Dáil Éireann díospóireacht -
Wednesday, 29 Mar 2000

Vol. 517 No. 1

Lisbon Summit: Statements.

The Taoiseach

I attended the Special European Council on Employment in Lisbon on 23 and 24 March. The Minister for Foreign Affairs, Deputy Cowen, and the Minister for Finance, Deputy McCreevy, also attended. I take this opportunity to commend Prime Minister Guterres and the Portuguese Presidency for calling the summit and for the enormous efforts made to ensure a successful outcome.

I was pleased to have the opportunity which the summit afforded to outline to our European partners the success of the Irish experience over the last number of years. Our experience demonstrates that it is possible to underpin social progress through economic and employment development and to combine prudent fiscal policies with increased social spending. It does not mean abandoning social goals or the crucial balance between economic development and social equity which characterises the European model.

I have mentioned the enormous efforts of the Presidency through bilateral contacts with partners, the Commission and the Council secretariat and a variety of special preparatory meetings, but I should also mention the exceptional level of interest taken by individual member states who produced individual and joint responses to the Presidency's paper. In Ireland's case we did both, reflecting our deep interest in the summit.

On 6 March I submitted to Prime Minister Guterres Ireland's national response to the Presidency paper on the content of the European Council. The paper focused on our priorities for the summit, particularly in the areas of life long learning, the economic and social environment, IT access and e-commerce, research and development and the role of benchmarking. I also submitted with Prime Minister Blair a joint paper highlighting areas of common concern for our two countries on which we wished to see progress during the summit. That paper focused on education and life long learning, innovation and enterprise and measures to combat social exclusion.

The summit has set the Union a new strategic goal for the next decade as follows: to become the most competitive and dynamic knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion. Achieving this goal requires an overall strategy aimed at preparing the transition to a knowledge-based economy and society by better policies for the information society and research and development, as well as by stepping up the process of structural reform for competitiveness and innovation and by completing the internal market; modernising the European social model, investing in people and combating social exclusion; and sustaining the healthy economic outlook and favourable growth prospects by applying an appropriate macro-economic policy mix. I was happy to give my full support to the above strategy and will now outline some of the major outcomes from the summit from Ireland's perspective.

For a number of years we have given an increased emphasis to the potential contribution which the information society, if properly harnessed, can make to the lives of everybody in society. The conclusions of the Lisbon Summit demonstrate Union level recognition of this contribution. In terms of the development of e-commerce, Europe clearly is currently a long way behind the US. Before we can begin to close this gap it is vital that Europe adopts a harmonised regulatory framework for e-commerce as early as possible. For this reason I gave my full support to the objective of all e-commerce related directives currently under discussion being adopted by the end of 2000. For our part, Ireland will use every effort to meet this objective.

The lnternet is at the heart of the information society revolution and Europe needs to embrace it fully if it is to achieve the benefits of growth, employment and inclusion that the information society offers. I therefore welcome the high priority that the Commission and the European Council are giving to rapid expansion of low cost, high speed lnternet access. The availability of broad band and other advanced communications infrastructure and services at low costs is one of the prerequisites of an economy based on innovation and knowledge.

The shift to a digital, knowledge-based economy, prompted by new goods and services, will be a powerful engine for growth, competitiveness and jobs. In addition, it will be capable of improving citizens' quality of life and the environment. To make the most of this opportunity, the European Council requested a comprehensive e-Europe action plan to be presented to the European Council in June, using an open method of co-ordination based on the benchmarking of national initiatives and drawing on the Commission's recent e-Europe initiative as well as its communication, "Strategies for jobs in the Information Society".

For the Union to close the gap between itself and the US in the e-commerce area, EU leaders stressed the need for competitive services. Accordingly, it was decided that a fully integrated and liberalised telecommunications market should be completed by the end of 2001. In particular, it is intended that this will involve greater competition in local access networks before the end of 2000 and unbundling the local loop in order to help bring about a substantial reduction in the costs of using the lnternet.

It is clear that Europe's education and training systems need to adapt both to the demands of the knowledge society and to the need for an improved level and quality of employment. They will have to offer learning and training opportunities tailored to target groups at different stages of their lives. This new approach should have three main components: the development of local learning centres, the promotion of new basic skills, in particular in the information technologies, and increased transparency of qualifications. In order to achieve these aims, the summit set a number of targets which I am pleased to say we in Ireland have already reached or are due to meet within the timescale outlined. I also fully supported the commitment to a substantial increase in per capita investment in human resources.

In Ireland, we have accepted that the wider use of information and communication technology – ICTs – will facilitate a higher quality of learning and teaching. Our schools IT 2000 programme is already ahead of target with every school now having an lnternet connection. In addition, a new £81 million programme for technology use in schools has recently been announced which sets new ambitious targets in the education area.

The special role of the Education Council in this area was recognised by the summit. As a result, it will undertake a general reflection on the concrete future objectives of education systems, focusing on common concerns and priorities while respecting national diversity, with a view to presenting a broader report to the European Council in Spring 2001.

The Government has recognised the central role of research, technology and innovation in a knowledge-based economy with an unprecedented level of funding committed in the national development plan. At Lisbon it was agreed that research activities at national and Union level must be better integrated and co-ordinated to make them as efficient and innovative as possible and to ensure that Europe offers attractive prospects to its best brains. A number of steps were agreed towards the establishment of a European research area, including the development of appropriate mechanisms for networking national and joint research programmes; improvements in the environment for private research investment, research and development partnerships and high technology start-ups by using tax policies, venture capital and EIB support; the creation by the end of 2001 of a very high-speed trans-European network for electronic scientific communications; and that a Community patent is available by the end of 2001.

I am pleased to be able to point to the Government's recent announcement of the £560 million technology foresight fund which will provide the necessary impetus in research and development in the ICT and biotechnology areas.

In advance of the summit I had sought, as a concrete outcome, the creation of a charter for small firms to set out clearly how we can help this key sector to develop through better and more sensitive regulation, easier access to venture capital and technology and the creation of a wider culture of enterprise. Accordingly, I welcome the commitment given to the establishment of a European charter for small business to be endorsed in June, which will commit member states to focus on small companies as the main engines for job creation in Europe and to respond specifically to their needs.

One of the Union's greatest successes is the Single Market in goods and services. However, in keeping with its focus on competitiveness, the Lisbon summit recognised that in order to ensure the interests of business and consumers, rapid work is still required in certain sectors to complete the internal market and to improve under performance in others. We agreed, in order to meet this aim, to set out by the end of 2000 a strategy for the removal of barriers to services; to speed up liberalisation in areas such as gas, electricity, postal services and transport; to conclude work in good time on the forthcoming proposals to update public procurement rules; to take the necessary steps to ensure that it is possible by the end of 2003 for Union and government procurement to take place on line; and to set out by 2001 a strategy for further co-ordinated action to simplify the regulatory environment, including the performance of public administration at both national and Union level.

Efficient and transparent financial markets foster growth and employment by better allocation of capital and reducing its cost. Since the introduction of the euro, good progress has been made on the rapid integration of money markets and payments systems. However, we must accept that a great deal of work still needs to be done. The European Council recognised that the Union's financial markets remain segmented and business and consumers have not yet fully benefited from direct access to cross-Border financial institutions. Again, the Union is currently behind the US. It was agreed that the financial services action plan should be implemented by 2005 in an attempt to close this gap. In addition, full implementation of the risk capital action plan by 2003 will be ensured. I fully support the need for priority action to achieve a fully integrated financial services market.

It is clear that the Union, through the existing broad economy policy guidelines and the Luxembourg, Cardiff and Cologne processes, has the necessary instruments to carry forward the outcomes from the summit. However, it was agreed that the guidelines should focus increasingly on the medium-term and long-term implications of structural policies and on reforms aimed at promoting economic growth potential, employment and social cohesion, as well as on the transition towards a knowledge-based economy.

Implementation of this strategy will be achieved by improving the existing processes; introducing a new open method of co-ordination at all levels; and by a stronger guiding and co-ordinating role for the European Council to ensure more coherent strategic direction and effective monitoring of progress. The first meeting of the Council each year in spring will determine the relevant high level mandates and ensure that they are followed up. I welcome this development as it will allow the necessary political emphasis to be placed on these crucial issues.

Ireland has long recognised that the mainstreaming of social inclusion in general Government policy is a vital factor in tackling social inclusion. Undoubtedly, the new knowledge-based society offers tremendous potential for reducing social exclusion, both by creating the economic conditions for greater prosperity through higher levels of growth and employment and opening up new ways of participating in society. It is also important, at the same time, to recognise the risk of an ever-widening gap between those who have access to the new knowledge and those who are excluded. In order to promote social inclusion, the European Council is seeking to promote a better understanding of social exclusion through continued dialogue and exchanges of information and best practice; to mainstream the promotion of inclusion in member states' employment, education and training, health and housing policies; and to develop priority actions addressed to specific target groups.

I argued in Lisbon that the turnaround in Ireland's economic and social fortunes is in no small part attributable to our system of social partnership. This has allowed us to develop a shared understanding with the social partners of the challenges to be faced and the strategies to be adopted to tackle them. I gave strong support in this respect to the European Commission in seeking to encourage the social partners to begin discussions this year on all aspects of the knowledge-based economy and society. The social partners need to be more closely involved in drawing up, implementing and following employment guidelines at Union level. In Ireland, this already happens.

I was pleased that the European Council acknowledged that the European social model, with its developed systems of social protection, must underpin the transformation to the knowledge economy. However, there is a shared understanding that the model needs to be adapted to ensure its long-term sustainability in the face of the Union's ageing population, to promote social inclusion and gender equality and to provide quality health services.

It is essential that member states co-operate together in co-ordinating policy development in this field to meet the major challenges they face in regard to ageing, changing employment patterns and family structures and social exclusion. Given the variety of the systems of social protection among the 15 member states, there is a wealth of experience on social protection policy and its implementation in the EU. The high level working party on social protection will prepare a study on the future evolution of social protection from a long-term perspective, giving particular attention to the sustainability of pensions systems.

Ireland's demographic profile and the current strength of our economy gives us an opportunity to prepare for the costs which inevitably arise as the population grows older. The problems facing some of our European neighbours demonstrate why we should act now while we have the time and resources. We have established a fund to partially offset the future cost of both social welfare and public service pensions. The Government has decided that 1% of GNP will be set aside every year for this purpose. The majority of the receipts from the privatisation of Eircom have also been ring-fenced for this purpose. This will be viewed as a wise and prudent measure in years to come.

The European Council recognised that, as well as preserving macro-economic stability and stimulating growth and employment, macro-economic policies should foster the transition towards a knowledge-based economy, which implies an enhanced role for structural policies. As regards the sustainability of public finances a report will be presented by spring 2001 assessing the contribution of public finances to growth and employment. The mandate given for the review of the quality and long-term sustainability of public finances is timely and of crucial importance. The issues posed are critical to the future prosperity and inclusiveness of our societies. A long-term perspective is needed to ensure that budgetary policies are framed for sustainability within budgetary balances which support confidence and growth.

Implementation of the Union's ten year strategic goal will be facilitated by applying a new open method of co-ordination as the means of spreading best practice and achieving greater convergence towards the main EU goals. This method, which is designed to help member states to progressively develop their own policies, involves establishing, where appropriate, quantitative and qualitative indicators and benchmarks against the best in the world and tailored to the needs of different member states and sectors as a means of comparing best practice and periodic monitoring, evaluation and peer review organised as mutual learning processes.

Benchmarking our position and progress in the knowledge-based economy and taking whatever corrective action is highlighted is a necessary underpinning to the new strategy and we should make comparisons with the most advanced economies in the US and elsewhere. We already have the base of raw data and research results in many cases. A structure which will allow this base to be used quickly and productively is needed. The model of voluntary co-operation among member states, with central co-ordination by the Commission, seems to be a good one to follow. This has the potential to allow the process to proceed as fast and efficiently as possible. We cannot mistake analysis for action.

With regard to the core theme of the summit, anyone examining the conclusions can only be impressed by the very specific goals and deadlines set down in every area which was considered. Equally, one cannot fail to note that, in addition to content, EU leaders acted to ensure that the processes by which the Union's goals are to be attained are streamlined and better synchronised. While no substantial discussion took place on the intergovernmental conference, Ireland together with its partners expressed satisfaction with the progress made to date and I look forward to the Presidency's report at Feira in June.

My colleague, the Minister for Foreign Affairs, will outline in detail in his contribution developments in regard to Common European Security and Defence Policy; the Western Balkans; Russia; and the EU-Mexico Agreement. Accordingly, I do not propose to replicate his statement. However, with regard to security and defence, I am happy to report that the European Council welcomed the establishment of the interim bodies foreseen at Helsinki and also the achievements in the non-military crisis management track.

Mr. J. Bruton

Have Irish representatives attended meetings of the military committee of the EU?

The Taoiseach

Yes. It was agreed to establish, by the Feira European Council in June, a committee for civilian crisis management, a development I strongly supported. I reiterate that from Ireland's point of view, developments in the security and defence area must remain based on the Treaty of Amsterdam and on the Cologne and Helsinki conclusions, which firmly ground them in the Petersberg Tasks.

The Lisbon summit focused on the Union's competitiveness across a wide range of areas, but more specifically on harnessing the potential of Europe's greatest asset, its people and its innovation and knowledge base. I will conclude by highlighting that the targets set for investment in human resources and a wide range of research and investment projects are fully in line with our goals under the Programme for Prosperity and Fairness and the national development plan. I am gratified that the approach adopted to achieve the targets mirrors the inclusive social partnership, public private partnership approach which has successfully operated in Ireland.

I envisage the Irish and European level approaches as strongly reinforcing. We set a strategic course in Lisbon for the next decade focusing on the development of the knowledge-based economy and modernising the European social model by investing in people and an active welfare state, and, most importantly, we have set down the concrete steps and deadlines for achieving our goals.

Mr. J. Bruton

The European Union is failing in five areas. It is failing to combat racism among its own people. It is devaluing caring and all unpaid work and putting the entire emphasis on what is known as labour market work as if the market defines all value, which it does not. This is all the more surprising considering so many of the Heads of Government are socialists. The European Union is failing in so far as inequality is increasing dramatically within the Union and little is being done about it, but it is increasing even more dramatically in Ireland. The European Union, through its own actions, is setting aside the principles of due process, respect for the law and the right of any person accused to be given a hearing before sentence is passed on them. The European Union is failing to endow itself with proper popular political legitimacy. Its decisions are being taken by elites whose mandates will survive as long as there is no crisis but they will not survive a crisis because they lack popular legitimacy. I wish to deal with each of these points in order.

It is a matter of serious concern, as I said in Lisbon after the European People's Party summit, that racism is growing in Europe. A mayor of the current governing party in Spain was recently re-elected with a greatly enhanced majority on the strength of a proposal he made that immigrants to Spain should not be allowed to live in the centre of his city but should instead be kept in particular suburbs to where they would be confined. That man was re-elected by the Spanish electorate.

In France, a recent opinion poll indicated that 70% of the French people find the presence of immigrants in their country aggravating. That represents an increase of 11% in two years in the number of people expressing anti-immigrant sentiments. Arabs call forth the greatest hostility among French people but there is a growth of eight points in the number of those who find people of black skin unacceptable in France. There is also a growth in anti-Semitism among the French people. This is true of all other European countries. There is a growth in racism in this country, in Germany and in all countries.

When European leaders meet, they should take a stand, and they should have taken a stand against this phenomenon of growing racism, yet racism is not even mentioned in the conclusions of the Lisbon Summit. We cannot talk about a new economy without tolerance. A new economy is based on trust, exchange and globalisation. There can be no durable globalisation without tolerance. There can be no effective economy without trust, and societies that are riven by racial prejudices of the kind we are seeing in this country cannot progress towards a new economy in an untroubled way. The first failure of the European Union has been its failure to take a firm stand against racism.

I have criticised the Taoiseach's remarks in Australia where he referred to centres where people could not leave until the procedures had been gone through, in other words, they were detained there until the procedures were gone through. That, to my mind, is a detention centre, however one defines it. By raising this matter the Taoiseach was responding, unfortunately, to sentiments expressed at home. He may have done this inadvertently and unintentionally but the truth of the matter is that these sort of sentiments adduce a sympathetic response from an unfortunately growing section of our electorate and should be avoided at all times by people commenting at public events. Such comments should not be made. Misconstruction and misquotation is no excuse, and in this instance there was no misquotation because the quotes are exact.

I criticise the way Europe is developing in the sense that it is economistic. The development of the European Union is being guided solely by the values of the market. Only those forms of work which are paid for count as far as the European Union is concerned. This is a critique that is not just being made by me; it was also made by the United Nations in a recent study it produced on the quality of life. It pointed to the fact that the society being created by globalisation has three deficiencies. Because global forces attract investment to the area of lowest taxation, they put a fiscal squeeze on welfare services. By the physical laws of globalisation, welfare services are being stripped of money because low taxation is the way to attract investment. The United Nations made the point that globalisation creates incentives for misuse of the environment. There is a short-term attraction in global competition to spend as little as possible on environmental protection because that costs money and adds a cost to the product being produced and to run down environmental assets irresponsibly to win markets abroad. The UN has pointed out that globalisation is placing a time squeeze on caring, and this is most relevant to the debate on our budget. People do not have time to care for their children any more in this pressured globalised market. As far as the European Union is concerned, people who take off time from work to look after either a sick relative, a sick child or a member of their family who may be perfectly well but who needs care, do not count because paragraph 4 of the European summit conclusions, endorsed by the Taoiseach – this could have been written by Minister McCreevy – states, "The employment rate is too low and is characterised by insufficient participation in the labour market by women and older workers". In other words, the only thing that any woman, older person or any person should do is participate in the labour market. One's work does not count if it is not being valued by the market. That is the philosophical value of this summit. Only paid work counts as far as this summit is concerned.

I do not believe that statement. It is wrong to say such a thing. All work that is designed to make life better for oneself or for other people, whether it is paid for or not, counts and should be valued. This narrow, economistic approach, which values only labour force participation, which sounds almost like a fascist phraseology, something one could imagine being put down under the words "Arbeit Macht Frei" as an emblem of success—

The Taoiseach

On a point of information, Deputy Bruton would do well to read the National Economic and Social Forum's local employment services report, which was produced on Monday. What the Deputy is saying is out of kilter with what the people involved in the schemes want to do. What he is saying is contrary to the views of people representing—

Mr. J. Bruton

That does not bother me. It may bother the Taoiseach. He may not like to be out of step with anybody and may always want to be popular with everybody, but that does not concern me. I will give my opinion without quoting from any reports. I have formed my own view about this matter.

The Taoiseach

The Deputy should not make comments about fascists.

Mr. J. Bruton

The Taoiseach can quote all the reports and focus groups he wants to advise him on the sort of off the cuff remarks he made when in Australia.

In my view, carers count, whether they are paid or not. I do not accept an approach to the economy, such as that set out in the European Presidency conclusions, which puts no value on unpaid work. I stand by that view, which is why I oppose the philosophy of the Government's budgetary policy and criticise the philosophy of the Presidency's conclusions in Lisbon.

The European Presidency conclusions are comparatively silent on the growth of inequality in Europe. It is important to bear in mind that, left on their own, markets will lead to ever wider inequality, up to a certain point when other equalising factors come into play.

According to the recent UN report which I quoted from earlier, three countries in the developed world, two of which were in the European Union, were singled out as having the highest levels of inequality, that is, the difference between the top and bottom 20% of income levels. The country with the worst record of inequality was, as a result of globalisation, the United States of America. The United Kingdom of Great Britain and Northern Ireland had the third worst record. The country with the second worst record – worse than Britain but not quite as bad as the United States – in terms of the growth of inequality between the top and bottom income quintiles was Ireland, the Celtic tiger. It is not surprising that income inequality is not being benchmarked, which is the new word, by the summit. The Taoiseach issued a long paper urging benchmarking on all sorts of matters but I do not think he has urged benchmarking on inequality.

It is important to recognise there is a dynamic in the world which lies at the heart of, and is perhaps the source of, the growth of a self-protective racism in the developed world. The income gap between the top 20% and the bottom 20% of people in the world in 1870 was 7:1. When Irish people were emigrating to America in 1870 they were probably in the bottom 20% and those in the top 20% were seven times better off than them. By 1960, the gap between the top 20% and the bottom 20% in the world was 30:1; in other words, the top 20% were 30 times better off than the bottom 20%. By 1997, the multiple had reached 74 – the top 20% of the world's people, which includes Irish people, are now 74 times better off than the bottom 20%, as compared to seven times better off in 1870. That puts the problem of immigration in its true context. If there is that degree of difference between the better off and the less well off, there will be pressure for immigration into the areas where those high incomes are being earned.

I have referred to racism, the devaluation of caring and the growing inequality in the world and in Ireland. The fourth area that has not been dealt with adequately is respect for due process between nations. The imposition of sanctions on Austria, which was reviewed in Lisbon, was neither based on, nor covered by, an EU Treaty provision. The manner in which the decision was taken constitutes a deliberate evasion of a procedure specifically provided for in Article 7 of the Treaty of the European Union for dealing with countries that are delinquent in some way. The Portuguese EU Presidency deliberately evaded the legal processes of Article 7 to impose these sanctions on Austria. It is deplorable for a country, which is part of a union which is supposed to be based on law, to participate, as Ireland did, in a deliberate evasion of the responsibilities imposed on it by Article 7 of the Treaty of the EU, whatever the cause.

The decision to impose these sanctions on Austria without previous dialogue with the Austrian Government violated the general principles of law. I am sure the Minister for Foreign Affairs is, as a lawyer, familiar with those general principles. People should be given a hearing before they are sanctioned. Austria received no hearing before it was sanctioned by Ireland and the other 13 member states. The principle of the right to a fair hearing is fundamental to European civilisation. The rule of law is the source of our economic success. If a state does not practice the rule of law in its relationships with other European Union member states, it is undermining a fundamental principle. That fundamental principle was breached by the Taoiseach and the other heads of government when they agreed to evade the responsibilities of Article 7 of the Treaty and to impose sanctions without giving a hearing to the state against which they were imposed. It is very important to re-establish that principle.

Furthermore, the Taoiseach, in agreeing to the European sanctions against Austria, breached the Irish Constitution. The Constitution requires us all to act in accordance with the principles of democracy and the application of laws in a fair way. In agreeing to these sanctions, the Taoiseach did not abide by the Constitution, which should require a hearing to be given to anyone against whom a sanction is being imposed, such as Austria.

There is also a general principle of equality in European law. This principle requires that similar situations shall not be treated differently, unless the differentiation is objectively justified. The sanctions against Austria were not taken either on the basis of a hearing being given to the Austrians or on the basis of specific examples being given of where the breach of European law or any other norms took place. It did not represent an equal treatment of similar situations. The Freedom Party of Austria was previously in government with the socialists. It participated in government with Dr. Bruno Kreisky as chancellor.

Mr. Quinn

Same name but a different party.

Mr. J. Bruton

Dr. Bruno Kreisky was not sanctioned for participating in government with the Freedom Party, although two members of the then Freedom Party government were former SS officers. Now, however, when a member of the Austrian People's Party participates in government with the Freedom Party, the majority of European Union heads of government take action that they did not take against Bruno Kreisky. I do not think this is because the majority of EU summiteers are socialists because the most militant in their demands for these sanctions were the French and the Spanish.

Mr. Quinn

And the Belgian liberals.

Mr. J. Bruton

And the Belgian liberals. However, it is not fair or right. The test of one's commitment to due process is when one is defending somebody who is unpopular.

I also find objectionable, on the same principle, the decision taken by the summit that the sanctions against Serbia will be maintained until President Milosevic is removed from office. Sanctions should be maintained on the basis of measures rather than men, of objective conditions rather than singling out an individual and saying we will sanction a country if that individual remains in office.

It could not be said he is a war criminal. If he is a war criminal, he is an accused war criminal; he is not yet a convicted war criminal. It is wrong and contrary to law to impose sanctions on an individual until he has been tried and convicted. He has not been tried or convicted. It is wrong in principle to impose sanctions related to an individual participating in government and it is another example of the sort of ad hoc politically motivated decision making that passes for leadership in the European Union.

Mr. Quinn

I will comment on the procedure for this kind of debate, or set of statements which more accurately describes what we are participating in. While it is correct for the Taoiseach to say that this is the format that has characteristically been the way in which we have dealt with these matters, I ask him in the light of his own comments at the Institute of European Affairs last week, whether this form of reportage back to the national Parliaments is extending the legitimacy of the European Project in any meaningful way? That is not to say that the Taoiseach is not adhering to the normal practice, which he certainly is. Before I go through the comments on the conclusions of the Lisbon Summit – Deputy Bruton made some interesting comments on a whole range of other matters, to which a time limit of 20 minutes will curtail my response – would the Taoiseach consider, perhaps in consultation with the Whips, a different way in which we can convey this kind of reportage back from what are now four summits a year? In the light of added responsibility which the spring summit will have arising from the conclusions of the Lisbon Summit, should the Taoiseach go before the Committee on European Affairs or should there be some series of statements followed by a set of questions and answers – a Committee Stage debate? From the Taoiseach's point of view and that of the Government of the day, which has changed with every election since 1969, this practice would enable us to gain more understanding of what is happening within the European Union and address the very democratic deficit to which the Taoiseach referred in the European Institute last week. The absence of the media in the Gallery is a fair indication of the priority being given to the dialogue in which we are now engaged.

Mr. J. Bruton

It is the operation of the labour market. They are getting better paid elsewhere. It is a new value system.

Mr. Quinn

They can argue that they can access our contributions or they can listen to them, which is true, but the presence or absence in the Gallery of the media is an indication of the level of priority they attach and subsequently that their editors will attach to the reportage of what happened in Lisbon or any other summit.

It is appropriate that what became known in jargon as the dot.com Summit took place at a time of controversy around investments in dot.com companies and that they, in some cases, as Will Hutton commented in The Guardian, bring echoes of the great bubble in investment in tulips in the last century. We need to be a little cautious, as investors have recently found, about the allure and the apparently effortless wealth that can be created by new technologies. I support the thrust of the Lisbon Summit, a project that Antonio Guterres has been trying to promote within the socialist group of party leaders for some time. It received enthusiastic support from a number of heads of government including our Taoiseach, Deputy Ahern.

Broadly speaking, I welcome the conclusions of the Summit, which is not to say that the Summit addressed every issue on the European agenda. It certainly did not but it did not set out to address every issue on the European agenda because no summit could meaningfully do so and be practical or functional. In many respects Ireland is ahead of the posse on a variety of issues outlined in the conclusions of the Summit. The Taoiseach was in a position to reinforce the conclusions of our information society which was established by the previous Administration with the commitment to link every school to the Internet within a relatively short period and to provide lifelong learning facilities for members of Irish society, be they in the labour force or not. Those kinds of conclusions at a European level are positive and reinforce what we have been trying to do over the years.

However, I have a concern which has not been addressed in the Taoiseach's comments on the evolving constitutional nature of the new role taken on by the Summit arising from Lisbon. There is an ambiguity in whether the Commission will have a co-ordinating role every year to review progress and to benchmark and to measure what has been achieved. It seems, referring to the Taoiseach's comments in the Institute of European Affairs last week, that Ireland must insist at all times on having a Commissioner, a position that I formally and fully endorse and have personally and directly conveyed to Romano Prodi on 10 March. There is an ambiguity in the set of conclusions from the Lisbon Summit where it refers to a pre-eminent and co-ordinating role for the European Council to ensure overall coherence and effective monitoring of progress towards the new strategic goal. It is not clear from my reading of the text and the Taoiseach's own text whether the Commission will have a primary task in co-ordinating or the Council will have a primary task in co-ordinating, measuring and benchmarking this. This is very important. The more the Council takes on for itself – the Council is not inside the Treaty in a formal sense, it is not accountable to the Parliament and it is not justiciable in terms of Luxembourg – the more that is a further move towards intergovernmentalism which is decidedly not in the interest of small member states, including Ireland.

I am reading from the conclusions – and I invite the Taoiseach to clarify it because I may be reading it wrong – that there is a danger in the ambiguity of the text and the conflict between it and the Taoiseach's text where he clearly refers to the Commission having a co-ordinating role and the Council having a co-ordinating role. The reference in the Taoiseach's circulated script refers to the model of voluntary co-operation among member states with central co-ordination by the Commission – this is just before the reference to the intergovernmental conference to which I will come later. This point needs to be clarified because what has happened in the ECOFIN Council, as the Minister for Finance will tell him, is that, with the advent of Euro 11, most of the work is now being done at Euro 11 on an informal basis and the formalities with Euro 15 are to tell the other four what has been decided at a macro-economics level and elsewhere. When Greece, Sweden and Denmark take part – recently Svend Auken, Danish Environment Minister, indicated to me that that would probably be carried in the referendum later this year albeit by a very small majority – the ECOFIN Council with Britain and the other 14 inside will become a totally different hybrid from what it was before.

That is Britain's problem on one level but it means that the movement away from co-ordinating macro-economic policy, all the matters supporting it and realising in full the completion of the Internal Market, are issues in which the Commission should have a central role. I detect a danger here, which I can hear in some of the utterances of Tony Blair and other leaders of the large parties, such as Jospin and Schröder. They are much more comfortable with the intergovernmentalism of the Union than with the role of the Commission. In the context of enlargement and the Intergovernmental Conference this is a serious matter for us, again referring back to the democratic legitimacy to which the Taoiseach referred in the Institute of European Affairs last week.

I move from this to the Taoiseach's reference to the Intergovernmental Conference itself. Since I do not know what the Minister for Foreign Affairs will say about the other aspects, I will wait, listen and respond accordingly. It is essential, given what has been agreed in Lisbon, that the Council will have a much more proactive role in co-ordinating economic activity, with or without the input from the Commission which has to be decided, but it seems that there is now a clearly, newly defined job for a Commissioner in a Commission of 20 to do precisely this. These approaches are necessary and the conclusions of the European Summit are valid as far as they go, which is not to ignore the points made by Deputy Bruton. For years, Europe was castigated for being too slow in its development relative to other parts of the world and relative to the globalisation of the world's economy. The completion of the Internal Market will give us the economic wherewithal to do many of the things we need and want to do.

It will be painful, however, and there will be a lot of restructuring involved. That is why the protection and maintenance of the European social model and its modernisation are critically important if we are to get the sort of internal restructuring which the logic of the internal market suggests. We have already begun to see it with the large motor manufacturers on the one hand and the financial institutions on the other.

To illustrate what I mean, there are currently 41 stock exchanges in the European Union but that number will be rationalised down to about five or six at the very most within ten years, if not sooner. There are enormous implications for workers, their families and communities as to how that rationalisation will be achieved. It cannot be done in an Anglo-Saxon manner, it has to be done within the framework of existing and enhanced EU legislation. The left in Europe only bought into the internal market on the basis that the social charter would be there as a counter-balance and protection. I was glad to see the references to the model of social protection in the Taoiseach's speech. While there is probably an over-emphasis on pensions, there is a need for greater participation by those who wish to participate in the EU labour force. Other issues, such as paternity leave and child care provision, all the issues in regard to which Ireland is bottom of the league, will have to be addressed clearly.

As regards the intergovernmental conference, in a speech to the Institute of European Affairs in Dublin last week the Taoiseach said that depending on the precise form of the conclusions at Nice later this year, there may or may not be a requirement for a referendum. I strongly urge the Taoiseach to make it clear that there will be a referendum, even if strictly speaking it is not legally necessary. On a previous occasion the Taoiseach promised a referendum on Ireland's participation in the Partnership for Peace, which was never legally necessary. If, however, he wants to address the issue of democratic legitimacy which is a major and increasing problem within the European Union, it is inconceivable that this country would not have a referendum even if it is just to give effect to matters left over from the Amsterdam Treaty. The referendum on Europe will be the first one that is not economic in nature, but political as far as the Irish electorate is concerned. When they voted for the Maastricht Treaty, in essence, they were voting for the so-called £8 billion that the former Taoiseach, Deputy Albert Reynolds, brought back from Edinburgh. That is the way it was promoted. Many other aspects of the Amsterdam Treaty were not highlighted during that debate. There will be no such economic package or dimension to a forthcoming referendum on Europe.

There is a need for the Government to develop the paper the Taoiseach presented to the Institute of European Affairs either as a White Paper, a statement of intent or a policy position. It will probably be clearer after the conclusion of the Portuguese Presidency and the start of the French Presidency when I urge the Taoiseach to set out the Government's position. That should be done on the assumption that either way we are definitely going to have a conclusion and a treaty at Nice, because that seems to be the thrust of every participating party to the intergovernmental conference.

In that context, it is not sufficient for the Government to say it wants to hold onto a European Commissioner. We have to argue very clearly for the centrality of the Commission's role in the future enlargement of the European Union. We must be generous as regards changes in weighted voting for the larger member states and, perhaps, the extension of qualified majority voting in other areas in order to maintain a balance. Otherwise, some larger member states will lose a Commissioner as a result and that will cause difficulties for them. Many applicant countries are waiting for us to articulate this point because they see Ireland as the role model for their membership of the European Union.

The Taoiseach has visited quite a number of the applicant countries, including Slovenia, Hungary and Poland. They have told him, as they have told me and others, that they see Ireland as a role model, much more so than Finland, Austria or Sweden which were wealthy and well developed prior to EU membership. Ireland has the unique experience of having made a rapid journey, moving from peripheral poverty, if I may use that phrase, to substantial economic wealth and having a central role to play. The Government of the day has to give leadership in preparing such a paper to set out clearly Ireland's position on these matters.

I wish to refer to some of the points made by Deputy Bruton in respect of what was not in these conclusions and what we could do as a single entity. The European Union is not a state, it is a hybrid of a constitutional kind for which there is currently no description or adjective. It will become one going into this century and will be copied by other regions. I have used the phrase "post-federal construction" to describe the EU, but it is an inadequate and misleading term because it does not have a federal aspiration, although I know some people have such aspirations for it.

Mr. J. Bruton

It has.

Mr. Quinn

It does not.

Mr. J. Bruton

The Union.

Mr. Quinn

Yes.

Mr. J. Bruton

Nothing could be more united than a union.

Mr. Quinn

Okay, but it is not federal in the sense that Canada, Germany or the United States are. I do not see it in that way. Once the Union gets its act together economically – Lisbon is focused exclusively on trying to do that – there are a number of issues that we should work on collectively. The first is to try to reduce the gap between rich and poor worldwide through our unique role in the World Trade Organisation. Seattle was a fiasco because of a conflict between the competing member states of the WTO. There should be a debate on what Europe can do to reduce the poverty gap that ultimately threatens our security along with the absolute devastation it is causing for people's lives in other parts of the world. That is easy to say but difficult to encounter. It means, for example, given Deputy Bruton's constituency, opening up our agricultural markets to third country producers and suppliers. The IFA would be the first to demand that we should protect Irish and European farmers in that respect. There are a lot of hard choices.

Mr. J. Bruton

Short-term.

Mr. Quinn

Many easy things can be said because they are comfortable to say, but difficult choices must be made. We have to provide leadership, which is expected. The issue of the Austrian Government, to which Deputy Bruton referred, is precisely about racism and about the comfort that Haider's so-called Freedom Party gave to anti-immigration sentiments throughout Austria. Other factors brought about the change in Government there, including a cosy cartel and a Government that had been in office for the best part of 30 years with an absolutely repugnant system whereby every public office post in the country—

Mr. J. Bruton

Patronage.

Mr. Quinn

—was split up between the two parties in Government. I know the situation in Austria is complex but the issue of racism is at the centre of the ostracism of the Austrian Government. That ostracism by the leaders of the European Union, which I support, is not of the Republic of Austria nor of its people, but of a particular Government which deliberately set out through one of its constituent parts to mobilise the racist fears of a sector of the electorate. Those fears can also be found in every other part of the European Union.

Unless we deal positively with the issue of immigration we will not be able to address other issues that will confront the European Union over the next 20 or 30 years. The issues that will affect the lives of those school children in the Visitors Gallery when they are adults include the deficiency in the social welfare fund for pensions, although good progress has been made in this country in that respect, and the decline in the working population both inside and outside the home. It is something the Government decided to do yesterday by seeking an extra 28,500 workers who will come here over the next five or six years. In embracing that necessity by opening up the doors of the European Union to people who wish to live here, we must realise that new immigrants bringing strange cultures threaten and frighten some people in every country of the European Union. It is the responsibility of both the Government and the European Union to lead in that area.

I can see a new task in relation to racism, assimilation and integration becoming the responsibility of the Commission and not just that of the Council. These will flow naturally from the Lisbon summit. If everything set out in the conclusions of that summit are achieved, then the European Union will attract more and more economic migrants and asylum seekers who will want to become part of what will be the largest single legal market entity in the world, with approximately 500 million people.

If we do not realise that is going to happen and if we do not prepare for it, we will have the sort of problems that characterised Europe in the last century. The history of Europe in the last century is one we can never repeat and we must learn the lessons that history teaches us. The success of the Lisbon conclusions will intensify the probability that more people will want to live not just in Ireland but across Europe and we will have to deal with them in a constructive, positive and inclusive way.

Minister for Foreign Affairs (Mr. Cowen)

The theme of the Lisbon Special European Council was "Employment, economic reform and social cohesion – for a Europe of innovation and knowledge." The Taoiseach's statement showed that the European Council responded creatively to the new opportunities and challenges posed by the transition to an innovation and knowledge-based society. It responded by adopting a new strategic goal for the next decade, namely "to become the most competitive and dynamic knowledge-based economy in the world capable of sustainable economic growth, with more and better jobs and greater social cohesion." It also made clear that the European Council itself is to play a strong guiding and co-ordinating role to ensure the overall coherence and effective monitoring of the work of the Council of Ministers in relation to the specific goals which were agreed at Lisbon and which the Taoiseach has set out comprehensively for the House.

Looking at the results from Lisbon, we have every justification for taking satisfaction in the outcome. The national position paper which Ireland submitted highlighted five key areas which we felt should feature among the priority areas for attention – lifelong learning, education and training, the economic and social environment, IT access, research and development and benchmarking. It will be clear to Members that these key areas feature extensively in the Presidency's conclusions.

Recent Irish experience validated a number of the key themes proposed for Lisbon. This applied to the pivotal role which social partnership has come to play over the years since the first national social partnership agreement was reached in 1987. It applied particularly to the Programme for Prosperity and Fairness, in which the Government and the social partners identified lifelong learning and successful adaptation to the information society as priority challenges for the years ahead in Ireland. The suggestions which the Irish Government put forward were firmly rooted in our own recent experience.

Mr. J. Bruton

Does the Minister consider it might be better to deal with contributions made in the House rather than delivering a speech prepared before any of us spoke?

Mr. Cowen

That is what I am doing.

Mr. J. Bruton

He is not.

Mr. Cowen

I must put various points that are important for my own sphere of interest on the record. If I get the opportunity without being interrupted I will deal with some of the issues mentioned by the Deputy.

It was gratifying and encouraging to find that these approaches commended themselves sufficiently to other member states to be strongly reflected in the decisions taken by the Heads of State and Government as reflected in the Presidency's conclusions from Lisbon.

While the European Council was devoted in the main to economic and social issues, it took account of a preliminary progress report by the Presidency on follow up to the Helsinki European Council conclusions on defence and security. The House will be aware that the question of European security and defence policy is the subject of continuing discussion within the EU on the basis of the provisions of the Treaty of Amsterdam. The focus of these EU discussions is the Petersberg Tasks and not mutual defence commitments of the Article V type.

The Helsinki European Council called for the creation of new interim bodies to enhance the EU's ability to take informed and effective decisions in the area of Petersberg Tasks, and to assist in taking forward the EU discussions on these points. These bodies, and in particular the interim political and security committee foreseen at Helsinki, began to meet this month. The European Council welcomed that fact that these bodies have been established and are starting to function effectively.

The Helsinki European Council agreed on a voluntary target for establishing capabilities for Petersberg Tasks. This target, known as a headline goal, which member states aim to meet by the year 2003, is to be able to deploy 50,000 to 60,000 personnel within 60 days and to be able to sustain this deployment for one year. This would equate roughly to a mission of a scale comparable to that of KFOR in Kosovo. What was agreed upon was a capabilities target and, as the Helsinki European Council conclusions make clear, this does not imply the creation of a European army, nor does it alter the fact that participation in the Petersberg Tasks under the Treaty of Amsterdam is on a voluntary basis, and is a matter for sovereign decision in each and every case.

The General Affairs Council, with participation as appropriate by Defence Ministers, was mandated at Helsinki to take forward the elaboration of this target and to develop a method of consultation through which this target could be met and progress reviewed. Member states will also use existing defence planning procedures which, in the case of Ireland and the other neutral and non-allied EU member states, would include the planning and review process of the Partnership for Peace.

The Lisbon European Council welcomed the fact that the General Affairs Council has identified a method for elaborating the headline goal and identifying possible contributions which member states could make in due course, without prejudice to the fact that participation in Petersberg Tasks is voluntary, for case by case decision and remains a sovereign matter for decision by the member state concerned. I am particularly glad to note the work that is also being done on non-military crisis management. Natural disasters, such as in Mozambique, and the fact that modern crisis management requires not only military peacekeepers, but also civilian and humanitarian relief assets, testify to the importance of progress on civil crisis management. The European Council has given further impetus to this work and has invited the General Affairs Council to establish by or at the June European Council an EU committee for civilian crisis management.

Developments in the western Balkans were discussed by Heads of State or Government and Foreign Ministers at dinner on Thursday evening. The discussion took place on the basis of a report submitted by the Secretary-General/High Representative, Mr. Solana, together with the EU Commission. The European Council confirmed that its overall objective remains the fullest possible integration of the countries of the region into the political and economic mainstream of Europe. The stabilisation and association process is the centrepiece of the EU's policy in the Balkans and the countries of the region are being encouraged to work together and with the EU to make a success of this process. The Commission is being urged to make proposals to ensure a fast-track procedure and speedy and effective assistance.

The situation in the Federal Republic of Yugoslavia, especially Serbia, remains a major source of concern. The European Council agreed that the EU should maintain its action for democratic change in Serbia, and that selective sanctions aimed at the regime would remain in place as long as President Milosevic stayed in power. Those sanctions are directed against the regime. It is envisaged that NGOs will be used in the region to build up a civil society.

We must continue with whatever efforts we can in the context of a regime that is oppressing its own people. The sanctions are being directed against the regime, although, obviously, great hardships are being imposed on Serbia as a result of the policies of the Serbian regime regarding its neighbours and the Western world. We must assist in changing this and in supporting democratic opposition to Serbia, which has had its own internal differences. It would be wrong to suggest there is a sanctions policy simpliciter against an individual called Milosevic; it is against Serbia and its regime. There are also other policies at that level to support the opposition and to bring about a position where Milosevic is no longer in power.

Mr. J. Bruton

Was he not elected?

Mr. Cowen

Concern was expressed by member states about the stability of the area. It was agreed that Montenegro's efforts to achieve democratic reform and economic prosperity should be supported by substantial assistance, both to ensure the survival of democratic Government and to avoid another serious crisis in the region.

Kosovo remains the focus of particular concern. The EU's special responsibility in the region means that it must play the central role in providing international support for Kosovo. The EU has already assumed the major role in contributing to reconstruction in Kosovo and has recognised the need to provide support in a much more co-ordinated, coherent fashion, and to ensure that the efforts of the EU receive appropriate recognition. The key issue currently is the achievement of Serb participation in the interim administration and the municipal elections to be held next autumn.

These will be important steps towards the stabilisation of the situation in Kosovo. However, the European Council noted that lasting stability in the region could only be ensured taking into account the legitimate interests of the neighbouring coun tries of the Federal Republic of Yugoslavia with full responsibility for territorial integrity and existing borders. There was considerable discussion of how a more coherent and action-oriented strategy could be developed to provide economic and political support to Kosovo and the region. The Stability Pact will make a vital contribution in this regard; in addition, to strengthen the central role of the EU, the Secretary-General/High Representative has been asked by the European Council to undertake, in association with the Commission, an enhanced co-ordination role. This issue will be discussed further at the next meeting of the General Affairs Council.

At dinner there was also a discussion of developments in Russia. It was recognised that, on the eve of the presidential election, the EU should signal to Russia the importance of the development of a genuinely effective and working strategic partnership. In this context, it was agreed also that, in regard to Chechnya, Russia should abide by its commitments.

East Timor remains the focus of attention and concern. The Taoiseach earlier reported to this House on his visit there in March and provided his European colleagues with an assessment of the situation. The President of the Commission, Mr. Prodi, also availed of the occasion to spell out the various financial commitments of the Union as well as the other instruments intended to contribute to stability in the region.

On the margins of the European Council, the EU-Mexico Joint Council met and approved the results of negotiations on a free trade area between the EU and Mexico which is scheduled to come into effect on 1 July.