the precipitated recognition of Croatia, the European Union's handling of the conflict in the former Yugoslavia has been marked by ineptitude and bungling. Too little, too late has been the unspoken motto. The declaration appended to the Summit conclusions gives little cause for optimism.

The Taoiseach has given a detailed outline of the main issues which were considered at the European Council and I will concentrate on a small number of particular points which need to be stressed and which also relate to some of the points made by the Deputies opposite.

The outcome of the meeting was satisfactory. The European Union is putting behind it the difficulties which had affected it since the first Danish referendum during the summer of last year. In recent months we have made progress in a number of important areas. The Maastricht Treaty has finally come into force and we can now start to implement its provisions. The GATT round has been completed, with all that this implies for the revival of confidence in the world economy. The negotiations to enlarge the European Union have entered their final stage——

May I ask why the Minister has come into the House with a prepared script rather than replying to the points made during the debate? He is not treating the House with respect by coming in with a prescripted document which was obviously written three or four hours before the debate even began.

Deputy Bruton will know that that is not a point of order.

The Minister is not treating the House or the Opposition spokespersons with the respect they deserve.

I listened carefully to what the Deputy and other speakers had to say and I can assure them that I will reply to the points raised.

As I was saying, the negotiations to enlarge the European Union have entered their final stage and the member states have made a commitment to have them completed by March. Finally, we have recognised the vocation for membership of the Union of the countries of Central and Eastern Europe, thus helping to underpin their reform programmes and contributing to security in a region whose stability is vital to the Union. I am under no illusions as to the most fragile nature of this return of confidence. Difficult issues remain to be resolved in the enlargement dossier.

All of the Deputies referred to unemployment. It is most important that the Union shows its capacity to deal with the most challenging task facing it at present, that is, the vital necessity to deal with the problem of unemployment. As the Taoiseach reported to the House, the European Council made a start in addressing this issue. The success of the Union's policies will be judged on its capacity to alleviate the misery caused by growing unemployment. The fact that last weekend's meeting devoted most of its deliberations to the issue of unemployment is a sign that it is being seriously addresed at European level.

I would now like to make some specific comments on three aspects of the Council's deliberations, some of which impinge on the points made by the Deputies opposite. I will come back to the detailed questions raised by Deputy Bruton in regard to the National Development Plan. I would like to deal first with the Common Foreign and Security Policy, referred to by some Deputies. The Taoiseach touched on this subject and I would like to elaborate on the Council's conclusions in this regard for the benefit of the House.

The full text of the conclusions has, of course, been laid before both Houses of the Oireachtas. One of the major consequences of the coming into effect of the Treaty on European Union is the replacement of traditional European Political Co-operation by the Common Foreign and Security Policy. The CFSP involves a number of institutional and administrative changes aimed at a more effective presence by the European Union at international level, not as an end in itself but in the interests of our citizens and of the international community in general. I am glad to report that the European Council had successful discussions in three areas covered by the CFSP.

I will refer first to the pact for stability. I find it strange that Deputy Bruton should be so critical of a pact which has not yet commenced. The Deputy should at least give this pact a chance to see how it operates. I can assure the House that the European Union takes this matter very seriously. It decided to launch the diplomatic process which should lead to the adoption of what is being called a "pact for stability" in Central and Eastern Europe. As the Taoiseach indicated, this is an exercise in preventive diplomacy, aimed at avoiding unstable situations which could lead to conflict in the future. With the active support of a wide range of third countries, as well as of the CSCE and relevant international organisations, a number of countries in Central and Eastern Europe will be encouraged to overcome potential problems related primarily to minorities and borders. Formal joint action under the new Treaty providing for the conference to open in April is likely to be adopted by the General Affairs Council on Monday next.

I regret to interrupt the Minister, but in accordance with an order of the Dáil of this day these Statements must conclude at 5.55 p.m. The Chair does not have any discretion in the matter.

The Private Notice Questions dealt with before the Statements dragged on somewhat. Nevertheless, I well accept your ruling.

To clarify the position, this is a 75-minute debate, in accordance with an order of the House.

The European Council had a detailed discussion on the Bosnian negotiations which began in Geneva on 29 November. Following the meeting between Foreign Ministers and the contending parties, the Council adopted a declaration on Bosnia and invited the parties to meet the EU Foreign Ministers again on 22 December next. One of the major concerns of the Bosnian Government is to obtain credible assurances regarding the effective implementation of a peace settlement. It seeks in particular an expanded role for NATO which is already involved in implementing UN sanctions policy in the Adriatic. The declaration adopted by the Union at last weekend's summit makes it clear that the implementation of a settlement which might involve NATO should take place under the authority of the UN Security Council.

In essence, what is now at stake in Bosnia is the avoidance of a humanitarian disaster. Differences between the parties are narrowing. Apart from the plan on the table, there is no other realistic option of peace. There is the strongest onus on the parties in the former Yugoslavia to end the agony now.

Two issues I have already mentioned, the European Stability Pact and former Yugoslavia, concern the European Union's neighbours in central and eastern Europe. The European Council also addressed another neighbouring region where peace, stability and progress will serve the basic interests of the Union. I refer to the Middle East. The framework for joint action agreed at the European Council is an overview of political steps and other economic measures to be taken in support of the Middle East peace process. The Taoiseach, of course, has already referred in this context to his meeting today with Mr. Yasser Arafat.

The Foreign Ministers of the Union issued separately a declaration on human rights, a copy of which I have arranged to be placed in the Dáil Library today. Ireland was one of the strong supporters of this initiative. We believe that in this year of the Vienna Conference it is important to underline respect for human rights. International involvement in ensuring such protection is at the core of our efforts for stability and progress at international level. In this connection, I welcome the likelihood of a decision at the UN early next week to establish a new post of High Commissioner for Human Rights. The Tánaiste called for this at the Vienna Conference and Ireland worked hard for it at the current session of the General Assembly. The second area on which I wish to comment is the GATT which was widely referred to in the course of the contributions opposite.

How does the Minister of State know that when his script was written before the debate?

The Taoiseach has indicated the advantages which a GATT agreement will bring to our economy and he has set out in detail the approach which Ireland adopted during the European Council discussions. I would like to focus on one aspect — the implications of the GATT for the Common Agricultural policy.

The farming organisations and some Opposition spokesmen on agriculture have not welcomed the agreement and I suppose this reaction was predictable. However, I would urge them to consider what would happen if the talks between the European Union and the United States had failed.

Why not address the points that were made here in the debate?

The CAP would not have continued as before — let us be clear on that point — and to argue otherwise is to ignore the realities facing the operation of the policy.

The Minister of State is reading a script instead of answering questions. He should treat this House with a little respect.

A failure on GATT would not have been cost free.

It is a little unusual to hear replies to points that were not made.

Disciplines on the world market would have broken down at immense and ultimately unbearable cost to the European Union's budget. Thus the financing of the whole network of support which underpins the industry would have been at risk. Furthermore, as we saw from the dispute with the US on oilseeds, a conflict might well have involved retaliation, not just against primary products, but also against foodstuffs.

Ireland would not have escaped retaliation. I have no doubt that the European Union should maintain a strong position in international trade and be robust in defending its interests but in undertaking such a defence we need to be realistic and strategic to ensure that action that might appear prima facie to be justified in one area does not rebound on us with disastrous results elsewhere.

The Blair House agreement, as amended and improved, does not, of course, meet the ideal which some seem to seek — open-ended and limitless support for agriculture production. That ideal, if it ever existed, has faded away over the last ten years. This is, however, a regrettable and inevitable process. No system which involves the accumulation of huge surpluses — to be dumped on third markets, often with the side effect of damaging the poorest countries — could survive indefinitely.

What is to take place over a period of years is a controlled reform of the CAP which reserves the essentials of the policy — as the Taoiseach has already made clear. The CAP, which is vital to Irish agriculture, will now be in a better shape to cope with the changed circumstances on the world market and on the European market. Surely it is better that we have the guarantee for continuity and protection for income and price support schemes than the real threat of constant trade wars, the draining away of budgetary support for the CAP and is ultimate collapse.

That was so convincing, a Leas-Cheann Comhairle.

It is ridiculous.

A third and final point on which I wish to comment is the fact that there was overwhelming support for the maintenance in an enlarged Union on the existing balance between large and small member states. I hope that at the Council on Monday we can finally settle this issue.

I must say I find the interruptions most regrettable.

The Minister of State is a joke. He is reading out rubbish.

He said he would reply to the points that were made.

I thought Deputies would have shown me the courtesy that I had shown them in listening to their contributions. I would like to reply.

Please allow the Minister to reply.

In relation to the first point made by Deputy Bruton regarding the National Plan, following submission of the plan the proposals are being discussed with the EU Commission with a view to agreeing a Union support framework and a wide range of issues are being discussed with officials in this context. The EC Commission has not yet given us a formal reaction on any of the planned proposals and it is mischievous to suggest otherwise.

Deputy Bruton raised a number of points. In regard to additionality, the plan shows clearly that planned public structural expenditure will be maintained at least at the 1993 level, thus fulfilling additionality requirements. He mentioned also the environmental requirements and they have been fully complied with in a separate chapter entitled "Environmental Situation on the Plan". The chapter on human resources is set in the context of the training and education needs of the Irish labour market. Deputy Bruton also referred to the hospital infrastructure. This is a new element but the Deputy is wrong to suggest that it is ineligible.

Other points were made in relation to the drugs issue and the question of asylum. The European Council initiatives on justice and home affairs will specifically deal with the problems of crime, including drugs. On the question of asylum, the Department of Justice has stated that it expects early action on this front. On the question of union bonds, that issue is not closed. This matter has been referred to ECOFIN and new sources of funding——

On the question of asylum, when the Minister says the Department of Justice expects action at an early date, does he mean that legislation will be introduced here at an early date?

All I can say to the Deputy is that the Department of Justice has stated that it expects early action on this front.

I am asking about Irish legislation.

That is not appropriate now, Deputy.

In regard to union bonds, the matter has been referred to ECOFIN and new sources of funding will be tapped if necessary.

The fact that we did not have sufficient time to cover all the points, or even for me to conclude my speech, is outside my control. The whole question of Sellafield was raised and there was a discussion on that topic for almost an hour before this debate. That was beyond my control but I regret that some Deputies did not show me the same courtesy that I showed them when I listened to each and every one of their contributions today.

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