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JOINT COMMITTEE ON FOREIGN AFFAIRS díospóireacht -
Tuesday, 30 Mar 2004

Lisbon Agenda: Statements.

The Tánaiste, and Minister for Enterprise, Trade and Employment, Deputy Harney, who is the deputy Prime Minister, is present. She must attend a Cabinet meeting later but would like to listen to some of the contributions relating to the Lisbon agenda because they are being made by some of the leading figures in the country. The Tánaiste will then speak.

We will begin with Mr. David Begg, the general secretary of the Irish Congress of Trade Unions, a crucial body in the positive developmental life of the country. He was chief executive of Ireland's largest charity, Concern Worldwide, until August 2001, and before that served as a trustee of Trócaire, the Catholic charity agency with which many delegates will be familiar. Before joining Concern, Mr. Begg was the general secretary of the Communication Workers' Union and a member of the executive council of the Irish Congress of Trade Unions from 1986 to 1997. He was a member of the trade union team which, during that time, negotiated three social contract agreements with Government and employers, the first of which was the Programme for National Recovery in 1987.

When I am asked about what happened in Ireland and how events took place, I always say that the first major step was the beginning of that social partnership. When it got under way, our education system and all the other elements came into play. To some extent before that, people were being educated for export but, when the trade unions, business people, farmers and the Government came together and made plans, that was when we achieved the greatest level of output and productivity. Mr. Begg was part of those negotiations from the very start. He is an executive member of the European Trade Union Confederation and a director of the Irish Central Bank. He is also a member of the advisory board of Ireland Aid. He is chairperson of the advisory group to the Select Committee on European Affairs. He has many other posts that involve him centrally in the life of the country. At the same time, he has various other interests, and I do not know how he finds the time for them. He is very fond of national hunt racing and rides out regularly himself. He keeps himself fit to handle so many different briefs so capably. I look forward to Mr. Begg's contribution and ask him to take the floor.

Mr. David Begg

I thank the Chairman for that introduction. I apologise for being a little late. I found out that I do not have security clearance, which is probably an endorsement of the security system. I would not let someone like myself into such a distinguished gathering either. I am glad to be here, and it is a pleasure to have the opportunity of addressing those assembled.

I understand that this morning's subject is the Lisbon strategy and where it currently stands. I am very happy to give participants my perspective on that. Until last week anyway, one could definitely have said that Lisbon was off course. Regarding the criterion on employment gain, it has increased from 62.5% in 1999 to 64.5% in 2002, but it will still not reach the interim target of 67% set for 2005. The ultimate objective is to reach 70% by the year 2010, with a corresponding target of 60% female participation. Last Thursday, there was a very good article in The Financial Times analysing the position on the Lisbon strategy. The essential thesis of the article was that it had been caught up in a debate between economic liberals and those who emphasised the social market model and environmental issues. In a sense, that ambivalence has been part of the Lisbon strategy from the very beginning, since its objective to make Europe the most competitive and dynamic knowledge-based economy in the world by 2010 is juxtapositioned with a corresponding commitment to provide more and better jobs. In a sense, there is a conflict between those who believe that the best solution to those employment issues lies with adjustments to the supply side and those who see it as being intrinsically more of a demand-side issue.

As the ultimate pragmatists, we in the trade union movement and the European Trade Union Confederation believe that there must be a remedy which embraces both supply and demand. From the perspective of demand, we see a crucial role for the European Central Bank. Its very obvious immediate role concerns interest rates. There is a feeling on our side that, although it might not have been particularly good for Ireland, to stimulate demand for Europe as a whole, interest rates should have been reduced some time ago. We also see it as being necessary to stimulate demand to try to get into circulation €3.8 billion in savings in Europe at the moment. In some respects we in Europe may be victims of a demographic change which is taking place, since older people tend not to spend money. As one gets older, one becomes more concerned about one's security. If one reflects on the Japanese situation, one sees that, for a good few years, that was the problem. Japan had an even older population than Europe, and for a period it resisted a whole range of stimuli attempted by the Japanese Government to get its economy moving. To some extent we have that on the demand side in Europe too.

There is also a conundrum on the supply side. If one examines the question of employment specifically, one sees that some European countries have a much higher rate of unemployment than the average - approximately 10%. However, when the economy begins to move forward, after a short period it becomes difficult to fill vacancies. That is where the argument about active labour market intervention comes in, since there is clearly a complete mismatch. In theory, if jobs are available and people are unemployed, surely they should be taking up those positions. However, the net result when they do not is that the economic recovery is choked off. That is where we think there is a need for a much more creative approach to active labour market intervention. When there is a discourse about flexibility, that is always seen as a euphemism for dismantling the social welfare code or for a policy of hiring and firing workers. Equally, when creating employment, pay becomes the issue. It is seen as an agenda for a more coercive approach to force people in off the social welfare list and into the market place. However, since that is seen as coercive, it is resisted. It creates fear in people's minds and makes them insecure. When they become insecure, they tend not to spend money and that affects the demand side again.

From our point of view, there is a good case for being more creative in this area to find a better way to intervene which is more user-friendly and does not contain the threats which that discourse of flexibility did up to now. It is important because approximately 70% of all economic activity is related to consumer confidence in one way or another. Out of that conundrum has come the term "flexi-security" - the idea that, in some way, we will be able to combine both flexibility and security for people, and that is the key. Last week, IBEC and ICTU had the privilege of attending the social policy summit in Brussels. We both supported the Irish Presidency's proposal that we should try to develop reform partnerships along the lines recommended in the Wim Kok report. That may very well be the way forward and it already has a certain amount of support.

People may wonder whether it is the right course. It is very interesting to watch the evolution of politics in Europe. If one considers the agenda 2010 debate in Germany and the weekend results in France, one sees that there is always a reaction to reform measures. They key is to avoid a situation where people are dogmatically against change so that they are instead able to examine matters and consider whether they might be changed positively. That is the challenge. The Commission has agreed to establish a new committee on Lisbon to try to drive the agenda forward. I confess that at the level of the ETUC we have had reservations about that, mainly because we feared that competitiveness would become the sole focus of that agenda. I am not saying that it is unimportant; of course it is. It is more important in Ireland than in any other European country, since we have such an open economy. However, in the great scheme of things in Europe - 12% of our trade is external to the Union - there is also the question of whether Europe, or some countries in Europe, has a competitiveness problem. I would argue the latter case.

Nevertheless, the chairman appointed to the group is Wim Kok, and that has assuaged some of our reservations, since Mr. Kok is held in high esteem in the trade union movement, where he has had a long career. As participants will be aware, he was Prime Minister of the Netherlands for many years and has established himself as a very principled person in public life. The report that he produced last November covering employment, Jobs, Jobs, Jobs, is an impressive holistic evaluation of the situation regarding the Lisbon strategy. It recognises all the labour supply issues, but also the contingent difficulties affecting labour supply, for example, that of caring in society and the problems with increased female participation in the labour force. In most European societies, women have traditionally been the carers. This issue affects, children, those with disabilities and older people. The Tánaiste has spoken about this on many occasions in recent times. It is necessary for us to evolve in a way that protects all the good things in society, while allowing people to have the fulfilment involved in a life of work. Mr. Wim Kok, in our opinion, is someone who is well-balanced on these measures and we are happy to support him.

I would like to say a few words about the general, almost philosophical view of Europe and how it should evolve. Proponents of the supply side analysis are heavily influenced by the experience of the United States. Under this analysis the United States is considered to be a dynamic economy which should be emulated by Europe. I have some difficulty with that. I am somewhat uncomfortable with it and I will explain why. If one examines the current recovery in the United States, it has been powered by the biggest monetary and fiscal stimulus in history. At the same time there are massive deficits on the fiscal and current account budgets. It is an imbalance which could unwind and I will explain why.

Taking the current oil situation, despite the hopes of last year prices have increased from around $30 to $38 a barrel for Brent crude. Not exclusively, but part of the reason for this is the fact that the oil producers, who are mainly paid in dollars, are trying to bolster the value of their income. Given that the value of the dollar has dropped, the price of oil has correspondingly gone up. That affects the current account deficit in the United States, which further depresses the value of the dollar. This encourages the oil producers to increase the price of oil, the circular effect of which again affects the US economy. If this ultimately forces the American government to put up interest rates it could choke off recovery in the United States. Given the international importance of the US economy, this in turn could choke off recovery in the world.

I am inclined towards apprehension that the United States will become less an object lesson than a cautionary tale for us all. I admit to being influenced in coming to that position in that I have just read Paul Krugman's book, The Great Unravelling: Losing our way in the New Century, and it has scared me. I am not saying this from the viewpoint of antipathy towards the United States, although I am antipathetic to its current regime. I have a vested interest as my pension could be affected and I am not far from retirement. I take a broad view but, potentially, there could be a cautionary tale here.

Going back to Wim Kok, one of the things to come out of his employment taskforce report is that under any set of performance criteria for the European economy, the Nordic countries and the Netherlands are doing very well in terms of productivity, research and innovation and flexibility in the workplace. However, these are also countries with high levels of participation in the labour force and quality public service provision in the area of childcare, which has resulted in an increase in fertility rates in the case of the Nordic states - against the trend in Europe. It seems to me they have the secret of success. I would much rather look in that direction than westward to the United States. We often make comparisons in this country between Boston and Berlin. Perhaps we should be looking at Athens and Stockholm.

At the weekend, the Tánaiste spoke about Clondalkin and California. She said she was closer to Clondalkin, so she may be moving in the right direction. The article in the Financial Times to which I have referred also mentioned that Ireland and Finland were two countries that had managed to combine economic efficiency and social cohesion. That is a generous tribute. In the case of Ireland, we have arguments between ourselves as to the extent we have achieved social cohesion. Our economic progress has been good. As a young man in the 1980s, when my children were young, my biggest fear was they would not get a job in this country. Things have changed tremendously in that regard. The unemployment rate has fallen from around 17% to 4.5%. In the course of that progress it has been possible to deal with many structural problems in the economy and to do it in a collaborative way.

In a sense our experience of the partnership model is good and we support the concept put forward by the Presidency for the reform partnerships. The core issue centres on solving problems and is less concerned with trying to force people to have a uniform vision of the world. That is impossible. We must try to identify the common space and whether problems may be solved within it. It is a high maintenance operation. It involves consistency, commitment and much work. One may never be complacent about it or be sure that it will not go off the rails for one reason or another. Our experience over 15 years has been positive and we believe it has something to offer Europe for the future.

In essence much now depends on whether this new initiative manages to drive the Lisbon Agenda forward. In all our interests I sincerely hope it does. We must look at it from a positive viewpoint and see how we may collaborate to resolve our difficulties and problems. The great political challenge is to secure economic efficiency, individual freedom and social justice. If we can obtain a Europe which combines these three elements of the political equation, the Lisbon Agenda will ultimately have been a great success. May I once again express my appreciation at being invited. It has been a pleasure to address the committee.

I will now introduce the Tánaiste or Deputy Prime Minister, Deputy Mary Harney. She must shortly attend a Cabinet meeting, but she wanted to listen to one of the contributions, at least, before leaving. Deputy Harney had her first ministerial appointment in the area of the environment. One of the matters with which her name will always be associated is the eradication of smog and smoke from Dublin in the 1980s by banning bituminous coal, which was widely in use throughout the city at that time. This initiative had a dramatic effect on the environment. Her most extensive ministerial experience is in the areas of enterprise, trade and employment. She is Tánaiste or Deputy Prime Minister in the coalition Government comprising Fianna Fáil - the party to which I belong - and the Progressive Democrats, of which she is leader. This is one of the longest continuous Governments in the history of the State. It is a good solid coalition and has addressed issues in a practical and progressive way.

It is a pleasure to be here in Dublin Castle, this morning, with the chairpersons of the Foreign Affairs Committees of the 25 parliaments that will shortly make up the European Union. There are representatives from the European Parliament here as well. On behalf of the Government I would like to welcome the representatives to Ireland. I hope they are enjoying their time here. In addition to exchanging ideas on foreign policy issues, I trust there will be an opportunity for sampling what this city and the country has to offer. We like people to work hard when they are here, but also to play hard. I hope that people will have fond memories of Ireland. If they return home exhausted, then we will have achieved the right result. If they are tired after their two days of deliberations and have enjoyed themselves as well, we will be happy. The delegates were in Farmleigh last night. I am due to meet the Taoiseach there this morning before 10 a.m., so I will not speak at length.

The Lisbon Agenda is the only agenda we have in the European Union to achieve economic growth and success. It was an ambitious agenda, as was said four years ago. It is about making Europe the leading knowledge-based economy in the world by 2010. It also has strong social inclusion and environmental sustainability dimensions. There cannot be social inclusion if additional economic growth is not generated. One follows the other. One may be able to have a fairer society where everybody is less well off. We can all be better off and have more resources for social inclusion if we generate increased levels of economic growth within the European Union.

There are two ways of looking at the Lisbon agenda. One could be very negative and some are. I read the same article that Mr. Begg read last Thursday and many articles have been written about Lisbon. There is no doubt that if one uses some economic indicators, we have slipped behind since we signed up for Lisbon four years ago.

Equally, there are positive aspects. I know people are often sceptical of a politician that is positive, but I remain extremely positive about the future of the European Union for many reasons. Enlargement will be one of the best things that has happened the European Union in quite some time. As I visit many of the applicant countries, the zest for reform is extraordinary and I believe this reforming zeal will add a lot to our deliberations within the Union.

It is a fact that whatever we use to measure participation and employment, or growth levels of productivity, we are behind the United States and we are slipping further behind. Europe is not going to achieve economic growth by returning to lower wage levels or competing with India or China. I worry sometimes when we compare ourselves solely to the United States. China is busily moving ahead. I visited the country only two weeks ago and the scale of what is happening there is quite extraordinary. We would be very foolish to keep our eyes focused solely on the United States and not to look at what is happening in other places in the world.

Europe faces a number of challenges. It is obvious that we have the demographic challenge and the pension challenge that flows from that. We have the challenge of enlargement and the challenge of trying to win more foreign direct investment and capture more market opportunities. We have to do that in a more competitive globalised market. Commissioner Bolkestein recently said that poorer countries are no longer going to be satisfied to trade merely in toys, textiles and tapestries, they are going to want additional trading opportunities and we have moral responsibilities in Europe in the context of the WTO to allow those countries trade. The UN Secretary General, Mr. Kofi Annan, said some time ago that countries were poor not because of too much globalisation but because of too little globalisation. We have wide moral responsibilities to those countries in the context of those talks.

Europe has to compete in that environment. In my view, economic growth will come through productivity growth which will come through innovation. If one uses the innovation yardstick, there are some warning trends. In 1995, the gap between what the US spent and what Europe spent was about $14 billion per annum. That has now widened to about $140 billion per annum and 80% of it is made up by a shortfall in what the private sectors spend. Unfortunately, the private sector spend in Europe is moving outside Europe. Some 40% of the innovation and research done by Europe's pharmaceutical companies is carried out outside of the EU. A recent article in Time magazine stated that over the last 20 years, 400,000 European science and engineering graduates had migrated from Europe to the US and that 90,000 of them were working in innovation. That is a frightening statistic.

Europe has to embrace innovation and all that it entails. One of the key things we must do is to be more tolerant towards new people. Prior to the last few months, the United States has always been very welcoming. The best brains in the world went to the United States and were very much at home there. Many of the best scientists from China, Japan and Europe ended up in the United States. A third of all of the new companies started in Silicon Valley in the 1990s were started by immigrants.

Europe still does not have freedom of movement for researchers within the EU and there are huge obstacles to researchers bringing their families with them. Ireland has recently made a decision that people coming to carry out research here will automatically be entitled to have their spouse work in the Irish economy and to take their families with them. There is a mobility of researchers directive which has been around for quite some time and we need to activate it. As someone said to me at a ministerial meeting in Europe some time ago, if a French researcher wants to carry out research in Britain, Italy or Spain, he or she will probably have to go via the US first. We are not good at allowing researchers to move from one country to another, never mind bringing in other researchers.

The United States has been much better in this regard. However, in the clampdown after 11 September, the researchers have been clamped down on as well. There does not seem to be a distinction between those who pose a security threat and those that can add to the success of the US economy. When I was in China two weeks ago, I was told time and again by many of the people whom I met in the universities that it is becoming a big issue. Perhaps there is an opportunity in the strategy pursued by others of which we should take advantage.

Another area to discuss is the resources that are spent on research and development. When it comes to public money, Europe and the US compare quite well, although I strongly support what the Commission has suggested in the new financial prospective. It suggested that a larger proportion of the EU budget, whether it is 1% or beyond 1%, has to go to innovation and research. The Commission is discussing at least doubling the percentage of the budget that goes into the innovation area. In the context of the next framework programme for basic research, it needs to be a lot simpler and clearer. Many companies and researchers have made the point that it is impossible to access the funds. One must have too many partners, too many rules, too much bureaucracy and many have said that if they could find money anywhere but from the six framework programmes, they would do that. We had very good discussions with Commissioner Busquin about that matter.

At our last competitiveness Council meeting on 11 March, we agreed that in the future funding will be provided only on the basis of excellence, and that no other criteria other than excellence would apply. We have to create in Europe the best environment for the best scientists to do the best research, otherwise we are not spending our money wisely and we are not going to get the benefits of new discoveries.

We must have much closer links within the EU between the world of the university and the world of business. We need much stronger collaboration. The United States is fantastic at this. The MIT has spun off about 4,000 companies in recent years, employing about one and a half million people with revenues of about €132 billion per annum. One could discuss other universities such as Stanford, Cal-Tech and so many others in the US. We have some fantastic universities in Europe, but we do not have the same number competing on the same basis. We have not made those crucial links between education, knowledge and business opportunities and we need to do that.

Perhaps it is too easy in Europe to get an appointment for life in a university without due diligence. In the United States it is much more difficult. After a couple of months or a year, one does not get an appointment for life. We need the best professors, the best researchers, the best possible environment, closer collaboration with business and we need incentives to support all of that.

I recently read a report that was published by a group in England about Europe's creative capacity called The Rise of the Creative Class by Mr. Richard Florida and Ms Irene Tinagli. I was pleased to see that they used three measurements - technology, talent and tolerance - to measure how creative Europe was. Ireland came out on top in terms of technology and talent. I am afraid that we did not do well in terms of tolerance, that is tolerance to new ideas and to new people, such as bringing the best researchers into the EU.

The report made the point that in seven of the European countries, 30% of the workforce were now in what is called "the creative class". It proceeded to persuasively argue that the inputs that affect competitiveness for the future are no longer natural resources or asset accumulation. It is very much human creation and human talent. That is what will grow in the European economy of the future and that is where the race is. The report made the point that there is no reason Europe cannot be number one in that race if we ensure that we put some of the things I mentioned earlier into effect.

Mr. David Begg made a point that I strongly agree with. To a large extent, the Lisbon agenda is the sum total of the individual effort of member states and he said that some countries do a lot better than others. Finland is the most competitive economy in Europe. When innovation in particular is examined, it is number one in the class. Ireland does well too and seven of the countries in the EU do a lot better than many of the others.

There are huge obstacles in Europe to doing business in services. That directive has now been published and we have set a challenging target to have it agreed by the beginning of next year. The Community patent has been in its current form for 14 years and has been on the agenda since the 1960s. We cannot become the most knowledge-based innovative economy in the world if an inventor cannot register a patent on a Community-wide basis. At political level we have not yet been able to agree on this. There have been a number of compromises and there is a suggestion that the claim on the patent be translated into all 19 languages. Some countries take the view that the claim should then have legal status. It is difficult to get patent expertise in 19 languages, while I am not certain that people will use the patent in the first place if the claim has legal status. It costs 25% less to get a patent for 20 years in the US than in the EU. That is why we have so few patents relative to the US. We also need to act upon the financial services action plan. These are among the things we need to do at European level.

The point was made in the article that 40% of the Lisbon agenda regarding unions was not acted upon by the member states, which is extraordinarily disappointing. We have created a new competitiveness council, the purpose of which was to bring together the internal market Ministers with the research and industry Ministers and to take a holistic, cross-cutting view of the issues. Unfortunately, while the Ministers have done that to some extent, in some member states there are several different Ministers with responsibility in the area. We had 38 Ministers at our meeting on 11 March, even though some countries such as Greece were not represented as they were in a transition period from domestic elections. There were industry Ministers, science Ministers and internal market Ministers. Whatever about being able to affect what happens in member states, that is a matter for member states. At European level there are five Commissioners who attend our meetings.

The Heads of Government, the competitiveness council and others have all stated that, when the new Commission is formed, we need greater co-ordination and integration of the competitiveness brief. Chancellor Schröder, Prime Minister Blair and President Chirac have suggested we need a vice-president for competitiveness, which is a view I share. We need an economic guru who can bring it all together. For example, there are two directives in what I would broadly call the consumer area. One is on unfair consumer practices which is being pursued by Commissioner Byrne and the other is on sales promotions and is being pursued by Commissioner Bolkestein. These are two sides of the one coin and should come from the same division. This happens because we have many people in the same area. If we want an impetus behind the Lisbon agenda, we need greater integration and co-ordination at Commission level. I hope that happens when the new Commission is appointed and that the Heads of Government will ask the new Commission President to give emphasis to competitiveness when allocating the new Commission portfolios.

While much of the effort is made at member state level, when the EU produces new regulations and directives, they need to be competitiveness-proofed. It does not mean we will not adopt them, but we certainly need to know to what we are agreeing. We do not do that but it is beginning to happen now. The competitiveness council has a major role to play in this respect and, before we enact any more regulations, we need to know at European level the impact on competitiveness. We need to get it right from that point of view to generate more economic growth and employment which can only come from innovation and capture the potential of this huge market. It is not the largest market in the world as we fall far short of the 1.3 billion people in China and the 1.1 billion people in India. However, it is the most developed economic market in the world and we must be able to reap the potential of that.

The first criterion that citizens use when they judge the EU and its success is the capacity it has to generate high quality employment and higher living standards. I take the view that, although the centre for European reform said that progress on the Lisbon agenda represented a mediocre C plus, we have the potential to become the most knowledge-based dynamic economy in the world. This may not happen by 2010, but certainly we have the capacity to do so if we just fix a few things which have been delayed for some time, such as the patents and the spend on research and development. If we reverse the brain drain out of Europe and bring the best brains into Europe, there is no reason the lofty ambitions set in Lisbon in March 2000 cannot be realised.

I welcome the appointment of Wim Kok to carry out the mid-term of the Lisbon process as he is ideally suited to the job for a number of reasons. He has just completed the employment report and I share his analysis in that which is concerned with flexibility and labour market reform. The Commission has stated that half of all the unemployment in the EU in recent years results from inflexibility, high taxes and high labour costs. We need to take all of this advice on board. We have signed up to the theory, we speak a great deal about Lisbon, we have the capacity to deliver on it and that is why it has been a priority for the Irish Presidency to breathe new life into the process. We made a good start at the Heads of Government meeting last week and I hope that momentum can continue. If we can agree at the Intergovernmental Conference to the new streamlined way of making decisions in the EU, it will become somewhat easier to be able to finalise many of the outstanding matters to which we have not been able to agree recently.

It is a great pleasure to be present at this meeting and I welcome the members of the conference to Ireland and thank them for being present. This is the sixth Irish Presidency of the Union. We, as a small country, are proud to hold the Presidency on the occasion of the Union's greatest enlargement. Many of the applicant countries often look to Ireland to see how economic success can be generated and we are proud that other countries want to emulate what we have achieved. For many years Ireland was a basket case and nobody wanted to look at us. We travelled the world to find out how to make things happen. We learned much and achieved much. As David Begg stated earlier, we have generated extraordinary levels of employment. Unemployment is down from 17% to just over 4%. That is in the context of reversing emigration and having a further 100,000 foreign workers in this country, half of whom come from outside the European economic area.

It is a great time for Ireland to hold the Presidency of the EU and it is an exciting time for the EU. That is why we intend to celebrate it with great enthusiasm on 1 May here in Dublin. I do not know if many members of the conference will be back to celebrate with us, but it is a terrific opportunity for us all in Europe to celebrate an historic event of this magnitude: the reunification of the European family and the opportunities that will flow from that.

I thank the Tánaiste and I think we can all see how deeply involved she is in her mission. She must leave quickly to attend a Cabinet meeting. The Tánaiste delivered her speech without her notes which is a sign of how deeply one can become involved in a subject if one is really interested in it.

Our next speaker is Redmond O'Donoghue from Waterford in the sunny south-east. He was educated there and at UCD and later completed an advanced management programme in the Harvard business school. He has had much experience in business. He was involved with the Ford motor company in the UK and as marketing director with Ford in Spain. In 1985 he joined Waterford Wedgwood plc as a main board director and sales and marketing director. He was then appointed chief operating officer of Waterford Crystal, one of our high-quality products. I hope those present notice that the little gift I have came from Waterford Crystal and its logo is built into it. It is a little something to remind people of this occasion in what is an historic year. In November 2001, Redmond was appointed group chief executive officer of Waterford Wedgwood plc. He is also chairman of the governing body of Waterford Institute of Technology. He was chairman of Bord Fáilte Éireann, the Irish tourist board. He is also a director of a number of other companies. He is a former president of Waterford Chamber of Commerce and until 1996-97 he was chairman of the Marketing Institute of Ireland.

I mention these achievements because they show a life involvement in broad sectors of our community and society. We look forward to hearing from Redmond who is very much in the frontline of business development on an international basis because in Ireland we depend very much on export business.

I thank the Chairman. Good morning everybody. I would particularly like to thank the Chairman for giving me what, in public speaking terms, is known as the "rabbit slot". It is called that because the rabbit is the only animal known to man who can sit bolt upright with eyes wide open while being fast asleep. After what I believe was a very good night in Farmleigh, there may be a few rabbits around here and I will be looking out for them.

As the Chairman said, my background is marketing. We marketeers have some unusual hobbies. One of mine is that I collect personal announcements in provincial newspapers, which are a most effective form of marketing. I find the collection of them is almost a compulsion and I have collected some unusual ones. I would like to share a few of them with the group which, if this does nothing else, it will probably test the instantaneous translation. Those present have had an easy morning so far, therefore I will test them. I will share a few of my favourite small advertisements from newspapers, and as this is an international community, I will refer to some from publications around the world. First, a small advertisement from an Irish newspaper states, "To all our patrons, this week the Saturday matinee will be held upon Tuesday, instead of Thursday". One has to be Irish to understand the thinking behind that one. For our UK colleagues, a small advertisement from a Scottish newspaper states, "Notice to ship in bottle makers, free service, young man accepts full bottles of whisky, returns them empty, ready for insertion of ship - prompt, conscientious work guaranteed". That is innovation and creativity, the likes of which we need more.

Another small advertisement, with a certain directness, from an Irish newspaper states, "Farmer, aged 38, wishes to meet woman around 30, who owns tractor, please send photograph of the tractor." The Tánaiste talked a good deal about America. I have two small advertisements from American newspapers which symbolise the American way. The first will test the translators. It states, "Important notice - if you are one of the hundreds of parachuting enthusiasts who bought our course entitled "easy skydiving", please make the following correction, on page 8, line 7, change the words "State zip code to "pull ripcord". That is a pretty important piece of information. A small advertisement in the New York Times states, “For sale, entire set of encyclopaedias, 45 volumes, excellent condition, $1,000, got married last week, wife knows everything.” That is what marketing does for one.

The Lisbon Agenda has one unusual feature, at least where European policies and programmes are concerned. It has a simple description, consisting of only a couple of dozen words which more or less anyone can understand. I refer to the now famous formula that the aim of the agenda is to make Europe, "the most competitive and dynamic knowledge-based economy in the world by 2010". All business endeavours should have what is know in the business community as a BHAG - a big, hairy, audacious goal. Perhaps the most famous BHAG of all time was President Kennedy promising, in the early 1960s, that the US would put a man on the moon by the end of that decade. Sadly, he did not live to see Neil Armstrong take that "giant step for mankind" in 1969. However, he proved the value of a BHAG. Now, with the Lisbon agenda, the EU has its own very welcome BHAG.

It is a deceptively simple aspiration. However, it raises as many questions as it attempts to answer. Behind the targets and objectives of the agenda are the key issues of where Europe stands now in the world of technology and competitiveness and where exactly it should seek to be. The formula gives quite a few hostages to fortune. There is the definition of "the most competitive economy". How is that to be measured and who is to measure it? There is also a remarkably precise deadline of 2010. Will a result, as they say in the football world, be declared and, if so, by whom? If it cannot plausibly be claimed that the objective has been achieved, will that be put down as another European failure by Europe's rivals and critics and add to despondency among its friends and supporters? That would be the wrong reaction.

The leaders of Europe did the right thing in setting some fairly precise targets at Lisbon. This gives extra political impetus to the project, along with the commitment to review it at the annual spring summit. Without such impetus, in all probability we would not still be discussing the progress of the agenda. It would have disappeared back into the diverse national politics of Europe and, perhaps, like monetary union for many years, it would remain an aspiration whose time, thankfully unlike monetary union, might never come.

Instead, we have clear objectives, even though we know they are not all being achieved according to schedule. Already there is talk that Europe will not be the world's most competitive knowledge-based economy by 2010, but I suggest that such talk is foolish. First, achieving competitiveness and maintaining it, as anyone in business knows, is a permanent task and challenge. There is never a moment or a year when one can sit back and say, "I am now the best in the business and I can relax." Whatever we succeed in doing by 2010, there will be just as much left to be done. That is the nature of the world in which we live.

Second, it is foolish to take too seriously a phrase such as "the most competitive economy". It is fine as a headline, but not as a serious statement of policy. Like companies, countries - even the European Union - have particular competitive strengths. They must capitalise on those strengths and make the most of them, improving their competitiveness where they have advantages and abandoning other areas to those who have advantages in them. People may have fun drawing up annual lists as to who is the most competitive at a business or national level, but fun is all it is. Competitiveness is a holy grail. We are absolutely correct to pursue it. However, to be competitive Europe badly needs to have a competitive currency which clearly it does not have. There is no argument for the current strength of the euro. There is something fundamentally wrong when someone can fly to New York, stay in a hotel, shop until he or she drops, and return again having saved money. The almost incredible thing about this lever of competitiveness is that Europe has the capability to influence it, both easily and quickly. Failing to do so is, in my view, an "own goal" of monumental proportions.

For Europe, the questions are where its strengths lie and how it can make itself stronger in these areas. What are its weaknesses? Among these, which ones can be turned into strengths, and which are endemic weaknesses where the business, in effect, should be closed down? Not only are these difficult questions but the answers can be uncomfortable and sometimes unpleasant.

As the Tánaiste has remarked, the rise of China and of India as global economic powers provides a dramatic illustration of these points. Already, China's output is larger than that of Germany. If it continues to grow at 7% per year - and there is no theoretical reason it cannot - that output will double in a decade. It will be built on a cost base which the rich economies cannot hope to match.

This is certainly a threat but it is also an opportunity. It will make the world richer - a great deal richer. The peoples of China and India will emerge from the abject poverty of the past. This is a good thing. However, I would welcome a more level playing field in terms of environmental practices, labour practices, ethical standards and the protection of intellectual property rights. The World Trade Organisation has a major role to play in this regard. Nevertheless, the incomes of the rich world will be enhanced by a flood of lower cost products and services which these new economies can and will provide.

Governments, firms and social partners in Europe and elsewhere must face the fact that they cannot compete directly with these new economies in many areas, especially in basic manufacturing. Instead, they must seize the opportunities provided by millions of new consumers, thousands of new suppliers and hundreds of investment possibilities. Europe must look to its strengths and seize these opportunities, by keeping open its markets while offering competitive products, services and investment of the kind the new economies will require as they become richer and more sophisticated.

Let us make no mistake about it - Europe has many strengths. It has world-beating technologies, from aviation to genetics. Its universities conduct world-class research. It is home to several of the world's biggest banks. Most striking of all, it has a commanding position in being home to many of the world's leading brands, such as Mercedes, Nestle, or - dare I say it - Waterford Wedgwood. It can match the United States in the range of products which consumers around the globe not only wish to buy but will pay a substantial premium price to acquire.

We must be honest and admit that a great deal of change in Europe is driven by perceived weaknesses compared with the US. I say, "perceived", because, while there are undoubted European weaknesses, they are not always the ones which are commonly portrayed.

Too much attention is paid to raw comparisons of economic growth. The US simply has higher growth potential than Europe because of its expanding labour force. This demographic fact is not a European "weakness". There is no reason to concede more than America's natural advantage in economic potential. That is why the Lisbon proposals for reform of the labour market are important. There is untapped labour force growth in the low employment levels of Germany, France and Italy as well as in many of the countries joining our enlarged community. The high employment levels of Denmark, the Netherlands and Sweden show that more jobs are not incompatible with the European social model.

The agenda's objectives for improving skills and lifelong learning are enormously important. Some economists call the combination of the numbers plus skills the "effective labour force". It is, perhaps, the biggest single explanation of the Irish economic miracle of the 1990s. Certainly, we in Waterford Wedgwood firmly believe in and are totally committed to the concept of lifelong learning. For example, we employ some 1,500 people in County Waterford. To date, more than 900 of those 1,500 people have completed some form of third level education in recent years and have achieved either diploma, certificate, primary degree or a master's degree. The individual provides the time and the commitment. The company not only funds the courses - most of them at our neighbouring Waterford Institute of Technology which plays such a pivotal role in the infrastructure of the south-east region - but also provides an active network of mentoring and encouragement. The impact of this programme is incalculable; it enriches everybody - intellectually, economically and, most of all, spiritually.

Other measures outlined in the Lisbon Agenda would also enhance economic growth. These include the opening of telecommunications markets, consumer competition in gas and electricity, and full liberalisation of air transport. There are other less glamorous sectors where deregulation and competition could make a significant contribution to growth and employment in many countries. One thinks particularly of some parts of the retail sector.

It is worth stressing that, although we speak of Europe for reasons of convenience and politics, the performance of individual countries can vary enormously, as it does among the states of the United States. In a wide range of measures, from employment growth to company profitability, the best EU countries outperform the US. The spread between best and worst is wide and the EU average is consistently below that of America. There is clearly scope for European countries to look at the best performers in each category and learn from them.

I have no doubt that better economic growth would remove much of the questioning in Europe over its role and destiny. The last few years, when the US averaged growth of approximately 3% per year while the EU failed to reach 2%, left a slightly bitter taste. Reform is necessary to improve that performance. I believe there is a deeper worry driving the Lisbon process - a feeling that Europe is being left behind in the technology stakes, that it is losing its former position as a rival to the United States and Japan in the development of the products and processes of the future.

We must be careful to avoid fads and fashions here. In the 1980s, America was seen as the technological loser. Its research was too driven by defence requirements, the theory went. The Japanese and the Europeans were seen as leaders in the technologies which produced products people actually wanted to buy. The 1990s changed all that. Information technologies provided the new paradigm, and the US led the world in those. Many of the hot products of the 1980s, such as super-computers, turned out not to be so hot after all. The world of the Internet was, and is, a largely American world.

The lesson is that it is difficult to predict successful technologies. There is the famous Western Union memo of 1876: "The telephone has too many shortcoming ... the device is inherently of no value to us." Then there was Darryl F. Zanuck, the legendary head of 20th Century Fox who said in 1946, "TV won't hold onto any market it captures. People will simply get tired of staring at a plywood box every night." We all know the story of the head of International Business Machines who thought there would be no more than half a dozen customers for computers. The Americans sold the rights to the transistor to the fledgling Sony Corporation because they could see no commercial use for it.

It is equally true that technologies which are widely admired run into the sand. At one time, the smart money was on steam-powered automobiles rather than the difficult internal combustion engine. Post-Concorde, there is no supersonic airliner, and little prospect of one.

The US does have an advantage in this unpredictable world. It is not necessarily because its research is better, or even more successful. Germany registers more patents per 10,000 inhabitants than the US. It is because its system is better adapted to the development of new ideas across a wide spectrum of research, and to providing the finance to turn those good idea into commercial realities. In short, it is more entrepreneurial and has a more efficient capital market ready to respond to such entrepreneurial flair and willingness to take risks. In this regard I always have been impressed by the words of that fine American writer, Brooks Atkinson, when he said:

There has been a calculated risk in every stage of America's development

The nation was built by men who took risks

- by pioneers who were not afraid of the wilderness

- by businessmen who were not afraid of failure

- by scientists who were not afraid of the truth

- by thinkers who were not afraid of progress

... and by dreamers who were not afraid of action.

Some of the most critical parts of the Lisbon agenda are those which seek to create a wider and more efficient capital market in Europe, and to improve the connections between that market and research establishments, with closer links between knowledge institutions and industry. Of these several goals, the creation of a single capital market is undoubtedly the most difficult. More progress has been made on the agenda's targets for innovation and research and development but I am not sure that these targets are ambitious enough. We need to think harder about how world class universities and institutions are to be funded and the relationships between the world of academia and profit and production.

As for the proposals on capital markets, they may be less eye-catching than other parts of the agenda but the importance of getting them right cannot be underestimated. Neither can the difficulties. European countries have very different traditions in the workings of capital markets and it is not easy to marry them. A recent, perhaps controversial, analysis by Goldman Sachs claimed that inefficient allocation of capital was the root cause of Germany's recent poor economic performance. It stated capital was, in effect, subsidised, leading to over-investment and poor returns. The same criticism has been levelled at the Japanese system.

I am not in a position to say if these criticisms are valid. I am well aware that many Europeans are equally critical of what they see as the fraught and short-term nature of the Anglo-Saxon financial model. I am no Anglo-Saxon but I am an inheritor of that system and work under its disciplines. From that perspective, I have to say attitudes to mergers and acquisitions in certain continental European countries are a startling illustration of the work yet to be done in creating a genuine European capital market.

The particular concern of the Lisbon process is the provision of development capital for new and small enterprises. Progress has been made in matching the two - more can be made - but there is a limit to what institutional change can do. Ultimately, we must create a market where capital looking for a return can be matched to businesses looking for finance, to the mutual benefit of both. Such a market will have to meet the peculiar needs of fast growth and high risk technology companies if a thousand flowers are to bloom, and the lucky few hundred are to produce seed.

I thank Mr. O'Donoghue for a particularly stimulating contribution. Professor Roger Downer, president of the University of Limerick, is our final speaker. He was born in Belfast, Northern Ireland, and obtained a BSc and MSc in Queen's University before moving to Canada where he completed a PhD at the University of Western Ontario. He was subsequently awarded the degree of DSc from Queen's University Belfast. A Doctor of Science degree depends on an enormous amount of very hard work and innovative research.

Most of Professor Downer's academic career was spent at the University of Waterloo in Canada where he had some 40 students and post-doctoral fellows in his research programmes. He is editor and co-editor of four books and author and co-author of over 160 research publications. He has received a number of awards, including a series of gold medals. I do not know where he keeps them all and had better not say how many he has because they might be stolen from him. He is a fellow of the Royal Society of Canada and a member of the Royal Irish Academy. He chaired the natural sciences and engineering council of Canada and has been a member of committees on food and agriculture and animal biology. He has served on the regulatory biology panel for the National Science Foundation of the USA.

Professor Downer has endeavoured to ensure the results of his research are made widely available. Consequently, he is in favour of links between industry and research in universities. He served as president of the Asian Institute of Technology, an international postgraduate university based in Thailand. He has also interacted with senior political and corporate leaders throughout Asia. He served on the board of directors of the John F. Kennedy Foundation. He assumed the presidency of the vice-chancellorship of the University of Limerick in September 1998 and chaired the council of the heads of Irish universities in 2001. He was chair of the conference of University rectors in Ireland in 2002. He is chairman of the Birr Scientific Heritage Foundation and vice-chairman of the national technology park. He is a member of the board of directors of the Shannon Free Airport Development Company Limited, where the first duty free centre in the world was established. He is also involved in the Irish Peace Institute and an honorary member of Garryowen Rugby Club, which he is proud to proclaim as Ireland won the Triple Crown last Saturday. Our English colleagues are still here to testify to this. He is very active and has been deeply involved in research, business and administration in the United States, Canada and Ireland. We look forward to his contribution.

Professor Roger Downer

I thank the Chairman. There are two prayers of forgiveness required, one for the Chairman for blowing up my CV much more than it deserved and the second for me for enjoying it so much.

My task is to talk about the role of higher education and how it can contribute to advancing the Lisbon agenda. This is a very interesting time to be involved in higher education. It is very difficult to visit any European city without seeing some mention of higher education in the media. It could be about student fees, entry requirements, universal access, academic standards, research, or the shortage of scientists. Higher education has suddenly become very popular and its profile has been raised.

Why is this the case? The reason is what is generally referred to as the knowledge revolution. We all remember from our history books how the agrarian revolution in the middle of the 19th century was replaced by the industrial revolution and wealth was transferred from land owners to the industrial barons, those who produced products in factories, provided the fuel to drive the machines, and the railways and ships to transport the goods and services.

During the last 20 years we have witnessed a new revolution. Wealth is being transferred from the industrial barons to a new type of business person. The wealthiest people today are not the Gettys, the Rockefellers or the Sultan of Brunei but the likes of Bill Gates, Larry Ellison and Michael Dell, those who deal in the sale, manipulation and transport of knowledge. It is a revolution that has changed the nature of business substantially. The Lisbon agenda attempts to seize the opportunity presented by this revolution to place Europe as the most competitive and dynamic knowledge based economy in the world. This is not an insignificant ambition; it is certainly an ambition that requires substantial change.

Knowledge differs from traditional types of tradable commodities. It is inexhaustible; the knowledge well is not going to dry up. Knowledge is auto-catalytic. Existing knowledge will stimulate the creation of new knowledge and more than any other commodity, knowledge is mobile. It does not require railways or shipping lines. With one press of a "send" button, I can transfer large amounts of knowledge to any part of the globe. Therefore, we are dealing with a commodity totally different from anything we have seen previously. This is changing the face of the industrial sector.

Another change is globalisation. It is no secret that for the past few decades business has been operating in a global marketplace. The sourcing of raw materials, resources, production, sales and competition must all be considered from a global perspective. Globalisation is a reality in the modern business world. Operations which cannot compete globally will not survive in the long term. It is now possible to design a prototype in a laboratory in Ireland, transfer the product protocol electronically to India, have the product produced in India and then shipped to markets anywhere in the world. It is a true global business environment in which we are operating.

Another change in the knowledge age is the way in which we treat our workforce. Human capital is now a major asset. It always amazes me whenever I ask the chief executive of a company what is his major asset, I am always told his people. However, the first time a company fails to make its quarterly targets the first thing the chief executive does is fires some of his people. Such a chief executive does not really believe people are the most important asset but this is changing dramatically because now human capital is a company's major asset.

Traditionally, companies invested heavily to maintain their machines. They ensured a machine, in which £1 million was invested, was maintained and worked optimally. Now they are looking after people. They are training, retraining, oiling and greasing the system to make sure human capital is maintained and operates efficiently. We are familiar with the term "empowerment". Human capital is coming to the front and centre of the business operation. Management has a responsiblity to deploy its major resources optimally and when human capital is the major resource, the way in which the company is managed will change.

The final change in the business environment is speed and agility. In the 1960s and 1970s cost price probably provided the most competitive advantage that any organisation could have in selling its products. During the 1980s it was quality for which people would pay more. Today, I argue that speed and agility are even more important. Cost and quality are now a given. We expect low prices and high quality but the ability to deliver a product rapidly and in the form a customer needs it are now every bit as important. People will subscribe to a catalogue company to buy a $20 shirt and will pay an extra $20 to have it delivered within 48 hours - they will not wait two weeks. People want products quickly.

Michael Dell has changed the way in which business operates. It used to be that a company would manufacture a product and then sell it but Michael Dell changed this paradigm. He now sells the product which he manufactures to a customer's specifications. He is flexible enough to change the paradigm in which business operates.

All of these factors are changing dramatically the way in which the business world operates and unless we change, we will not be competitive and the Lisbon agenda will not be delivered. I hate to quote Ronald Reagan but he came up with a beautiful quotation, namely, that status quo is Latin for the mess we are in. If we do not change, we will go nowhere. We have changed the business paradigm and are now dealing in an environment in which it is survival of the fastest.

How can Europe adapt to these changes and be competitive with the rest of the world? I argue that business must have two requirements, one of which is human capital. Business needs to recruit, develop and maintain outstanding human capital. I suggest the second is to have ready access to the research which will result in new products, technologies and services which will provide a window to new global developments. These are essential requirements for successful business.

Universities are pivotal to the meeting of these needs. The production and continual upgrading of graduates and research are the core missions of any university. No economy can be successful without an effective, efficient world class university system behind it. I mentioned the oil wells that drove the industrial revolution. Universities are the knowledge wells that will drive the knowledge revolution. It used to be that we asked why God had given the Arabs all the oil and the Irish potatoes. God has given us knowledge wells and universities - the core to our success in the knowledge revolution. The effectiveness of the university system will determine economic success.

I acknowledge that just as business must change and adapt to this changing business climate, universities must change. I must be careful because, like all university people, I believe very much in autonomy, the importance of universities being able to pursue their own agendas, embrace the principle of academic freedom in pursuit of new knowledge but this does not mean that they cannot change. It does not mean that they should not recognise the changing environment in which they are working, the changing needs of their students or the society in which they are operating.

Let me mention some of the changes taking place in universities. The first in the area of teaching and learning is the effective deployment of IT. Traditionally, universities have taught by having a professor stand in front of a classroom and pontificating, delivering facts and professing. It has never been the most efficient way to use the contact time between the teacher and student because what the teacher is doing in much of this interaction is simply delivering content. Now much content can be delivered by IT, CD-ROM, the Internet and a variety of other devices. The contact time between the teacher and student can be used to explore and understand those facts to ascertain how they can be employed. This is one of the major changes that has taken place in universities across Europe as we deploy IT effectively.

If we think of a university graduate as a product, most business people will look to add value to that product. What value can we add to graduates of our European universities? When I talk to employers and ask them what they want university graduates to have, rarely will they say they want them to know the second law of thermodynamics. They will say they want graduates to have communication skills, another foreign language, team-working skills, problem solving abilities, global awareness, citizenship, an understanding of a value system and understand European culture and values. Rarely are these elements introduced to the curriculum. We still teach the second law of thermodynamics, the only thing universities can teach, but what we are now doing is totally changing the way in which we teach to ensure we embrace and introduce these value-added extra-curricular skills to the curriculum. That will provide Europe with the workforce it needs and the highly trained, effective human capital that our industry needs.

Another change that has taken place and one that is pivotal to our future is what is generally known as life-long learning. When an employee joins a company, very quickly the information received will have to be upgraded on a regular basis. Universities, and certainly my university, now want to become partners of industry so that we work with the human resource department in human resource management to help the company to recruit the best person but also to work in career development to help that worker continue to increase his or her skills and abilities and contribute effectively to the realisation of corporate goals.

We also recognise a very important role for universities in retraining a workforce that perhaps has become redundant because technology has passed them by. These people are valuable and we have to invest in re-skilling and re-training them and giving them opportunities to participate in the new industries, technologies and economies that are emerging. That is another very important role for universities in this whole process. We want to give mature students, who through changing economic circumstances have been left behind, a second chance and the opportunity to re-enter the workforce with the skills they need.

The second major role for universities and the second core mission that I mentioned is research. I am sorry she is not here to hear the accolade but, as a result of the efforts of the Tánaiste, this country has invested in its research and, as a result, we have been eminently successful in attracting some outstanding researchers here. I do not want to put my own university to the fore but, as an example, we have been able to attract one of the top software engineers in the world. He moved his entire laboratory from Canada to the University of Limerick. In 18 months he is now employing 30 people as postdoctoral research associates. Industry is interacting with him and we are spinning off companies. This is what we can do if we invest in our research. We have just recruited a biotechnologist from Ohio state. Already he is hiring outstanding young scholars from all over Europe who are building up a critical mass of research expertise which will stimulate growth and development in our region. Research is pivotal and, with appropriate funding, we can attract and sustain outstanding researchers.

We have to develop close links with industry. We are partners in this game. The wall that used to divide industry and university is now broken down. A university is much more like a village pub, if I can use an Irish analogy. It is a place where people gather, explore ideas, become stimulated and excited and bring those ideas to the community to create a better world. That is what a university is. It is a catalyst and that is why it is so important.

Universities have to make sure that they understand technology transfer. One of the most misunderstood concepts within a university is technology transfer. Universities believe that, if they invent something, they have to get 90% of all of the income that comes from that intellectual property, yet it is business that is doing the investment and spending the money. It is a partnership and we have to understand how to effectively bring about this transfer of technology from the laboratory bench into products and into the marketplace.

European universities are vital to the Lisbon agenda, but we have a long way to go. I do not believe we are doing as good a job as we could. Before the Second World War, 89% of Nobel prizes went to Europe. After the war and particularly in the past 20 or 30 years, most of the Nobel prizes have gone to the United States. That is a simple measurement but it suggests we are no longer as competitive as we used to be in the frontline research. As previous speakers have said, we lag behind in our ability to attract postgraduate students from China, India and around the world. Many of our best PhD graduates from European universities, and we do an outstanding job in producing good PhD graduates, go to the United States. We are not providing them with the research environment which allows them to stay and develop.

Our universities are badly under-funded relative to the United States. It is about two to five times, depending on the country. The United States spends two to five times more per student than European countries. There is a drain of European PhD graduates to the United States. More foreign postgraduate students go to the United States.

My final message to this group is to invest in European universities. They are pivotal to the delivery of the Lisbon agenda and I suggest we invest in them before this knowledge well runs dry. I thank the Chairman.

Once again we have had a straightforward contribution from another person who is deeply involved in and passionately concerned about the areas in which he works. I wrote a book around 1970, published by the Institute of Public Administration, entitled Research in Ireland - Key to Economic and Social Development. It is great to see that come to fruition in recent years. It took some time to come into its own, so to speak, but as members can see, a different approach is being taken now by our universities.

A number of questions have been tabled. The first questioner is Mr. Gustavo Selva from Italy.

Mr. Gustavo Selva

I thank the Chairman. I apologise for taking the floor for the fourth time, but this is a perfect parliamentary system with two Chambers, a Senate and a Lower House, and since the Senators are not present I can take some of their time.

I was delighted with the dynamic presentation by our last speaker, a professor from the University of Limerick. He encouraged and incited us to do something similar to what has already been achieved here. We are in the same boat but, if we look at the world as a whole, we are not in the same boat because, while it is true that we have conquered certain degrees of modernity and modernisation of work which enabled us to dispense with physical strength by substituting it with machines, unfortunately, it is not the same story in Africa as in North America or in the Far East. It is not the same everywhere. We are in the same boat but we must ask ourselves what we are to do for the others because not even the boats of the others are travelling at a speed that would allow them to have the life we live here.

What do I mean by that? It is important that we focus on the Lisbon agenda to ensure globalisation does not benefit only a small portion of humanity, which Europe represents. Although, for example, the south of Italy is not at the same level as other parts of Europe.

The Tánaiste, Deputy Harney, is rightly proud of the results that a small country such as Ireland has achieved. However, the Lisbon Agenda is a task which we must accomplish. This will be done by defining the objectives with which we are all familiar. During this encounter they have been highlighted quite well. By 2010 we want to improve the Union's achievements in terms of research, development and innovation and bring investment up to 3% of GDP. In order to achieve that goal, the Council has stated that two thirds of that new investment should come from the private sector.

The European Council arrived at even stricter conclusions in March 2002, observing that to make up for the difference between Europe and its main competitors - Members know who they are - there would have to be a major increase in the overall research and development effort in respect of innovation in the European Union and that this would have to include special emphasis on high technologies. There is also a need, as pointed out in December last at the European Council meeting in Brussels approving the European action in favour of growth, for material investment in two main sectors, European infrastructure, on one hand, and research, development and innovation, on the other. We all agree on what is the material infrastructure. We are talking mainly about the two corridors, five and eight, which are going to give new impetus to the new countries that will be joining the European Union on 1 May.

The most defining characteristic of the Brussels approach appear to me to be the following: the institution of a programme to be launched quickly and the identification of a series of strict criteria relating to a provisional list of immediate action programmes; and the involvement of the European Investment Bank in the financing of the rapid application programme and the definition of the mobilisation of private resources with a view to financing projects as a cornerstone of the action in favour of growth. We must, by so doing, emphasise that it is not a question of giving up our national identities, European identities or the values that underpin our societies and economies; it is a question of associating this economy and identity with the logic of an economy rather than a global identity because we must remain Europeans who participate, with their rights and duties, in the system of globalisation.

I reiterate my thanks to the Chairman. I also thank colleagues who have taken part in our discussion and expressed positions which we largely share. As parliamentarians, we continue to develop parliamentary diplomacy which can sometimes seem too idealistic for economists and materialists. However, it is important in terms of helping the European Union achieve unity in national diversity.

Mr. Selva reminded me that Professor Downer has a DSc degree. Such degrees are decided by peer review on an international basis. When we went to assess the projects for research, I was then Minister for Education and we put together a team of peers in the area to assess the different projects put forward. This removed it from the local politics of universities or institutes and brought it to a higher, independent plane. It forced those seeking the moneys that were available to work as teams. Universities co-operated with each other and put their various experts to work together as a team to meet the standards and demands of the highest level peer review. This did a great deal in terms of raising the standard and ensuring proper use of the moneys.

Our next contributor is Mr. Gabriel Elorriaga of Spain.

Mr. Gabriel Elorriaga

I thank the Chairman. I have asked to contribute to this final debate with one objective, namely, to sincerely thank Members for their expressions of solidarity and commiseration with the Spanish people in respect of the recent tragic terrorist attacks in Madrid. I assure Members that the Spanish people understand fully at this time the need to continue the global struggle against terrorism, wherever it originates, in co-operation with our friends around the world, particularly our allies in NATO and the other member states of the European Union.

I assure Mr. Elorriaga that the expressions of sympathy were sincere and deeply felt. Our next speaker is Mr. Josef Jarab of the Czech Republic.

Mr. Josef Jarab

I wish to express my appreciation of Professor Downer's dynamic image of one university's impact as an institution and as a driving force behind the Lisbon Agenda. I was president of a university for seven years during the transition period and I am aware that this was not easy to make happen because universities do not change very easily.

The time is over when universities are considered ivory towers compared to the rest of society and industry. I am returning to a week of unrest at Czech universities, which began yesterday, where students initiated a rebellion. Their message is the same as that in Professor Downer's presentation. It suggests that we should be more active in helping the Lisbon Agenda or whatever transformation is needed.

However, I have a few minor warnings. As a humanist, I would ask where is the place for human sciences. European culture and values are mentioned but it is interesting that this subject is always at the bottom of the list. I do not think it should necessarily be the case. I agree that autonomy and academic freedom must be re-justified. We cannot continue saying it has been like this since the Middle Ages. I am sure Professor Downer will agree that we need academic freedom. However, we must readjust our views. We must prove to politicians and society at large that this is something which will benefit the whole of society.

If there are close links between universities, the economy and industry, we must speak about applied research. We should not speak about basic research. Who will monitor investment in cultural values, citizens' education and so on if universities are driven in the race for competition, money and the research that can flow from that? This is a serious problem. Having visited a number of universities, I can see that it is not easy for them to deal with the issue.

I do not know whether teachers delivering in the classroom should deliver content only. We all remember teachers who delivered a cultural or human message that shaped us more than the formula the teacher was giving us.

Professor Downer

May I respond?

There are just two more speakers, so we will take them all together.

I am tempted to respond to that aspect. What Mr. Jarab said will now happen at approximately the age of 15 rather than later. I see this happening in regard to my grandchildren because they have gone through that period. There is so much knowledge readily available to children that what one wants from teachers is culture, advice and understanding on how to handle matters. This is not just happening at university level, but earlier. Teachers must adapt to this in the future.

We will take all the answers together and I will say nothing at that stage. There are two further questions, which will complete the questions session. The fourth question comes from Liisa Jaakonsaari from Finland.

Ms Liisa Jaakonsaari

I am from Finland, the most competitive country in Europe. I thank the Chairman for his kind words.

The Lisbon strategy is very ambitious. Listening to Professor Downer, it should be more ambitious as far as harnessing human resources is concerned. I am not sure whether these political statements are true and whether we want to put these ideas into practice. I share the anger about limiting the movement of people from the new European accession countries. I agree with the Tánaiste that we should be more tolerant and willing to attract people into Europe rather than dividing Europe by limiting the free movement of people. The Irish President should state that this is not a good policy.

My question concerns universities. Why have European universities lost popularity? Fewer students come from outside Europe to study in European universities than apply to study in universities in the States. The Tánaiste, Deputy Harney, said that we must try to attract new brains to Europe. Our universities have lost their competitiveness. I would like to ask Professor Downer the real reason for this and how European universities can attract students from outside Europe. The presentations give us all food for thought.

Ms Annemnie Neyts-Uyttebroeck

I begin by thanking all the contributors to this very interesting debate. I have been thinking about the lessons politicians can draw from what we have heard and what comments we can make. No one defined precisely what is meant by competitiveness, except to say that it means to be first. It has not been defined any further, which is surprising.

The Tánaiste, Deputy Harney, gave an important message when she said that tolerance towards newcomers is an important element of development and growth. It strengthens what my Finnish colleague said. It is something we should take on board as politicians. Our reluctance to face the issue of economic immigration will not help our common development. This is something we should tell the general population, which we generally do not. On the contrary, many of us strengthen their fear.

Another item which was referred to was the European patent. I worked on this aspect when I was a member of the internal Council of Ministers for more than a year. Why is it taking so much time? It is taking so much time because it is a qualified majority item, not a unanimity one. In spite of the fact that it is subject to qualified majority, people cannot agree because the sum total of the various national interests - sometimes petty or important such as which language the person requesting a patent should be allowed to use, which to me is a fundamental issue - makes it impossible to make any serious progress on the matter. Outside the room, everyone agrees it is an important matter.

The heads of State and Governments, every six months, state the matter is extremely important and that it must be concluded within the next semester or Presidency. However, that has been said every six months for 20 years. Once among their own Council of Ministers they agree they must protect their own national interests. That is why it does not succeed. That is an important factor.

When it is stated by American universities that there is more money available per student, we should not lose sight of the fact that American students pay much higher tuition fees than the average student in Europe. There is a link in that regard. We need to face the hard choice of whether we want universities that are widely accessible, financially at least, to large portions of the population or whether we want the type of elitist universities where one pays €20,000 or €30,000 per year. We need to make that choice.

The question was asked as to why universities are no longer as popular as they used to be, an issue with which I have been faced in Latin America and Asia. There are several reasons. First, Australian, New Zealand, Canadian and American universities are better known because they advertise in newspapers and on television. Second, they are more generous with grants and, third, whatever our feelings regarding the policies and politics of the US, culturally speaking, the US is the major focus of attraction for youth throughout the world. That is important. It points to the comparative cultural dynamism of countries and cultures, something about which we need to think.

Thank you for your questions. We will now ask the three speakers to answer in turn. On the question of drawing in researchers, it is important to do the kind of thing of which Mr. Redmond O'Donoghue spoke. One has to be genuinely interested and has to develop one's interest. One has to make access easy in every way possible, including access to the particular country, where the person will reside and so on. Perhaps we do not do enough in terms of the total package needed. It would be worthwhile to spend time on that issue.

I will now ask Mr. David Begg to reply on behalf of the speakers. We will then move on to the other speakers.

Mr. David Begg

I will deal with a number of the points raised. My colleague from Italy, in the course of his opening remarks, raised the difficulty of trying to ensure globalisation brought economic benefits to the poorest parts of the world. I would like to offer a view on that point.

There is a real danger that the progress currently being made in India and China will mean that regions such as sub-Saharan Africa and Southern Asia will be relegated in importance and considered to be basket cases. I will explain what I mean in that regard. The United Nations and the developed world have adopted the concept of millennium development goals which means that by 2015 certain standards will be achieved in terms of halving the number of people living in absolute poverty, access to education and so on. There are approximately seven such goals. The possibility is that some of those goals will be sufficiently achieved through progress in China and India that it will appear that great progress has been made, whereas the more difficult regions will remain out in the cold.

The reason it is so difficult for globalisation to work for those countries is that the whole possibility of integrating them into the global marketplace is extremely difficult; the infrastructural deficits of most countries involved are enormous and the institutional framework is extremely weak. The civil service, judiciary and all other things which normal developed countries regard as being essential have been hollowed out; many of them are shell states.

The developed world is responsible for much of this because the structural programmes conducted on behalf of the World Bank and IMF were an absolute disaster. The solution lies in a multi-faceted approach embracing an openness to trade, which we all know is an extremely contentious issue, particularly in the agricultural sector, and in terms of aid, debt and governance. The quality of governance in developing countries is a big issue, a subject for debate on its own. History may well record as the great failure of liberal democracy that it did not succeed in reducing inequality in the world either in terms of the developing world or the developed world.

Roger will deal with the questions regarding universities. People spoke of the amount of knowledge young people have. It strikes me, as a layman, that facts and knowledge are not necessarily the same. The process of assimilating facts into a useful knowledge base is more complex than we appreciate. The only analogy I can think of is when young people first learn to drive, they think they can do so successfully and they whiz around and generally get into trouble and cause accidents. There is a certain amount of experience and maturing of these facts into a knowledge of how one does things.

I am one of the few people who believes it is important for a university to be independent and to be a source of new ideas and of humanities, of enhancing the good of all society. My fear for the universities is that they will become assimilated in the cause of business and abandon the greater task for which they were established. A famous man in Ireland, Cardinal Newman, many years ago laid out in great detail what should be the basis of a university. Without going into more detail, he raised a deep and philosophical question.

Part of the problem for our universities is the issue of finance. There are two reasons for dealing with business: to try to promote the objectives of which Roger spoke in terms of the Lisbon Agenda and to obtain funding. Many of our universities have halls of residence and many parts of the campus are named after millionaires, with one exception. Roger's has a department of business named after a local socialist, a unique thing. Every other university in Ireland has buildings named after millionaires but Limerick's is named after Jim Kemmy——

He was a parliamentarian.

Mr. Begg

He was a very good one, Lord rest him. Perhaps the reason is that his sponsor was one of the prominent people involved in national hunt racing, a point made here earlier.

I am concerned about this issue. As I said this to President Downer and his colleagues, there is in some respects a huge danger in such a linkage. It creates an unacceptable obligation on public comment from universities to express a particular, philosophical, political kind of view. There are also practical questions.

People have referred to the attractiveness of the United States universities much of which has to do with the resources they have. Some of the foundations which run the US universities are so incredibly wealthy that universities in this part of the world cannot compare with them. They have, therefore, a natural attraction for students. Funding is a contentious issue here and in the United Kingdom, where there has been recent controversy regarding the introduction of top-up fees. The issue has still to be resolved. We have yet to decide whether to opt for private funding or to increase taxation in order to provide revenue centrally for the running of the universities.

The final matter on which I want to comment is that raised by my Belgian colleague with regard to competitiveness and its definition. It is correct to say that it is difficult to get a succinct definition. I pointed out in my contribution that I did not believe Europe had a competitiveness problem as such but that it was a problem for individual countries. Individual countries are different and so too is Ireland, which has an extraordinary relationship with the wider world. All our macro-economic linkages are with Europe but all our micro-economic linkages are with non-euro zone countries such as the United States and Britain. Our links with the United States are in the areas of markets, tourism and foreign direct investment while our link with the United Kingdom sterling area is best exemplified in the fact that 40% of our exports go there. This puts us in a unique position.

Approximately 10 to 12% of Europe's overall exports are outside of the region. For those interested in the subject, Adair Turner, former director general of the Confederation of British Industry, has written a fascinating book called Just Capital in which he debunks comprehensively almost all of the present theory about competitiveness. As he is a liberal by conviction I do not recommend him because he is unsympathetic to my views. He says that competitiveness councils, etc., are nonsense. I recommend the book to anybody who wishes to study the question. It provides a stimulating and different perspective on the issue.

I agree with what Mr. Begg has said with regard to the university area. I came from a research background originally and I agree that the area should not become assimilated into business. It is crucial that research should retain its personal integrity. Finland has been mentioned in the research context and I collaborated with a Professor there for some years in the 1960s. Just as UL president, Mr. Downer, is attempting to give leadership in the area, other university presidents must try to do the same. I am sincere about this. If leadership is given by the universities, people will be happy and the other question will not arise. The issue is to keep in the forefront and to be seen to do both.

I will concentrate on the globalisation and competitiveness points raised around the table. I will first, perhaps, strike a discordant note with my colleague Mr. Begg because I live a life which means that I know what competitiveness means every waking hour of my day. It is a difficult and important issue and it would be a mistake for anyone to leave this room believing it to be otherwise.

In some European countries, particularly Ireland, for reasons we all understand, we have a high cost economy and a strong euro. We also face an enormous emerging threat from the Far East, particularly from the People's Republic of China. While a threat, this is also an opportunity. I come up against these issues in the marketplace every day. The issue is real rather than academic.

We ship approximately €130 million worth of product from Ireland to the United States every year. Therefore, in terms of currency, we face exposure twice, first, in terms of the translation of profits in the United States and second, in terms of the value of that transaction. With the euro as strong as it is that is penal. Competitiveness is therefore very definable and I would be happy to elaborate on this aspect in another arena.

The emerging threat of China touches on the issue of globalisation. Globalisation is one of those pejorative terms that have emerged in recent times and there is a question as to its definition. There has been a change in perspective regarding some of the discussion in America at present, particularly in the lead up to the election. One cannot discuss globalisation or China in the United States without talking about Walmart. A combination of Walmart and the People's Republic of China has led to deflation and low prices, which is good for the consumers - the American way. Recently, however, there has been a notable swing in the discourse. The questions now being asked concern the recovery of the jobs market. People are asking where the jobs are going and whether deflation and what is good for the consumer is really good for America. More and more industry is being sent offshore.

It behoves all of us all to talk more about the issue. There is no doubt that China will drive a dagger through the heart of manufacturing industry in the United States and Europe. We must be aware of that. In a macro sense, jobs for people who have been underprivileged and impoverished in China are as good as jobs in any other part of the world and are just as important. However, I would like to see the creation of a level playing field about which I spoke earlier.

With regard to competitiveness, and bearing in mind that China will play a large part in our future, I believe that in 20 years we will have three huge economies, the United States, the European Union and China. China is extraordinarily competitive in terms of wage rates, particularly in the textile industry, which it dominates. There the wage rate is 40 cents an hour, about one third of the level of Mexico, the previous low cost producer. When we study China, as I am sure many here have done, one almost begins to wonder whether one should despair.

However, one thing China does not have which the United States and Europe have is - I regret returning to my earlier remarks - branding and marketing. China is a contract manufacturer for a great deal of the rest of the world but it has not yet created its own brands. This will take a long time as China does not appear good at branding. A Chinese mobile phone brand sponsors Everton football club but it will take many premiership wins - which is not likely to happen quickly - for that brand to become an international branding success.

In terms of a definition of competitiveness, it is a very wide subject and concerns not just price, quality, design but also branding and marketing skills which, thankfully, Europe has in abundance. That dovetails into the discussion about the role of the universities which one contributor stated was a little too focused on the issues of hard research and development. One of the great points of differentiation which the EU has and can continue to have, is a major focus on branding. The third-level organisations such as the universities have a huge obligation to ensure that it is improved, honed and finessed.

The question of not giving up our national identity was raised and I am in agreement with that sentiment. Anyone who was in Lansdowne Road last Saturday or Twickenham would know that those things have not changed. The cultivation of an EU identity is evolving. I am very proud to be European and I become even prouder when I am abroad, and I am frequently abroad. There are not too many opportunities to see manifestations of an EU identity but it is beginning to be seen. One place in which I have seen it is in the Ryder Cup, which comes to Ireland in two years' time, when we hope to see the delegates return. The Ryder Cup is Europe versus the United States. It is intensely competitive but also good fun. The question of identity is an emerging issue. Most of the other issues raised concern the universities and I will bow to greater knowledge.

Professor Roger Downer is the final contributor.

Professor Downer

I picked up several points from the questions asked. I will begin with the question asked by my Czech colleague, a former rector who is looking remarkably well. I hope I will look as well at the end of my tenure as a rector. The first point he made was that areas other than science and technology must be important within the agenda of university; there has to be a place for humanities, for social sciences and for these disciplines which have such a humanising and important civilising effect upon society. I would not like it thought that we are neglecting these disciplines. The philosophy which we have adopted in my university and which is becoming increasingly common across Europe, is that we cannot be good at everything and so we have to specialise in a few fields.

In consultation with my humanists and social scientists we have tried to identify the areas in which we would seek to develop a speciality. A number of areas emerged of which the first is integration. It is an issue that will be of enormous importance to Europe and to society. How do we integrate migrants into our society but how also do we integrate the new technologies into environments where they have not been used before? We are developing a research centre along the concept of integration, looking at all the factors that might be involved. It is providing an opportunity for social scientists, linguists and people from a great variety of backgrounds to come together and contribute to this field.

The second issue which I think will be of interest to David Begg, is work. Everybody works but we do not know a great deal about what makes a productive workplace and about the kinds of incentive programmes that work best in the manufacturing sector versus the services and IT sectors. How does the work environment in Scandinavia differ from the work environment in the Mediterranean region or Europe or the United States? How does contract law differ in these different environments? We are asking a number of questions around the concept of work. My university has also inherited a fine music programme so we are examining music as one of our centres and looking at world music and the common strands between music from different regions.

A recent development in my university is what we are calling sustainable enterprise. It arises from what is happening in New Zealand where companies in their annual report are reporting not just the bottom line financially but also identifying what they have done socially and environmentally during the year. Shareholders are now demanding this information of their companies. We want to look at what drives this, whether it is shareholder pressure and what is it that prevents other companies from doing the same. We are looking at the whole concept of sustainability.

The second point made was about academic freedom. I will be the first to admit that a great deal of shoddy research is done under the guise of academic freedom but that does not have to be the case. What I would distinguish is the difference between good research and bad research and I do not even identify applied research and pure research. Good research is when people ask good questions and carry out a rigorous series of experiments or analyses in order to get answers to this question. If my people are asking good questions, I do not mind if it is applied or not.

David Begg referred to the danger of industry determining the agenda. In my experience, chief executives do not try to tell me what to do in the university; in fact they respect very much the autonomy of the university and recognise that if we had been pursuing simply corporate goals, we would have followed vacuum tube technology to the ultimate and we would never have had a transistor. The new innovations and ideas come from blue-sky research. I believe every chief executive would agree that this is very important and they will encourage it.

I would also argue - this is probably a dangerous argument to make in this environment - that it would be preferable to have a diversity of research funding than to rely solely on government. If I was in the United States at the moment, I would not like all of my research to be dictated by the Government. Having alternative sources of funding such as industry is very important.

I agree with the questioner that no single style of teaching is ideal. He mentioned the danger of simply using IT; that is never what I intended to say. We have students of different backgrounds, we have different courses and different ways of teaching and, of course, we use all of these techniques, depending upon the students or upon the teachers. My point is that IT offers another advantage to improve the pedagogy presented within the university.

Our colleague from Finland mentioned the difficulty of attracting students to Europe and our colleague from Belgium provided part of the answer. Part of the answer is marketing. Certainly when one goes to Asia or to some of these countries, one sees magnificent presentations from Australia, from the United States and from Canada. We are behind the ball in this; we are simply not doing it. That is not the only factor. We make it difficult to bring students into Europe. Visas are much more difficult to obtain. In Asia if a student goes into a recruitment fair and expresses a desire to go to Australia to study, they will have the visa approved within 48 hours. In this country it sometimes takes three months to get visa approval and by that time the student has lost interest and accepted an offer from another country. We have to reduce the amount of bureaucracy that is involved in bringing a student into this country. There is much to be done in that regard.

Scholarships help but we do not have the resources to offer scholarships to these students whereas Australia and the United States are offering them free residence and all kinds of benefits. In Australia I believe the figure is €3 billion a year for income generated through foreign students. This is a market which we are not tapping although we are beginning to do so. My university has just signed a deal with one of the largest technology parks in China, just outside Shanghai. We have agreed to bring 100 postgraduate students in computer science from there every year. We are making a start and there are opportunities for Europe here but we have not been as effective as we should. I do not understand why this should be the case because Europe has so much to offer, in culture, history, music and literature. Europe has a wonderful legacy and cultural heritage and we should market this. We should tell students around the world that if they want to come and study where it all began, then Europe is the place. There are tremendous marketing opportunities in this.

On the question of funding raised by the Belgian representative, no government can afford to fund universities at the level that is required, so we must look at alternative sources, which gets us into the thorny issues of fees and private sector investment. One of the glaring differences between European universities and North American ones is the lack of investment by the private sector in universities. While in Europe alumni contribute considerable amounts of money, those graduating from an American university are told they were able to attend that university because their predecessors put money back into their institution. That culture does not exist in Europe and this will have to change, otherwise we will suffer. I believe I have addressed most of the issues raised.

We have spent two and a half hours discussing this subject and all have been stimulated by what we have heard despite a late night of festivities last night. I thank all the delegations for their participation and the officials for their support. I also thank the interpreters for the wonderful job they did throughout the conference. I particularly thank David Begg, Redmond O'Donoghue and Robert Downer. We have had the highest quality of contributions and they deserve a round of applause for giving their time this morning.

We started with the ambassadors from China, Russia and the United States of America. In many ways everything we have heard since has re-emphasised the wisdom of listening to the views from outside the enlarged Union. These views were particularly interesting and we have copies of their papers.

People often wonder about how Ireland has such a relationship with the United States. Ireland is only about 133 miles from east to west. For someone in Galway looking across the sea, the next parish to be seen is Boston on the east coast of the United States. There is another reason, which was mentioned at our function last night. The three ambassadors attended last night's function, two of whom brought their wives. The wife of the Chinese ambassador had gone home to mind his parents, which is a great tradition they have maintained.

A friend of mine spoke to the American ambassador about his uncle, Jimmy. When I introduced the American ambassador on Sunday night, I mentioned he had been involved in business and in an extension of O'Hare Airport in Chicago. This was the busiest airport in the United States at one time and remains one of the top three. My friend, who comes from County Cavan, spoke to the ambassador about the work he had done at the airport. He advised the ambassador that his uncle had been there between 1928 and 1930 during the depression and remained for a long time afterwards.

His uncle sold the field to the authorities in Chicago for the airport. He owned a farm there and, I presume, along with a number of other fields his was absorbed into this great new development. My friend's uncle had to move his house twice afterwards, because having moved, the airport kept expanding and he had to move to other parts of his farm. Only in Ireland is it possible to find people with the kinds of connections to the many millions of people who have gone around the world. Some 74 million of Irish origin live around the world with only about 4 million here in the Republic and 1.6 million in Northern Ireland. This is probably why we are so outgoing. We look out to the world and have friends all around the world. We get on particularly well with people in Europe. We see ourselves as Europeans as Mr. O'Donoghue has said and we believe strongly in the culture.

I hope the delegates will have had an opportunity to enjoy themselves while in Dublin. I will not try to summarise, as we will provide a record of proceedings at a later date and the individual papers presented are available to everyone. We spoke about the neighbours after enlargement, on which a wide range of views was expressed. There was some consensus that following the accession of the three candidate countries into the Union, the next priority for enlargement in practical terms will be the western Balkans.

Delegates emphasised that we should maintain an open door policy and should not close this option to potential applicants. The prospect of membership, if used wisely, can be a very strong tool to promote positive change in our near neighbours. We include Africa and I thank those delegates who welcomed its inclusion. It is hugely important for all of us who are doing good work there. The European Union is spending the greatest amount of money there per head of population. Collectively we do not sell it very much and we have much more to do. Throughout Africa the European Union is doing some extraordinary work

We had a very good panel of speakers. Clearly we as parliamentarians have an important role in encouraging our governments to meet the millennium development goals if we are serious about it. While we may argue about problems with the UN and the need for reforms of different kinds, ultimately they need the money to do the work on our behalf. I was interested to hear that many of our governments are setting time-limited specific commitments to move towards the UN goal of spending, which is 0.7% of GDP per annum on development aid. Ireland has made a commitment and has already reached 0.41%. We must ensure we keep going.

It is important that the committees monitor progress on this matter and keep up the pressure as otherwise it may be lost. We also have a duty to ensure the development aid is allocated and spent wisely and that efforts continue to eliminate waste where it may occur. This means our committees should visit the countries in which we are involved. The Irish committee has been doing so and will continue to do so, as the visits have been particularly enlightening

I hope the delegates enjoyed and were stimulated by the contributions on the Lisbon Agenda. I thought they were excellent. I am conscious of the involvement of the people there. The key message is that much work remains to be done, but that there are grounds for optimism. It seems clear that Europe should not simply try to emulate the United States, but might find more relevant economic models by drawing on the recent experiences of the member states. As Mr. O'Donoghue stated, we are behind the United States overall, yet some of our countries are ahead of the United States. It is therefore a matter for us to spread the technology, ideas and practices so Europe as a whole will prosper, particularly the new countries joining us on 1 May. We have a very serious obligation to communicate with them, advise and assist them in every way possible, and advance the position of the three other countries that hope to accede to the Union. I do not know how matters are progressing in Switzerland and I hope the discussions are going well.

The Taoiseach, some Ministers and the Deputy Prime Minister were present. One will note that the Taoiseach is deeply involved, very committed and very practical. He has adopted a no-nonsense approach. Perhaps we have been too philosophical for too long about too many of the different issues. We know many of the things that should be done and how to do them and, given that we have the expertise within and between our countries, we should get on with the job and stop thinking about it. The contributions we heard this morning indicate that this is the way forward.

Coffee will be available outside at the end of the proceedings. It was supposed to be at 11 a.m. but it is now 11.45 a.m. Two and three quarter hours have elapsed at this stage. It is only a short walk across to Christchurch Cathedral and there is no point in bringing the bus so we will gather together after coffee and walk across. We will be given a tour of the cathedral and will have lunch in the crypt, which is just across the road from the castle. Coaches will be available to bring delegates back to their hotels after lunch.

I thank the delegates for attending. Every country attended except the two countries which have had difficulties. They have just had elections and do not yet have committees, as one will appreciate. There has been excellent attandances and great participation. I hope the delegates enjoyed being with us in Ireland. There are many more things we could do. We could sing a few more songs but one may have been out too late last night.

One can see from our leaders in industry, the trade unions and our universities that we have very capable people. On 1 January 1990, almost immediately after the fall of the Berlin wall, we assumed the Presidency of the European Union. Our Taoiseach at the time was Charles Haughey, who said to us that there was an obligation on us to meet the countries concerned, discuss various matters with them, show them what we had learned and help them integrate into Europe. I spent a good deal of time in the Czech Republic, formerly known as Czechoslovakia, and we worked very hard on this. One can imagine the great privilege it is for us to have the accession occurring during our Presidency and all the countries concerned moving forward so well. It is also a privilege for us to assist and encourage them in their further development within the European Union. After accession, we must look to Romania, Bulgaria and Turkey and address any of the difficulties and barriers that exist. One has to surmount many barriers to make progress, but we are well capable of doing so.

I look forward to the accession of Bulgaria in particular. In 1969 I attended a research conference in Plovdiv in Bulgaria where the delegates shared their research on agricultural development, crops and compost. It will be a great privilege for me to see Bulgaria entering the European Union. There is much work to be done between our countries and a great deal to be achieved.

I thank everybody for participating and I thank our very distinguished speakers for giving us of their time, energy and interest. Go raibh míle maith agaibh go léir, which is the Irish for "Thank you all very much."

The conference adjourned at 11.35 a.m.
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