Dáil Éireann díospóireacht -
Wednesday, 13 Apr 2005

Vol. 600 No. 2

European Council: Statements.

The Taoiseach

I attended the European Council in Brussels on 22 and 23 March 2005. The Minister for Finance, Deputy Cowen, the Minister for Foreign Affairs, Deputy Dermot Ahern, and by the Minister of State with responsibility for European affairs, Deputy Treacy accompanied me. The Presidency's conclusions at the European Council have been laid before the Houses of the Oireachtas.

The spring European Council adopted conclusions on the reform of the Stability and Growth Pact and on the mid-term review of the Lisbon Agenda. It marked a further stage in Europe's programme of economic and social reform building on the work of the past five years. In particular, it recommitted all member states to achieving the European Union's ambitious goals as set out in the Lisbon Agenda.

The European Council endorsed the report from the ECOFIN Council on improving the Stability and Growth Pact. Ireland is a strong supporter of the Stability and Growth Pact as it underpins the stability and credibility of the euro. The Government very much welcomes, therefore, the new measures that underline the continued European commitment to fiscal discipline and strengthen the economic basis of the pact.

As with any pact or agreement, it is essential that it be reviewed from time to time to ensure that it is meeting the real objectives set for it. The recent review of the pact has placed it on a more viable footing which reflects the current state of the European economy while reflecting the continued commitment to fiscal discipline. The requirement to avoid deficits in access of 3% of GDP is retained and member states have stepped up their commitment to reduce debt levels and to strengthen long-term budgetary sustainability.

Member states have also agreed that medium terms budgetary targets should reflect economic circumstances. This means that countries with low debt and high potential growth, such as Ireland, can have more flexibility to run modest deficits rather than having a medium-term objective of near to balanced budgets, particularly where this is needed to fund extra investment in infrastructure, for example. On the other hand, highly indebted countries will be required to meet more demanding medium-term objectives.

The treaty already allows the Commission and Council to take into account other relevant factors in deciding if an excessive deficit exists. The Council has now elaborated further on these special factors. The special factors apply generally and not just to specific member states.

The agreed reform of the Stability and Growth Pact provides that such special factors include: developments in the medium term economic situation, in particular, potential growth, prevailing cyclical conditions, implementation of the Lisbon Agenda and policies to foster research and development — developments in the medium-term budgetary position, in particular, in good times were used to reduce debt; debt sustainability, public investment and the overall quality of public spending; and special budgetary efforts toward fostering international solidarity and achieving European policy goals, notably the unification of Europe.

It is important to emphasise that these special factors are subject to the over-arching principle that the budgetary excess above the 3% limit is temporary and the deficit remains close to the 3% reference value. The 3% deficit and 60% debt criteria remain unchanged as the anchors on the treaty of the Stability and Growth Pact.

Of course, we are party to the Maastricht treaty. Sound fiscal policies are essential for confidence, investment and growth across Europe. Ireland's economic success is a case in point. I am pleased that European leaders have reaffirmed their commitment to fiscal discipline with a package of measures that will help the Stability and Growth Pact to operate more effectively.

The European Council's endorsement of ECOFIN's report on the reform of the Stability and Growth Pact is a considerable achievement for the Luxembourg EU Presidency and the negotiating skills of my colleague, Prime Minister Junker.

The mid-term review of the Lisbon Agenda was the main item on the agenda of the Spring European Council. As political leaders, we were conscious that the issues covered by the Lisbon Agenda, such as jobs, growth and the quality of life, matter to all our citizens.

In March 2000, the European Council, which met in Lisbon, agreed on a new goal for the European Union, namely to transform Europe into the most competitive, dynamic and knowledge based economy characterised by a greater degree of social inclusion. At Gothenburg the following year, an environmental dimension was added to this goal to ensure that sustainable growth would be achieved. Five years on, the outcome is mixed, and there is general consensus that Europe needs to redouble its efforts to meet the challenges ahead.

In considering the mid-term review, the European Council was assisted by two key reports — that of the independent high-level group headed by Wim Kok set up during the Irish Presidency, and the Commission's communication to the spring European Council. Both of these reports acknowledge the scale of the challenge facing Europe, in particular the widening growth gap with other major world economies. Failure to address this gap will see Europe experience economic decline, with inevitable pressure on its social and environmental policies.

Our review of the Lisbon Agenda has resulted in a positive outcome. The European Council committed itself to re-launching the Lisbon Agenda as a "Partnership for Growth and Employment". While we have decided to focus on two urgent priorities, growth and employment, we have also endorsed action in two complementary areas — promoting social cohesion and sustainable development. The re-focused strategy, therefore, goes hand in hand with the promotion of social and environmental objectives which are crucial to Europe's success. The new focus on growth and employment expressly acknowledges the over-arching role of sustainable development.

The Lisbon Agenda and sustainable development strategy reviews are, therefore, closely linked, and their aims are mutually supportive. The European Council will adopt a declaration on guiding principles for sustainable development at its June meeting.

The European Council welcomed the Commission's communication on the social agenda which addresses vital issues on tackling poverty and disadvantage. The social agenda will help to achieve the Lisbon objectives of full employment and greater social cohesion. In our discussions on growth, the emphasis was on a number of key items such as promoting the knowledge society, completing the Internal Market and achieving better regulation.

We must complete the Internal Market, in particular, the Internal Market for services. The draft services directive is aimed at removing barriers to the free movement of services. When 70% of employment is in the services sector, it is clear that this draft directive is crucially important, both for the creation of new jobs and to stimulate growth and competitiveness. I support the overall thrust of this directive, with proper regard for the necessary standards. The European Council accepted that the directive as drafted requires some amendment in order to secure a broad consensus on achieving its overall objectives.

Competitiveness is also vitally important for Europe. Europe must become more competitive in its actions as well as its words. We must accept that the global picture is important, given that the EU competes directly with other regions of the world for mobile investment in knowledge and research. Our state aids regime must take account of this so that EU countries are not disadvantaged in competing for investment. In a word, the review of state aid rules which is being undertaken must be Lisbon-sensitive if Europe is to remain an attractive location for future global investment. Wording which stresses this point was included in the European Council conclusions at Ireland's suggestion.

A core objective for the European Union must be the delivery of more and better jobs. The report of the employment task force, chaired by Wim Kok and integrated into the joint employment report, provided the European Council with a good basis to take firm action on employment.

The issues are clear. We need to concentrate on attracting more people into the labour market, improving adaptability and investing more in human capital. At every level, we must increase the ability of workers and enterprises to respond to change. We must make work more attractive to particular groups, including women and older workers and we must continue to invest effectively in the whole area of education and life-long learning, to equip people for employment in the knowledge society of the future.

To realise the Lisbon goal, it is clear that implementation must be improved both at EU and member state levels. The European Council has agreed arrangements for a more streamlined and simplified approach to delivery. I supported this approach, which will be based on new national action programmes and single annual reports. This new format will be flexible enough to enable each member state to focus on and deliver its own key priorities in accordance with national administrative arrangements.

The Partnership for Growth and Employment can only be delivered in co-operation with all the stakeholders. Across Europe, we need to engage national Parliaments, social partners and civil society as a whole to achieve the necessary pace of reform. The partnership concept mirrors our own well developed social partnership process and we will continue to use this process to achieve the reform programme.

Last year, the European Council agreed to establish national reform partnerships to ensure the necessary level of engagement of all the players in the reform programme. In Ireland, the social partners have helped build the necessary partnership. We have been engaging in dialogue with our newly-formed National Reform Partnership throughout the past year. For example, we have consulted it in regard to our proposed approach to the mid-term review of the Lisbon Agenda and on our submission to the Commission on the subject. This level of engagement has helped us to come to broad agreement on the measures necessary to achieve positive outcomes in terms of the Irish economy and Irish society.

I am convinced that with genuine commitment from all stakeholders, member states will be similarly enabled to deliver the Lisbon goal of strong economic growth and a better society. Because of the strong focus on economic issues at the Spring European Council, there was relatively little discussion of external relations matters. The European Council's conclusions include statements on Lebanon and on Africa. There is also a statement welcoming the presentation by the UN Secretary General of his report on UN reform.

In this context, I welcome the appointment by the Secretary General of the Minister for Foreign Affairs, Deputy Dermot Ahern, as one of his four special envoys in the run-up to the September UN Summit. This is a great honour for Ireland and for the Minister, Deputy Dermot Ahern, personally. It reflects our long-standing commitment to the central role of the United Nations and our determination to ensure that the Secretary General's vision of a reformed and more effective UN becomes a reality.

The European Council was a key staging post in the economic and social development of the European Union. The improved Stability and Growth Pact will ensure that the euro and the euro-area economies remain fundamentally sound. The new streamlined approach to the Lisbon Agenda will give it a new momentum during the next five years and, along with complementary reforms within the member states, will help lay the ground work for strong economic and employment growth. In doing so, the Lisbon Agenda can ensure that Europe works in every sense, just as this European Council demonstrated that the European Union continues to work effectively and efficiently for its people.

Mr. Kenny

The Stability and Growth Pact, the Lisbon strategy, the UN and climate change were among the key matters discussed at the last European Council meeting. It was careless that no Irish Minister attended the subsequent meeting of the EU Finance Ministers to reform the Stability and Growth Pact.

I welcome the new rules allowing member states with significant infrastructural needs to borrow to fund infrastructural projects. We also believe that other aspects of the deal are questionable. Some member states are offering soft excuses for exceeding borrowing limits. It appears that enforcement procedures are being politicised but interest rates and the post meeting prospect of a rise are more problematic.

The Government has not addressed the real risk of interest rate increases. The level of indebtedness in the Irish economy has risen significantly in recent years. Consequently, possible future European Central Bank moves to increase rates could have a disproportionately high impact on Irish people, especially those in the eastern part of the country, mortgaged to the hilt for average homes. I ask that the Government clarify the merits of the new deal it signed up to in abstentia and to reassure borrowers they will not pay in the long term.

In respect of the Lisbon Agenda, there was agreement that the mixed results so far meant it was time for urgent action. The mid-term review by former Prime Minister, Wim Kok, suggests that the Lisbon Agenda be re-focused on growth and employment to counteract the dearth of progress made in the first five years of its remit. It appeared as if the Lisbon Agenda contained too much waffle and had objectives and targets that were simply impractical to achieve. The new start for the Lisbon Agenda is to be welcomed. From an Irish perspective, I am deeply concerned at the Government's ongoing inability to improve competitiveness and to enhance basic infrastructure which are both key aspects of the Lisbon strategy. Ireland has fallen from No. 4 to No. 30 in the World Economic Forum's global competitiveness report, due mainly to the Government's failure to control prices. Ireland is No. 14 out of 15 countries in terms of broadband penetration. Denmark, a country of similar size, has more than ten times as many broadband lines. There has been much talk and many promises but the impact and penetration of broadband is not there.

A central issue of great concern to me is that Ireland has prided itself so much on its IT sector as a means of improving our world ratings and our economic prospects, yet there has been no roll-out of the IT programme for Irish schools. No moneys have been allocated even though I understand provision has been made for this in the Vote. This was promised 18 months ago and there is still no sign of it. We expect our school children to compete internationally even though they are at a serious disadvantage. This is a consequence of lack of clarity from Government.

Other challenges to member states include an ageing population, unemployment and the need for family-friendly work environments, all of which have been addressed in the EPP document, Growth, Prosperity and Jobs in Europe, which was adopted last month. Critical to addressing these problems is reform, as the Taoiseach has pointed out. Only bold reform will ensure that the Lisbon strategy is progressed successfully in its second five years.

I congratulate the Minister for Foreign Affairs, Deputy Dermot Ahern, for obtaining a signal honour for the country and for himself as a result of his nomination to do a particular job by Kofi Annan recently. The council welcomed Secretary General Annan's report on its future. Reform of membership of the Security Council and speeding up the deliberation process are vital, as is the UN's capacity to react quickly to changing situations. The proposed reform of the Economic and Social Council and the replacing of the Commission on Human Rights are also vital aspects of the reform programme. It is perfectly obvious that the UN Security Council was designed and created after the Second World War for a world that no longer exists. Fifty years on it is time for change. There are now some very powerful, emerging nations with vast populations which are not represented on the Security Council. I hope the Minister, Deputy Dermot Ahern, will consider the attempt to create a structure within the UN reflecting the demographics and dealing with the problems of the modern world.

Three million people die of HIV-AIDS every year. The Taoiseach referred to these statistics in respect of Lesotho and other African states. Millions more are being lost to starvation, poverty and disease. Kofi Annan states that the UN goals to tackle these problems will be met in the next ten years only if all of us dramatically accelerate action on this front. Unfortunately, Ireland has decelerated action through the Government's U-turn on ODA. In congratulating the Minister, Deputy Dermot Ahern, on his reform role, I hope his presence there will create an opportunity to effect real change in this organisation because time is running out for millions all over the world on a daily basis. By the conclusion of this debate today, millions of children in Africa will have died.

Time is running out too in terms of climate change. Scientists are warning that sea levels could rise by 88 cms by the end of the century, threatening 100 million people on the planet. Even the infringement proceedings signalled in recent days prove how abjectly irresponsible is the Government's attitude to climate change and ensuring Ireland meets its international responsibilities. The Government is letting Ireland down in this regard, not just politically, but morally. The poorest parts of the world will suffer most from severe weather events such as longer, hotter droughts and rising oceans. Yet these are the people who have contributed least to the serious problems of global warming and global dimming. In terms of ozone depleting gasses, Ireland is the only member state not to file the most basic emission information. This should have been done in 2001. It is further proof that despite ratifying the Montreal and Kyoto Protocols, the Government has continually and casually failed to deliver on these fundamentals.

The Bill to provide for the ratification of the EU constitution will be published in the near future. My main argument is that we must not fail to deliver a "Yes" vote at the next referendum on Europe. Agreeing the treaty was one thing but adopting it will be quite another. Getting the people to adopt the constitutional treaty will be the moment of truth for politicians. When Ireland votes at the next referendum on Europe, the question will be unequivocal: Are we for or against Europe? How Ireland answers depends critically on how we, the politicians, engage with the public and on how honestly and passionately we communicate the political argument for Europe in the intervening time. It is clear that the EU can no longer be sold to the electorate as an innocuous economic club which is owned by the governments of the member states. At this time of acute transition in the European Union, the economic argument is no longer the main argument. This is the argument that puts forward the notion of the one-way benefit and asks what is in it for me.

The constitutional treaty agreed last summer signifies the European Union as a political and legal entity of its own. From now on, the argument is primarily political and even philosophical. It is now a question about the "why" of Europe. Low voter turn-out at the last European elections drew comments that Europe is lacking a brand. There may be some element of truth in this. What is needed to sell Europe is not a rebranding exercise, but something far deeper. That deeper component is raw politics such as examining, debating, defining, interpreting and reinterpreting what it is to be Irish and what it is to be European, particularly at this time of growth and transition in the EU.

The tradition of individual rights is one of the great realisations of European civilisation. There is a danger for Europe and the EU when the rights and demands of the individual state are ring-fenced without considering their connection with the needs and the good of the whole. Therefore, it is time to communicate what it is to be European in a way that involves responsibility as well as rights. It must relate the good of the individual state to the greater good of the larger group. If this is not done, we will begin to erode the political process at a crucial juncture. We must persuade people that the EU is about them and their lives. We must help people take ownership of the EU project. Our 455 million citizens must decide together the kind of future we want for ourselves and for our children.

Margot Wallström expressed it well in Dublin Castle recently when she said: "Europe is not just about business and the Single Market, it is also about helping each other to tackle social problems, human problems." Just as the European Union cannot survive if individual states become alienated from the whole, neither can it survive if the individual voter, the person, becomes alienated from what Europe is supposed to be. Our challenge and opportunity is to engage with the person. We must address them not just as voters, but as individuals, every one of them with their own story, their personal hopes, ambitions and fears. Our challenge and our opportunity is to give them a reason to think again about Europe, to debate the European ideal, to discuss their complex identity, their attachment to their country and their continent in a new and meaningful way. It will be necessary to overcome our history. Historically and geographically, Ireland never had that shared sense of Europe, with its shared memory of the Inquisition, Napoleon, fascism and two world wars. Almost from the time of the Dark Ages, Ireland as an island nation has been obsessively outward-looking. Despite our somewhat separate history, we share with Europe the fact that political happiness is a relatively new idea for both of us.

I urge the Taoiseach and his Government to bring the debate on the constitutional treaty to the people of Ireland as a matter of urgency. Ireland and Europe cannot afford a repeat of the first Nice treaty referendum, where large numbers of people rejected the treaty for the simple reason that there was not sufficient information and clarity about the issues. Romano Prodi was correct when he stated after the last European elections that there must be an immediate response to the disenchantment of our citizens.

France will shortly go to the polls on the constitution and the outcome is uncertain. Research indicates French voters are not anti-Europe per se but that they feel uninvolved by Europe and in the European process. We should not allow the same to happen here. We must convince people that Europe is their Continent, their Parliament and their Union and that we face a time of critical transition.

Every era of transition invents new forms — political, social, economic, technological and even philosophical. The map of Europe has changed radically in the last 30 years. What will it look like in 30 or 50 years' time? Will we as a Union have achieved and even exceeded the ambitions outlined in Lisbon? The Taoiseach and Government were congratulated, when handing over the EU Presidency on 1 May last year, on having successfully concluded the negotiation of the European constitution. How do we now handle the debate around the referendum? Do we want to be among the inventors of these new forms or mere observers? How we vote on the treaty will decide that.

Referenda on the constitution may fall in some countries. I know from discussions with my colleagues in the EPP that there will be difficulties in a number of states. Margaret Thatcher's "Fortress Europe" that would steamroll national identities is very much alive in the imagination of a particular section of British society. It is difficult to envisage Britain joining the euro, for example. There seems to be some innate difficulty in that regard. It may be that Britain will not be convinced to join the euro until other European economies perform exceptionally well, particularly France, Germany and Italy. If the British Government sees the growing strength of these economies, it may decide to join the euro on that basis. It is difficult to see it joining for any other reason.

It is up to countries like Ireland to take the lead and renew our commitment to the European ideal. The new Europe needs this constitutional treaty to be carried by the electorate if the Union is to function in an efficient and relevant way that can make a difference to the daily life of its citizens. We could limp along on our existing legal base but that is not enough. The constitutional treaty is necessary if the Union is to be as flexible, efficient, transparent and accessible to its citizens as it possibly can be.

The treaty brings Europe closer to the people in that it contains in one document the provisions of all existing treaties. In short, it indicates that for which the EU and the individual Governments are responsible. We must remember that we only give to the European constitution the authority we agree to give it. As a compromise between 25 countries, it is not and cannot be perfect. We will not all get what we want. However, it represents a critical balance of the rights and responsibilities of the different member states which constitute the European family. The people of Ireland and Europe are people of ideals. The Government should and must respond by providing citizens with adequate information to make their decision. Let us have this debate in full and open session as often as possible.

Mr. Quinn

I want to address five issues — the Stability and Growth Pact, the Lisbon Agenda, sustainability, the UN summit and some comments on Europe. In welcoming the necessary changes to the Stability and Growth Pact, we must acknowledge that the primary task for which the pact was established was to make the selling of the euro an acceptable political project, particularly in states such as Germany for which the creation and stability of the deutschemark was the crowning achievement of post-war democratic stability. Most Germans right across the political spectrum attribute the rise of fascism directly to the hyper-inflation of the 1920s. A stable currency was an absolute necessity, therefore.

It was against this background that TheoWeigel and Helmut Kohl had serious problems in trying to persuade the German population, and by extension the DM zone which included Austria and The Netherlands, that in replacing this sound foundation of post-war democratic Europe which had known either communism or dictatorship in the previous period, the euro would be a stable success. It has proven to be so. I invite this House and Eurosceptics elsewhere to consider that despite the political turbulence within Europe and worldwide recently, there has been no currency speculation since the single currency project came on the horizon.

The early 1990s, for example, witnessed the first Gulf War followed by difficulties in Asia with the meltdown of the currencies in Thailand and Malaysia. None of these events has had the slightest ripple effect on European currencies. As Minister for Finance, the Taoiseach had to grapple with such difficulties in September 1992 and is more aware than most of the problems in that regard. Each time there was a political hiccup anywhere in the world, the markets went crazy, mortgages went through the roof and small businesses were crucified. The real success of the single currency is evident in what it has avoided rather than what it has achieved. We should not be shy in singing that song.

The euro was originally obliged to be a straitjacket in order to be sold to a nervous constituency. I welcome that the straitjacket has now been loosened. A distinction is now made between countries with a low level of national debt and which use capital investment for sound purposes and countries which indulge in a spending binge. However, we must be careful in how we relax the rules. During the time of its design, I attempted to explain the Stability and Growth Pact by comparing it to a joint account with either a business or personal partner. One must take the other party's signature on trust and assume he or she will not write a cheque for an amount in excess of what is in the account. If a large economy such as Italy were to lose the run of itself, it would have a negative impact on other member states in terms of interest. Notwithstanding this, the necessary changes have been dealt with and I join the Taoiseach in once again applauding the chairmanship and direction of Jean-Claude Juncker in this area.

I wish to refer to two specific items arising from the Council's deliberations in order to evaluate Ireland's performance. The issues of infrastructure and the upskilling of the workforce are two examples of an entire area of deficit to which we must address our attention and energy. Unlike the Single European Act, where one of the Commissioners, Lord Caufield, was able to identify 315 legislative measures at European level which, under the Presidency of Jacques Delors, member states had to achieve collectively as a political entity, most of the necessary tasks that must be undertaken by the participating member states in achieving the objectives of the Lisbon Agenda must be done primarily at national level and we must impose that discipline on ourselves.

I invite Members to see if they can recognise Belmullet, Sligo or Donegal in the following description contained in Article 27 of the Presidency conclusions:

The Single Market must in addition be based on a physical internal market free of interoperability and logistical constraints. Deployment of high-speed networks in poorly served regions is a prerequisite for the development of a knowledge-based economy. In general, infrastructure investment will boost growth and bring greater economic, social and environmental convergence. Under the growth initiative and quick-start programmes, the European Council emphasises the importance of carrying out the priority projects in the field of transport and energy networks and calls on the Union and the member states to keep up their investment efforts and to encourage public private partnerships.

The Minister for Foreign Affairs knows more about the delivery of broadband than I do because of his previous responsibility. When one listens to the small print verbalised on ads on the radio, one notes that terms and conditions apply and that broadband is not available through Eircom right across the island. We have fallen dramatically behind in terms of the delivery of broadband. The Independent Deputies from the west coast can sing and shout for as long as they like but they will never secure development in the region unless broadband is delivered. I refer also to Galway East, the constituency of the Minister of State, Deputy Treacy. If we had relied on market forces to deliver either rural electrification or piped water, there would still be houses and towns without either in this day and age.

Mr. Kenny

The Deputy is dead right. I agree.

Mr. Quinn

Market forces are great when markets work but they do not work in quasi-monopoly circumstances. This issue must be addressed. We are falling behind in this area and I invite the Minister to consider it.

The second issue that must be considered was drawn to my attention by a constituent by way of coincidence. It is alluded to in page 11, paragraph 34, of the Presidency conclusions:

Human capital is Europe's most important asset. Member States should step up their efforts to raise the general standard of education and reduce the number of early school-leavers, in particular by continuing with the Education and Training 2010 work programme. Lifelong learning is a sine qua non . . .

One knows the script.

A 34 year old constituent who works as a hospital porter in a major hospital in Dublin approached me. He is facing the possibility of being a hospital porter for the rest of his life. He is reasonably well paid but has ambitions and wants to be trained as a paramedic. It will cost him €3,000 in fees. He is prepared to pay this himself and is not looking for a grant for this amount. The hospital in which he works, Tallaght Hospital, is prepared to give him leave of absence but evidently cannot pay him. When he presents to those responsible for social welfare, they are incapable of presenting him with money. He is prepared to go on the equivalent of social welfare and would survive if he did so. His wife works part-time and they have two young children aged nine and 11. They live just off the South Circular Road in south-east Dublin. He is a solid, conscientious taxpaying worker who wants to upgrade himself but he simply cannot do so and there is nowhere in the State where he can do so. This makes paragraph 34 a nonsense because we cannot reach out to people who themselves want to climb up the ladder and acquire the skills they aspire to have. I am not referring to a person who is very old or who left school a long time ago. He is only 34.

There is no way our system works. In the past, we introduced the back to work allowance scheme and the enterprise allowance scheme. The Government operated the latter after I left the Department of Labour. All of these measures were to address labour market failure. In terms of the Lisbon strategy, this is labour market failure and we have no domestic instruments to address it. I invite the Minister to examine this.

The third issue about which I want to talk is sustainability. Ireland has probably the worst performance in terms of adherence to the Kyoto Protocol. Now that the Russian Federation has signed up to the protocol, sustainability has become a reality and we should address it.

I was not present to hear the Minister for the Environment, Heritage and Local Government give answers in the House and therefore I may be doing him a disservice. Is a sustainability criterion being run like a slide rule over every Government measure, as was the case in respect of gender-proofing and assessing impacts in terms of cost or personnel? Members will recall the requirement of the Department of Finance that the impact of every proposal be measured in terms of cost and gender. Do we now have a measure for sustainability?

Was the relaxation in the rules pertaining to rural housing subject to such a sustainability measure? By giving people the right to build a house on their family lands, ten kilometres or 12 km from the local village, are we now guaranteeing they will have to make two car trips per day while their children are going to primary school? If one had made sites available on the periphery of the village, they could have walked to school. These issues involve individual, complex choices and I understand fully the arguments of those involved. To make the point without trying to be simplistic, we are not addressing to a satisfactory level the issue of sustainability, as referred to in the conclusions. The Taoiseach and Ministers realise this themselves. I hazard a guess that there was no measure of sustainability applied in determining the impact of rural housing.

Next year a directive is to come into effect that will measure the energy efficiency of housing. We are facing serious fines. I know I am stealing some of the environmental thunder of my constituency colleague, Deputy Gormley, in this regard. The environment is no longer a fringe issue and it is central to the Lisbon strategy. Europe is the most densely populated continent of all five continents. We must address these issues and if we do not, we will very quickly slide down the league table. We have managed to climb to the top of the league table in respect of many other indicators.

I join the leader of the Fine Gael party in congratulating the Government, particularly the Minister for Foreign Affairs, on the honour conferred on him personally and the country when he was made special envoy for United Nations reform by Kofi Annan. The Minister has a very difficult task and will be absent from the House quite often. We and his colleagues will have to give him some leeway and I hope he gets the extra resources necessary to undertake this role.

Reform of the United Nations is critically important for the reasons Deputy Kenny stated, which I will not repeat. If we do not reform the United Nations, it will fail. Many would argue that it has effectively failed, particularly the neocons in the United States. They want it to fail in the same way that Hitler and Mussolini wanted the League of Nations to fail in the 1930s. If it fails, the rule of international law will go with it. Tenuous, limited, fragile, incomplete and imperfect as the United Nations manifestly is, it is not easily replaced. What does one replace it with?

The Minister's mission is incredibly important and I wish him every success. If he believes Members of this House, including those of my party, can be of assistance in this regard, he should inform them. This issue goes way beyond the argy-bargy of national politics and the rivalries and democratic competition that comprise a healthy part of what we do here. It is a question of the rules that underpin the playing pitch upon which every democratic party political participant or citizen participates, be he or she on the pitch or in the stand. It is therefore very important and the Government should afford it the priority it deserves. I wish the Minister well in this respect.

On Europe and Deputy Kenny's comments, it is pertinent to recognise that the emotional driving force that underpinned the European project in the 1950s and 1960s and, to a certain extent, in the period until the early 1980s has run out of steam. This is because the participants are dead. Helmut Kohl and François Mitterand were the last two national leaders who actually remembered the war and participated therein. Theo Waigel told me he was 12 years of age when the war had ended. He had a memory of it but it was not seared into his heart or physical experience. He remembered the aftermath, as did Gerhard Schröder. However, they did not fight or lose friends who were killed. Without such a memory there is no way that the Germans or French would have agreed to the reunification of Germany. Just think of the Franco-Prussian war, the pride of France and the burying of the deutschmark, which was the trade-off. One will not find this written down but any French or German diplomat will tell one this was the deal. Ruud Lubbers lost the Presidency of the Commission because he hesitated. Being a neighbour of the Germans, he had certain reservations about a reunited Germany, just as I would have had if I were a Dutchman. I believe the Taoiseach may have been present in some capacity at the meeting at which he was vetoed. The aforementioned push factor was incredibly strong. I have just given one illustration but there are millions. This factor is no longer present and we must find a way of igniting a new kind of emotional push factor. Globalisation is not permanent or guaranteed. We had globalisation until the Great War in 1914. There was the gold standard, international communications and transport, and various other connections. This disappeared because it was a free trade zone and nothing else. If globalisation cannot be civilised to include rights for workers, environmental protection and the rule of law it will collapse in a sorry mess just like the 20th century collapse in 1914. The only force that can civilise international capitalism and tame globalisation is an enlarged European Union. That is why the constitutional treaty is so important.

Mr. Gormley

I wish to share time with Deputies Ó Snodaigh and Connolly.

The EU March summit covered several areas, including the Growth and Stability Pact, the Bolkestein or Services Directive, European rules on state aid, the ban on exporting arms to China, the Iran nuclear programme, the mid-term review of the Lisbon Agenda, the European social model, climate change and energy supply.

In the summit's Presidency conclusions, No. 47, the EU leaders called for the building of an international thermonuclear experimental reactor nuclear fusion project in southern France and called on the Commission to "make every effort to achieve that aim, in particular by finalising the international agreement by July 2005". Japan is apparently the rival location for this nuclear reactor.

Did the Taoiseach raise any objection whatsoever to this further development of dangerous nuclear power or did the Government just meekly wave this through as it approved, for example, the lifting of the ban on arms exports to China? Will it cost €4.5 billion to build the plant and billions more euro to run it? Even under the most optimistic assumptions fusion will not be available as a commercial generating option until 2050.

The EU support for the bad option of nuclear energy makes a mockery of other goals in the Presidency conclusions which stress the need for the development of renewables and the pursuit of environmental sustainability. In particular, Greenpeace has highlighted in the past year that the EU's Framework Programme allocates €750 million for fusion research and development compared to €810 million for all other non-nuclear energy options combined. Do the Taoiseach and the Minister for Foreign Affairs share the view that the EU believes it will solve climate change problems by pursuing the nuclear option? Attaching the EURATOM Treaty as a protocol to the new constitution does not give us any real grounds for optimism.

The Presidency conclusions deal with the issue of climate change and the EU's need to achieve and surpass the Kyoto targets. However, Friends of the Earth and other environmental NGOs have expressed disappointment with the conclusions. Despite the recommendation of the EU Environment Ministers that industrialised countries should aim to cut greenhouse emissions by 15% to 30% by 2020 and by 68% to 80% by 2050, the Heads of State deleted the 2050 reference completely and left only the 2020 targets.

Friends of the Earth calls the 2020 target weak and ambiguous, stating that the 30% target reflects only what industrialised countries must achieve to prevent catastrophic climate change. What does the Minister think of the new targets? Is he embarrassed that Ireland has no strategy for combating climate change and that we are far overshooting the Kyoto targets? We are now 25% above 1990 levels although we should achieve 13% above 1990 levels between 2008 and 2012.

The services directive, known as the Bolkestein directive, is a controversial plan to liberalise services, which is causing major problems in France and threatens to scupper the EU constitutional referendum. There are fears, for instance, that it would allow construction firms and other service providers to operate throughout the EU according to lowest legal labour standards, posing a direct threat to the European social model. Companies like Gama Construction might operate here which perhaps is what certain people want.

In particular, there are concerns regarding the country of origin rule, allowing service providers to work in other member states under the domestic rules of their own countries. This is a serious problem. Mr. McCreevy, the Commissioner for the Internal Market, who looked favourably on this directive, approved the compromise reached at the summit. I suspect, however, that it will be on the table again, perhaps after the French referendum on the European constitution.

At the summit the Taoiseach stated it was clear that changes were needed in the Bolkestein directive but that the services plan had not been withdrawn. Will the Minister for Foreign Affairs elaborate on the changes necessary to this directive? Is the Government in favour of the country of origin principle in the directive or are we supporting changes to that?

This summit carried out a mid-term review of the Lisbon strategy. At Lisbon, five years ago, the Taoiseach and other EU leaders pledged to make a decisive impact on the eradication of poverty in the EU by 2010 but that has not happened. Despite the wealth in the EU, 68 million people are living in poverty. Despite Ireland's dramatic growth, our cut in unemployment and the fact that we are the second richest state in the EU, we have the worst rate of relative poverty in the 25 EU member states.

The EU has a social inclusion strategy but is the Minister convinced that the EU has the political will to tackle these problems? The European Anti-Poverty Network welcomed the broadening in the emphasis at the summit from the competitiveness aspects of the Lisbon goals to social cohesion but it asks how the EU leaders will ensure an adequate focus on meeting the social cohesion objective. Is the Minister convinced that provision has been made for a more detailed development of the EU social agenda? How does the Taoiseach propose putting our house — this country — in order?

Will the Government take any heed of evidence from other EU countries, particularly the Scandinavian countries, that different tax and welfare schemes could make a major impact on our poverty levels? Ireland has one of the lowest levels of social protection expenditure in Europe. Has the Government taken on board any of the findings of last year's ESRI report, Why is Relative Income Poverty so High in Ireland?, which found that the introduction of a Danish-style welfare system in Ireland would have a very substantial impact on reducing the number of people at risk of poverty?

With regard to concerns about the referendum in France, if we want to bring the EU closer to the people we must respect democracy in the form of the conclusions reached by the British and the French. Often we do not respect democracy and ask people to vote again because we do not like their first decision, but that is not democracy.

Aengus Ó Snodaigh

The French electorate, which appears to intend to vote against the EU constitution, is concerned about the notorious services directive with its negative implications for public services and workers' rights. We have not fully debated that directive in this House. The Government supports it but my party opposes it and seeks a debate and a vote on it. The so-called compromise wording reached at the summit is not acceptable because it is internally contradictory. One cannot impose deregulation of the services market and maintain essential social protections. This is no more than a big lie.

There is speculation that the price of French consent to the constitution may be the introduction of tax harmonisation in the EU. Tax sovereignty is said to be one of the Government's red line issues. Commentators have observed that this presents the Government with a Sophie's choice. I anticipate that it will cave in on this as it has on other issues, for example, its supposed cornerstones of independence, foreign policy and matters of criminal justice. Will the Minister address the Government's position on the services directive in his closing remarks?

Sinn Féin has long called for Stability and Growth Pact reform because the existing rules have had negative consequences for Ireland by preventing public investment for social and infrastructural development. The reform package endorsed by the summit is an admission of this. Unfortunately, the new reform proposals are not acceptable because they will encourage member states to dismantle social security and the welfare state to obtain a lower rating in connection with the deficit procedure. Ireland may be better off withdrawing from the Stability and Growth Pact or, in any event, developing a credible and workable alternative for dealing with the issues of inflation, budget deficits and public debt.

At the summit meeting, the EU leaders agreed to adopt an EU Common Position on UN reform. At this occasion, I congratulate the Minister on his role in reporting to Kofi Annan on the UN reform proposals from different countries. However, it is unacceptable that there is an EU Common Position on UN reform. We must examine the position of many countries within the EU in recent years, and the Vilnius 13 who supported the termination of UN weapons inspections to make way for the invasion and occupation of Iraq. We should not be required to converge our policies with countries who have treated the UN and the will of the international community so contemptuously.

If the Government insists on adopting a Common Position, it is crucial that there is a substantial debate on UN reform in this House in advance. The Minister should give an assurance that he will consult the people and public representatives and that there will be a substantial debate in this House prior to deciding the future of the UN.

Mr. Connolly

In one of the shortest EU summits on record in March this year, which lasted for a total of five hours, the EU leaders agreed to give governments considerably more latitude to spend their way out of recessions. With a somewhat fetching display of Dutch courage, they also backtracked on plans to liberalise the EU's internal trade and services. They demonstrated a lack of bottle to take the necessary steps to boost the EU's sluggish economy. A sense of poetic justice pervaded the summit, particularly in regard to Germany which helped to push through the EU Stability and Growth Pact in 1997. The pact was an attempt to deter profligate neighbours from attempting to freeload on Germany's credit rating under the unified euro currency. It placed very tight restrictions on countries' borrowing deficits of no more than 3% of gross domestic product, GDP, and a total national debt of no more than 60% as a condition of joining the euro.

In the meantime, Germany has proceeded to treat its own proposed restrictions in a somewhat cavalier fashion, having breached the pact's deficit criteria for three years running, and it looks set for a repeat performance this year. Having been strongly lobbied by the German Government prior to the Brussels summit, EU finance ministers agreed to revise the Stability and Growth Pact, effectively rendering it toothless. Its stringent criteria have been relaxed, with finance ministers simply urged to keep deficits close to their reference value. In a period of severe economic downturn where countries could exceed the deficit limits and the previous strict standard of 3% of GDP, any period of negative growth or protracted period of low growth will suffice.

New rules approved and rubber-stamped by Heads of Government allow for all types of temporary spending in advancing European policy goals. They also include fostering international solidarity, which sounds like funding for international peacekeeping activities. Allowances were also made for the continuing cost involved in German unification, estimated at 4% of national GDP. The Austrian finance minister was somewhat caustic in his reference to the concession to Germany that, since the wall came down 15 years ago, it was hardly a temporary emergency.

Five years ago, the Lisbon Agenda reform programme was advanced with the objective of making the EU the most competitive economy by 2010. It is something of a gesture or a nudge rather than a directive. It is left up to individual governments to implement. Fearing opposition from powerful vested interest groups, they have largely been reluctant to do so. There is much talk about Lisbon but little or no concrete action. There was an attempt to raise the issue of a proposed services directive with a view to liberalising EU internal trade and services. This was an attempt to mollify French and German concerns regarding the question of social dumping and competition from companies in poorer countries with lower wages and taxes. However, this service directive is not exactly flavour of the month in France where it is already threatening the outcome of the referendum on the EU constitution, which would be a huge setback for one of the EU's founder nations.

The summit did not achieve very much other than to dilute the Stability and Growth Pact. It shied away from any attempt to make the Community more competitive or pushing EU growth towards American levels. The next pricing matter will be the agreement on the budget for the period 2007 to 2013, with Britain's rebate already proving controversial. This issue, which was worth €2.5 billion last year, was negotiated by Margaret Thatcher in 1984 as compensation for Britain getting relatively little under the Common Agricultural Policy. It appears as if real economic reform will again take a back seat without a change of heart from some older members.

On Croatia's application to join the EU, I am happy to note that Ireland was one of the countries that voted against the proposal to defer the accession talks with Croatia.

An Ceann Comhairle

We will now move on to questions to the Minister for Foreign Affairs.

Mr. Durkan

Did discussions take place during the summit on the equal availability of broadband throughout Europe? What can the Minister do to address the issue from a European perspective?

Has the Minister examined the impact of the draft services directive on the Irish economy, keeping in mind that we are an island economy? We are now the only country in Europe in that situation because our next-door neighbours have a land link to the continent of Europe.

On the delivery of jobs, which appears to have been an issue under discussion at the summit, to what extent has that matter focused the attention of the combined governments? Deputy Quinn and Deputy Kenny already referred to this aspect. To what extent did the summit focus on the inability of Europe, even in its present form, to compete with the United States in that area? To what extent did the summit focus on Germany's potential, in particular, and a number of other European countries on whom great responsibility rests in this economic area?

On the forthcoming ratification of the treaty, what indication or advice did the Minister receive from other European Heads of State or ministers in that particular area? Did he examine the possibility of the failure of a referendum in one or more countries and how it might be dealt with in the shortest possible time? I will have other questions later if I get a chance.

Minister for Foreign Affairs (Mr. D. Ahern)

I thank the Deputy for his questions. I also thank the Deputies who referred to my recent appointment, which is an honour for me and particularly for the country. It is a testimony to the ability of this small nation to punch above its weight on many occasions, something to which Kofi Annan alluded. I will liaise as much as I can with the House regarding the issue and we can return to it.

With regard to Deputy Durkan's point about the availability of broadband, I spent two and a half years at the Department which has responsibility in that regard. Ireland has the highest rate in Europe in terms of the growth and increase in uptake of broadband. We are starting late because of structural issues in that many European countries already have cable systems whereby it is easy to drive broadband into homes. That is one of the reasons the US is one of the world leaders in terms of broadband services.

There is some benefit in being behind in the race. This was evident when I visited South Korea and Japan. Technology is changing dramatically day by day and one could invest substantial amounts of money in infrastructure. The Deputy is incorrect to shake his head.

Mr. Durkan

It will change anyway.

Mr. Quinn

The Minister's position is that we should do nothing.

Mr. D. Ahern

I assure the Deputy there will be dramatic changes. One must be careful when investing to ensure that one ultimately gets a return. Dramatic changes in the type of technology available can occur within a year or less. A plethora of platforms are available for any part of the country to bring in broadband, and no area should be unable to do so.

Personally, I am most proud of the group broadband scheme whereby we gave substantial amounts of grants to small and rural communities and towns to allow them avail of the service. I agree with Deputy Quinn's remarks regarding market forces and the lack of economic return. We based the group broadband scheme on the group water scheme and they are exactly the same. Small amounts of money enabled some areas to avail of broadband. Better broadband services could be provided by some private companies. That scheme is up and running and hopefully the uptake will be better than heretofore.

Deputy Durkan also raised the issue of direct services and their impact. We have examined the issue very closely and studies show an annual figure of €47 billion if we had a truly open market with regard to services. Forfás has carried out research which suggests a gain of approximately €400 million annually in this country if we had increased services trade through the directive. There is also a strong belief that the enhancement of North-South trade would be made possible with the passing of the services directive. However, those issues are being examined again with possible amendments. We are broadly in favour of the services directive and its principle.

Deputy Gormley asked a question regarding the country of origin issue. This is the only realistic way in which service providers, in particular small businesses, can take advantage of the Single Market. They could not otherwise be expected to familiarise themselves with the law in 24 countries or more.

We have not sought the advice of other nations with regard to ratification. We obviously look to see what they are doing, but as a democratic State we will make our own decisions in a referendum. Preparations are ongoing in that regard, and I thank Fine Gael for its assistance in that respect.

Mr. Quinn

Perhaps the Minister would outline his brief in respect of the role he will undertake for the Secretary General of the United Nations. What actual territory is defined as being European — does it refer to the European Union or the actual political and geographical Continent? Can he outline his proposals and the timeframe within which he intends to work?

Mr. D. Ahern

I thank the Deputy for his remarks. There are five envoys, as an additional one was appointed, and our remit is to represent the Secretary General in capitals of the world. A huge amount of work will continue in the General Assembly, the President of which, Jean Ping, has appointed a number of facilitators and permanent representatives to deal with issues at UN-level on the ground in New York. The General Assembly, based in clusters, will go through the Secretary General's recommendations line by line this month.

It is the view of the President of the General Assembly, together with the Secretary General, Kofi Annan, that there must be direct, one-to-one discussion in the capitals. We are to engage and promote the package, liaise with the Secretary General's people on an ongoing basis and, ultimately, be utilised in the anticipated event of blockages with regard to certain international issues. It is a very broad remit. The appointment of the Latvian vice-president as an additional envoy will ease the burden for the four original envoys. My geographic remit is Europe, though it is envisaged that I will be used in other parts of the world also.

Mr. Gormley

I wish to return to some of the questions I raised in my speech. I congratulate the Minister on his appointment as an UN envoy.

Considering we are nuclear free, the Irish Government's support for the fusion project in southern France goes against the grain. It is not the way to go if we are to deal with the issue of climate change. Many within the EU regard nuclear energy as the way to address the issue and believe we can sustain economic growth while combating climate change. Would the Minister agree that this analysis is entirely wrong? Why has the Government not been more vocal at European level with regard to the issue?

Will the Minister elaborate on the European services directive and how the Bolkestein directive could be amended to his satisfaction?

Is the Minister ashamed of our environmental record? We are the environmental delinquents of Europe. We have a truly appalling record and a cavalier attitude towards European Union environmental directives. How does the Minister feel sitting around the table when he looks his colleagues in the eye and tries to explain how this so-called small green country can have such an appalling attitude towards the environment?

With regard to EU ratification, was there any discussion about the potential for a "No" vote in France and Britain? If there is a "No" vote in France——

Mr. F. McGrath

Vive la France.

Mr. Gormley

——will the French people be asked to vote again or will we have to go back to the drawing board on the constitution?

Mr. D. Ahern

I will answer the Deputy's last question first. There was no discussion as to what will happen if there is a "No" vote. It is wrong to deal with such a hypothesis. It is up to each individual state in its own way, whether by referendum or other process of ratification, to decide that matter for themselves. There is no plan B. If there is a difficulty in that one state does not ratify the constitution, it will cause a difficulty and divert attention from the ongoing work of the EU. That is a bridge we will have to cross if that difficulty arises.

On the issue of nuclear research, I want to make it absolutely clear that this Government and all parties in this Parliament are adamantly and implacably opposed to the nuclear industry and nuclear power. That said, over recent decades, successive Governments of every political persuasion have not opposed research in this area by other countries on the basis that it would make the industry safer. In this instance, we continue that practice of not opposing research designed to make the nuclear industry safer for those countries that use it.

Deputy Gormley referred to what he described as our appalling response to sustainable development issues. In recent years there has been a significant fall in emission levels in this country. We are making solid progress towards achieving the target of limiting emissions to 13% above 1990 levels. Our commitment is to reduce our greenhouse gas emissions by an average of 9.2 million tonnes per annum over the period 2008 to 2012. Arrangements have been made in that regard. I have some knowledge of this area from my previous office. I do not accept that we have an appalling record in this area. Neither do I accept that other countries consider this country has a cavalier attitude to environmental issues. That is not the case.

Mr. Gormley

The Government has.

Mr. D. Ahern

The Deputy does this country a great disservice.

Mr. Gormley

That is not the case.

Mr. D. Ahern

The Deputy must be careful about what he says. This country is regarded by most people in Europe as having one of the cleanest environments in Europe. The Deputy does our society a disservice.

Mr. Gormley

No.

Mr. D. Ahern

The Deputy also raised the issue of this country having the lowest social spend in the EU. One of the main reasons we have a low social spend compared with other countries is because we have the youngest population in the EU. The social spend in Italy is high because it has the oldest population in the EU. Ireland has the youngest population, hence we have the lowest social spend in the EU.

Mr. Gormley

Perhaps it has something to do with the Progressive Democrats.

(Interruptions).

Mr. D. Ahern

I am delighted about the issue Deputy Quinn raised because the alternative Government being postulated in some quarters made up of Labour, Fine Gael and the Greens——

Mr. F. McGrath

The Greens are not in it yet.

Mr. P. McGrath

Is the Deputy in it?

Mr. D. Ahern

The corollary to what the Deputy is saying is that there must be dramatic increases in taxation. I would like to hear the proposals by the proposed alternative Government for increases in taxation to skew matters in the way Deputy Gormley wants.

Mr. Gormley

I have no problem with meeting the Minister any time.

Aengus Ó Snodaigh

I have three or four brief questions. Will the Minister ask the Government Whip to arrange a debate and a vote on the services directive and a debate on the Lisbon Agenda? The Joint Committee on European Affairs discussed it and produced a document, but the House has not debated it. Will Minister also arrange for a debate on the proposed Stability and Growth Pact reforms? Will he also ensure that we have a debate on UN reform well in advance of the adoption of any EU Common Position on it? What are the Minister's plans for making the process of UN reform inclusive of the views of the people?

Mr. D. Ahern

I can give a simple answer to those questions. These are matters for the Whips to decide. I encourage the Deputy's party Whip to ask the Government Whip. Perhaps the Deputy is the Sinn Féin Whip.

Aengus Ó Snodaigh

I am.

Mr. D. Ahern

He could ask the Government Chief Whip about all these substantial issues which have been debated on an ongoing basis in this House. That is one of the reasons we are having this debate.

On the matter of a Common Position on UN reform, the House should discuss this issue. My role in this regard is distinct from my ministerial role in that I am in effect the representative of Kofi Annan in those countries, but that is not to say we do not have a view on the UN reform package. Most views in Government are that we can support the vast majority of the reforms.

As for issues such as Security Council reform, I agree with what Deputy Quinn said about how, in its present form, it was designed for yesteryear. We now need a new scenario. Ireland has a particular position on the reform of the Security Council, although not in terms of model A, B or whatever model is proposed. Our overriding principle is that the interests of small states must be preserved in any reform of the Security Council because we have relied on the council on many previous occasions. The UN has been the cornerstone of our foreign policy for decades.