I welcome the president of the Parliament of Iceland, Ms Sólveig Pétursdóttir and the delegation to our meeting. I invite the president to introduce her colleagues and make a short presentation, following which the meeting will be open to questions.
Visit of Icelandic Parliamentary Delegation.
Ms Sólveig Pétursdóttir
It is a pleasure to be in Dublin. We are happy to have the opportunity to meet the Joint Committee on European Affairs. There are three members of the parliament here Ms Rannveig Guómundsdóttir, president of Althingi and from the Social Democrats, the largest opposition party in Iceland, also former president of the Nordic Council; Mr. Guólaugur Thór Thórdarson is from my party, the Independence Party, who chairs the environment committee and the EFTA delegation, also vice-chairman of our parliamentary group; and Ms Thórunn Sveinbjarnardóttir, Social Democrats, sits on the foreign affairs committee among other committees. We have 63 members in our parliament so obviously we have to sit on many committees.
As the committee is aware Iceland is a member of European Economic Area and there are substantial links between the EU and Iceland due to this agreement. We are full members of the internal market covering the four regions taking over a large portion of EU legislation. Another important fact is that Iceland is a member of Schengen. While Iceland is not a member of the EU it is very much a European country and we value our good and strong relationship with the EU. It is safe to say that, more or less, all politicians in Iceland recognise the value of the EEA agreement for Iceland as well as the value of our relationship with individual EU countries, especially those in northern Europe.
If we may, we would like to discuss some issues with the committee and we have some questions. What is the position about the free movement of persons? Iceland, like most other EU and EFTA states put restrictions on the free movement of persons from the new EU member countries. These restrictions are up for review in Iceland by the Minister for Social Affairs. As Ireland was one of the few countries that did not put any restrictions on the new member countries in this area what is your experience?
This is unusual. I have never been directly questioned as quickly before by someone appearing before the committee. I will give my take on it and put it to the committee. We are about to publish a report on the whole migration issue. The draft report is completed. We will probably publicise this next week. We have premised the report by making it clear that the decision to allow freedom of movement of workers from those countries was the right decision. We support the Commission's view on that issue. That is the unanimous view of the committee. Outside of that, the issue that is pertinent for us is the decision that will be taken soon on whether to allow free movement of workers from Romania and Bulgaria. What has happened during the past couple of months is that some concern has been expressed, particularly by labour movements that wages are being depressed because of the number of workers coming into the country. The figures suggest that 10,000 new workers from eastern Europe come here every month. Given those figures, approximately 1 million workers will come in over the next ten years. When families are included that is a very big number considering our population of approximately 4 million. There is that consideration.
We have had delegations appearing before the committee, such as the head of FÁS, which is the training entity, say that we will need at least 500,000 to 600,000 workers to keep the economy buoyant during the next ten years or so and that we may be competing for these workers. It will not be a case of stopping them but other countries will be actively trying to get those workers into their countries to keep their economies viable. There is a potential housing infrastructure issue, as well as concerns about the implications for our domestic workforce. At the same time the question is how many workers we will need to keep the economy going in the next ten years.
I welcome the delegation. It is a different format but useful as it makes us think. The Chairman has covered the matter well and the arrangement has worked very well for us. Our agencies have told us that we need the people concerned. We should create a climate that shows we appreciate their presence. We should not repeat the mistakes of other countries, where people come to the country, are useful for a period and when there is a downturn in the economy, they are just let return to their countries of origin. If they wish to integrate into Irish society, retaining their own cultures and values, we should facilitate them. That is one of the recommendations made in a draft report we have compiled on immigrant workers which has not yet been published. It will put severe strain on our infrastructure and services — health and education services and roads — as a result of the huge increase in population. There is also a downside for their native countries. For many years Ireland experienced a brain drain when our brightest and best educated had to go abroad to seek employment. That is now happening to the countries of eastern and central Europe. The brain drain they are suffering is a huge issue for them. It will create problems. It is up for review but I hope there will be an opening of the markets in other countries rather than a clawback. Generally, it has been a positive experience for us. There are concerns among the trade unions about what is termed the "race to the bottom" but with proper inspection and proper structures in place, the rights of both foreign and Irish workers will be protected.
I welcome the president and her colleagues to Ireland. The Chairman and I, with other members of the committee, had the pleasure of visiting Iceland when we met the president's predecessor. We gained an understanding of the country and are most impressed that it has the oldest parliament, the Althingi, in the world. We had the pleasure of visiting the original site outside Reykjavik.
I am a member of the Progressive Democrats, the smaller of the two parties in the Government coalition. Our view does not differ greatly from those of the Chairman and Deputy Allen who represent the main Opposition party. Like Iceland, ours is a rapidly growing economy and there is a large requirement for labour to feed that growth. People were already coming to this country. We definitely welcome people from Poland and the other new member states who have made a valuable contribution.
Ireland has come from a position where it experienced many years of emigration. Our people contributed significantly to the success of some of the countries concerned, notably the United States. We can understand why others might want to come to this country when it is successful and contribute to its success. It has been a positive experience but also a novel one, with which we are coming to terms. We have not been accustomed to receiving people from other countries and this has led to major psychological shifts, with which we are coming to terms successfully.
Our experience has been positive with regard to migrating workers from the new member states. However, as Deputy Allen said, because of the financial benefit, it can lead to highly qualified individuals leaving countries such as Lithuania and taking up jobs in Ireland for which they are greatly over-qualified. In other words, if one was a doctor in Lithuania, it is possible one might be earning less than one would as a petrol pump attendant in Ireland. That has definitely caused difficulties for the countries losing expertise to our economy. Nevertheless, our experience has been positive. The question is what our attitude will be when Romania and Bulgaria become member states and whether we will deal with them in the same way as we have dealt with Poland and the other countries.
Members of the committee visited the Czech Republic. There is a much greater tradition of people emigrating from Poland than there is from the Czech Republic, which is interesting. It is part of Polish tradition for people to go to the new world and other countries, whereas in the Czech Republic, although there are high levels of unemployment, there is not the same appetite to emigrate.
Ms Pétursdóttir
This is interesting information. I apologise if committee members consider it somewhat unusual that we should start with questions but we know the committee's time is valuable. We also want to learn from Ireland's achievement and receive some information on it. Many immigrants have come to Iceland to work in our fishing industry, to take care of elderly people and so forth. It is not a problem because we have always had plenty of jobs. We were quite lucky. Again, I congratulate Ireland on its achievement. Ireland and Iceland were among the poorest countries in Europe. Members of the delegation have questions for the committee.
Ms Rannveig Guómundsdóttir
Has research been carried out in the European Union on social dumping, if I can use that term, in various countries with regard to immigrants, on salaries and conditions in the labour market? This is a big issue at home.
To ascertain if people are being underpaid and discriminated against.
Ms Guómundsdóttir
Yes. Has there been research in other countries?
Our experience is that it has happened and is happening. Its extent is hard to determine but the evidence suggests people are being discriminated against. I cannot hazard a guess as to its extent. In the past six months it has become a big issue. The most important point the Government has tried to impress on new workers concerns their right to a minimum wage. A celebrated case involving Turkish workers came to the fore a few months ago, in which the issue of wage discrimination and immigrants being paid less than Irish workers was highlighted.
On the first point raised, one of the big fears about expansion concerned Ireland's ability to absorb the flow into the country. When Irish people went abroad, they went to Germany and the United States where they were absorbed into large populations. There was reference to 40 million Poles invading this country. That did not happen and I do not believe it will but there was a fear about the effect it could have on a small population. As we need workers, it is working in our favour.
The other issue concerns the education system. There are multicultural and language difficulties in schools. This subjects the service to a great deal of stress. There is also the problem of people presenting at accident and emergency departments in hospitals and not speaking English. These are the practical issues involved. There are concerns about our ability to continue to allow the free movement of people into our country. If they keep coming in, will we continue to have work for them?
The other big issue is the effect it will have on wages. Employers tend to seek people who will work for less money, which is only natural but, as a result, people are looking over their shoulders. In recent months, we have heard about workers being displaced by the number of foreign workers in the building trade, which is effectively driving the economy. In addition, many workers in the hotel sector come from foreign countries. One may say that will give Irish people an opportunity to upgrade but there are some difficulties in that regard.
I welcome the delegation and hope its members get on well in Monaghan, which is the real Ireland. I hope they will enjoy their trip there. I have certainly enjoyed the meal and the discussions I had with members of the delegation during the week. I also thoroughly enjoyed my trip to Iceland, which was an unforgettable experience.
Mr. Guólaugur Thór Thórdarson
This is my second time in Dublin. On the last occasion I also met you, Chairman, in this committee room when we discussed European affairs. It is always pleasant to be in Ireland. I have never met any Icelanders who do not say the same thing when they come here. They say, "It is just like home, apart from having a different language". It is good to meet members of the joint committee here in Ireland.
With your permission, Chairman, I wish to raise an issue which is important to Iceland. It is not a big issue but because we have an opportunity I would like to address it. It concerns the question of fishmeal. For some strange reason we are not allowed to export it to the EU. The reason given is that it has something to do with mad cow disease, although fishmeal is not connected in any way to BSE. No one understands why the export ban is in place but we would like Ireland, as an influential member of the European Union, to examine it. There is no scientific research to indicate a connection between fishmeal and BSE. Iceland is all about fishery matters.
Ireland has had a positive experience of EU membership and the country's economic record is perfect, as we all know. As I understand it, Ireland has liberalised its own economy with low taxes. When we met the Finnish delegation in Europe its members referred to tax harmonisation. It has not happened yet but it is always on the agenda. What is the joint committee's view on tax harmonisation in the European Union as well as more integration in that area and in others?
Let me answer the first question and Senator Quinn can deal with tax harmonisation if he wants. With regard to fishmeal, I will ask the Department of Agriculture and Food for an explanatory note on why its importation is banned. Bonemeal is prohibited as an animal feedstuff but, in Mr. Thórdarson's mind, there is no relation between the two.
Mr. Thórdarson
Bonemeal is from meat but fishmeal has nothing to do with meat at all.
Yes, I understand Mr. Thórdarson's point. I will ask for a note to find out why, because I have no idea. We will revert to Mr. Thórdarson on that point.
Mr. Thórdarson
Thank you, Chairman.
I also welcome the delegation. I have never had the chance to visit Iceland but I look forward to doing so at some stage. I have been invited to speak at a conference there next February so maybe I will make it then.
I wish to deal with two or three points in answer to Mr. Thórdarson's questions, including tax harmonisation. When we voted to join the European Union back in 1972, over 30 years ago, we knew it was going to affect the Ireland of the past, including agriculture in particular, which was a large contributor to the economy. Iceland has decided not to join the EU and I assume that is because the country's fishing industry is so crucial. Therefore, I wonder if Iceland has considered having an association with the EU that perhaps would enable the country to overcome the fishmeal problem.
Ireland has benefited from EU membership, including financially, but our strong view was that we had to have the ability to run our own economy. We decided that one of the benefits was a taxation system which would encourage foreign direct investment. We are adamant that we should not allow that to be harmonised. We can see what has happened in larger countries that have higher tax rates and whose economies are not doing as well as ours. As a result, a great deal of Europe is being damaged. We feel strongly that Ireland should have the freedom to decide on the tax rates it charges, so we are opposed to harmonisation. Competition in this area is of benefit to the Union as a whole, so we think that position is unlikely to work against us.
When we joined the European Monetary Union we lost the ability to handle our bank interest rates. I notice that Iceland's bank interest rate jumped last week to 11.5%. Ours is at the bottom of the scale. It would suit us better to be able to influence the bank rates we charge. We do not have the ability to do so, however, and therefore there is a danger that we have lost some control in that regard. It is interesting to note that in recent years house prices in Iceland have trebled, as have ours, so control of bank rates does not solve the problem on that basis. Does the delegation have a view on this? I assume the domestic fishing industry is the reason why Iceland has not applied to join the European Union. Does it also concern Iceland's lack of ability to handle such matters as tax and bank interest rates?
Mr. Thórdarson
There are different views in different political parties but I can speak for myself and the Independence Party, which is a large party. Of course, fisheries are very important and it is obvious that we have fought a few cod wars, as they were called, with a neighbour of Ireland's to gain the right to fish in our own territorial waters. That is not the only aspect, however, because we must have access to the European market, which we have through the EEA. We have considered so many matters in the interests of the Icelandic nation and we cannot see the benefits of joining the European Union. It is obvious that if we joined the EU we would have to pay more than we get because we would be a rich member state. It frightens us also to see the labour market trends in Europe. When we meet with the leaders of big EU countries, like Germany and France, which are the main driving factors in Europe we can see that big problems there, such as pensions, have not been solved. We get some of that through the EEA agreement because we have to adapt a lot of our legislation, which is then influential in a way.
I cannot see what benefits there would be for Iceland to join the EU, however, and thus take on part of the problems the other nations have. We have been fortunate enough in that we have steered Iceland towards being more economically prosperous than ever before. It is important for us to have control of the economy and our own affairs. We have a population of 300,000 and the situation in many ways is totally different from mainland Europe. Even though we see ourselves as Europeans, consider EU member states as our friends and like to have good contacts with them, it is important to have control of our own issues as far as possible.
I wish to remind everyone that we have approximately five minutes to wrap up the meeting.
Ms Thórunn Sveinbjarnardóttir
As a member of the Opposition, I must contribute having heard the opinions of my colleague on the European Union, in particular. I am very impressed by the positive attitude everybody we have met has towards the issue of migration and migrant labour. If one does not consider it a problem to begin with, one will hopefully have an easier time resolving the associated social issues because social pressures will be created in a small country such as Ireland, let alone in Iceland.
We have benefitted greatly from the EEA, not least in the labour market, having adopted legislation from Brussels in that respect. The EU is a political question and not a question of the bottom line. Being a social democrat, I very much agree with many of initiatives put forward by the EU. I do not agree with everything and it is not black and white. My party has more in common with the EU than not. There are certain issues such as the economic zone, fisheries and so forth. When we take the decision to apply, we will have to negotiate and put to the people what comes out of that process. Our friends in Norway have done it twice and they had to take it back home because they did not get in. This issue is continually debated in Icelandic politics. We have a general election, like Ireland, in a year and who knows what will happen after that.
I have a question for the Chairman regarding the EU enlargement process. With Romania and Bulgaria set to join, where does enlargement end?
I do not know. We have discussed it repeatedly and members have expressed serious reservations. From our standpoint, we do not even know what the process is. What initiates the discussions? There are three different levels prior to full membership and we are not sure what the process is. We have invited the Commissioner with responsibility for enlargement to speak in the Dáil and we are still waiting on that individual to attend so we can put questions on that issue. As far as the electorate is concerned, enlargement is moving too fast and it is a significant issue. This is a pertinent question.
The Chairman is correct. A committee delegation visited Turkey before the Union made its decision to initiate talks and we produced a report concluding that the initiation of the talks should begin. Applicant countries must abide by criteria relating to democracy and human rights, which are absolute essentials. We could argue about the degree to which the economy should converge but parliamentary democracy, respect for human rights and fair laws are fundamental criteria. That is an issue for Turkey. While the Government has improved the legal framework, we wondered how that had been effected at ground level, for example, by the police. We were also very concerned about the issue of honour killings.
With regard to the Union and the EEA, the EEA confers certain benefits to Iceland and we wonder why it does not want a seat at the table to control the decisions made, which impact on the amount Iceland receives. A census will take place in Ireland shortly and for the first time the explanatory leaflet has been printed in 11 languages, which reflects how much society has changed.
We are fascinated that Iceland has no army and it has entrusted its security to the United States. However, there are problems, as the US has expressed the opinion that it should not spend the money involved. Is this an item of discussion in Iceland?
It would take half the day to deal with the enlargement issue but, generally, we have an ongoing problem with the European constitution, which has been rejected by a number of countries. Ireland has not had a referendum and a question on our minds is whether it would be passed.
A number of factors will affect people's attitudes more than in the past. There is a perception that jobs are drifting from Ireland to the new accession countries because of our lack of competitiveness and the ability of the Union to absorb the changes of recent years. There is a perception that enlargement should be slowed down until the full effects of the most recent enlargement are analysed.
Bulgaria and Romania will join next year. Senator Dardis referred to Turkey, while the EU is engaged in talks with Croatia, which is in an important region. Many of us have an open mind on enlargement beyond Bulgaria and Romania. It is important that Balkan countries should be encouraged to come on board but my fear is that we, as politicians, are moving too fast for the people.
Ms Pétursdóttir
On the security issue, one must think of the entire world and not only of European countries. Since the end of the Cold War, there has been a massive reduction in the US military presence in Iceland, as elsewhere. Recently negotiations took place between Iceland and the US on sharing costs for the running of the international airport and the remaining defences, including the four jet fighters and the search and rescue helicopter squadron. These negotiations came to a halt abruptly a short time ago when the US announced its unilateral decision to withdraw all air defences from Iceland no later than September.
The Icelandic Government has addressed this decision and has expressed its disappointment. In simple terms, this means two things. Icelandic airspace will be rendered defenceless and Iceland will be the only NATO member without air defences. Icelandic airspace is the largest in the world with almost 100,000 aircraft passing through the Icelandic air traffic control area each year on transatlantic routes.
The capacity for helicopter search and rescue missions is greatly reduced, which must be a concern for all states with fleets in the north Atlantic. However, the defence treaty between the US and Iceland is still intact and new negotiations will take place on how the US intends to provide for the defence of Iceland after the announced withdrawal. We hope the negotiations will result in an acceptable solution for both parties. As our time has expired, I thank members for giving us an opportunity to attend the committee. As I said previously, there are warm feelings in Iceland towards the Irish nation. The Irish monks were the first immigrants to Iceland. Thank you very much.
Thank you, President, for coming to the committee to question us. You were very welcome.
Sitting suspended at 1.01 p.m. and resumed at 1.03 p.m.