Léim ar aghaidh chuig an bpríomhábhar
Gnáthamharc

Seanad Éireann díospóireacht -
Wednesday, 7 Mar 1984

Vol. 103 No. 4

Developments in the EEC: Motion (Resumed).

Debate resumed on the following motion:
That Seanad Éireann takes note of developments in the EEC during 1983.
—(Senator Dooge).

I have no objection to the Minister for Justice listening to the debate. Before the adjournment I was going to suggest that quoting figures related to a local issue might make it easier to understand the implications of the super-levy on this country. I was going to relate some figures which I got from Avonmore Creameries which might bring home to people the ferocious problem that would have to be faced if the super-levy, as proposed, was brought in.

Avonmore Creameries take milk from the south-east area. They have 6,000 suppliers and 1,396 employees. If you consider that on each farm there would be approximately two people engaged in the production of milk for the creamery, you are talking about 12,000 people directly working on the land and 1,396 people in the processing plant. In 1981, the year on which the super-levy was to be based, Avonmore Creameries had an intake of 101 million gallons, and based on accurate projections for 1984 the intake this year will be 138 million gallons. The increase from 1981 to 1984 would be 37 million gallons. The levy was to be at 70p per gallon; 70p per gallon by 37 million is £25,900,000. If you divide 6,000 into £25 million you get an average of £4,200 per farmer. Naturally, this would mean that some farmers would have a much bigger drop in income and others would get a smaller drop in income and there would be a drop in the numbers employed in that particular industry. Almost £14 million per year is paid out in salaries and wages by Avonmore Coops and of that £14 million, £4 million is paid to the Exchequer by way of PAYE and PRSI contributions. Avonmore also pay £171 million to the Exchequer by way of tax on profits. This brings home to people the magnitude of the possible effects of the super-levy. If one takes it that the drop in income would be £25 million, and that Avonmore take one eighth of the milk production, it is easy to multiply that and one gets a loss of £200 million per annum to the suppliers in this country. The imposition of this super-levy would have a disastrous effect.

Everybody is fully aware of the fact that there will have to be modifications made in the method of financing the European Parliament and the European Community and that Ireland will have to play her part in the modification. I do not think there is any doubt that the Irish farmer and the Irish people are prepared to pay in a reasonable amount in order to get a reasonable amount out. It cannot be suggested by anyone that there should be an equal share paid by each country because the overall principle of the EEC was to raise the standards of the poorer countries to the standards of the richer countries. Therefore the richer countries must pay a substantially bigger share into the EEC. Suggestions have been made in the last few days that the VAT rate should be increased from 1 per cent to 1.8 per cent or 2 per cent. We would agree with this increase as long as readjustments were made in terms of what CAP is involved in at present. The bigger countries are complaining that all this means is that they would be paying more into the EEC budget. They did not say they would be prepared to put the extra amount in if there were changes made in CAP. Since the EEC are running out of resources very quickly a radical change will have to be made in the method of financing. Possibly the best method would be to increase the VAT rate from 1 per cent to 2 per cent.

Ireland, in terms of her production of milk, is in no way a major cause of disruption in the EEC in terms of the amounts of money required to subsidise CAP at all levels. The imposition of the super-levy on milk production would mean a complete blockage in the expansion of our production and of the dairy sector in general. We have one of the most under-developed dairy sectors in Europe. It must be recognised that unless Irish farmers are subsidised to a degree they will not be able to bring up their levels of production to those pertaining in the EEC.

It must be remembered also that a bigger percentage of Irish farmers are dependent on the dairy sector than in any other country in Europe. Fifty-three per cent of farmers in Ireland are dependent on milk production. The EEC average for farm holdings with dairy cows is 35 per cent as against 53 per cent here. The average cow herd is much smaller here than it is in any other country in Europe. Over 85 per cent of Irish dairy farmers have less than 30 cows compared with 46 per cent in the Netherlands and 35.4 per cent in the United Kingdom. It must equally be remembered that the beef trade, which is of vital importance to us, is highly dependent on our dairy industry. Eighty per cent of all beef produced in Ireland comes from the dairy herd. The super-levy, it is estimated, would put 14 to 15 per cent of Irish milk production out of existence, with serious employment consequences, apart from anything else, at a time when unemployment is such a major problem for us.

In the EEC the biggest proportion of the budget has gone to the agriculture sector. It is logical that there would be a big move to get the percentage that is given to agriculture brought down. Of course, we are trying to keep the subsidy to farmers and to milk production up and, at the same time, we are trying to fight to keep food prices down. There seems to be a total conflict there, but nevertheless, I think that on balance it is to the advantage of this country to have the subsidy rather than the subsidy on production and on increased production rather than to allow the prices of the commodity to creep up, thereby exacerbating the problems we have with inflation and the cost of living. On balance we must look for the super-levy not to take effect, but there will have to be adjustments made which will give enough cash to the Community to keep going.

We recognise the fact that remedial measures are necessary to redress the financial situation. Milk production accounts for 33 per cent of gross agricultural output, and milk output is six and a half times more important to Ireland than overall milk production is to the European Community as a whole. Milk in Ireland is four times more important to the Irish economy than Danish milk is to the Danish economy and three and a half times more important than Greek milk is to the Greek economy. The importance of milk production in Greece and Denmark is next to Ireland in the Community. Milk and beef output in Ireland is five and a half times more important than it is in Denmark and four and a half times more important than in Greece. These figures thrown out may seem boring and irrelevant, but nevertheless they show that we are not in a favourable position in terms of our production levels and our GDP, vis-à-vis any other country in Europe.

One half of all farm families in this country depend on milk as their sole regular source of cash income and the other half almost in its entirely on cattle and beef production. The dairying sector is of paramount importance and it is of paramount importance that it be protected. The situation which has arisen because of the threat of the super-levy is that we have in this country a dissatisfaction level with the EEC which is far greater than it has been at any time since we went into the EEC in 1973. There were a number of people who claimed that we should never have gone into the EEC. I do not subscribe to that idea. I do, however, agree that unless measures are taken now, the value we have got through the years from the EEC will be dissipated. For every £1 that we put into the EEC we get £5 back, so if we get out of the EEC it is very hard to know where that amount of money will come from.

As I said at the beginning, I was very disappointed that the Minister's statement did not take unemployment into account at all. There is not one single page in the Minister's speech of 29 pages which deals with the unemployment situation. That is something to which we must address ourselves in this House, but since we are talking about what happens in the EEC I think that is a matter which the EEC will have to spend a lot more time on in the future, because when one looks at the 4½ million people under 25 years of age unemployed in the EEC and of that 4½ million unemployed, 1½ million have been unemployed for more than a year, the magnitude of the problem becomes apparent.

In the Commission's programme for 1983-84, they set out a list of themes, and I feel that not one single item of their programme has been, to any extent, improved during the 1983-84 period. They set out five inter-dependent categories for priority action: (1) Improving the general economic and social environment; (2) Completing the single market; (3) Restoring industry to a position of strength; (4) Reinforcing the Community's budgetary and financial instruments and (5) Enhancing the Community's influence in the international environment. I would suggest that not one of those objectives has been advanced in any way. The Minister in his speech made much about the foreign policy improvements that have been made during the year, but I do not think we have had any progress. The Minister in his speech — I think it is important that we should dwell on it for a few minutes — mentioned the enlargement situation and welcomed the fact that advancement had been made in the bringing in of Spain and Portugal. In terms of enlargement we have to be very careful because of our very bad economic situation. It must be said that industrially we would be at a disadvantage vis-à-vis Spain and Portugal if we went out looking for new industry. Unless adequate protection is given to Irish industry within the enlargement proceedings, when Spain and Portugal come in it would seem to be of more advantage for firms wanting to locate in Europe to go to economies like Spain and Portugal where they will have cheaper labour and where they will not have the same problems in terms of transportation, as they would have here. Unless we have, within the Community, decided upon a proper budgetary basis, the Community does not have any right to bring in anybody else. All we would be doing is dissipating the benefits that are there and creating more and more problems for our own country. Indeed, on 17 February, the Evening Herald had a paragraph which stated that the Israeli economy will be damaged irreparably if Spain and Portugal come in because of the fact that they would then be at a trading disadvantage vis-à-vis Spain and Portugal because of the amount of fruit and vegetables that are now coming into the EEC at about the same level of support as is being got by Israel at present.

It is interesting to see that the Agence Telegraphique Juive of 8 February 1984 contained a report in relation to an important aspect of the EEC — the EEC-Israeli agreement in the context of a decision regarding a possible free trade agreement between Israel and the United States. Mr. Elmer Wilson, Chairman of the Committee for Economic Relations for Israel and former Chairman of the American Jewish Committee, was invited to give evidence to the Senate Finance Committee.

According to the agency report Mr. Wilson explained that the projected free-trade agreement between the two countries would open new export markets for American industrialists and new possibilities for research and development for American industrial laboratories. He went on to say:

Thanks to the Free Trade Agreement which Israel enjoys with the EEC, American industries will be able to be competitive in Europe, after their products have been manufactured and finished in Israel.

If what has been stated by that agency is correct this would mean major problems for us.

We must be very careful, if we are going to make agreements with countries which are outside the EEC, that they are not going to be to the detriment of our economy. Member states have been allowed by the EEC to make trade arrangements with countries outside the EEC which have been to the detriment of the EEC. We would not be in the same situation vis-à-vis the super-levy if arrangements had not been made with countries such as New Zealand, countries which are allowed to export cheap food to Britain. In the dairying sector there are subsidised foodstuffs coming in which are being used to feed cattle on the extensive farms of France and Holland. We must be extremely careful that enlargement of the EEC does not further disrupt the progress we have made in this country.

The Minister made reference to hunger in the world. When we talk about hunger in Ireland, it is relative hunger. Anybody who has been to a Third World country would not suggest that the hunger that exists there is in any way comparable with the hunger that exists in Ireland. We in the western world, irrespective of whether we feel we are developed or not, will have to look at the Third World and the problems they have in relation to the production of food. In parts of Africa you have whole communities dying of starvation. Right through Central Africa, there are large areas of land reverting back to the desert and hundreds of thousands of people are dying of hunger. We as a country will have to be more aware of the problems that exist in the Third World, and treat it not just as an area from which to get business to help our economy. We will have to see that the European Economic Community adopts the attitude that if we are going to trade with countries in the Third World it will have to be on a two-way basis of trading; that we will supply them with the expertise and knowledge that they require to get out of their difficulties and that, as a quid pro quo they will supply us with materials we need.

What is happening in trade in the Third World at present as regards the EEC countries in general and the Western world in particular, is that there is a colonisation process continuing whereby the Third World countries are being milked of everything they have. The only difference between now and one hundred years ago is that the people who are doing the milking do not live in these particular countries. We must ensure that when we have used up the energy resources they have in the Middle East and in the African countries we have given back to these countries something which will enable them to retain a standard of living comparable with what we would expect here.

The Minister made no reference in his speech to our neutrality situation and our attitude towards neutrality. Apart from unemployment, the younger people in our community see the nuclear problem as the major one of the day. Whether nuclear weapons are short range, medium range or long range does not matter. Every extra nuclear weapon placed on the territory of the EEC creates a threat to the future of the world, to our future and to our children's future. Our young people are very much aware of the dangers. There is no point in saying those weapons are placed there for deterrent purposes. You could say that is the argument of the bully who has to hit first just in case somebody might get the idea that he is the weaker person. We will have to address ourselves continually to the nuclear problem and voice our opinion in Europe that we do not want those weapons, that they are not needed and that they are not a deterrent.

We must equally condemn the number of missiles that have been placed by the USSR in countries in Eastern Europe and right throughout the periphery of the Middle East. At every forum that we can, we must ensure that what has happened in the last 12 months when weaponry of this type has been allowed to proliferate all over the world will not happen again. It is very hard to stop this. We read yesterday that the United States sent a plane with nuclear missiles without the warheads over Canada and the Canadian Government were not in a position to stop them doing so. It was stated quite categorically that they used Northern Canada and Alaska as being the type of terrain that these missiles would encounter if they were flying over parts of Russia. These people are not preparing, by placing their missiles in a deterrent manner; they are stating quite categorically that they are prepared, if pushed, to attack, and when somebody gets to that stage it is very easy for somebody on the other side to adopt the attitude: if you start we will follow suit.

We have had a breakdown of support for the United Nations within the EEC in the last 12 months. Troops from this country have supported the United Nations mandate and the United Nations mission for many years, and in southern Lebanon they have done a magnificent job in maintaining some semblance of normal life and have been accepted by the people of southern Lebanon as being a force who are not there for any reason except in support of peace. During the past 12 months we have had the situation where the United States went into Lebanon on a separate basis, and Britain, France and Italy, as part of a multinational force rather than going in as a peacekeeping force under the aegis of the United Nations.

We should be playing a more vociferous part in ensuring that countries in Europe do not get involved in conflicts which have nothing to do with them unless they go as part of a UNIFIL force. It is interesting to look at the countries which went in. These are Italy, France and Britain, three ex-colonial countries which had been in the Lebanon in the past as colonialists. Anybody who would look at what has happened in the Lebanon or in the Beirut area since these multinational forces went in would see that there has been a total breakdown of what was a semblance of law and order. The Middle East is a cauldron that has been mentioned by the Minister, and I should like to compliment him on his attitude towards that particular area.

In the past few months there has been an escalation of the war in Iran and Iraq. We in the EEC are not fighting hard enough to get the opposing forces in that war to come to their senses and to get those people to the negotiating table, because that conflict is escalating at a terrifying rate. The situation between Iran and Iraq is fraught with danger for us. The major powers are hanging around the border supporting one side at one time and another side at another time in the supply of arms and weapons. Unless the suppliers of the arms and weapons come to their senses that conflict could engulf us in Europe in a war which would be too horrific to even think about.

The situation regarding unemployment, as I have mentioned before, is one which should have been highlighted more. The Minister's speech will probably be reported and a copy will probably be sent to sources within the EEC. If they do not see that we are interested in progressing our job creation rate, I do not think anybody else will help us. Ireland now has the highest unemployment rate in the EEC, 17 per cent. The nearest figure to this is 15.4 per cent in the Netherlands. There is 11.5 per cent of the work force in general out of work in the EEC. Obviously we at home will have to do something to help ourselves. I do not think enough consideration has been given to the part that could be played by local groups, whether it is voluntary groups or local authorities, to help in the creation of community derived employment. For too long we have depended solely on outsiders to help us in our aims towards full employment. We will have to help ourselves more, and we will have to try to get that message across as vociferously as possible.

The impact of the increase in unemployment has created many problems. If one looks at the intake of patients into hospitals one will find that a large number of people who are admitted to general hospitals have psychosomatic problems and the intake into mental institutions is far higher than it has ever been. The number of people attending psychiatrists' out-clinics is growing at an alarming rate, and a lot of those problems are caused by the fact that our unemployment figures are so high. Again there are links which can be made between our increased crime rate and our increased unemployment rate. The EEC is not working as hard as it should in trying to alleviate the problems we have as a small country with a very open economy. To quote some of the headlines in the papers: "Jobless Figures Up Again", "No Sign of Recovery as Euro Jobless Totals Rise" and "EEC Jobless Highest". One can go on and on about unemployment problems but, as I have said before, the EEC with all their resources have not done anything in the past 12 months to help. The Athens Summit reinforced this when they could not even come up with a joint communique afterwards. There was a lot of time spent at the previous summit, which came out with a lot of what I would call pious platitudes and did nothing to help. Then the leaders of the bigger countries headed off to Williamsburg in the States where they sat for four days and talked round about the problems the world faces. They came away from that beautiful part of America and they might as well have spent it in the Bahamas and enjoyed themselves, because they did not do any better in Williamsburg.

In the last 12 months attempts have been made to bring in a common transport policy. Before a common transport policy is brought in we will have to look at the problems that transport changes have created for Irish industry in terms of increased costs. We are living in an industrialised area which is separated from the mainstream of Europe by two seas, and our transport costs, vis-à-vis our European partners, are much higher. If we introduce a common transport policy which does not take into account the problems we face we will find ourselves in a few years' time looking for help from the EEC to support our transport industry in a manner which nobody wants.

Under the tachograph regulations a vehicle travelling from Dublin to Cork must have two drivers. One could do double the amount of mileage on the Continent in the same amount of time. That is just one instance. If we are to have a common transport policy we will have to ensure that we have a common costing for input into the road vehicles. If we have a common costing method to ensure that insurance rates are reasonably equal, to ensure that the costs of replacement parts are reasonably equal, then we can have a common transport policy, but not until then.

The EEC in the last 12 months has not given to us as a community what we would have expected from it. I sincerely hope that in the 1984 period we will see the common agricultural policy defended by this Government, that we will see the finances of the Community being brought into proper accounting, that our situation in Europe at present as being one of the poorest will be taken into account when any changes in policies are to take place. By the time we take up the Presidency of the EEC in four months' time I hope the people who voted to get into Europe, the people who want to stay in Europe and the young people, will get from Europe what is needed to help us to provide a future for young people and to help industry and the community in general and to stop, as the Minister said in his opening remarks, the Community from staggering from crisis to crisis during 1984.

I want to compliment the Minister on his very comprehensive and wide ranging report, which gave the House an account of a rather disappointing year as far as the EEC were concerned. At the outset I would like to say to the Minister that I personally am sorely disappointed that despite the fact we have gone through a difficult and impossible year from the European point of view we are discussing a period for which the report is not even published, even though that report should have been published last June. That is not acceptable. Our debate here this evening is directly because of section 5 of the 1972 European Communities Act, which stipulates that we should have twice yearly reports.

I am very glad to have the opportunity of looking at 1983 and have the opportunity of hearing the Minister give his view, and I certainly look forward to the points that he will make in reply to the queries and perhaps the disappointments that we will, in the course of this debate, underline for him. The period under review was one of absolutely no progress. There was no development as far as the European Communities were concerned and the Council of Ministers demonstrated themselves to be absolutely incapable of taking any worthwhile decisions towards the development of the Community and towards meeting the challenges that the year has brought up.

Debate adjourned.
Sitting suspended at 5.30 p.m. and resumed at 6.30 p.m.
Barr
Roinn