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Dáil Éireann díospóireacht -
Thursday, 1 Apr 1999

Vol. 503 No. 2

European Summit: Statements.

As the House is aware, the Taoiseach is involved in important business in Northern Ireland and, therefore, I am reading this Dáil statement on his behalf.

I attended the Special European Council in Berlin on 24 and 25 March, together with the Minister for Foreign Affairs, Deputy Andrews, the Minister for Finance, Deputy McCreevy, and the Minister for Agriculture and Food, Deputy Walsh. This was the second time the Heads of State or Government had met during the German Presidency to consider the future financial perspective for the Union. The first meeting, the informal Petersberg Summit in February, presented a key challenge to the Presidency in terms of progressing the complex issues contained with the Agenda 2000 portfolio within relatively tight budgetary parameters. I am happy to say that sufficient progress was made on foot of the orientations coming from Petersberg to allow an agreement to be forged in Berlin.

We also decided on our nominee as new President of the European Commission; we adopted statements on Kosovo and the Middle-East and we approved a trade and co-operation agreement with South Africa. Overall and for the reason which I will point out in the course of my statement, I believe that the summit was a success for Europe and for Ireland in particular.

I will begin by outlining the format of the European Council. Proceedings opened last Wednesday morning with a meeting with the President of the European Parliament, Mr. Gil-Robles, where there was a useful exchange of views on the process for the appointment of the new Commission and the issues arising under Agenda 2000.

A detailed discussion of the recent resignation of the Commission took up most of the first working session of the European Council. It resulted in the decision to nominate Mr. Romano Prodi to be the next President of the European Commission.

The emerging situation in Kosovo was discussed during our working lunch that day. Detailed negotiations on Agenda 2000 formed the major part of our afternoon working session and indeed the rest of the summit. However, as Deputies will understand, given the currency of the Kosovo situation this was an issue which featured frequently in our discussions.

I turn now to the agreement negotiated on Agenda 2000. This is not a deal that was agreed in two days of hard negotiations in Berlin. Rather, it is the culmination of a process that began in July 1997 with the presentation by the Commission of its policy document of Agenda 2000. Intensive negotiations were conducted at a technical and political level. This involved the Agricultural Council, the ECOFIN Council and, in an overall co-ordinating role, the General Affairs Council, thus preparing the grounds for agreement at the level of Heads of State or Government.

In parallel with this I engaged in an intensive round of bilateral meetings with my European counterparts and the Commission – highlighting the particular objectives of Ireland in the negotiations. In a period of 11 months, beginning in late April of last year, I visited Finland, Austria, France twice, the UK, Spain, Portugal, Germany, Denmark, the Netherlands and Belgium. Each visit was undertaken specifically to discuss Agenda 2000 and ensure that Ireland's approach was well understood by its partners and the Commission. I believe that my initiative paid dividends; the agreement negotiated last week recognises the special situation of Ireland. On 19 March, I met with German Federal Chancellor Gerhard Schröder as part of his tour of capitals in advance of Berlin. This last meeting allowed me the opportunity to prioritise Irish objectives for the Chancellor at a crucial stage in the preparations for Berlin. Key among those objectives was the maintaining intact of the agriculture package as negotiated at the Agriculture Council the previous week and the need to ensure a balanced outcome on Structural Funds which would take account of Ireland's particular situation.

It is important to set the context in which we conducted our negotiations. We entered these negotiations having derived considerable benefit from our membership of the European Union. One measure of this is that since 1973, Ireland has received a cumulative net transfer of some £23.5 billion in receipts from the EU. Perhaps more importantly as an exporting nation, Ireland has greatly benefited from access to a Single Market which has now grown to over 370 million people. Our progress has not gone unnoticed by our partners and I assure the House it was raised with me at every bilateral meeting.

When we joined the EEC in 1973, the Irish gross domestic product – GDP – per head approximated to 60 per cent of the EU average. While the gap had been halved by 1993, most of the convergence of the Irish figure towards that for the EU has taken place in the very short period since 1993. The nature of this rapid convergence needed to be recognised in judging the extent to which we have "caught up" with our partners. This was a point which my Government colleagues and I sought to emphasise in contacts with our counterparts.

Relative to most of the EU, Irish infrastructure is underdeveloped. Even the Commission's own Sixth Periodic Report on Regional Policy and Cohesion recognised this fact, noting inter alia that Ireland has the least developed motorway network in the Union. The infrastructural gap represents a social and economic barrier to continued economic progress which will take both time and major resources to overcome. The Stability and Growth Pact, which requires countries to be in budgetary balance over the economic cycle, excludes systematic recourse to Government bor rowing to meet these needs. Accordingly, I asked our partners in the Agenda 2000 negotiations to look beyond the very recent statistics on Irish economic growth and to recognise the underlying need for consolidation of our recent achievements in order to complete the convergence process.

Any assessment of the deal struck in Berlin, which I will outline to the House, must take account of the context in which the final negotiation took place. The negotiations took place against a background of general budget retrenchment at EU level. This factor, and the reality of Ireland's economic prosperity, combined to ensure that Ireland would have to bear a significant cut in EU transfers in the period 2000 to 2006. Ireland has negotiated throughout the process on the basis of the Commission proposals, despite the deterioration in our budgetary position which they involved.

However, in the final phase of negotiations, a number of developments gave rise to particular concern to Ireland. The debate on overall levels of EU expenditure was dominated by the suggestion, supported by a majority of member states, that EU expenditure should be stabilised in real terms. This was compounded by the not unreasonable wish of the net contributor member states for a commitment to address what they regard as their excessive contribution to the EU budget.

Ireland consistently resisted the tendency towards overall stabilisation, arguing that it failed to take adequate account of the implications of CAP reform or of the Treaty requirements on economic and social cohesion or of the financial implications of enlargement. Taken together, these factors created an unpromising situation as we went into the negotiations in Berlin. Nevertheless, I have no hesitation in asserting now that Ireland secured an excellent deal in difficult circumstances. The final outcome is one in which our key concerns, CAP reform and Structural Funds, were satisfactorily addressed.

In regard to the resource side, Ireland was prepared to pay its fair share of the burden and, in this regard, contributed positively and constructively to the examination of ways to place the revenue side of the budget on a more equitable and transparent basis.

The existing system of calculating EU budget contributions involves a number of different mechanisms which, in our view, are both unwieldy and lacking in transparency. The European Council decided that the Union's own resources ceiling should remain at the current level of 1.27 per cent of EU GNP. The maximum rate of call of the VAT resource will be reduced to 0.75 per cent in 2002 and to 0.50 per cent in 2004. Traditional own resources will be maintained, with the percentage retained by the member states in the form of collection costs increasing to 25 per cent with effect from 2001. Both the switch to GNP and higher retention of traditional own resources were policy options favoured by Ireland. The UK rebate will remain with some technical adjustments made to neutralise windfall gains resulting from the progressive reduction of the VAT resource and from the increase in the percentage of traditional own resources retained by member states. In addition, it was agreed that on enlargement, an adjustment in the calculation of the UK rebate will be made to exclude from its scope an amount equivalent to the pre-accession aid for these countries.

In order to meet the concerns of net contributors, the financing of the UK rebate by other member states will be modified to allow Austria, Germany, the Netherlands and Sweden to see a reduction in their financing share to 25 per cent of the normal share. The outcome on own resources was a good one from an Irish viewpoint bearing in mind the concerns of the net contributors and the domestic political pressure in the United Kingdom not to concede on the rebate.

Ireland's budget contribution will rise over the period largely in line with GNP growth but the estimated effect of the changes agreed will be to reduce Ireland's contribution to the EU budget over the period by some 40 million euros as compared to what it otherwise would be. The own resources system will be reviewed before end-2005, taking account of the effects of englargement. Ireland will still be a substantial net beneficiary in 2006 but on present trends and assuming enlargement goes ahead, Ireland may become a net contributor during the EU multi-annual budget round commencing in the year 2007.

The Common Agricultural Policy has enabled Irish agriculture to transform and modernise over the past two and a half decades while also helping to preserve our rural communities. Agriculture continues to contribute 6 per cent of our GDP, more than three times the EU average. On top of that, two of the sectors being reformed, beef and milk, account for about 70 per cent of Irish agricultural output. This level of dependence on two agricultural sectors is unique in the EU and we argued this should be reflected in the eventual package.

In entering the latest round of negotiations in Berlin, I was determined to ensure that the detail of the agreement reached at the Agriculture Council would not be modified to our disadvantage. I was very pleased that we achieved this objective.

In order to stabilise agricultural expenditure, the European Council decided on a number of measures. One of these is the postponement of the reform of the dairy sector from 2003 to 2005. Importantly, this is without prejudice to the decisions concerning the specific additional dairy quotas from which Ireland and only three other member states, as well as Northern Ireland, benefited.

I am pleased to confirm that the Irish dairy quota will be increased by approximately 1.8 per cent from the marketing year 2000-01 and by a further 1 per cent or so from 2001-02. Another measure decided by the European Council was that the intervention price for cereals will be reduced by 15 per cent in two equal steps of 7.5 per cent in the marketing years 2000-01 and 2001-02 and not by 20 per cent as originally decided.

The Commission and the Council were also requested to pursue additional savings to ensure that total expenditure, excluding rural development and veterinary measures, in the 2000-06 period will not overshoot an average annual expenditure of 40.5 billion euros in real terms. Through skillful negotiation, together with a number of other member states, we managed to ensure that neither degressivity nor co-financing of the CAP featured in the final agreements.

The net result of the agreement finalised in Berlin is that, over the period 2000-06, Irish agriculture will gain to the extent of 501.5 million euros, even assuming that market prices fall by the full amount of the reductions in support prices. On the same assumption, gains to the economy from lower prices on the domestic market are estimated at 344.1 million euros. Thus, the total gains to the Irish economy could amount to 845.6 million euros over the 2000-06 period.

EU transfers to Ireland from the guarantee section of the agricultural fund will amount to 12.7 billion euros approximately over the period even before counting headage payments in disadvantaged areas, which from 2000 will be funded from the guarantee section and should amount to about 507.9 million euros over the seven year period. Overall, the agreement on agriculture represents a substantial achievement by the Government, which has been lauded by the various farm organisations.

We are all very aware of the important contribution which the Structural and Cohesion Funds have made to the development of this country over recent years. They have facilitiated significant infrastructural investment and promoted the development of a range of programmes encompassing sectoral economic development, human resources and the fight against social exclusion. The Commission identified as a central theme of the Agenda 2000 reforms the need to improve the effectiveness of the Structural and Cohesion Funds in achieving the goal of economic and social cohesion. Structural Fund assistance would be concentrated on the areas of greatest need by, inter alia, a substantial reduction in the number of objectives to three.

In Berlin the overall amount available for the Structural and Cohesion Funds over the period was set at 213 billion euros. Of this, 18 billion euros will be allocated for the Cohesion Fund. Of the overall allocation for Structural Funds, it was agreed that 135.9 billion euros would be allocated to Objective One, including transitional support; 22.5 billion euros for Objective Two, including transitional support; and 24.05 billion euros for Objective Three.

I regard this as a very positive outcome, in particular against the background of the intensive pressure from a majority of member states, which emerged at the informal meeting of Heads of State of Government in Petersberg, Bonn, in late February in favour of a significantly lower volume of resources for structural operations. In this context, I emphasised and, not without difficulty, secured recognition of the need for adequate transitional support to address Ireland's ongoing infrastructural requirements.

On the Cohesion Fund, Ireland supported the Commission's proposals that the existing Cohesion four should retain entitlement subject to a mid-term review. We achieved this aim despite strong pressure from some member states for an earlier review in 2002 or even annual reviews. It was also agreed that in calculating Cohesion Fund share-out, account should be taken of real convergences in GNP terms by individual member states. Because of the much better performance of the Irish economy in recent years this factor will act to depress our Cohesion Fund receipts over the period to 2004. While all regions of the country are sharing in the present period of growth, regional disparities still exist. The poorest regions have incomes below the EU threshold for Objective One status.

The distribution of population growth across the regions also indicates a considerable lagging behind of economic development in certain parts of the country. These regions are also the most dependent on agriculture. The Government decided in November last to pursue a policy aimed at maintaining part of the country as an Objective One region. On foot of this decision, the Government submitted an application to EUROSTAT to change the current single NUTS II status of the country into two NUTS II regions. Our proposal to regionalise the country was accepted, albeit in a modified form. This ensured that the Border, midland and west regions will continue to enjoy full Objective One status over the whole of the next round. The additional amount of Structural Funds arising from this is 590 million euros, a figure which of itself justifies the Government's strategy. Apart from the direct Structural Funds benefit, these regions will continue to be eligible for the highest level of State aid allowable under EU regulations.

The remainder of the country will be treated as an Objective One region in transition for six years. We managed, through late night negotiations, to secure an additional 100 million euros in the form of a special phasing out allocation. This is particularly welcome as it underscores the Government's commitment to ensure that the problems of many of the poorer urban and rural areas in the transition period will continue to be addressed through targeted measures.

All in all, we estimate that Ireland's share of Structural and Cohesion Funds will be around 4.25 billion euros. This includes headage payments now situated in Heading 1 of the budget and is a very commendable achievement in the circumstances.

The task ahead of us is to utilise these funds, in conjunction with Exchequer and private funds, to produce a national development plan which meets the developmental and social needs of the country as it heads into the new millennium. This is now a most urgent priority of the Government.

From Ireland's point of view another key outcome of the summit was the commitment for a continuation of EU support for the Northern Ireland peace process. This built upon the commitments we secured from the European Councils in Cardiff and Vienna. Together with Prime Minister Blair, I had sought to ensure that the level of EU Structural Fund support to Northern Ireland would be maintained at levels broadly comparable to those in the current funding period. The conclusion reached of a continuation in the PEACE programme for five years with funding of 500 million euros, of which 100 million euros will go to the Border counties, over the period was very satisfactory. In addition, following intensive lobbying by Ireland, the EU will make a contribution of 15 million euros per annum to the International Fund for Ireland over three years.

It should not be forgotten that the primary driving force for the Agenda 2000 package was the need to prepare the Union's finances and institutions for enlargement. It was very important that the Council took the opportunity to reassure the applicant countries of the Union's continuing commitment to the enlargement process. The recent focus on the Agenda 2000 package and the crisis in the Commission might have created the impression that the enlargement process was less of a priority for the Union. This is not so. Enlargement remains an historic priority for the European Union. The current crisis in Kosovo underlines once again the importance of Europe's economic, social and political integration project. The crisis highlights the need for a stable Union with stable borders and should reinforce our determination to remove barriers to the early integration of applicant states.

We also took the opportunity to consider the recent resignation of President Santer and the entire European Commission. It was unanimously agreed to ask Mr. Romano Prodi, the former Italian Prime Minister, to accept the position of President of the next European Commission. I fully share the satisfaction of all my colleagues in the European Council that a candidate of proven stature who has demonstrated his commitment to Europe will assume the responsibility of leading the Commission in the months and years ahead. I have no doubt that, with the support of the Heads of State or Government, he will be able to reform, modernise and equip the Commission to discharge effectively its vital role in the European Union. Like other member states, Ireland continues to look to the Commission to be the engine which drives the Union forward. I shall be very happy to work closely with Mr. Prodi, initially on the formation of the new Commission and later on the challenges which we must all face together.

As to the steps to be taken in the short-term, in line with the provisions of the Amsterdam Treaty which is due to come into force on 1 May, this decision was communicated to the European Parliament. After his approval by the Parliament, Mr. Prodi will begin to prepare the nomination of a new Commission in co-operation with the Governments of member states. The Governments of the member states shall, by common accord with Mr. Prodi, nominate those whom they intend to appoint as members of the Commission. Following the European Parliament elections in June, the newly elected Parliament will give its approval to both the President and the nominees for the Commission.

The Minister has gone over his time.

On a point of order, a Cheann Comhairle, it is important to allow the Minister continue.

Is that agreed? Agreed.

It is intended that Mr. Prodi will have a first exchange of views with the Heads of State or Government on a reform programme for the Commission at an informal working dinner in Brussels on 14 April.

I am pleased to report that the Council reached agreement on a trade and co-operation agreement with South Africa which had been under negotiation for some time. I was very keen to see this agreement finalised and have consistently supported the early conclusion of a generous agreement. It sends a very strong signal of our commitment to South Africa and, in particular, to Nelson Mandela as he prepares to leave office.

The developing situation in Kosovo was a large focus of attention during the summit. During the summit, two statements were agreed on the situation in Kosovo. The first was agreed before the air strikes and urged President Milosevic to sign the Rambouillet peace agreement. The second statement was agreed following the commencement of air strikes and asked President Milosevic to reconsider his refusal to sign the peace agreement. The Irish Government, while not a party to NATO's decision to undertake air strikes, recognises the humanitarian crisis which prompted it. Ultimately, as we have seen on our island, only a return to negotiations will solve this regional conflict.

Heads of State and Government also took some time to discuss the current status of the Middle East peace process in light of the stated intention of the Palestinians to make an unilateral declaration of independence on 4 May. We reiterated our support for a negotiated settlement in the Middle East to reflect certain basic principles including that of land for peace and called upon the parties to implement fully and immediately the Wye River Memorandum. In addition, we broke new ground in two areas. First, we called for an early resumption of what are known as the final status negotiations and expressed the belief that it should be possible to conclude these negotiations within a target period of one year. Second, we reaffirmed the continuing and unqualified Palestinian right to self-determination – and this is a significant innovation – including the option of a state. We declared our readiness to consider the recognition of such a state in due course in accordance with the basic principles set out in the conclusions. Having visited the region earlier this year, I believe that this is a progressive step for the Union which the Irish Government fully supports.

While attending the summit, as well as conducting discussions and negotiations on the key European issues which I have outlined, I took the opportunity to meet the Prime Minister Mr. Blair to discuss current developments in Northern Ireland.

In summary, the Government was pleased with the outcome of the summit. We were tough in our negotiations but realistic in our expectations. Our partners were likewise and an equitable outcome was achieved. This agreement marks an important step in the development of the Union and in Irish attitudes to and relations with our partners and the Union's institutions. All member states, whether net recipients or contributors, were forced to compromise in the course of negotiations and agree a deal that will be to the benefit of all the people of the Union and those countries which are due to join the Union over the coming years. We should be grateful for the past and continued support of our partners while being justly proud of the progress we have made using our own resources and the talents of our people.

I want Chancellor Schröder and the Presidency team for their skilful handling of the negotiations. I also thank my Government colleagues and their officials for their sustained efforts over the entire course of these negotiations and for the positive outcome we achieved for Ireland.

The summit declaration represents a blank cheque endorsement of NATO's actions. European foreign and security policy seems to consist of cheerleading others from the sidelines. No thought seems to have been given at the summit to the predictable humanitarian crisis which confronts the Balkans.

Mr. Milosevic alone has caused this humanitarian crisis by unleashing murderous bands of Serb militia to terrorise Kosovars out of their homes. However, EU leaders have a responsibility to assist their fellow Europeans in Albania, Macedonia and Montenegro in coping with the crisis. Why were plans not put in place in Berlin? Must we watch people die on our television sets before we deliver on what is already a very serious problem? What is the Government's position on the Kosovo crisis? Does it simply support the bombing or does it have any plan? What role, if any, is it playing in EU discussions on the issue? Is there a Plan B or does the Government have any plan in connection with this or similar issues? For a Government which is willing to travel the world seeking support for Ireland's election to the UN Security Council, its weakness and indecision during the crisis has been pitiful. I will return to this subject later in my contribution.

I welcome Mr. Prodi's appointment as EU Commission President. I hope Government relations with the new Commission will not be damaged by the Taoiseach's comment in support of Mr. Prodi's rival, Mr. Wim Kok, when he spoke on radio recently. It was a naive and foolish comment on the part of the Taoiseach and I hope it will not be damaging to our long-term interests or to the portfolio that our Commissioner, when appointed, might get.

The proposal accepted by the summit means that Mr. Prodi will have to be approved by the current European Parliament. He will then present himself and his team to the new Parliament after it is elected between 10 and 13 June. This will, in effect, extend the Commission's term by six months. It is vital that the new Commission is endorsed quickly to avoid further damage to it as an institution, particularly now that the Parliament is aware of its power. It is unacceptable to the citizens of the Union that the current caretaker Commission will continue in place for another three months, having resigned in the manner it did. It is an unsatisfactory solution which gives rise to concern.

The key decision now is the early nomination of a politically skilled and experienced person as the new Irish nominee for the Commission. Has the Taoiseach revised his earlier view that this issue should be dealt with after the elections to the European Parliament? Does he not accept that if the Irish nominee is to be allocated a meaningful job in the Commission, the Taoiseach must open discussions with Mr. Prodi on the issue in the next couple of weeks?

I welcome the deal on Agenda 2000 but wonder if it will last. Is the Berlin deal not just a fudge which will fall apart during the next round of the world trade talks due to start in January? The Minister referred to aid for urban blackspots. One element of the Berlin deal which has not attracted sufficient attention is the position of the 13 eastern and southern counties as Objective One areas in transition. These areas will suffer significant cuts in EU aid. A rocky landing rather than the promised smooth landing is now in prospect.

There are important local development projects in areas such as north Cork city, Tallaght, the north inner city and areas in my constituency of the south inner city such as St. Theresa's Gardens, Fatima Mansions, Dolphin House, Bridgefoot Street, St. Michael's Estate and Cherry Orchard. How will these areas fare after the negotiations? From where will the funding for partnership companies in these urban blackspots come?

It is all very well to say the farmers did well. I wish them well and it is good for the economy. However, why do we not have two strings to our bow? Why omit the urban dwellers in Dublin and other cities who will suffer badly due to the lack of local development funds? Will the Minister give a commitment that the Exchequer will ensure that these partnership companies, which are attempting to redress imbalances and injustices in society by trying to equip people to take a fairer role in society, will continue to be funded? The House must receive such an undertaking.

It is time Members who represent difficult constituencies in this and other cities spoke up for these people in the same way other Members speak up for and achieve progress for other groups. These people are among the poorest citizens in this State and they are not considered in the summit report beyond a small paragraph and a throwaway comment on their future. We do not want comments. We want the type of undertakings other groups in society are getting.

I will now return to the issue of Kosovo. EU leaders had comparatively little to offer beyond a statement broadly supportive of the NATO air strikes, despite clear indications that there is no clear view of where this plan will go. However, Ireland has no plan. That is not only in the case of Kosovo – we also sat out the Bosnian crisis. We disgrace ourselves when international security issues come up for debate by not having a position. Deputy De Rossa and I might not agree on what that position should be but at least we put forward ideas for consideration.

The Government has no idea of its position beyond claiming to be caught between a rock and a hard place. This is the Government that is canvassing for a seat on the UN Security Council. It has no ideas, no comments and nothing to say about the most disastrous humanitarian crisis and security issue to arise in Europe since the Second World War. Why does the Government believe Ireland has no place in security matters? Does it believe it should seek a seat on the Security Council for prestige rather than to make a contribution?

We have a long tradition in peacekeeping. We have something to bring to the table, something to offer. We are not a big state like France, Italy or Germany but Denmark, for example, has views on these matters. Many other small countries have views and it is time Ireland formulated its own views and plans. It is time the White Paper on foreign policy, which was drafted by the previous Government after a long period of discussion, was complemented by the promised White Paper on defence and security. It is time these documents were built on and for Ireland to take its role in these issues more seriously.

We should have a plan and I wish to put forward some elements which might be included in that plan, since nobody on the Government side of the House seems to have any ideas. My ideas are no more than that. I do not have available to me the ambassador to the OSCE or the Department of Foreign Affairs. The Government has these facilities and I hope that by being prodded with ideas it might play a more constructive and positive role at summits of this kind. It must stop shaming the country by keeping its head down and not making a contribution to the resolution of these issues.

Ireland is not neutral in the sense of the definition contained in the fifth and 13th Hague conventions. These conventions require neutral states to deny assistance to all belligerents equally in times of conflict. Our neutrality does not measure up to that definition.

The principle or principles upon which our neutrality is based have never been defined beyond the definition offered by Seán MacBride in 1949 that Ireland would become full charter members the day after partition ends. We might bear that definition in mind on a day when these issues are being discussed on another part of this island. That definition remains the basis of our neutrality.

Ireland sat out the Bosnian crisis despite repeated genocide. The paralysis of the Government to date in the Yugoslav conflict indicates that it intends to give a repeat performance. There is no policy. Ireland has cosigned a blank cheque without any understanding from or with NATO that NATO has a follow through plan. I wish to put forward ten ideas for consideration which might prod members of the Cabinet, who have responsibility in this area, to put together some ideas on what our contribution should be in trying to play a more proactive role in security matters of this nature.

Ireland should bring forward the date for joining Partnership for Peace. It should not be left to the second part of this year. Members who believe in Partnership for Peace should be before the public putting the case for membership. There are people who do not agree with that policy and they will put forward their case. However, people who do believe in it have kept their heads down for too long and appear to be apologetic about it.

It is wrong to leave this matter until after the European elections and somehow claim that because Fianna Fáil, Fine Gael and others got so many seats that the people have endorsed the decision. The people do not know what it is about. Let us take the argument to the people and not wait until the second half of the year. We must bring this issue forward. It is time people who believe in the Partnership for Peace took on the argument and proactively sold it, not in a way that disrespects the views of other people but in a manner which asks others to respect our position and to debate and argue about where they believe we are wrong. Why should we hide and keep our heads down? That is no way to conduct security and foreign policy.

In advance of joining Partnership for Peace, I call on the Government to appoint an ambassador to NATO. The Taoiseach told this House yesterday we will not appoint an ambassador to NATO. The day before, the Minister for Foreign Affairs said the same. I asked the Minister for Foreign Affairs if he was sure about that because all the other European Union neutrals have done so. Switzerland, which joined Partnership for Peace, appointed its ambassador to the Kingdom of Belgium, who is also Switzerland's ambassador to the Western European Union, as ambassador to NATO. As night follows day we will do the same because many PfP meetings will be held at ambassadorial level, and we have an ambassador to the Kingdom of Belgium who is already ambassador to the Western European Union.

We are not telling the people the truth if we tell them we are not appointing an ambassador to NATO. This will be another U-turn by the Government which will make the appointment later in the year despite what has been said here. It should be done openly so that the people will know about it. It should be done in advance of the European elections so that people can see what is happening on this issue.

If we had an ambassador to NATO we could tell our views and the concerns expressed in this House to Javier Solana, an honourable man doing a job he believes in, with whom Deputy Spring worked when he was the Spanish socialist foreign minister. We have no way of doing that at present.

We should actively campaign for the early transfer of the Petersberg Tasks type policy decisions in the area of peace-making, peacekeeping and humanitarian assistance. We should ask for those to be transferred to the EU without further delay. They are provided for in the Amsterdam Treaty. The people have voted on them so we would at least have some proactive role on the part of the European Union in which we could have an input in dealing with these matters.

Many EU states, most recently the British and the French, have proposed a defence policy and/or defence role for the European Union. If the ultimate outcome is assessed by Ireland as a likely merger of the EU and the Western European Union, we should seek now to influence the outcome of such evolution. Specifically, the Article 5 commitment of Western European Union full membership which obliges all member states to automatically come to the defence of another member state if attacked, could be made a protocol of any future merger agreement. This would mean that future Western European Union members could opt in or out of this automatic commitment. If others are allowed to make the policy, we may ultimately be left with fewer options to exercise in the medium to long-term future. Keeping our heads down, if we assess the situation as I suggest, is not in our best interests. We need to negotiate what is in our best interests in case others set the rules and we are left only with the option of joining.

We should explore a joint initiative with Denmark to advance its policy for a UN rapid deployment force, a state of high readiness brigade, SHIRBRIG, for deployment in UN mandated operations.

We should initiate a debate on North-South security and defence issues in a healthy and open atmosphere.

Following on the White Paper on Foreign Policy produced by the previous Government, the promised White Paper on security and defence issues should be published now and debated during the forthcoming European Parliament election campaign. That is the way it would be done in any democracy, so why can it not be done here? It is time we were mature enough to debate these issues. They can do it in Northern Ireland where the PUP, Sinn Féin, the Ulster Unionist Party and the SDLP, all of which have different views, can discuss issues. Why can those of us with different views not discuss security issues instead of pretending they do not exist and misleading the people?

An Irish Government security council could be created. This might include the Minister for Foreign Affairs, the Minister for Defence, our ambassadors to the EU, OSCE, the UN in Geneva and the UN in New York, the Council of Europe, the Western European Union and NATO, when appointed. This group could meet regularly to review international security issues and to propose policy options for Ireland to pursue.

A plan to provide immediate humanitarian aid to Kosovar refugees to include providing facilities for them to come to Ireland, where appropriate, should be put in place. EU Ministers should meet immediately to co-ordinate such a response and Ireland should ask for a meeting.

Through the Minister for Foreign Affairs and our ambassadors abroad, we should set out to initiate an exchange of ideas on the effective action the European and international community can take to bring an end to the genocide and bring Mr. Milosevic to account.

These are not exhaustive ideas but I put them forward in the hope that the Minister for Foreign Affairs might take the best of all the ideas put forward. We must not leave this issue to other people. We have a contribution to make. If we leave it to others they may leave it to us and nothing will be done. Ireland has been neutered by Government inaction. I put forward these ideas in the hope that they might assist in overcoming our self-inflicted impotence.

I support the comments by the Minister on enlargement but I would like to go further. We need the 12 applicants in the EU as much as they need to join. I accept there are new challenges facing us, not just institutional challenges but challenges as to the way we will accommodate these people around the table of the Council of Ministers, the Commission and the Parliament. That has to be worked out, and already there are ideas on the table following the Amsterdam Treaty. There are economic challenges also. If we add together the GNP of all 12 applicant states it would probably total that of an existing medium-sized state like The Netherlands or Belgium. The challenges are unprecedented. There is also the challenge of the countries only now emerging as market economies and democracies.

There is an unprecedented opportunity to fulfil the dream of the people who started us on the European Union enterprise when they pooled coal and steel resources in the hope there would never be war again. We can have an integrated Europe. We can bring those 12 states into the European Union and we can build peace and stability, the prerequisites to prosperity, and ensure there is not a repeat of the inheritance the generations in the first half of this century received when 60 million Europeans lost their lives in two world wars which started in Europe. The great opportunity is that of peace, stability and prosperity.

I plead with the Government not to play cute on this. Let us have enlargement. Let us bring in those countries and share our prosperity with them because in the longer term it will be in the interests of our children and our grandchildren.

I will open my contribution on the summit by referring to the Kosovan crisis. The Minister referred to Kosovo in his contribution, but there is a stark difference between the way he dealt with Kosovo and the reference to the Middle East peace process. He spoke at length, relatively speaking, on other issues about the Middle East process and had no difficulty in supporting the unqualified Palestinian right to self-determination, etc.

In relation to Kosovo we have weasel words yet again. Ultimately, as we have seen on our own island, only a return to negotiations will solve this regional conflict. We all know that but what is the Government's position now on the NATO bombing of Serbia and Kosovo? In particular, what is its attitude to the latest phase of NATO bombing, where NATO admits that it is bombing bridges, water supplies and sewage treatment facilities? These cannot, by any stretch of the imagination, be described as military targets. NATO has consistently said that its target is Slobodan Milosevic and the degrading of his military capacity. What is being done now is bombing in a way which clearly indicates a scorched earth policy. It is trying to drive Serbia – and Kosovo, because the nature of the bombing is the same in Kosovo – back to the stone age. It is trying to obliterate any semblance or possibility of civilised living in that area. That cannot be supported by Ireland or by any European country, particularly as the stated objective of NATO is to prevent a humanitarian catastrophe. What is obvious to everybody who watches their television screen is that the bombing has created the circumstance which it was declared it was intended to avoid. It has created a humanitarian catastrophe, yet the bombing continues and Ireland is silent on its attitude.

I have said here on a previous occasion that there are circumstances when the international community can and should intervene, where genocide is being pursued by a state against its own people or against a section of its own people. That choice should be made by the international community as a whole through the United Nations. I have argued that the current actions by NATO are illegal in international law. This is not a legal quibble in which I am engaged. It strikes at the very root of the nature of international security of the new world order which we all hoped would emerge following the end of the Cold War and the collapse of the Berlin Wall. We see a situation emerging where NATO, the most powerful military alliance on the face of the earth, is seeking to establish itself as the pre-eminent decision-maker as to who should intervene and where they should intervene in issues of conflict, whether they be internal or between states. That cannot be acceptable to a small country like Ireland. Ireland, as a small country, cannot survive in a world where individual regional groups or individual states take it on themselves to make decisions of this kind. We can only survive and prevent global warfare in a situation where we support the United Nations and seek where necessary to reform the charter of the United Nations to match the new situation in which we find ourselves in global affairs.

I call on the Government to get off the fence, to call for a stop to the bombing, to call for the restarting of negotiations, using whatever friends Serbia has left in the world as mediators in such negations. Serbia still has friends. Russia has clearly indicated that it does not want Serbia obliterated. Not just Russia, but Austria and others have also expressed views about the possibility that this war could ignite the whole Balkan region. If that happens, who knows where it will end? It is essential that Ireland as a small country with a view to express, as is clear in relation to other matters dealt with by the European Summit, should do so on this issue. It is not in our long-term interests to stay silent on this issue, either from a humanitarian point of view or from the point of view of being able to influence the nature of global security for the future.

In the Dáil the other day at Question Time, the Minister for Foreign Affairs stated that Ireland was not and would never be a member of NATO. He also stated that the German authorities had indicated that the European Union should develop military arrangements to implement its responsibilities under the Amsterdam Treaty in relation to Petersberg Tasks but that the issue of mutual defence within the European Union was a matter for NATO. I asked the Minister then whether he agreed with this position of the German Government. If he does we are, either by default or by decision unstated, deciding that the European Union is not going to develop its own defence capacity or its own common security position outside the context of NATO. If that is a decision that has been made by this Government, we should be told about it because it is mine and my party's view that membership of the European Union carries with it a responsibility to develop a common foreign and security policy and that it also implies a common defence policy and common defence.

There is an issue there which the Government has not addressed publicly. It has gone off on what I would regard as a side-show in relation to Partnership for Peace. I have expressed my view on Partnership for Peace, as have other members of the Labour Party and members of other parties which are not united on that issue. It seems that if we take the two issues of Partnership for Peace, the Government's stated view on NATO and the Germans' stated view that common defence for the European Union should be through NATO, the only conclusion we can come to is that by joining Partnership for Peace the Government is seeking to soften us up in relation to accepting NATO, whether we join it or not, as the security architecture for Europe. I believe that is a wrong position and I will continue to argue against it.

The bombing by NATO of Serbia and Kosovo is making a bad situation worse. It should stop and people should return to the negotiating table. We have had eight days of bombing. The very least that should happen is that we should be calling for a moratorium on bombing in order to give Serbia an opportunity to come to the table. I hope that point of view will prevail. I get the distinct feeling that the Department of Foreign Affairs has a clear view on this issue in relation to Kosovo, in relation to European security and in relation to NATO, and that the problem is that Fianna Fáil is acting in a cowardly way in relation to what it believes it should do and at the same time not wishing to alienate its supporters.

On the summit itself and the financial package that was negotiated there, the emphasis on how much we can extract from the European Union in financial terms is a mistaken view. It is an old-fashioned view of our relationship to the European Union. We have been for 25 years a member of the European Union. We have held the Presidency of the Union and have been very successful in that job a number of times under various Administrations. Despite the disadvantage that to a large extent we still have in common and generally understood economic terms, we are a prosperous country, primarily because we are a member of the European Union and have had the benefit of the open market within the Union and investment from within and without the Union, plus the Structural Funds.

It is important therefore that we reassess how we approach our membership of the Union. If this Government or anybody else continues to see it solely in terms of the amount of money we can extract from it, we cannot blame the public at large for applying the same criterion. If that is the case, we will find that enthusiasm for membership of the European Union will decline as EU contributions decline. That would be a grave mistake.

It is unfortunate that the Government chose to go into the summit amid a sea of hype about how much it would extract. Government Ministers returned saying what great fellows they were, having managed to gain an extra £400 million or 500 million euros. Whether the Government likes it, that attitude is reflected by the fact that during the Minister's speech he referred entirely to euros. It is not because the Minster is such a Europhile that he will use no other term; it is because when one expresses the figures in euros rather than pounds they look far larger in terms of financial success. That is simply a reflection of a mind-set in relation to Europe, but it has to change. We must begin to talk to the public about having a different attitude to Europe. We must accept our share of the burdens of Europe as well as our share of the goodies which come from there, as we have done in the past.

There is no doubt that many of the social advances that have been made in Ireland, whether they relate to environmental issues, equal pay, women's rights, and working conditions, including health and safety issues, have been driven by the European Union and we have been obliged, by and large, to follow that trend. That has been good for Ireland because it has helped to modernise our industry and society. It would be a grave error to walk away from that simply because in five or six years' time the amount of money we get from Europe will be nil.

I am interested to note that there is not a single reference in the Minister's speech to the possibility, post-2006 or 2007, that the current Objective One area – the western counties – will qualify for transitional funding. This was part of the argument made for dividing the country into two artificial regions some months ago but it has been abandoned. I argued at the time that it was not realistic and that not only was there no guarantee but that it was extremely unlikely that we would qualify for any of that money, or that the region would qualify for transitional funding after 2006 or 2007. I am still of that view and the Government has clearly come to that conclusion also because there was no reference to it in the Minister's speech.

In the few minutes remaining, I want to deal briefly with a number of issues, including the national plan. The Government has a packet of money under its belt from Cohesion, Structural and farm funds. It is essential that we plan the use of that money in a way which will ensure that there is infrastructural development of a high order in order so that our prosperity and economic growth continues. If we do not provide the infrastructure that growth will start to decline and as a result we will not be in a position to benefit in future.

There is a need for enormous infrastructural development but there is also a need for real regional development. One of the reasons I so strongly opposed the idea of dividing the country into two artificial economic regions was that I felt it enabled the Government to abandon any real regional development policy. The eight regions we currently have are based around centres of population. Anyone with knowledge of regional policy knows that if one is to develop those regions one must create dynamic economic development hubs. To create the two regions that have been created and to apply money from Europe and national funds to them will result in a dispersal of funds rather than in their concentration that is necessary to develop both urban and rural areas. It is an issue we should return to in the House. We should have a debate on the national plan when the Government has produced it in draft form and before it is finalised. The expertise and knowledge of Deputies should be drawn upon in terms of how the plan will be finalised.

I also want to refer to the issue of the President of the European Commission and the appointment of the Commission. The choice of Mr. Prodi was an inspired one. He will have a grasp of the issues and the need to develop the Union along social as well as economic lines. Ireland must ensure that the European Union never becomes simply a free trade area because if it does we will lose out. We have to ensure that the social principles which we negotiated in the context of the Amsterdam Treaty are fully respected and implemented. Otherwise small countries like ours on the periphery of the European Union will suffer.

The Government should seek to ensure that the European Parliament is allowed to use the procedures under the Amsterdam Treaty for the appointment of the President of the European Commission and the Commissioners. Legally the terms of the Amsterdam Treaty may not be fully applicable at that point, but in so doing it would certainly be a gesture in acknowledging the rights of the European Parliament and the extraordinary circumstances that gave rise to the appointment of a new Commission.

In the Taoiseach's statement we had a comprehensive report on the outcome of the Berlin European Council.

On behalf of the Minister for Foreign Affairs, I wish to say that on Agenda 2000 the outcome of the Berlin summit was a satisfactory one both for the European Union as a whole and for Ireland. When Germany took over the Presidency in January, the German Government was faced with the onerous task of ensuring a successful conclusion of these lengthy and complex negotiations within the agreed deadline of the end of March. That it did so within the agreed timetable is a significant achievement and one on which it is to be warmly congratulated.

I recall our gratitude to the preceding Austrian and UK presidencies for the important contri bution they made to preparing the way for final agreement.

The Agenda 2000 negotiations involved both the Agriculture Council and the ECOFIN Council, as well as the General Affairs Council which was responsible for co-ordinating the negotiations and preparing an overall package for consideration by Heads of State or Government. I pay tribute to Mr. Karl-Heinz Funke for the effective and competent manner in which he, as President, organised the work of the Agriculture Council and I compliment the President of the General Affairs Council, Mr. Joschka Fischer, on the excellent work he did in ensuring that overall co-ordination was successfully executed.

The agreement reached at Berlin on Agenda 2000 constitutes an important package of policy reforms and a financial framework to achieve them over the next seven years and will ensure that the Union is in a position to face the challenges of the forthcoming period and to make a success of its future enlargement.

As the Minister for Finance pointed out, the negotiations took place in a context of continued EU budget retrenchment, majority support for overall stabilisation of EU expenditure in real terms and the insistence by the net contributors that the imbalance in their contributions be addressed. Against that background, it was never going to be easy to secure our objectives in these negotiations. Notwithstanding these difficulties, I am satisfied that we reached a balanced and equitable agreement in which the concerns of all member states were addressed and to which all member states contributed. From Ireland's point of view, it also represents the satisfactory culmination of a concerted effort to ensure that our essential concerns would be addressed in a realistic and balanced manner.

The main elements of the outcome have already been outlined in the Taoiseach's statement. However, I refer in particular to the agreement on agriculture. The results of the negotiations on CAP were particularly gratifying to me and extremely beneficial to Irish agriculture. When the Commission published its detailed proposals in March 1998, my Department estimated that they would involve losses of £226 million a year to Irish farmers after their full implementation in 2003. For technical reasons, that estimate has since had to be adjusted marginally upwards to £233 million. The changes to the Commission proposals negotiated in Brussels, together with the adjustments agreed in Berlin, have reduced that loss to £14 million in the first year after all changes have been phased in and this will not now occur until 2007 – an improvement of £219 million a year. In fact, the £233 million loss was estimated in March 1998 necessarily on the basis of the annual average value of output over the years, 1995, 1996 and 1997. If the more up to date database now available of 1996, 1997 and 1998 was taken, the result is a gain of £7 million a year in 2007 and thereafter.

However, the outcome of the agreement on agriculture is far more beneficial than these figures suggest. Over the seven year period, 2000-2006, of the EU's new financial framework, the gains to Irish farmers from the agreement will amount to £395 million. This compares with a loss of £1,386 million which would have accrued over the period from the Commission's proposals and represents a turnaround of £1.8 billion – a major achievement which will have a profoundly beneficial effect on Irish agriculture and on the farm families dependent on it.

In addition, there will be gains to the economy from lower prices. These gains are estimated at £271 million over the period. When these are added to the gains to agriculture, the total gain to the Irish economy from the agreement finally concluded in Berlin last week is £666 million. The challenge to everybody, particularly the Government and its agencies, will be to ensure that the gain to the economy is passed on to consumers to the greatest possible extent.

These estimates of the gains to Irish farmers assume that market returns to farmers will fall fully in line with the reductions agreed in the support prices. That is not necessarily so and it is my intention that it will not be so. To the extent that this does not happen, the gains to Irish agriculture will be even greater than £395 million. I am happy that, in the agreement reached, the Taoiseach's and my own major objective of fully protecting the interests of Irish agriculture and Irish farmers has been met. I believe there is scope for the agricultural sector to make even further gains from the deal that has been concluded. Now that the broad policy direction has been set and the foundation for future progress has been laid, we must not waste the opportunities. It will be my intention to challenge farmers, processors and the supporting State agencies to make gains through further improvement in efficiency, higher quality standards and a better marketing effort all round. The clear objective is to secure the best possible prices for Irish food in export markets and the best return to the economy from those markets. I will be outlining in depth my plans in this regard in the near future.

On Structural Funds also, the overall outcome takes due account of our key concerns. It provides for adequate transitional support in terms of volume and duration for those regions coming out of Objective 1 status. The objective of the reclassification of the country into two NUTS II regions with one retaining Objective 1 status has been secured. The message that transitional support would be essential to address our ongoing infrastructural needs and to copperfasten our relatively recent economic progress was successfully conveyed. We have also secured continued eligibility for the Cohesion Fund, at least until a mid-term review in 2003, against strong opposition from several member states that participation in the euro should be a bar to continued eligibility and that reviews of eligibility should take place on an annual basis.

We are also extremely grateful to receive continued EU support for the peace process. It is fitting at such a critical juncture in the peace process that we should be reminded of the consistent support which the EU has offered in this area and which it continues to offer. I am sure I reflect the views of all Members when I emphasise the importance we attach to that support and put on record our deep gratitude for this act of solidarity.

The Taoiseach set out the broad lines of the declaration by Heads of State or Government on the appointment of the President of the Commission. The House has already expressed its satisfaction with the nomination of Mr. Romano Prodi to be the next President of the Commission. This reflects the widely shared perception that Mr. Prodi has the qualities necessary to enable the Commission to exercise its prerogatives under the Treaty with the full confidence of the Governments of the member states and of the other institutions of the Union, including the European Parliament. It is of great importance for the Union and not least for Ireland that the Commission's vital role in the Union's structures should be rapidly reclaimed after the setback of recent weeks.

Mr. Prodi was the unanimous choice of the Heads of State or Government to be the new Commission President precisely because he combines political stature and economic expertise with the character traits necessary to command respect in reforming and revitalising the Commission. A first exchange of views between the Heads of State or Government and Mr. Prodi on the way in which the new Commission shall work will take place in Brussels on 14 April.

Some precision on the timeframe for the various steps outlined in the Declaration from Berlin should begin to emerge at that point and subsequently. Following the Treaty of Amsterdam procedures, the Presidency immediately communicated Mr. Prodi's nomination to the European Parliament for approval. It requested that the Parliament give its vote on the nominated candidate in time to enable the members of the Commission to be appointed as soon as possible, in order to ensure that a new Commission can start work at an early date. The Government shares this sentiment. The European Council has further stated that, after his approval, Mr. Prodi should strive to prepare the nomination of a new Commission as soon as possible, in co-operation with the Governments of the member states.

In line with the Treaty of Amsterdam, the Governments of the member states shall, by common accord with Mr. Prodi, nominate the other persons they intend to appoint as members of the new Commission. The process of consultations which this implies is entirely new, and it strengthens the hand of the Commission President, and through him of the European Parliament, in potentially important ways as yet uncharted.

An understanding will need to be developed between the Heads of State or Government and Mr. Prodi, in co-operation with the President of the European Parliament, on how the various steps which the Heads of State or Government must, for the first time, take by common accord with Mr. Prodi as their nominee for Commission President, will be implemented.

The European Council also wished to enable the new Commission to start work at the earliest opportunity and to continue with a mandate for a full five year term from January 2000. It stated that the new elected European Parliament should start the procedure for appointing the new Commission as early as July. The increased involvement of the European Parliament under the Amsterdam Treaty will strengthen the democratic legitimacy of the Commission. The new requirement that the European Parliament approve the Governments' nominee for the Commission Presidency indirectly enlarges also the Parliament's role in the approval of the nominees for the Commission.

Member state Governments, including the Irish Government, are determined that the appointment of a new Commission should spur reform of the functioning of this key EU institution. The Government fully endorses the statement by the European Council that the new Commission should speedily put the necessary reforms into effect.

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