I was accompanied at the European Council in Cannes by the Tánaiste and Minister for Foreign Affairs, Deputy Spring, the Minister for Finance, Deputy Quinn, and the Minister of State for European Affairs, Deputy Gay Mitchell.
The European Council in Cannes achieved its immediate objectives. First, the Council cleared the way for the establishment of Europol which will enable European police forces to cooperate using modern technology in the fight against increasingly sophisticated crime, especially the drugs trade.
Second, the Council cleared a substantial aid programme for the Third World, Central and Eastern Europe and the Mediterranean region. Before Cannes this had been blocked by disputes about share-outs.
Third, following the priority which I attached to the drugs issue at the dinner in Paris for Heads of State of Government earlier this month, the Cannes Council commissioned an expert study on the drugs issue to be presented to the December Madrid Council.
Finally, the summit confirmed that there will be annual reports to the European Council on the employment performance of each member state and of the Union as a whole with the first report to be submitted to the Madrid Council next December. This is very welcome because it will create a political and institutional focus on the jobs issue at the highest level every year and will help to ensure that all community policies serve the overall objective of job creation.
This European Council was the first Council of the enlarged Union including for the first time the Heads of State and Governments of Austria, Sweden and Finland. The 15 were joined on 27 June for a working lunch and a subsequent plenary session by the leaders of the states of Central and Eastern Europe, the Baltic states, Cyprus and Malta. As the Council conclusions state, copies of which I have arranged to have placed in the library, the presence of the leaders of these countries provides confirmation that they are destined one day to join the Union.
The Council considered the major strategic issues facing the Union at present, notably employment, economic and monetary union, the 1996 Intergovernmental Conference and the future enlargement of the Union and also other issues of prime concern to the citizens of Europe especially drugs and general co-operation on the prevention of crime.
Widespread concern was expressed at the Council that, despite recent benign economic conditions, the level of unemployment in Europe remains unacceptably high. The Council and the Commission have set out what needs to be done to tackle the problem of unemployment and this message was reinforced at Cannes. Accordingly, stress was laid on the implementation by member states of stability-oriented monetary and budgetary policies which will deliver a climate conducive to investment and employment growth. On this basis the Council approved the broad guidelines of the economic policies of the member states and of the Community and emphasised that the current economic upturn must be used to step up sustained efforts to put public finances in order. Compliance with these guidelines is also necessary to substantially reduce unemployment.
It is, however, recognised that proactive structural policies are also called for to deal with the scourge of unemployment. The Cannes Council, therefore, underlined the necessity for follow-up on the guidelines for action on structural reform set out in the conclusions of the Essen Council. It was agreed that a comprehensive report on member state performance in these areas would be submitted to the Madrid Council next December.
The onus on implementing the prescriptions on employment agreed at Union level rests with individual member states rather than the Union itself. Ireland has a good record on this score. The Government's commitment to stable macroeconomic policies and sound management of the public finances is delivering the necessary climate for employment growth. We are also making advances on the specific guidelines set out at Essen. For example, stress is laid in these guidelines on reducing non-wage labour costs. Consistent with this objective the 1995 budget increased the earnings threshold for the lower PRSI rate from £9,000 to £12,000. This measure, with the 1995 budget improvements in income tax primarily directed at the lower paid, form part of the Government's tax reform policy aimed at rewarding work and promoting enterprise. Clearly our policies are working as employment is expected to expand by approximately 31,000 this year.
Deputies may also wish to note the emphasis placed in the Cannes conclusions on the development of local employment initiatives. The Commission paper on this subject referred to the Irish experience in this regard. The Government is convinced of the importance of local initiatives in generating employment, and has given recognition to this by conferring special responsibility for local development on the Minister of State, Deputy Gay Mitchell. I outlined our success in this area to my European Council colleagues and indicated that we intend to convene a special conference on local employment initiatives during our Presidency next year.
The Council also noted the vital role played by small and medium sized enterprises in the creation of employment and asked the Commission to submit a report to it on the policies currently being conducted in this field and on ways of improving their effectiveness in aid of small and medium sized enterprises.
I wish to refer to economic and monetary union. The Cannes conclusions reiterate firmly the Union's resolve to prepare for the changeover to the single currency by 1 January 1999 at the latest in strict accordance with the convergence criteria, timetable and procedures laid down in the Treaty. In essence, the preparations for the final stage of European Monetary Union were given significant momentum in Cannes. The central importance of convergence for the European Monetary Union project and for sustainable progress in growth and employment was emphasised by all the participants. The European Council endorsed the work already done under the aegis of the Finance Ministers and mandated them to report to the Madrid Council on the various issues, technical and otherwise, so that the European Council can decide at Madrid on the scenario for introducing the single currency. The message from Cannes is clear: the single currency is on track for introduction by 1 January 1999 at the latest. I reiterate that the Government intends that Ireland will be among those countries which qualify for inclusion in the single currency bloc whenever it commences.
The Council also focused on the important issue of the relationship between those member states in the single currency zone and those member states in the single market but not in the single currency zone. Clearly this scenario contains the potential for distortion in the operation of the single market. It is an issue which requires further study. The European Council, therefore, directed that a special examination of it should be undertaken by the Commission, which is required to report on its conclusions in the autumn so that they can be considered at Madrid.
I am glad to be able to report to the House that agreement was reached on the convention establishing Europol. I have to admit that this agreement was exceptionally difficult to achieve and was only arrived at by deferring until June 1996 a decision on the role of the European Court of Justice under the convention. Nonetheless, the agreement on Europol is a significant step in institutionalising co-operation between member states in internal security matters.
The convention provides for the setting up of a European police office to be called Europol. The objectives of this office will be to combat drug trafficking, nuclear or radioactive material smuggling, illegal immigrant smuggling and motor vehicle-related crime. The tasks of Europol will be to facilitate the exchange of information between member states: to obtain, collate and analyse information and intelligence about crime; to pass information rapidly to national units or police forces and to maintain a computerised information system.
What is important now is that the convention be adopted by all member states as a matter of urgency so that Europol is operational as soon as possible to enhance the fight against crime, especially drug trafficking. It is important for all member states to put this convention through their parliaments. I accept the view expressed by some member states that there are difficulties about the lack of dispute settlement mechanism and disagreements about whether it should be run by the European Court of Justice or some other body. It is very important to recognise that most of the work of Europol will be done without any dispute or disagreement. It should be let proceed with the work which can be done without dispute or disagreement and the issue of the disputes mechanism can be solved in a year's time. We cannot afford another year of lack of adequate co-operation between police forces just because of what are essentially ideological arguments about the appropriate disputes mechanism. I make that appeal in particular to those member states and parliaments within which there may be arguments about this issue. These arguments should be put in their proper context relative to the wider importance of dealing on a European-wide basis with crime which is a threat to society. The threat of crime is of similar magnitude to the threat which led to the creation of the European Union in the first place, namely the threat from behind the Iron Curtain, and it requires a similar degree of commitment and sacrifice on the part of member states. I hope the arguments about the dispute mechanism which is a relatively minor issue in comparison to the overall concern are not allowed to delay the implementation of the convention by all member states.
On the specific issue of drugs, the Council urged on member states the practical implementation of a strategy involving the reduction of supply, combating of trafficking and better international co-operation. It was also decided to establish an expert group to report to the Madrid Council with proposals on how to implement this strategy. I am particularly pleased about this as it was one of the issues I raised in Paris. I am glad action was taken so quickly to establish this expert group.
I accept that more than generalised aspirations are needed in regard to drugs and while the establishment of Europol is clearly a significant advance, concrete action must be taken and we must ensure that the expert group comes up with solutions in this regard for Madrid. Deputies will be conscious of the priority which the Government attaches to dealing with the drugs issue at domestic and European levels. We are determined to put forward realistic and tenable proposals in regard to combating drug trafficking in Europe. An inter-departmental group chaired by the Department of Justice has been established for this purpose and will advise the Irish representative of the new EU expert group in relation to specific Irish proposals in this area.
The European Council confirmed the mandate of the reflection group which has the general task of preparing the way for the work of the Intergovernmental Conference. As Deputies are aware, Ireland is represented on this group by the Minister of State with responsibility for European Affairs, Deputy Gay Mitchell. The Council went on to emphasise the importance of focusing on the needs and expectations of its citizens, with particular reference to the following: analysis of the principles, objectives and instruments of the Union in the context of challenges facing Europe; strengthening of the common foreign and security policy so that it can cope with new international challenges; provision of a better response to modern demands as regards internal security and the fields of justice and home affairs more generally; making the institutions more efficient, democratic and open so that they are able to adjust to the demands of an enlarged Union; increasing public support for the process of European integration by meeting the need for a form of democracy which is closer to the citizens of Europe who are concerned with employment and environment questions; and putting the principle of subsidiarity into practice more effectively.
Some of these priorities accord very closely with views enunciated by me, the Tánaiste and the Minister of State with responsibility for European Affairs in relation to the work of Intergovernmental Conference. In particular I have at every opportunity stressed the need for the Intergovernmental Conference to respond to the real needs of European citizens and to address the issues of transparency and democracy in the institutions. I have commissioned a study by the Politics Department of Trinity College Dublin on the issue of the democratic accountability of the European Union in the context of the preparation of the Irish position on these issues for the Intergovernmental Conference.
It would be useful if I outlined the general approach which Ireland will take to the negotiations on the Intergovernmental Conference, bearing in mind that we will, of course, have to react to the agenda as it emerges and to the priorities of other member states. Ireland's general approach to the Intergovernmental Conference negotiations will be to equip the European Union institutionally and otherwise to meet the challenges of the 21st century, including further enlargement, and in the process to ensure that our vital national interests are fully protected. I would make the following specific points in this regard. The balance between large and small member states and between the institutions of the Union in the Community under the present Treaty provisions has served both Ireland and the Union well and should not be significantly altered. Ireland will oppose proposals which suggest that the smaller member states should forego their Commissioner or should share Commissioner posts on a rotating basis. A single speed approach to further European integration should be maintained as far as possible; there may however continue to be instances, such as with Economic and Monetary Union, which would permit a differentiated approach in terms of timing, to a common objective. In general we are opposed to the concept of allowing options. The question of the democratic legitimacy of the Union will have to be addressed at the Intergovernmental Conference in a way that would not adversely affect the positions of small states or dilute the power of the Commission. The outcome of any negotiations that would involve Ireland's participation in a common defence policy will be put to the people in a referendum. This will ensure that Ireland's policy of military neutrality remains unchanged, unless the people decide otherwise.
One thing is clear — and this was recognised at the Cannes Council — there must be no repetition of the experience of the Maastricht Treaty. The citizens of Europe must be kept informed of the deliberations of the Intergovernmental Conference and the outcome must be crystal clear, intelligible and above all relevant to the ordinary citizen.
A key task of the Intergovernmental Conference will be to prepare the way for future enlargement of the Union. As I indicated earlier, the Heads of State and Governments of those countries who have Association Agreements with the Union and who aspire to eventual membership of the Union were in attendance at Cannes. Our exchange of views with the leaders of these countries enabled us to review the strategy of preparing them for accession. In specific terms the Council approved the Commission White Paper on integrating these countries into the internal market. The White Paper outlines the admistrative, legislative, and legal environment necessary for the effective and efficient adoption and implementation of internal market legislation. As such it should prove to be of valuable assistance to the associated countries in adapting their legal and other frameworks to what is necessary to allow them to participate in the single market. Of course advice on the changes necessary for participation in the single market is not sufficient for these countries. A significant element of financial assistance must also be provided. At Cannes the European Council reached agreement on the appropriations for financial co-operation with the countries of Central and Eastern Europe and the Mediterranean countries for the period 1995-99. This amounts to some 11.4 billion ECU in aid broken down as 6.7 billion for the Central and Eastern European Countries and 4.7 billion for the Mediterranean region. The Union has not therefore shirked its responsibilities towards these countries especially the newly established democracies of Central and Eastern Europe. The preparation of the associated countries for accession will be kept under review at subsequent European Councils.
Enlargement of the Union to the east and to the south is a scenario which poses both challenges and opportunities for Ireland. The Government will carefully study the implications of accession by these states for all sectors of the Irish economy. The debate to date has concentrated on the fear that Ireland's monetary benefits will be diluted as a result of the next enlargement. Ireland receives 18 per cent of its public expenditure and 7 per cent of its national income directly from European Union sources. However, let us not lose sight of the trading opportunities which will be afforded by enlargement through the opening up of large and relatively untapped markets. All sectors of our economy should be preparing now to avail of this opportunity.
I mentioned funding for the Mediterranean region. The provision of such aid underlined the importance the European Council attaches to relations with the states in this region. The Council looked forward to the forthcoming Mediterranean Conference in Barcelona in November to lay the foundation for a Euro-Mediterranean partnership. Peace and stability in this area is a vital strategic interest of the European Union.
I should mention at this juncture that the Council also adopted the amount and financing arrangements for the Eighth European Development Fund. As a result the conditions have been met, to conclude the revision of the Lomé Convention with the developing countries of Africa, the Caribbean and the Pacific (the ACP countries). The effect of this agreement will be to increase the Irish contribution over the next five years to the Eighth European Development Fund by 20 million ECU. This is an increase of significant proportions and is a measure of the importance we attach to the Lomé Convention. We are doing this in the context of the Government's commitment to make steady progress towards achieving the UN target of 0.7 per cent of GNP devoted to overseas development aid.
The Council also discussed a number of important external issues, notably former Yugoslavia and Russia. We adopted a declaration on former Yugoslavia and resolved to establish a substantive relationship with Russia commencing with a decision to authorise the Commission to sign the Interim Agreement with Russia against the background of the improved situation and the negotiations on humanitarian aid in Chechnya. The importance of relations with the US was also underlined. The Tánaiste will elaborate on those matters in his statement.
A generally optimistic scenario was painted by its immediate neighbours at the extended meeting we had on the evolving situation in Russia both from political and economic points of view. It was more optimistic than general comment in the West would seem to indicate.
The Cannes European Council considered the basic questions of jobs and crime, especially drugs related crime which confront the Union and its citizens and how these might be tackled. It also laid solid foundations for a new stage in the process of European integration, including revision of the Union Treaty, completion of economic and monetary union and the achievement of a further major enlargement. Our task is to build on this foundation, bearing in mind that we must retain the support of public opinion. Europe has been a success but it has not been a commensurate success in the public view. That needs to be addressed.
I will give a few personal impressions arising from my first attendance at a European Council. I was struck by the large measures of common philosophy and shared purpose among all the participants. The major and detailed preparatory work undertaken by the Presidency and the Commission was very evident and contributed to the smooth operation of the Summit. President Chirac of France showed himself to be a dedicated and determined chairman with a fine ability to facilitate appropriate compromise between the divergent views and an equal ability to impose his will whenever that was necessary. I found it a little disappointing that some issues of minute detail were left to be settled at this level although I accept that the European Council is the highest decision making forum in the Union and the exercise of its function may from time to time involve dealing with such minutiae.
On employment and economic issues, we had to consider seven or eight individual lengthy papers on different employment and economic topics. Our discussion would have been assisted by a more synthesized approach in the papers and a more targeted focus on the decisions being sought from the Council. We might, thus, have used our time more appropriately rather than having interminable tours de table which became longer and longer the more countries were involved. When 11 of the 15 have spoken the remaining four feel obliged to speak as well even though they may have nothing to say. This approach is tiring. There is a need to look at this issue and it is one of the matters we hope to address at a more informal meeting later this year, in the first half of the Spanish Presidency. We may be able to look at how the Council does its business and how it can be prepared for more precisely, so that decision points are more easily identifiable and questions of detail, if possible, are settled elsewhere. I realise that is not always possible.
