John Bruton
Ceist:1 Mr. J. Bruton asked the Taoiseach if he will report on his attendance at the EU Heads of Government meeting in Vienna on 23 and 24 October 1998. [21039/98]
Ceisteanna—Questions. - Official Engagements.
John Bruton
Ceist:2 Mr. J. Bruton asked the Taoiseach if he raised the issue of the proposed abolition of duty free sales in the European Union with the German Chancellor, Mr. Schröder, when he met him in Vienna on 23 and 24 October 1998. [21041/98]
Joe Higgins
Ceist:3 Mr. Higgins (Dublin West) asked the Taoiseach if he will report on his meetings and talks at the recent informal EU summit. [21093/98]
Ruairí Quinn
Ceist:4 Mr. Quinn asked the Taoiseach if he will report on his meeting with other EU Heads of State in Austria recently; and if he will make a statement on the matter. [21115/98]
Ruairí Quinn
Ceist:5 Mr. Quinn asked the Taoiseach if he will report on his meeting with the President of the European Commission; and if he will make a statement on the matter. [21116/98]
Proinsias De Rossa
Ceist:6 Proinsias De Rossa asked the Taoiseach if he will make a statement on the outcome of the EU summit in Austria. [21610/98]
Austin Deasy
Ceist:7 Mr. Deasy asked the Taoiseach the plans, if any, he has to visit Germany to meet Chancellor Gerhard Schröder. [21691/98]
I propose to take Questions Nos. 1 to 7, inclusive, together.
The EU heads of State or Government and the President of the Commission had an informal Meeting in Pörtschach in Austria on 24 and 25 October. As had been decided in advance, given the nature of the meeting, no formal decisions were taken and written conclusions were not issued.
A number of essentially forward looking questions were addressed at the meeting. Among these were the issues raised at Cardiff last June, namely, the economic role which Europe should play in a global economy and consideration of how best the Union can be represented externally, including the mechanisms available to co-ordinate policy in this area.
The meeting commenced with a session with President Arafat who briefed the heads of State or Government on the Wye Plantation Agreement which had been concluded the previous day. President Arafat thanked the EU for its role in the peace process and stressed that the parties involved in the process continued to require the assistance of the European Union.
Mr. Gil Robles, President of the European Parliament, joined the meeting for its next session. His address focused on the role the European Parliament can play in the issues facing the Union. He emphasised four themes: the current economic situation in Europe, particularly in the context of the introduction of the euro; internal and external security matters; harmonising social policy; and, democratic legitimacy of the European Union.
The President of the General Affairs Council, Mr. Wulfgang Schuessel, joined the next session of the meeting. He raised a number of institutional issues which had been discussed previously at the General Affairs Council.
The next part of the meeting commenced with presentations from the Dutch Prime Minister, Wim Kok, Prime Minister Aznar of Spain and Prime Minister Blair of the United Kingdom. The discussion which began in this way was continued over dinner. I would like to touch on some of the key issues which were raised in those discussions and which were addressed again in the final session on Sunday morning, and to indicate the approach I adopted.
On the issues arising out of the Cardiff Conclusions such as democratic legitimacy and subsidiarity, I indicated that Ireland supports any moves which would bring the European citizen closer to having a greater sense of ownership of the European Union. I stressed, however, that on these and other ideas designed to bring Europe closer to the citizen, we feel the most practical way forward is the entry into force and full implementation of the Treaty of Amsterdam which contains relevant and useful, if modest, steps in that direction.
In relation to economic policy co-ordination within the EU, I indicated that we are already well served through the institutional arrangements and the various instruments already in place. However, I acknowledged that economic and fiscal co-ordination is essential if we are to have an effective response to crises and, indeed, for EMU to succeed. I emphasised that the stability and growth pact sets out the overall framework for fiscal policies and that stability programmes will set out our individual national approaches. I stated that existing surveillance procedures should be fully utilised. The existing procedures for assessing member states' fiscal and economic policies should be given time to develop before considering further changes. I pointed out that Ireland accepts the need to assess the effectiveness of the European Union response, both internally and externally, to a changing international economic situation and to seek improvements where necessary while maintaining the integrity of the institutions and procedures already in place.
On the issue of co-ordinating fiscal policy and tax harmonisation, a number of countries proposed the notion of a common tax level throughout the EU. However, it is also true that other countries, such as ourselves, have very strong views that tax rates should continue to be decided at a national level. On the issue of the role and reform of the GAC, I stressed that in any examination of the role of the council, Ireland would be concerned that the central link between the General Affairs Council and the European Council be maintained. In this respect, reforms should be oriented towards making this link more direct, more dynamic and more efficient.
In this context, I expressed support for splitting the agenda of the GAC into a two day session dealing with horizontal issues and external relations, respectively. However, I emphasised there is a need to bear in mind that reorganisation is no substitute for the political determination to make a system work and it must work if the Union is to master the immediate challenges it faces. I also expressed Ireland's support for a rationalisation of the number of council formations.
In relation to internal security, I stressed that this is a sensitive and important area of work within the EU at the moment and that Ireland is satisfied that it is being addressed in the context of an EU action plan for the area of freedom, security and justice which is proceeding in the Justice and Home Affairs Council. I pointed out that Ireland considers that the best means of advancing the security of the European Union lies in the development of the action plan which will also include provisions regarding the EU's relationship with third countries. The incorporation of the Schengen Agreement into the Treaty of Amsterdam is also a complex institutional and legal issue and while Ireland is currently outside the Schengen Agreement, we are closely monitoring developments in this area. It was decided that the Finnish Presidency would host a special summit on justice and home affairs issues.
I indicated that Ireland attaches great importance to EU wide measures to combat issues such as crime and drug trafficking. I also expressed support for the ongoing work on the initiative by the Austrian Presidency for the development of an EU strategy paper on migration and asylum policy.
The meeting raised the challenge of how the European Union can enhance its action for peace and stability in crises such as that in Kosovo. It was acknowledged that the EU has a significant combined influence politically, diplomatically and economically. It was agreed that an increased focus should be given to combining that influence so that it is used as effectively as possible. On the issue of a High Representative for CFSP, I stressed that Ireland believes this role should be filled by a person with strong political skills and extensive experience of the EU and its institutions and preferably who comes from one of the smaller member states.
On the issue of the Treaty of Amsterdam, there was broad agreement that member states should seek to implement those conventions agreed but not yet ratified and also that the fundamental rights of citizens must be protected.
The German Chancellor, Gerhard Schröder, attended for the first part of the meeting only. Accordingly, I did not have the opportunity to meet privately with him. However, I look forward to an early opportunity to do so before the German Presidency of the EU commences on 1 January next year. While the President of the Commission attended the meeting, I did not hold any private discussions with him.
I thank the Taoiseach for his long answer, the last paragraph of which is, I take it, his reply to Question No. 2 concerning discussions with the German Chancellor, Mr. Schröder, regarding duty free. I take it the Taoiseach did not have such discussions. Did he take the opportunity at the Vienna summit to raise the issue of duty free? He wrote to Mr. Jospin some time ago about the matter. Did he get a reply to that letter? Did he raise the issue with Mr. Jospin? Will the Taoiseach tell us when he found out that EU Commissioners, who lectured Members of this House and of the European Parliament about the need to abolish duty free, had done a deal whereby they can continue to buy duty free goods ad infinitum as a result of their diplomatic status? If the Taoiseach did not raise the issue, will he say why?
I did not raise the issue because it was not on the agenda. As always, I privately raised it with some of my colleagues. Mr. Schröder was not the German Chancellor at the last meeting, he had not been installed at that stage. He attended part of the meeting and then returned home to finalise his agreement for Government. The first time I heard of the arrangements for Commissioners was when I read about them in the papers last week.
Mr. Schröder is now Chancellor and in view of his public statements of support before becoming Chancellor that duty free should be maintained, has the Taoiseach taken the opportunity to talk to him and make a case for the retention of duty free? What exactly is the Taoiseach doing on this issue? I reject the suggestion that the matter was not on the agenda of the Vienna summit as it could have been raised on behalf of Ireland under tax harmonisation, or is the Government just playing PR games with the issue?
I have since written to the Chancellor and hope to meet him early next month. The Minister for Public Enterprise will raise the matter with Neil Kinnock at a meeting next week.
(Dublin West): Will the Taoiseach say whether there was any detailed discussion on unemployment in the EU in the wide-ranging discussions which took place among the Heads of State, and the fact that in the 11 countries which are planning to be part of EMU, 12 per cent of the workforce is unemployed in 1998, half of whom are out of work for more than a year? Against the background of growing instability in the world economy and the austerity measures already stipulated by the Maastricht convergence criteria, was concern expressed that unemployment has remained persistently high and may grow in view of the two issues I have raised? Regarding the discussions on the economic role of the EU and the global economy, what was the assessment of the Heads of State in regard to world capitalism and the world economy in the next year or two, particularly in view of the collapse of the so-called tigers in south-east Asia?
Yes, employment policy was discussed as it is a major priority for the Union. The experience across Europe has been that the absence of fiscal discipline in the past was detrimental to economic prosperity and employment. The Council was particularly anxious to ensure the stability and growth pact, negotiated here some years ago as part of the Irish Presidency, and the individual stability programmes represented the best way forward in promoting employment policies. Concern remains, however, that unemployment levels are too high and that there should be co-ordination of policies and actions, both individually and collectively, to ensure we continue to create greater numbers of jobs across the Community as well as reduce unemployment. The Commissioner for Social Affairs continually brings position papers before the Council on ways to push forward EU action employment policies. We are working to our own action plan which has been seen to be effective, but we must also examine the ideas of others and continue to deal with the issue.
The outlook for the future will vary because many countries will reduce their growth next year; this has been indicated in the UK, France and Germany. Other countries have maintained the status quo in regard to their projections for next year. Much will depend on how those countries in recession in South America, the Far East and Russia impact on the global economy. The general feeling is that the totality of the impact will be negative but we must wait and see whether multinational companies throughout the world suffer adverse effects. There will be some knock-on effect in Ireland but I hope it will not be too dramatic. We must monitor the position and continue to pursue intelligent economic policies. Most countries are waiting to see what happens in the early months of next year, although nobody is certain about the extent of the downward effect.
I thank the Taoiseach for his comprehensive reply to seven questions and hope the Chair will bear with us as we ask supplementaries. On the question of the ratification of the Amsterdam Treaty, was the meeting informed by the French Prime Minister that the French National Assembly and the Senate, meeting in constitutional convocation, are unlikely to ratify the treaty until February or possibly March, that subsequent to that the role given to the European Parliament in the treaty will require its involvement and that, having regard to the fact that the last plenary session of the European Parliament will take place in the first working week in May, it is unlikely that the negotiations on the Agenda 2000 package will be formalised before 11 June when the European elections take place? Was that political timetable discussed? Were the consequences for member states, including Ireland, outlined or discussed by the Heads of Government present? What contingency plans, if any, has the Taoiseach decided to put in place to ensure we do not experience budgetary problems towards the end of this calendar year when the new Parliament and Commission will come into place?
There are two aspects to those questions. In relation to the Amsterdam Treaty, it appears that it will be some months before all countries ratify the treaty. The exact dates were not clearly outlined by either President Chirac or Premier Jospin but it seems likely we will be some months into next year before that happens.
Did they refer to it at all?
They did, but they have never indicated the exact timetable for ratification. I and others have continually argued that we should not get into discussing institutional areas until the treaty is ratified. If we do, this will drag on for even longer.
On the other question, Chancellor Schröder, the President of the Commission and everyone else emphasised at the meeting in Pörtschachthat we should complete the negotiations by Easter. That is still the view, and if anything it was reinforced even more strongly than in Paris when the then Chancellor, Mr. Kohl, set the original timetable for this during the German Presidency. For the reasons mentioned by Deputy Quinn, there is a very strong view within the Council that these matters would be best dealt with before April, thereby keeping within the timescale outlined by the Deputy. That is a wise decision, because otherwise we will not only drift into the second half of next year but realistically we will drift into 2000. That would cause enormous budgetary problems.
Was the consensus view of this informal meeting of heads of Government that the preferred timetable is to ratify Amsterdam and Agenda 2000 before Easter 1999? That being the case, when will this House and the citizens of this Republic know what the Government's position is in relation to our proposals for reform in the complex structures of Agenda 2000? When will the Government formally communicate its opening position on this vexed issue to the Commission and its colleagues on the various councils?
To give an accurate assessment of the meeting, the ratification of Amsterdam and Agenda 2000 are not being joined, though the summary of Deputy Quinn's comments would still be correct some time during the summer. There is not as much focus. People want to see Amsterdam dealt with next year and are not putting that on the terms of Agenda 2000——
But the Parliament has a role. There is a clear conflict in the timetable.
Yes. The French are well aware of that and it was originally hoped that they would wrap it up this year. However, I told the House some months ago that I did not see that as being likely, which is how it is turning out. The French have all the time tended to want to get into other institutional issues before ratification, which makes no sense to me or to most others. That view has been clearly put by the majority of other countries.
Regarding Agenda 2000, it is the view of the Council that we meet the March deadline. I strongly favour this and hope everyone else does also. In terms of our proposals and our first discussions, we will start putting forward our proposals at the General Affairs Council meeting in early December and lead on to a more detailed discussion in Vienna in mid-December. Separate discussions and working papers are being dealt with by the Commission, though I have not seen any of the preliminary or preparatory figures yet.
I thank the Taoiseach for his extensive reply. I believe it is the first time a Taoiseach has volunteered information about the positions he has taken at a meeting of this kind.
I did so because it is unusual for an informal meeting to put forward no conclusion whatsoever. I thought it only right to report on what we dealt with for the information of the House. There was no formal conclusion at the end of the meeting, and everyone was left to make their own point.
My comment was not intended to be a criticism.
I accept that.
I welcomed it and hope the Taoiseach gives the House more information on future occasions. My question relates to the debate on the legitimacy of the Union. Will the Taoiseach agree that, apart from implementing the important advances made in the Amsterdam Treaty, one of the ways in which the legitimacy of the Union could be enhanced would be to enhance the role of national parliaments in relation to positions adopted by member states in various debates at European level? The European Parliament already has a significant role in previewing decisions and proposals and co-decision making afterwards. Will the Taoiseach agree that a role for national parliaments, in advance of decisions being made, would enhance the legitimacy of the Union and, if so, what proposals will the Government make to achieve that?
I did not understand the Deputy was being critical. It is better that these matters are discussed. We tend always to discuss matters about Europe after they have been completed. We discuss the reports of a particular six month period six to nine months after the event. When there are major discussions it is useful for the House to have a view. This is becoming increasingly important, unlike at the earlier part of the decade. The European Parliament and the President of the Parliament, Mr. Gil Robles, always attends and puts forward his assessment of the Parliament. I would be open to a similar type discussion here.
In relation to the information provided to the House on the response of the European Union, both internally and externally, to the changes taking place in the world economy, was the issue of a review of the stability and growth pact raised? Given that in Germany there is now a social democratic party in power, along with the Greens, does the Taoiseach consider there needs to be a revisiting of what are essentially monetarist criteria established by Maastricht? We need to review how the Union can intervene more effectively, both internally and externally, in relation to the operation of the global economy.
The stability and growth pact stands on its own. It is a good document and a good policy. It emphasises the experience of recent times, and perhaps during the past decade and a half, that tight fiscal stability more or less drives the success of the economy.
Will the Taoiseach agree it would prevent, forever and a day, the dangers of the 1997 manifesto, which was a fiasco? A 13 per cent of GDP debt problem——
It all started before that.
It was all in a very bad period.
I would rather talk about the 1987 one, on which I had a direct influence.
Or the 1997 one.
The Government came to power in 1997.
I had to wait a while before I had influence. The stability pact makes common sense. It is clear, even if one goes back to 1977, that it is a well managed economy with tight fiscal policies and a sensible exchange rate policy that leads to economic growth. The stability pact will stand the test of time. I do not see why it should be changed. There are arguments about interest rate policy, on which I have already given my views. The discussions which took place in Pörtschach about interest rates were interesting but were out of order because the European Central Bank has that power. While people may talk all night about interest rate policy, they have no influence. The European Central Bank and those who appeared to challenge that have now accepted them.
In regard to the High Representative for Common Foreign and Security Policy, did the Taoiseach formally or, more importantly, informally make any recommendation that such a person should come from Ireland? If so, did he put forward any specific names for consideration?
There were no formal discussions on that issue. It has been well publicised informally in European and Irish newspapers that there are a number of names on a short list. My views are well known to my colleagues. There is an Irish name which is at least tentatively on that list but there will be no formal discussions on the matter until the Vienna summit, and perhaps not even then.
Was that name put on the list at the Taoiseach's instigation?
No, the name has been in the European Council domain for some months, but it has my support.
Deputy Quinn may ask a brief supplementary.
As I indicated earlier, seven questions were taken together and there was a very comprehensive reply, although I know you have a job to do, a Cheann Comhairle.
We have spent almost 30 minutes on these questions.
The Taoiseach referred to the portion of the report dealing with the possible division of the General Affairs Council, the body which deals with overall housekeeping. Does the Taoiseach regard it as appropriate, 25 years after Ireland joined the European Union, that Ministers with responsibility for foreign affairs should have a co-ordinating role for the internal operation of the European Union, having regard to the advent of the single currency and the fact that the internal market is all but completed?
Is there not a contradiction, in institutional terms, in giving responsibility for the co-ordination of internal affairs to a group of Ministers and their Departments or secretariats whose focus is external to the European Union? Did he personally express a preference which could, for example, inter alia assign some of the responsibilities of the GAC to either ECOFIN or a new body which would be formed by the Tánaiste and Deputy Prime Ministers of the participating member states?
There was a frank discussion on that issue. I favoured the view, for, among others, the reasons mentioned by Deputy Quinn, that the workload is too great for the General Affairs Council. One example, with which the Deputy is familiar, is that under present institutional rules Agenda 2000 technically comes under the Foreign Affairs Ministers.
Which is a nonsense.
While Foreign Affairs Ministers are highly competent political figures in their own right, I do not really see them being able to deal with the teeth of the Common Agricultural Policy or the Common Fisheries Policy. I have long held the view, which I expressed forcibly at the meeting, that it should be split in one form or another.
I supported the concept of a body comprising the Tánaiste and Deputy Prime Ministers or, if that option were not accepted, that the agenda should be split, preferably at different times of the month. I think it will end up, because of the strong lobbying by Foreign Affairs Ministers in other jurisdictions, as a two day session, with one day for external foreign affairs issues and the second for internal issues. Member states will probably have some flexibility in terms of who will represent them.
I was interested to hear the Taoiseach say he is attempting to arrange a meeting with the new German Chancellor. We all fear that the change of Government in Germany might have repercussions for this country. Does the Taoiseach anticipate there will be a major reduction in the German contribution to EU funding and that Ireland may shortly become a net contributor to, rather than a major beneficiary of, the funds? Will this change of Government in Germany constitute a grave threat to our financial situation in the EU?
There will clearly be a change of emphasis in the European Council — I would mislead the House if I said that were not the case. At the last meeting Chancellor Schröder was sitting quite near me and the Italian Prime Minister, who replaced the former Prime Minister Prodi, was on my other side. There was a different emphasis on how matters will proceed and that was spelt out by the Chancellor and others. Agendas will change. This is a political issue.
To answer the Deputy's question one need not look further than the new German Government's manifesto. It is short compared to political manifestos in the European context and those with which we are familiar. The issue of own resources is prominent in it. It is no secret that the German contribution will change fundamentally. Our contribution is increasing all the time and there has been a significant increase in it this year because of our economic growth rate. However, we are still the fourth poorest country in the Community in terms of Eurostat's figures. It is my argument, and I am sure that of anyone who attends European meetings, that we should continue to be a net beneficiary for some years to come.
(Dublin West): Returning to the economic discussions among the Heads of State, while the majority of them are politically committed to EMU, in view of the slow growth rates in many of the countries to which the Taoiseach alluded — some of which are on the verge of recession — did he detect any nervousness that the strict Maastricht criteria on restrictions on public borrowing, budget deficits and fixed currency rates might give rise to severe tensions in the EU against a background of recession in the next few years? When matters are going well everyone considers EMU is hunky-dory, but when there is a sudden crisis there can be a tendency for every State and the ruling elite in a nation to take to its own boat. Does the Taoiseach consider the EMU project and a common currency could come under severe strain and be blown out of the water with the onset of a world recession?
I did not detect that. I remind Deputy Higgins that practically every country in the Community, including those who joined and did not join Euro plus, have bent every way possible in the past 12 months to ensure they can join the Euro and that they met the Maastricht criteria and adhered to the stability and growth pact. Rather than countries turning away, parties of all persuasions and coalitions of all political perspectives in Europe have tried to follow that policy. Countries appreciate there are strictures related to the Maastricht criteria and that they are not easy to meet, but the reward on meeting them is the possibility of increased economic growth and stability. The European Council, ECOFIN and other ministries hope the Euro will bring stability with the desired effect of economic growth and thereby employment in the years immediately ahead. While many countries, probably half the world, will experience an economic downturn at one stage or another, by acting in a co-ordinated way countries will build confidence and see us through that economic downturn and out the other side. Countries, particularly Euro plus countries, appreciate that the inextricable linking and fixing of their currencies in seven weeks' time, will provide an opportunity for people to live in a more confident economic climate. There are dangers involved and the system is based on discipline, but the dangers are well outweighed by the good prospects.
What prospects for the current arrangements for stability and growth were under question at the summit? The Taoiseach indicated in his reply that he acknowledged certain things, stated certain things and that we accepted certain things. It is clear, therefore, that there were suggestions in the discussion we were not fully in agreement with and that we were putting down markers on our stance on the matter.
There is a need for us to address the question of how effective the current procedures are in ensuring there is sustainable growth in the EU, both economically and environmentally, and how we deal effectively with issues arising from collapsing economies outside the EU, especially crises arising from natural phenomena in Central America. The developed world appeared to be able to produce $30 to $40 billion dollars to bail out bankers a number of weeks ago, yet the most we can produce to help Honduras, Nicaragua and Costa Rica is a couple of hundred million pounds. There appears to be a grave imbalance in how we treat different crises.
I do not wish to address the broader question. I could express views on what is happening with the stability and growth pact but the Deputy did not wish to comment on that. The parts of the pact and the stability programmes under discussion were concerned with interest rates. I judged the discussion was not in order. The comments made afterwards created a stir in the markets.
The issue of interest rate levels is for the European Central Bank. While the discussion was ongoing for a considerable time it has no bearing on the matter. People urged regeneration of economic activity on the basis of a quicker reduction in interest rates. They were concerned with the lower range at which rates are currently set falling further, not with the higher range, at which we were positioned. However, it is an unrealistic discussion.