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Dáil Éireann díospóireacht -
Thursday, 17 Dec 1998

Vol. 498 No. 6

European Summit: Statements.

I attended the EU Council meeting in Vienna last weekend with the Minister for Foreign Affairs, Deputy Andrews, and the Minister for Finance, Deputy McCreevy. The Council, the second time the Heads of State or Government have met during the Austrian Presidency, the first meeting having taken place at Portschach in October, presented a key challenge to the Presidency in terms of progressing the complex issues contained in the Agenda 2000 portfolio. For a variety of reasons which I will highlight throughout my statement, I believe the meeting was a success and a tribute to the competence of the Austrian Presidency and, in particular, to Federal Chancellor Viktor Klima.

I should perhaps outline the format of the Council. It began last Friday morning with a meeting with the President of the European Parliament, Mr. Giles Robles, where there was a useful exchange of views on issues such as employment, the further potential of the Single Market and the key items to be considered by the summit, including Agenda 2000, enlargement, common foreign and security policy, subsidiary and the common statute. A detailed discussion of economic co-ordination formed the bulk of the first working session which followed, while issues such as Agenda 2000, justice and home affairs, common foreign and security policy, subsidiary and the internal market were examined on Friday afternoon.

Over dinner on Friday evening, leaders discussed the enlargement process and gave particular attention to the situation in Russia and how the Union should respond. I know this is a matter which the Minister, Deputy Andrews, will address in greater detail in his concluding statement. On Saturday morning, as is usual, leaders focused on the draft Council conclusions and subsequently met the Heads of the 11 applicant states.

The Council considered the employment guidelines for 1999 and the possibility that the guidelines might be strengthened to ultimately evolve into a European employment pact within the framework of the Luxembourg process. The emphasis given to the discussion of employment underlines its status as the top priority for the Union, a situation being sought by Ireland. Accordingly, the issue of job creation underpinned the whole of our discussion on economic matters, the concern being to promote greater economic growth and to maximise its employment intensity. The call for a greater synergy between the guidelines and the broad economic guidelines also reflects this approach.

In calling for the 1999 guidelines, the Vienna conclusions asked member states to take into account important areas such as promoting equal opportunities between men and women, using benchmarking and mainstreaming approaches; making lifelong learning a reality and setting targets in this regard; exploiting the potential of the relatively employment intensive services sector, especially in information technology and environmental areas; developing small and medium sized industries; reviewing tax benefit and benefits systems; supporting the re-entry of other workers to the labour force and promoting greater social inclusion.

In addition to these factors, I add that in the Irish context when forming our next national employment action plan, we must retain a strong focus on supporting the re-entry of the long-term unemployed to the workforce.

The leaders also discussed the launch of the euro on 1 January next and the related issues of the external representation of the Union to EMU matters and enhanced policy co-ordination. A practical arrangement has been found in relation to representation at the G7 Finance Ministers and Governors group and at the International Monetary Fund and in relation to the composition of ECOFIN delegations for missions to third countries. That arrangement was based on the report from ECOFIN on the state of preparation of stage three of EMU which, inter alia, stressed the need for the Union to speak with one voice in this area and that the Commission should be involved appropriately. I fully supported this approach.

I also welcomed the ECOFIN report's conclusions and fully share the view that closer community surveillance and co-ordination of economic policies is essential, if the full benefits of the single currency are to be obtained. Existing institutional arrangements and instruments must be given time to work before any additional measures are considered.

The somewhat contentious issue of tax co-ordination or co-operation was also discussed. Clearly, there is a strong case for the elimination of harmful tax competition between member states which I fully supported, but, equally, harmful tax competition between the Union and third countries must also be examined. I made it clear in my intervention that we welcome proposals for a fully comprehensive study of corporation regimes within the Union — a study which would address not only corporation tax rates but also allowance and incentive arrangements together with the accounting standards and other practices which determine the tax base in individual member states. Ireland's tax system is fully transparent and will compare favourably in the forthcoming study by the Commission with the regimes in place in other member states, especially as regards the all important effective rates of tax which are applicable in each country.

I am pleased to be able to report that the conclusions on taxation specifically state that co-operation on tax policy does not mean the pursuit of uniform tax rates and instead is aimed at eliminating distortions in the single market and the development of tax structures which are more employment friendly. After the Vienna Summit, there is a fuller understanding of what needs to be done in the areas of tax co-operation and, more importantly from an Irish point of view, of the situation which pertains in this country. This represents a real improvement over the level of debate on this issue in the European media in recent times.

In other areas of taxation, there was progress on proposals for new directives on the taxation of savings and on interest and royalties and an endorsement also for the framework on energy taxation, taking into account its implications for the environment. I argue strongly that its implications for competitiveness should also be borne in mind.

There was real progress on the subject of duty free sales. Ireland secured a valuable agreement that the Union will examine the 1991 decision on the abolition of tax free sales within the Union. This examination will focus on the employment impact of the abolition and will, EU leaders concluded, consider also "a possible limited extension of transitional arrangements". The Commission and ECOFIN are to examine by March the employment problems which will arise from abolition and consider proposals for addressing them. Together with other EU leaders, I intend to pursue the matter directly with President Santer to ensure that work on this item proceeds as rapidly as possible. We will press for a full five year extension of the transitional arrangements.

In addition to addressing employment, the other major area which was considered by European leaders at Vienna was that of Agenda 2000 — ensuring that the progress called for by the Cardiff conclusions was made in advance of the German Presidency. I am happy to report that the Austrian Presidency succeeded in a comprehensive examination of the proposals for the next financing period from 2000 to 2006, identifying both areas of potential agreement and, perhaps more importantly, those areas where further work and compromise is likely to be required. A key outcome was a strong endorsement of the end of March deadline for the conclusion of negotiations. The deadline should be adhered to to avoid protracted negotiations as in previous rounds and to force all member states to address issues which will ultimately have to be resolved in any event.

I understand the German Presidency is considering the need for a special summit on Agenda 2000 to be held in Germany in late February to ensure that the end of March summit in Brussels is not overburdened. The handling of the Agenda 2000 negotiations was a theme which I addressed in Bonn on Tuesday with Chancellor Schro1der. I went through with him in some detail Ireland's position with regard to phasing out Objective One Status for the better off part of the country, its retention along the Border and in the west, and the reasons in terms of our underdevelopment infrastructure we need it for a few more years to remain recipients of the Cohesion Funds.

We agreed the Austrian Presidency has laid a sound foundation for the work of the German Presidency and is to be complimented on that. This will allow for the end of March deadline for political agreement to be met and, more importantly, for the final adoption of an agreement in advance of the European Parliament elections in June of next year.

The need for all member states to adopt a flexible and pragmatic approach was discussed and the Chancellor outlined to me the need, as perceived in Germany, to address the level of Germany's contribution to the Union's budget. We discussed the progress made to date at a technical level in the consideration of the draft regulations on Structural and Cohesion Funds and the various proposals for reform in the agriculture area. As well as recording our concerns on Structural and Cohesion Funding, I indicated Ireland's rejection of any proposal for co-financing of the Common Agricultural Policy both because it breached the fundamental principles of policy and because of the disproportionately negative effect it would have on countries like Ireland. I also mentioned the value of the milk and beef sectors to the Irish economy and that, for instance, current Commission proposals on milk quotas and proposals favouring intensive rather than extensive beef systems, would impact very negatively on Ireland, especially when compared to the position of other member states.

We must be realistic in our expectations, but so must other partners and an equitable outcome is what is required. We cannot resist all suggested avenues to reform. All member states, be they net recipients or contributors, will be forced to compromise in the course of negotiations.

The German Presidency realises fully the challenge presented to it, but I am confident on foot of my discussions with the Chancellor that he is determined to conclude the negotiations during his Presidency. Having said that, I fully appreciate that until there is agreement on all aspects of Agenda 2000, including the issue of own resources, no single element can be finally signed off.

In Luxembourg last December probably the most significant decision on enlargement was taken in terms of the admission of the so-called "ten plus one" applicant countries. The Commission's reports on the progress that has been made by each of the applicant states was welcomed by leaders at Vienna and reinforced our belief that each country should be dealt with on its own merits.

We must be realistic in our approach to enlargement since meeting the eligibility criteria for joining the Union is a very substantial task for all applicant states, and we must support in practical ways in helping them to meet those criteria. The "five plus one" countries, the so-called "ins"— Cyprus, Hungary, Poland, Estonia, the Czech Republic and Slovenia — have made substantial progress in their respective accession conferences, while the remaining countries, Romania, Slovakia, Latvia, Lithuania and Bulgaria have made good progress in their preparatory process and will move to bilateral rather than multilateral negotiations with the Commission from the beginning of next year. In the course of our detailed considerations of the enlargement issue, we noted also the reactivation of the Maltese application for membership and welcomed that the Commission would bring forward a report early next year updating its opinion of 1993, which was favourable.

I took the opportunity of the meeting with the leaders of the applicant countries to have a short bi-lateral meeting with the Bulgarian Prime Minister, Mr. Ivan Kostov, and assured him of Ireland's full co-operation throughout the accession process. Irish agencies and private sector companies have a small but growing presence in the Bulgarian market, and I expressed the hope that this growth would accelerate in tandem with the transformation of the Bulgarian economy, a process under way since 1990.

The European Conference which was inaugurated in March of last year provides a useful forum for political consultation with participant countries and a further meeting at Foreign Minister level will take place next year. It is a potentially useful forum for the improvement of EU-Turkish relations and I hope it proves so during the course of 1999. However, it is right that we should review the role and functions of the Conference in Helsinki next December to ensure its effectiveness. On the European Conference, I welcome the extension of an invitation to Switzerland to become a member elect.

I mentioned at the outset that the Vienna summit was the second of the Austrian Presidency. The first took place on 24 and 25 October at Portschach and was convened to discuss the wide range of institutional, organisational and administrative issues facing the Union. At Vienna we were able to build on those discussions and agree key elements of the so-called Vienna Strategy for Europe contained in the conclusions.

I covered the main employment aspects of the strategy already and will address the justice and home affairs issues shortly, but I wish to focus briefly on those elements aimed at reforming the Union's policies and institutions.

I look forward to the final ratification of the Amsterdam Treaty in the second quarter of next year and the progressive implementation of its provisions. I welcome the decision at Vienna to agree to examine at Cologne in June of next year, how and when to tackle the institutional issues which were not resolved by this treaty. I accept that we must look at the size and composition of the Commission and the reweighting of votes in the Council in line with Article 1 of the Protocol to the Amsterdam Treaty. However, we should be careful about the timing of any changes. I would also be concerned lest we re-open any wider discussion of institutional arrangements and the treaties generally at too early a date given that we are still in the process of ratification of the most recent treaty. There are wide-ranging instruments and provisions in the Amsterdam Treaty and these must be allowed to be implemented and developed before we turn our minds to any fundamental reviews.

The measures put in place by the General Affairs Council to separate the internal and external affairs of the Union within its agenda, will allow for the more efficient processing and co-ordination of the Union's internal issues and I look forward to further consideration by the Council of how its work can be organised for greater effectiveness. In that regard also, I welcome the conclusion at Vienna that the number of Council formations should be reduced and the initial recommendation that the Internal Market and Industry Councils be merged. I look forward to the reports from the President of the Commission on the Internal Reform of the Commission and from the Secretary General of the Council on its functioning in light of an enlarged Union. The Vienna strategy usefully encapsulates the medium-term actions required across a variety of areas of concern to maintain the organic development of the Union. In this way, it prefigures to some extent the "millennium declaration" planned for agreement at Helsinki, which is intended to outline the Union's priorities for future years.

The area of justice and home affairs is one of increasing importance since many of the issues faced by individual member states are best dealt with collectively at European level given their transnational nature. An action plan on freedom, security and justice was considered by leaders at Vienna. It sets out the priorities for action in this regard over the next two years after the entry into force of the Amsterdam Treaty. Co-operation in this field will allow for a co-ordinated approach to tackle serious problems such as drug trafficking and organised crime.

EU level co-operation also allows for the development of global solutions on asylum and immigration. To progress work in this area, a high level working group on asylum and migration has been established by the Justice and Home Affairs Council. The diverse strands dealt with in the broad justice and home affairs area will be brought together for detailed consideration in the special meeting of the European Council to be held on 15-16 October 1999 in Tampere, Finland.

I have often noted that the European Union has provided a useful framework within which progress in Northern Ireland can be made and I welcome the reiteration of support from our European partners provided in the Vienna conclusions. They recall the conclusions at Cardiff which mandated the Commission to bring forward proposals for the continued support of the peace process. I look forward to the Commission's proposals and thank our European partners, as well as the Commission and the European Parliament, for their ongoing and genuine support.

As far as common foreign and security policy issues were concerned, the Vienna European Council discussions and conclusions broadly covered three areas: human rights, the implementation of the Amsterdam Treaty and a number of external policy issues. The 50th anniversary of the Universal Declaration of Human Rights fell on 10 December and, to mark the occasion, the European Council reaffirmed its commitments to the rights and fundamental freedoms enshrined in that historic human rights document. The European Union is founded on the principles and values enshrined in the universal declaration — liberty, democracy, respect for human rights and fundamental freedoms and the rule of law.

In the context of the implementation of the Amsterdam Treaty which will come into force in May or June next, the European Council took some decisions of a procedural nature. These concerned the new instruments of common strategies, the appointment of a High Representative for the Common Foreign and Security Policy as soon as possible, and the new impetus given to debate on security policy issues. While the Council stated that the CFSP must be backed by credible operational capabilities, which has an immediate application to the Petersberg Tasks, and welcomed the Franco-British St. Malo Declaration, it also stated that European solidarity must take into account the various positions of European states, including the four neutral states.

The Heads of State and Government had a detailed discussion on Russia over dinner on the first day when concerns were expressed about the economic challenges facing the Russian people. The European Union stressed its solidarity with Russia and its people and reaffirmed the importance of Russia as a strategic partner. Foreign Ministers at their dinner discussion focused on the western Balkans. Progress was noted, where such had been made, in respect of Albania, Macedonia and, to a lesser extent, the return of refugees in Croatia. With regard to Kosovo, the Council expressed concern at the lack of progress on political talks between the Serb and the Albanian sides, but reiterated its support for the process as well as the readiness of the EU to provide further humanitarian and reconstruction aid to Kosovo.

The European Council also considered the Middle East peace process, and in that context reviewed the important Wye River Memorandum Agreement. The Council welcomed the new dynamic for peace created by that agreement. However, all members of the European Council are conscious of the serious difficulties which have arisen in its implementation. We deplored the recent violence which led to several deaths and the setting of new conditions which impede its implementation. We called on the parties most concerned to implement the agreement fully in accordance with the agreed timetable and in good faith.

Since the European Council, President Clinton has visited the Middle East. I pay tribute to his great personal efforts in support of peace between the Israelis and Palestinians, efforts which we in Ireland, together with our partners in the European Union, fully support. The European Council reaffirmed its determination to make its own political and economic contribution to the peace process. The Union and individual member states made pledges at the recent donor conference held in Washington. On that occasion, Ireland pledged a minimum of $10 million during the five year period 1999-2003 for projects in the West Bank and Gaza.

In my meeting with Chancellor Schröder in Bonn, I raised Ireland's campaign for a non-permanent seat on the UN Security Council for the period 2001-2 and asked for favourable consideration when the new German Government comes to consider the issue, highlighting Ireland's commitment to the UN, multilateralism and peacekeeping over many decades. I had a very friendly and productive meeting with the German Chancellor in Bonn, in which we went over all the issues which must be decided in March and clarified Ireland's position on them. The meeting represents a new start to a good working relationship, which will be very important when vital decisions have to be taken.

The Austrian Presidency managed to host a very successful summit which saw advances on many key items on the Union's agenda. The Austrian contribution will be more evident in the medium term as the many reports commissioned are produced and the deadlines they hope to set are met.

I wish to focus on a sentence in the Taoiseach's speech which illustrates clearly why Ireland and Europe are not able to influence events such as the bombing of Iraq. The Taoiseach stated:

While the Council stated that the CFSP must be backed by credible operational capabilities, which has an immediate application to the Petersberg Tasks, and welcomed the Franco-British St. Malo Declaration, it also stated that European solidarity must take into account the various positions of European states, including the four neutral states.

That sentence constitutes a complete fudge as far as European security is concerned. What is being said is that there should be an operational capacity to support European security but also that everyone should be free to follow their own course of action. That is a complete contradiction. The Anglo-American attack on Iraq demonstrates that there is no such thing as a common security policy in Europe. The attack was not discussed in Europe nor at the summit in Vienna, even though it was being planned while the summit was taking place. There was no word about Iraq in the Taoiseach's speech. The attack was being planned at the time by a body, one of whose members, Britain, says it is a part of a common security policy with other members but it did not discuss the matter with them.

As a country which insists on the one hand that it is neutral but on the other puts forward someone to be the representative of a common security policy, we have a deep ambiguity in our position. How can it be credibly stated we are neutral and that we do not have any position on these matters as far as common European security is concerned when we believe one of our citizens should be the person to represent that policy? It does not add up and this is because the Fianna Fáil Party has not been able to make up its mind on the issue of common European security. It is wrong that Ireland is not a member of Partnership for Peace when all the countries of eastern Europe, former members of the Warsaw Pact and Finland and Austria are willing to join it.

Fianna Fáil is not willing to join it, not because of any strong sense of Ireland's interests but because of sheer political cowardice. There is a populist view within Fianna Fáil that it could not explain Ireland being involved in Partnership for Peace or being committed to European defence without difficulty, so it will not put itself to the trouble of explaining it. We are standing outside a common foreign and security policy for Europe. The reality is that if one wants to influence what people do, one has to be part of the decision, part of acceptance of and the taking of responsibility for the decision. It is not possible to sit on the sidelines and say we are the moral conscience of the world, that we will take no part in any of the decisions and will not pay for any of the decisions but we want to be able to preach from the sidelines and then complain we have not been consulted. If we have not been consulted it is because we have not opted in. This is an issue other parties in the House need to come to terms with. We cannot become great purveyors of moral outrage if we are not willing to contribute to European common security. There is a provision for common European security in the treaties and under the present Government we have not been willing to live up to it. I am sorry that is the case. This has serious consequences.

I have no doubt that United Nations law on the matter is ambiguous. The Taoiseach was able to say there is one view that the British and the Americans are entitled to do what they have done and there is another that they are not. While the people are arguing about this, people are being killed. There should be a European determination for Europe on this issue and Europe should be able to come to a conclusion, at least as a United Europe, as to what is the correct legal interpretation. Is it legally correct that action of the kind being taken can be taken? In the absence of any genuine common European security policy where people pool their discussion one is forced into a situation where countries will take unilateral action. In a sense the British will claim they could not wait for Europe to make a decision because Europe would never make a decision. Therefore, they would claim, they had to act on their own. Equally we have to play our part to ensure Europe can act together if we want to restrain others from acting unilaterally. We have not done that. That is the problem about Ireland's approach to the common European security. The idea that one would have a common economic policy, a common budget, a common currency, a common political structure and no common defence is unsustainable. If we are to have a common policy on all these matters and are not prepared to defend it, that is unsustainable and people have got to come to terms with that.

I agree with what the Taoiseach said about tax harmonisation. Our tax system, while it is a low rate system so far as corporation tax is concerned, is transparent. There are no sweetheart deals for individual companies. There may be a low rate of corporate taxation which is privileging trading sectors over other sectors of the economy, but there are no sweetheart deals as there are in other countries. The Taoiseach was right to make that point which is a valid one. It is a strong defence against any criticism that could be made.

There are no designer taxes.

Exactly, it is all off the shelf. It is the same for everybody. If you meet the criteria you qualify for the 12.5 per cent corporation tax and that is how it should be.

The Taoiseach indicated Ireland's rejection of any proposal for co-financing of the Common Agricultural Policy because it breached the fundamental principles of the policy. I agree with the Taoiseach on that point. The idea of moving back to renationalising the Common Agricultural Policy is not only bad for Ireland, it is bad for Europe because it dismantles one of the few long-term policies at a time when we are trying to create common policies in other areas. The Taoiseach went on to say the current Commission proposals on milk quotas and proposals favouring intensive rather than extensive beef systems would impact negatively on Ireland. This is probably true and is undoubtedly true in the short-term in the sense that Irish farmers would lose substantially.

It is time we took a long-term view on what the Common Agricultural Policy, with all the aids, grants and controls, is actually doing to Irish farming. When I entered this House, farming was a commercial activity. Farmers were independent, stood on their own feet, made and lost money in the market and occasionally complained to politicians but broadly speaking they worked as free agents in a free market. That is not the case now. Farmers no longer operate in a free market. Effectively they are people on a rural reservation. We are turning the agricultural community of Europe into an equivalent of the inhabitants of an Indian reservation in the mid-west. That is not what farmers want. It is important that that be said in this House. There is an idea that farmers want this situation and that farmers want to live on handouts. They do not. They want the freedom to farm, to produce, to buy and sell land, to buy and sell cattle and to make their own decisions as independent people. Independence is something they have had through generations. They do not want to become the pensioners of the European Commission which, unfortunately, is what farmers are becoming.

We should reflect on the damage the Common Agricultural Policy is doing to the quality of Irish production. I was shocked to read in the McKinsey report the evidence of the deterioration in the quality of Irish beef since 1990. In Ireland or Britain about 56 per cent of Irish beef would qualify as being of sufficient quality to go on a supermarket shelf in 1990. By 1997 we had reached the position where only 26 per cent of Irish beef would be of sufficient quality in Ireland by the retailers. The remaining 74 per cent would not be accepted. Why has that happened? It has happened because the Common Agricultural Policy pays people a cheque on the head of an animal whether suitable for sale or not. People are encouraged to have animals to qualify for cheques, not to to feed people but simply as a passport for a cheque. They do not care about breeding or feeding policy. They just have the animals to qualify for the cheques. The extent of the rapidity of the deterioration in Irish beef quality since 1990 is shocking. I do not wonder why the McKinsey report was not published. Had it been published, the damage would have been great. I say it in the House, safe in the knowledge that this is one place in Ireland where one can say anything with an almost certain guarantee it will not be published. I say to the Taoiseach in this effectively private meeting that what is happening to Irish beef is very serious. I have some familiarity with the sector from my professional background. It is awful that the quality is so bad. It is due to the Common Agricultural Policy because the dairy policy encourages milk production on a quota basis regardless of implications for the quality of the beef herd. When the bullocks are sold and go into the beef sector the quality of the beef sector deteriorates because the Holstein breed is unsuitable. There is also the headage payment system which encourages people to hold on to these animals rather than slaughter them. The position is getting worse.

I appeal to the Taoiseach to take a long-term view of agriculture. It involves taking short-term decisions which are not very popular. I know some of the farming organisations would not support him in taking a long-term view because they are totally fixated on the short-term. They are far more political in the way they operate than any of us here, in the sense that they live from headline to headline, from pressure group to pressure group. Their sole imperative is unity and they have no regard for the medium-term consequences for the sector.

Someone must take a long-term view of the future of agriculture and it is the Government's responsibility to do so. It must consider developing commercial agriculture. There is no way we can realistically support the number of commercial farmers currently involved in the industry because there is not enough land available from which they could earn incomes comparable to the average industrial wage. No one involved in farming or any other occupation should be asked to work for less than the average industrial wage. For individuals to be commercially successful in farming they must be able to purchase and farm adequate areas of land. The Government will encounter difficulties in this area. If we do not deal with this matter now, there will soon be no commercially viable farmers working the land and everyone will be claiming pensions. Irish land, which has the capacity to feed the people of Europe, will not be capable of doing so because the structures will have been overrun by the pension and headage payment mentality.

I will now deal with the single currency. I am concerned about the German Government seeking to get its money back. It is being supported in this approach by a number of other countries. The European Union is not some kind of defined pension scheme where every country must pay in a certain amount and receive a certain amount in return. The common budget creates a common market and Germany has benefited more than almost any other country from that market. Richer countries benefit more from the common market than poorer ones, while poorer countries benefit more from the common budget than richer ones. That is the deal, the richer a country, the more it pays into the common budget. Equally, however, that country will gain more from the common market because of its larger productive capacity. Likewise, a small, poor country will gain little from the common market because it is not competitive in terms of its production.

Those countries adopting Mrs. Thatcher's "I want my money back" approach do not understand what is going on. I have heard reports that Chancellor Schröder stated he is tired of being "ripped off" and that German money was "squandered in Brussels". That is not the case. The European Commission's budget is probably smaller than those of London County Council or Berlin City Council. The European budget is quite small when compared to those of municipalities in many member states.

Unfortunately, Europe is becoming a focus for people to air their opposition to globalisation, free markets or change. No one likes change, particularly politicians who are in Government because it might mean the end of their term of office. In my opinion, Opposition politicians are more open to change. The truth is, however, no one really likes change. To some extent there is so much change happening throughout the world because of globalisation that someone must be blamed. There appears to be an increasing tendency for people to blame Europe for change. The changes taking place would occur in any event, regardless of whether the European Union existed. In reality, the EU provides us with an instrument by which we can influence change for good or ill. Without the European Union, we would be simply the victims of change.

The globalisation forces to which I referred would be taking effect regardless of whether the European Union or the the European currency existed. However, through the EU and the single currency, we will have some influence on the shape of change. That is the way this matter should be considered. In my opinion Europe's leaders are failing abysmally in their duty to explain the value of the European Union to their electorates. They are allowing anti-sentiment to flourish because of a Euro-minimalist approach on their part, which is related to the Government's weak approach to common European security. The philosophy of this approach is "We want something out of this but we do not want to put anything in".

Ireland is under pressure on a number of fronts, including the common agricultural policy, the budget, taxation, etc. The country is also a net beneficiary and it receives a great deal of money from Europe comparative to its wealth. I am surprised, therefore, that Ireland has the second worst record in Europe in respect of implementing EU directives. Deputy Quinn tabled a series of questions on that matter a number of weeks ago, the answers to which proved highly informative.

They were highly depressing.

They show that Ireland has failed to implement 76 directives it should have implemented under the Single Market. Only Luxembourg, with 80 un-implemented directives, has a worse record. However, Luxembourg is tiny and its civil service probably employs fewer staff than Dublin Corporation. Given the other matters with which it must deal, Luxembourg's civil service cannot be blamed for failing to implement those directives. However, that Ireland, the greatest single net beneficiary from Europe in per capita terms, should have the second worst record in terms of implementing EU directives, is a gratuitous invitation to get ourselves kicked.

We should try to be the best, not the second worst, in implementing directives so that we do not leave ourselves open to criticism. I remind the Taoiseach that Finland, a country which joined the European Union after Ireland, has the best record on implementing directives. Finland is a small country but it has failed to implement only 15 directives while Ireland has failed to implement 76. That country's civil service is obliged to translate EU directives into Finnish, a language which most other people cannot understand. The Finnish civil service is comparable in size to Ireland's, but that country has managed to implement a far greater number of directives. Ireland, which receives the directives in English and which has a sizable Civil Service, has failed to implement 76 directives.

The Taoiseach should ask the secretaries general of the Departments which have not implemented EU directives — virtually every Department is guilty in that regard — what they are doing exposing Ireland to this sort of criticism. The last thing we need when trying to defend or position on taxation or the common agricultural policy is to be criticised for not implementing the directives to create the Single Market. We do not need to expose ourselves in that manner.

I will now comment on the enlargement of the European Union. Prior to the Taoiseach's meeting in Vienna, I had an opportunity to meet the Prime Ministers of Bulgaria, Romania and Slovakia, the Polish Finance Minister and others. We should recognise the difficulties faced by the Governments of countries hoping to join the EU in terms of modernising their economies. One of the ways they can sell EU membership to their electorates is by informing them they have to do these things to qualify for entry into the European Union and escape from under the umbrella of Russian influence. Ireland did the same thing in 1973 partly for the same reason, namely, escaping from under the British umbrella.

For the countries to which I refer, EU membership is a political as much as an economic imperative. They are having to make terribly difficult decisions. For example, the five party coalition Government of Romania will have to decide to make redundant approximately 70,000 state sector employees of loss making state companies. These people have to be laid off because the companies must be closed down. Even if they were paid for doing nothing, the country would save far more than if they were working. Poland will be obliged to close seven coalmines in the short-term. That country, which ten years ago was still under communist rule, has a more liberal rail system than Ireland and it allows private sector trains to use rail lines. Ireland has not yet liberalised its rail system and I am sorry the Minister for Public Enterprise is not present to reflect on that.

As already stated, these countries are being forced to make difficult decisions and they sell those decisions to their electorates by stating that they must be taken to facilitate entry to the European Union. Member states of the EU are slowing down enlargement and the will for enlargement does not exist. I understand that at one level because if it is difficult to create a sense of Euro patriotism — which will be needed to hold the Union together — in western Europe, it will be even more difficult to convince people living in Connemara that they have something in common with their counterparts in Gdansk or Bucharest and that they are all part of the same team. Galway people, wherever they live, support the Galway team when it reaches the All-Ireland Final and they must take the same approach to Europe.

There will ultimately have to be a sense of a common European identity that will support the European team when difficult decisions have to be made. The more the European Union enlarges the more difficult that will become, but the price of not enlarging reasonably quickly is to put these democratic countries under pressure. It should be borne in mind that they were let down and serially betrayed by western Europe in the 1930s when they were gobbled up one by one by Hitler. They are waiting to discover — this is not said at meetings — if the precedent will be repeated in the 1990s and the early years of the new century. We should be generous in our approach.

I make a special appeal for Malta. The Maltese should not lose out because for a few months they had an anti-EU Government which, mercifully, was voted out of office recently. They should be treated as if their application was always on the table.

Although one does not get this impression from the Taoiseach's report, the European Council in Vienna was the first occasion on which it was apparent that Ireland's status as a favorite younger child or struggling participating member state, which was used by successive Governments to secure concessions, was at an end. We are no longer looked upon in a benign way. If one reads the popular press in a number of member states and listens to debates in the European Union, it is apparent that Ireland is no longer seen as a good player entitled to receive a little extra, as happened in Edinburgh when we received the largest per capita increase in Structural Funds notwithstanding the fact that we are not the poorest member state. Although different parties have different views on some issues, there is a possibility of consensus in a number of areas around which we should build positive positions. Does the Taoiseach accept there has been a fundamental shift in the perception of Ireland among other member states at all levels?

On economic and monetary union and the proposal for co-ordination, the perception of Ireland as a tax haven presents a serious problem. As the Taoiseach, as a former Minister for Finance, is well aware, it is erroneous but it is being promoted by ill-informed or envious comment. There is an obligation on the Government — the Taoiseach shares my view — to engage in a diplomatic counter exercise, for which there is a precedent.

When we were attempting to ensure Ireland would qualify, through our observance of the Maastricht Treaty criteria, to participate in the first round of the single currency Ireland was not mentioned by some continental commentators and senior institutional officials such as Mr. Hans Tietmeyer, president of the Bundesbank, even though we were more compliant than some of the countries mentioned such as Belgium. During my time in the Department of Finance a concerted effort was made to ensure this erroneous impression was corrected and Ireland would be one of the founding members.

That campaign was won but it did not happen by accident. There were systematic briefings, interviews and contact with the financial media by the NTMA, the Department of Finance and other relevant bodies. This required much resources and was hit and miss because there was no guarantee of success. I have no confidence that the Department of Finance has analysed the need for such a campaign or that the Minister for Finance is attempting to pursue it.

I support the points made on tax co-ordination, from which Ireland has nothing to fear. The rates of 12.5 per cent and 25 per cent have been decided. Changes would require unanimity and a new treaty. Ireland's effective tax rate is similar to that in other countries which have a higher nominal rate of taxation but a narrower base, particularly in the area of corporation tax. In the Netherlands there are designer tax rates — I have direct knowledge of this — whereby in a special deal an individual company can negotiate an effective 7 per cent corporation tax rate with the Dutch authorities. No one is suggesting that should happen here, but this information was conveyed directly some years ago to the Department of Finance. The IDA is also aware of it.

The tax havens of Jersey and the Channel Islands are under the jurisdiction of the United Kingdom. Ireland is not a tax haven. There are no brass plate operations in the IFSC, although some German and Luxembourg commentators are attempting to suggest there are. Envy and worry, particularly on the part of Luxembourg, and the rise of the IFSC are factors which will give rise to adverse comment and distort political opinions. This has to be addressed. Although it is primarily a matter for the Department of Finance, the Department of the Taoiseach should have a co-ordinating role.

I do not know if the Taoiseach is satisfied about the arrangements with regard to the representation of the euro countries and the G7, but I appreciate the efforts being made by the German and French Finance Ministers to secure economic co-ordination in the member states which have a common currency. The Maastricht Treaty did not provide for monetary union. It provided for economic and monetary union. The focus of attention is on economic governance now that the technicalities have been resolved. Greater co-ordination is in everybody's interest and we must look at how we perform in relation to that. There must be a better dialogue between the citizens of this State, their representatives in the European Parliament and their representatives in the Oireachtas about the implications of such economic co-ordination and closer economic governance. We have heard nothing from the Minister for Finance about emergent thinking in this area and there is no indication from the Taoiseach of what that thinking might be.

My opening comments inform my attitude to Structural Funds. I look forward to the day when Ireland is a net contributor to the European Union budget because when that happens Ireland will be a seriously rich country. We are today a rich country but I look forward to the day when we become a net contributor, not a big contributor but a net contributor. The Finnish contribution of 0.5 per cent would initially meet my requirements. We must assert clearly and unreservedly that after 25 years of membership of the European Union, we aspire to paying our way and to returning some of the economic solidarity and support we received when we were growing up economically, so to speak. We must declare our willingness to see substantial amounts of Irish taxpayers' money going to countries and regions of the European Union which need it. We must say this without equivocation. I have said this to the Socialist Group in the European Parliament and in bilateral meetings in other European countries. I have yet to hear it from the Taoiseach or from the Fianna Fáil-Progressive Democrats Government. I suspect that in the course of the complex and intense negotiations which will take place between now and next March, including the special summit which the German Presidency envisages in February, we will not be able to negotiate the best possible transition deal in the next round of Structural Funds unless we assert what our end position is, what our aspirations are and our willingness to make a clear and full contribution to the European budget. We have benefited immensely from membership of the European Union.

I return to the point I made at the outset and which cannot be repeated often enough. There has been structural shift in the perception of Ireland by the other member states which informs their attitude to our approach to Structural Funds. We have already had a debate on regionalisation. The Government was forced into a political compromise for domestic reasons and perhaps will not be unhappy if EUROSTAT comes to a conclusion which does not support our application. That is for another day and I do not wish to prejudice the negotiations. As far as I am aware, the matter will be adjudicated on very clear objective criteria.

Ms Máire Harkin who represents the Western Development Commission and the alliance which sought regionalisation for the west of Ireland, has said the Government, by including parts of regions not connected one with the other, has damaged the prospects of a clear success in that area. We must wait and see what comes from that decision.

It must be accepted that while it is legitimate to maximise the amount of money this country will get, the idea of forcing regionalisation up to the point where, according to various estimates, we would only get perhaps an additional £100 million to £130 million over the seven year period of Agenda 2000 is not. This idea has not been convincingly argued by Ministers or spokespersons. It will prejudice our success in the wider set of European negotiations if we are seen, in a mealy mouthed, béal bocht manner, to squeeze that part of the entire European agenda for a few extra million pounds when we enjoy twice the rate of economic growth of the whole of Europe, our national debt is falling dramatically in terms of GDP and our projected set of total budget surpluses is substantial in absolute and real percentage terms. In addition we have, after the United Kingdom and the Netherlands, one of the largest private sector pension fund industries in Europe with massive reserves. The Taoiseach, when he was Minister for Finance commissioned a study which reported while I was Minister for Finance. This demonstrated that, on today's figures, the accumulated value of private Irish pension funds such as the Aer Lingus and ESB workers' funds and private sector funds, is between £23 billion and £25 billion, or approximately half our GDP. The European Union is aware of our budget surpluses, our economic growth and our tax take which is the lowest in the European Union and projected, in the documents which accompanied the budget, to fall in real terms. We are not in a strong position to make a case for an extra £100 million to £200 million to countries who do not enjoy such a strong economic background. The potential for a succesful set of negotiations across a wider front could be prejudiced.

I remind the Taoiseach that we have already run into that resistance in one operational area. Leaving aside the impasse in relation to the docklands project and the conference centre, every town which confidently expected to be granted urban renewal or integrated area planning status on 31 July last is still awaiting an announcement. These towns had hoped for an announcement on this matter in the early autumn so that plans could be made. However, this item has fallen into the crevasse of envy, opposition and suspicion which is being aggravated by the béal bocht bleatings of some people in our approach to European funds.

Tipperary town is considered an economic black spot compared to other towns in south Tipperary such as Clonmel or Carrick-on-Suir. Tipperary South Riding decided to make only one application to the Minister for the Environment and Local Government in relation to integrated area planning. On a recent visit to Tipperary town I met the chamber of commerce and others who want to make their investment plans but have been put on hold while a decision is awaited. This kind of investment money will flow to other places and the people of Tipperary fear they will miss the boat. This is an example of how a strategic political position and a set of perceptions, which are not being countered by our embassies or by the Department of Finance, works its way through the Commission and DG4 down to the underdeveloped parts of Tipperary town. Urban renewal type projects are being deliberately stalled because of the change in atmosphere and of attitude in the European Union as a result of what has been happening during the past year or so.

I very much support what Deputy John Bruton said about the Common Agricultural Policy. The CAP is the last command economy in the world. It has distorted market mechanisms to the point where it is run on forms and applications with no regard to market mechanisms as we know them. It is doing more than that. It is conning a generation of people living in rural Ireland into thinking that by lobbying or by invading Farm Council meetings in Killarney or elsewhere, they can continue to live on an economic drip feed. It is easier for the Labour Party to say this than for Fianna Fáil or Fine Gael. Perhaps the House should be saying that.

The Common Agricultural Policy death-knell was sounded by the former Commissioner, Ray MacSharry when the Blair House Agreement, which was part and parcel of the WTO institutions leading to the liberalisation of trade, was signed. European food prices will move inexorably towards world market prices with some give or take. Rural decline is a reality in Ireland. When we joined the European Union in 1973, 27 per cent of the workforce was engaged in primary agriculture. The rate is now 11 per cent or 12 per cent and falling and it will continue to fall. The IFA must be confronted with this and told that instead of fighting a rearguard action which is doomed to failure, we need to construct a positive and constructive policy of rural renewal and rural settlement that will take into account the reality that primary agriculture will decline and the numbers engaged directly in primary agriculture agribusiness will consequently decline, the rural population of Ireland is not made up of only farming communities, people are living in rural Ireland who do not earn their living directly from agri-business activities, and, the needs of growth of our economy and our population growth. We have a population of 3.8 million, the highest since 1870 and much of that population, which has been generated by urban growth is choosing, of necessity or by choice, to live in rural Ireland. In rural Ireland there is an immense capital stock of communal buildings, such as, schools, post offices, churches, community halls, clubs and so on. If we do not have a positive policy on rural renewal, we will not be able to ensure the economic use of that capital infrastructure and we will have even more congestion in our towns and cities.

On the question of enlargement, Ireland should be positive with respect to Malta, but we should be proactive in relation to the three of the six applicant countries, in which we do not have a resident embassy, which will join the Union fairly soon. I refer to the Republic of Cyprus, Estonia and Slovenia. We have resident embassies in the other three applicant countries. To construct a new alliance of friendships and contact in an enlarged Union, Ireland through the Department of Foreign Affairs, should run a bilateral programme to facilitate and assist those applicant countries to make the transition so that they qualify to implement the Acquis communitaire and fully participate in the membership of the Union. That is an enormous task, as we heard earlier today. We have considerable expertise and we should offer to share it in a bilateral programme run by the Department of Foreign Affairs in a manner that will enable us to win friends and allies, which we will need for the future.

In the ten minutes available to me I will not be able to cover all the aspects of European policy in the Vienna Summit that I would like, particularly as I want to spend some time speaking on the current appalling attacks on the people of Iraq. Before dealing with other matters arising from the summit, I wish to refer to last night's attack by the United States and the United Kingdom on Iraq. EU leaders discussed the Iraqi situation at Vienna, but the Presidency Conclusions did not refer to any support for military action against Iraq. Everyone acknowledges the major contribution made by President Clinton and Prime Minister Blair to the peace process on this island, but that does not mean our critical faculties should be put into cold storage when it comes to other actions they may take.

The decision to launch bomb and missile attacks against Iraq was wrong. It was immoral, unjustified, contrary to the UN Charter and disproportionate to the issues involved. Many people seem to believe a decision was made some time ago by the US authorities to teach Saddam a lesson and, regardless of what attitude the Iraqis had adopted to the UN inspection teams, that it was only a matter of time before the military would be let loose. It is important to emphasise that there is not a United Nations mandate for these attacks. Attempts by the US and Britain to wrap the blue flag around themselves is fundamentally dishonest. The attacks have already split the Security Council and are likely to damage the standing and credibility of the United Nations.

History has shown that Saddam Hussein is an unsavory, unstable and unpredictable dictator who has been unspeakably cruel to his own people. However, those who will suffer most from these attacks will not be Saddam or the Iraqi generals but the ordinary Iraqi people. In addition, the penal application of sanctions in the aftermath of the Gulf War has created real hardship for the Iraqi people. The World Health Organisation estimated that up to 6,000 children are dying each month. These sanctions have allowed Saddam to depict himself as a defender of his people. Military strikes are likely to add further to his prestige with ordinary Iraqis. Far from ousting Saddam Hussein these attacks may serve only to strengthen his hold on power.

In addition, given his unpredictability, these attacks on Iraq could set off a chain of events, which would have dire consequences for the people of the region. The failure of Iraq to comply with UN resolutions is deplorable and requires a strong diplomatic response from the world community. Unfortunately, the failure of the international community to take sanctions against countries like Israel, Turkey and Indonesia, which have been allowed to ignore UN resolutions time and again, may simply have encouraged Saddam Hussein to believe he could get away with this defiance.

Are we also to take it that there has now been a change in international law and that possession or alleged possession of weapons of mass destruction which pose a potential threat to neighbouring countries are legitimate grounds for military intervention by third countries. If they are, Israel, Libya, Syria, India, Pakistan and a host of other countries are legitimate targets.

To make an analogy with our own island, we all know the IRA and the other paramilitaries continue to possess weapons of destruction, that they pose a potential threat to others, that the paramilitaries are refusing to destroy those weapons, that they are defying the democratic will of the people of the two jurisdictions and that they are failing to co-operate with the duly appointed decommissioning body. Is anyone seriously suggesting that the British and Irish Governments should launch pre-emptive military strikes? When international crises have arisen before, especially those involving the United States, the tendency for Irish Governments has been to bury their heads and hope that nobody will ask them what is their position. I hope we will not have a similar silence on this occasion, although I am not at all sure that will be the case given the Taoiseach's response in the Dáil this morning. Already other European countries like France and Germany have made it clear that they do not approve of these actions. Why does the Taoiseach not also make it clear that this country does not approve of this action? Ireland should join with like minded countries in the EU and the United Nations and work for an immediate ending to the attacks and for a peaceful settlement of the dispute with Iraq. Article 29.2 of Bunreacht na hÉireann states "Ireland affirms its adherence to the principle of the pacific settlement of international disputes by international arbitration or judicial determination." It is now time that we started to live to those fine principles.

The Vienna Summit seems to be more notable for the number of decisions deferred by the EU than the number taken. Apart from the resolution agreeing to award the designation of honorary citizen of Europe to the former German Chancellor, Helmut Kohl, one can search in vain through the usually lengthy Presidency Conclusions for another single decision of significance. The Presidency Conclusions is littered with the words "welcomes, asks, invites, encourages, reiterates, underlines, takes note," but the word "decides" hardly appears in the document. A number of important issues requiring decision have been deferred. Agenda 2000, agricultural reform, new employment initiatives, Structural Funds and duty free issues have all been deferred to future summits. Unless care is taken we will end up with a serious logjam in the decision-making process in the European Union.

The one issue on which a decision, or what might be described as a half-decision, was made, was duty free sales, an area of particular concern to this country. As an island nation on the periphery of Europe, with a high level of travel between here and other European countries and a tourism industry that is vital to our economy, the proposal to abolish duty free sales is a matter of vital interest. The decision to ask the Commission to examine again the implications for jobs of the decision to abolish duty free sales provides a window of opportunity to have the matter fully aired again. Every study to date has identified serious potential job losses and the Commission study is hardly likely to find otherwise. However, we should not assume that the battle has been won. Strong opposition to reversing the decision remains, especially in Denmark, and the Taoiseach needs to continue to exert pressure.

The move to abolish duty free within the EU is a reflection of the type of rigid and inflexible free market dogma which drives the decision-making process and makes people cynical about the European project. The disclosure a few weeks ago that duty free facilities will be retained for members of the Commission will increase the degree of cynicism.

I am surprised the issue of the next round of EU Structural Funds has not been raised, given how important Fianna Fáil claims it is to Ireland. The next round of Structural Funds will have a huge impact on regionalisation and the fight against poverty and disadvantage over the next decade. The decision by the Government to draw an artificial line through the heart of the country was a cynical move which has more to do with the perceived political needs of the Government than the needs of disadvantaged areas. The 70 per cent of unemployed people who live outside the areas singled out for preferential treatment by Fianna Fáil and the Progressive Democrats have been told they are on their own.

The Government has made a nonsense of its own claims to have a coherent policy on regionalisation by creating, for purely political purposes, a totally artificial region that leads over the Shannon Estuary and bypasses impoverished communities in the city of Limerick. There is every chance the EU will recognise this proposal for the political stroke it is and reject it, thus damaging the standing of Ireland in the Community and diminishing our prospects of getting a sympathetic hearing.

One item I welcome in the Vienna conclusions is the statement that employment is the top priority of the European Union. It also states that this is the best way of providing real opportunities for people and combating poverty and exclusion effectively, thereby serving as a basis for the European social model. The jobs must be good with decent pay and conditions. Few reasonable people could disagree with those sentiments. Direct investment must be targeted specifically at those areas of highest unemployment, particularly long-term unemployment.

We are about to engage in a debate on the Common Agricultural Policy and its reform. The IFA and other organisations which primarily reflect the interests of commercial farmers will do farmers and the rural community a disservice if they start to cry gloom and doom again. There is an urgent need for reform of the Common Agricultural Policy to ensure that, where resources are available, they are used to assist those who need them and not, as happened under the MacSharry proposals, to give 20 per cent of farmers the benefits of 80 per cent of the money available.

I thank the Minister for Foreign Affairs for facilitating me in meeting my German colleague, Joschka Fischer, this morning. As the Minister is probably aware, Mr. Fischer has issued what are regarded in some quarters as controversial statements on NATO. The German Greens policy has always been to "denatify" the European security architecture and this has met with widespread criticism in the United States.

What type of vision does this country have for Europe? How do we see the common foreign and security policy progressing as we enter the new millennium? It seems we are in a quandary. Fine Gael and the Progressive Democrats are in favour of Partnership for Peace and Fine Gael favours joining NATO, which is based on nuclear weapons. That is not the way the German Greens or Joschka Fischer want to go. We would like to take NATO out of the equation. By joining Partnership for Peace, we are heading in the direction of NATO.

The Minister stated in previous debates that neutral countries are joining Partnership for Peace. It may be of interest to the Minister to know that NATO personnel and generals have referred to those countries as the former neutrals, which gives some insight into their way of thinking. Partnership for Peace is a stepping stone towards NATO. It is not the direction in which Europe should be heading. The Western European Union is based on NATO and could be seen as the European leg of NATO. This country should be steering away from that.

It is no good saying that Austria and Switzerland are involved in Partnership for Peace. There have been internal debates in those countries on Partnership for Peace. The governing elites are pushing this issue. NATO literature refers to them as the "political elites". It is clear the establishment, including the media, is pushing for membership of Partnership for Peace. Those of us who oppose this issue — I issued approximately eight press releases on it — cannot get any coverage. That is deplorable. We need an open debate on this issue so we can tease out the difficulties.

The vast majority of people want to retain our neutral status. They are confused by the name Partnership for Peace. This is an advertising agency's dream; Saatchi and Saatchi could not have thought of a better title. What could be nicer than partnership and peace? When they are asked if they favour Partnership for Peace, 70 per cent will say yes. They do not know the problems involved and that it is a stepping stone to NATO. I hope we have a proper debate on this issue in the new session so that we can tease out the difficulties.

I urge the Minister to head in the direction of the German Greens who want to take NATO out of the equation. The statements by the French about the bombing of Iraq show they want to dissociate themselves from it. We should be courageous enough to take a similar step. Which camp are we in? We seem to play it both ways by saying we love the Americans and the Europeans. We should develop a proper European identity and shape Europe towards the type of vision we want.

I hope the Minister addressed the issue of Sellafield with Joschka Fischer this morning. As he knows, the programme of the SPD and the Greens in Germany refers to the decommissioning of various power plants, the majority of which run on nuclear fuel. If the German Greens hold true to their promise, there will be decommissioning which will have huge effects on the operation of Sellafield which depends on spent fuel for reprocessing. If that was stopped, Sellafield would no longer be economically viable. I hope this issue will be pushed during the German Presidency. It is in our interests to push this issue and to stop spent fuel being used at Sellafield.

The euro has not been properly debated. During the so-called Maastricht debate we spoke about whether we would get £6 billion or £8 billion. If we asked the people if the single currency was debated, they would not be able to remember. It is regrettable the debate focused on funding. This is, as Deputy Spring said, a huge step. It is even bigger than joining the EEC about which we had a long debate. We did not go into the details of the implications. At this stage there are many people who fear the consequences. Many people do not understand the full implication, that we are giving up our economic sovereignty and the tools of economic management. They believe it is simply a question of having euro notes so that when returning from abroad one no longer has pesetas in one's pocket. That is a gross simplification but is the idea which people have of the euro. It is time to inform people of the seriousness of the issue.

Europe is ill-prepared for this. In the United States, for example, where there is an economic union, there are fiscal transfers for those states which cannot maintain their position. Mr. Hans Tietmayer has stated that it is up to us and we are on our own. If one cannot maintain one's position, so be it. It seems to me to be an extremely harsh regime and quite undemocratic. The utterances of Mr. Wif Duisenberg do not inspire confidence. This man seems to think that he is now king of Europe and he can do whatever he wants.

Ireland needs to state that this is not satisfactory. We must have some input. We do not seem to have any input on the European Central Bank — Deputy Quinn has raised that essential matter. All of these things have been conveniently put to one side and we are entering an unprecedented stage in our economic development without any real lifelines. It is certainly uncharted territory. All we can do at this stage is hope for the best.

I remember at the time saying that before long we would come to the issue of tax harmonisation and I was told that was nonsense. In fact, Deputy Dukes told us we could talk about that perhaps 40 years down the line. Chancellor Schröder is stating this is now on the agenda and Mr. Lafontaine is certainly pressing this issue. What we are witnessing especially within Germany is a sort of new Euro scepticism. Perhaps it is politically convenient to blame Europe for many of Germany's ills but we are under pressure from the Germans. The Germans are pressing for tax harmonisation and I do not know how long Ireland can hold out. Ireland is a relatively small player within Europe and it will take all of our resources to withstand that sort of pressure. It must be remembered that it is our good tax regime which has helped improve our economy.

I hope that some of the issues I have raised will be addressed by the Minister in his response.

I have already dealt with Deputy Gormley's arguments and I will deal with further arguments about the Partnership for Peace. He suggested that at some stage in the recent past I uttered the immortal words that we would need a referendum if we decided to go the PfP route. I did not make such a statement.

The Taoiseach did. He said it would be totally undemocratic.

I do not agree with that either. The whole thing was a little messy and I am trying to put it right.

The Taoiseach in his statement earlier has reported comprehensively on the outcome of the Vienna European Council. In relation to Agenda 2000, the outcome of the European Council in Vienna was a satisfactory one from Ireland's point of view. Following Vienna, the negotiations are now moving into their final phase under the incoming German Presidency. Although the negotiations promise to be difficult, they remain on course for political agreement in March.

As Deputy Gormley said, I met my colleague, Mr. Joschka Fischer, this morning and outlined a comprehensive overview of our concerns and interests in the context of the up-coming deepening negotiations on Agenda 2000 which the German Presidency hopes to conclude by the end of March. We said we will be constructive but nevertheless, taking account of our membership of the EU, we also had to take account of our national interests.

The detailed report submitted to Vienna reflects considerable progress, especially on the more technical aspects of the negotiations, gives an overview of the state of play on the main outstanding elements of the negotiation, and includes a series of addenda setting out in detail the various legislative proposals as they now stand. Ireland's concerns are adequately reflected in the report. The European Council noted that the progress report and the Commission's proposals constitute a good basis for further work on Agenda 2000.

Progress on the more sensitive political aspects of the negotiations has inevitably been slower. This is reflected in the relatively brief conclusions of the European Council which focus on some broad considerations for the remainder of the negotiations. The European Council reiterated its commitment to meeting the deadline of March 1999 for reaching agreement on Agenda 2000, and recalled that agreement can only be reached on the package as a whole. It invited all member states to make their full contribution to achieving a fair, balanced and acceptable outcome.

Difficult and challenging negotiations lie ahead. As we enter this critical phase of the negotiations, we will continue to approach the Agenda 2000 negotiations in the constructive spirit which has informed our approach to date. However, I can assure Deputies that constructive approach to the negotiations will be accompanied by a continued, robust defence of Ireland's interests across the range of areas encompassed by the Agenda 2000 package. I expressed Ireland's deep concern at the Commission's proposals on CAP reform, particularly under the headings of beef, milk, co-financing, the prospect of renationalisation and so on. We will insist on the importance for Ireland of a satisfactory outcome of the proposals for CAP reform, and we will seek to ensure that adequate and equitable transitional arrangements are available for those regions moving out of Objective One status.

European integration gained new momentum at Vienna. From the reports presented to the Council it was noted that the elements of economic policy co-ordination in relation to the third stage of EMU were already in place and working well and that there will be a successful and smooth transition to the introduction of the euro on 1 January. This event will be a milestone in the evolving process of European integration as well as strengthening our capacity for economic development. The Council was able to take important decisions about the external representation of the euro-area in the international monetary system consistent with the major role which the euro will play after its launch in the new year.

Discussion on economic policy co-operation highlighted the increasing importance being given to the efforts of the member states to expand employment opportunities in Europe. The co-ordinated efforts already under way are showing encouraging results. The review of the National Employment Action Plans for 1998 and the setting of the employment guidelines for 1999 mark a deepening and strengthening of economic policy co-operation in this vital area to ensure the success of EMU and to support sustainable jobcreating growth in Europe within the framework of the Growth and Stability Pact. We welcomed the recognition that the social partners have an important responsibility in contributing to the overall strategy for employment, growth and stability.

In the past year the global economy has suffered as a result of the economic setbacks in Asia, Japan, Russia and elsewhere. The Vienna Council demonstrated that the member states share a common outlook on the appropriate response to the global financial crisis in terms of the key role that Europe should play and how the international system might be strengthened and reformed to enable it to respond more effectively to such problems in the future.

The remainder of my statement is devoted to CFSP issues. As the Vienna European Council took place immediately after the 50th anniversary of the Universal Declaration of Human Rights, it took the opportunity to highlight the primary importance it attaches to this seminal human rights document. It noted, in particular, that the European Union is founded on the principles and values enshrined in the universal declaration — liberty, democracy, respect for human rights and fundamental freedoms and the rule of law — and that its actions are based on those values.

The European Council also endorsed a solemn declaration of the European Union on human rights which was issued during a commemorative event held in Vienna on 10 December. This declaration set out the Union's achievements to date in the field of human rights and it outlined how human rights might be strengthened, both internally and externally. The Commission and member states will now examine how best to implement these proposals.

The European Council availed of the current focus on human rights issues to stress the need to combat all forms of racism, both in the Union and in third countries, and it invited the Commission to draft proposals for its Cologne meeting for measures to counter racism in the candidate countries. Member states have also been invited to consider similar measures. With the Treaty of Amsterdam expected to come into force in May or June of next year, considerable attention was paid to preparations for its implementation. However, despite the fact that there had been the intention to appoint the new high representative for the common foreign and security policy at Vienna, it was clear that the time was not right for a decision. Therefore, the European Council agreed that the high representative would be appointed as soon as possible.

Four common strategies were agreed. It was decided that Russia would be the first to be dealt with. Hopefully, that will be taken at the Cologne Council. I set out my views on security policy and they were reflected in the conclusions of the European Council. Account was taken of the need to emphasise the Amsterdam Treaty and the Petersberg Tasks thereafter, and the special position of the neutral states in the Union. We also raised the position of the ——

On a point of order, the next time the Minister for Foreign Affairs comes into the House to deal with such a debate, will he not come with a prepared script? Comments are made in the debate which are best replied to other than by a script prepared before the debate.

The Deputy has pre-empted me. I thought I had more time to respond to this debate. I was making my formal statement. I understand the constraints of the Chair but if I had sufficient time I would have dealt with the points raised, particularly by Deputies Gormley, De Rossa and others. I do not have the time to deal with those points in the manner in which Deputy Bruton properly suggested. I had intended doing as he wished but I cannot do so in the circumstances.

The Middle East process was raised, as was Russia and the common strategies relating to four countries. I will conclude by mentioning the situation in Iraq. Since the European Council, there have been dramatic developments with the air strikes by the United States and the United Kingdom last night. These followed the report of the UN team of inspectors, UNSCOM, to the effect that it had been unable to complete its work on the issue of Iraqi weapons of mass destruction because of obstruction by Iraqi authorities. We regret that it was not possible for UNSCOM to complete its work and we are disappointed that the use of force was deemed necessary.

Iraq must comply fully with the decisions of the United Nations Security Council. The Security Council has been meeting to discuss the issue and it is important that, following the air strikes, the emphasis should be placed on urgent efforts to resolve the crisis by peaceful means, avoiding the loss of innocent lives.

Regardless of any dispute with the Iraqi Government, we would also like to see the humanitarian needs of the Iraqi people properly addressed. The use of force should be kept to the minimum in order to avoid further suffering for the Iraqi people and potentially destabilising consequences in the Middle East. Time will be given for a discussion on Iraq later today.

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