Vol. 124 No. 17
I move:
That Seanad Éireann takes note of developments in the European Communities.
I would suggest, to give as many speakers as possible the chance to contribute to this debate, that the speakers should try to confine themselves to a maximum of a half an hour.
The most important of the recent developments referred to in the motion is the Special European Council which took place in Dublin on 28 April. The background to this meeting was the rapidly evolving situation in Central and Eastern Europe and, particularly, in Germany. Its principal purposes were to consider the implications for the Community of German unification and of developments generally in Central and Eastern Europe and at the same time to reaffirm our commitment to the Community's own integration process.
As the Taoiseach stated in his letter of invitation to his fellow Heads of State or Government, it was extremely important that the Twelve bring their collective voice to bear on the issues now arising, that steps be taken to develop the Community's own integration process and also that the demands that will be made on the Community in the new Europe would be taken into account.
It is useful at this stage to review briefly some of the principal developments that have taken place since the beginning of the year so as to clarify the significance of the Special European Council in Dublin. We began our EC Presidency with a meeting between the Irish Government and the EC Commission to establish the agenda and the priorities for our Presidency. That meeting enabled Ministers to meet their counterparts in the Commission and develop an understanding on how best to co-operate in advancing the Presidency work programme.
At the special meeting of EC Foreign Ministers which we convened in January, the Community expressed support for the process of liberalisation in Central and Eastern Europe and agreed in principle to a meeting of the CSCE later this year. A positive response was also given to requests for economic aid from Eastern Europe.
At the end of February the Taoiseach visited Washington as President of the European Council with the purpose of seeking to strengthen the political relationship between the European Community and the United States. I am glad to say that he was able to reach agreement with President Bush for the holding in each Presidency of a regular meeting between the US President and the President in Office of the European Council. In addition, there will be two meetings in each year between EC Foreign Ministers and the US Secretary of State, in additiona to US-Commission meetings.
At Ashford Castle, at the end of March, the Finance Ministers of the Community had a first detailed discussion of the final stages of economic and monetary union. At this meeting there was a considerable degree of agreement reached on the design of a future economic and monetary union, and on the general principles on which it should be based, including policies to promote cohesion.
Not just European but international attention also has been focused on events in Germany as they unfolded. Free elections had taken place in March in the German Democratic Republic and the first democratically elected Government there has now taken office. Practical steps to implement the economic and monetary union of the two German states, from the beginning of July, have been agreed. The impending unification of Germany and the incorporation of what is now the territory of the German Democratic Republic into the Community have profound political and economic implications for all the member states and for the Community as a whole.
In preparation for the Dublin Summit the Taoiseach undertook a tour of all the EC capitals to discuss with the other Heads of States and Government their priorities and their views on the agenda for this special European Council meeting in Dublin. During these bilateral meetings he found broad agreement in regard to the unification of Germany, the developments in Central and Eastern Europe and their implications for the Community. He and his colleagues discussed the need for the Community to move more rapidly toward political union, and many of the Heads of State or Government were anxious to see rapid progress in this area.
Arising out of this, President Mitterrand of France and Chancellor Kohl of the Federal Republic of Germany, sent the Taoiseach a joint letter on 19 April indicating that, in the light of the far-reaching changes in Europe, the completion of the Single Market and the realisation of economic and monetary union, they considered it necessary to accelerate the political construction of the Europe of the Twelve. Earlier the Belgium Government had circulated a paper on political union which was also considered at the Dublin Summit.
This then was the background to the meeting on 28 April. What of the outcome? A copy of the Presidency Conclusions and related documents has been placed in the Oireachtas Library for consultation in the usual way. The meeting was very successful and a number of important decisions were made. Directions were given in areas of vital importance for the future of Europe. There was a warm welcome for German unity, and procedures were agreed which will ensure the smooth integration of the territory of the German Democratic Republic into the Community; the end of 1992 was set as the target date before which ratification of the outcome of the Intergovernmental Conference on Economic and Monetary Union, which will open in December 1990, should take place; the European Council made a firm commitment to political union, and asked the Foreign Ministers to prepare proposals so that a decision can be made at the June European Council in Dublin on the holding of a second Intergovernmental Conference to run in parallel with the Conference on Economic and Monetary Union, with a view to ratification by member states within the same timeframe; the necessity for developing a wider framework of peace, security and co-operation for all of Europe was recognised and guidelines were agreed for participation by the Community and the member states in all proceedings and discussions within the CSCE; the European Council expressed support for the fullest use and further expansion of close transatlantic relations, and endorsed the arrangements for meeting at the highest and other levels agreed between President Bush and the Taoiseach at the White House in February; the Community agreed to extend the present aid programmes to Poland and Hungary within the framework of the Group of 24 to the other five Eastern European countries, and to conclude negotiations on association agreements with the countries of Central and Eastern Europe as soon as possible.
The European Council warmly and unreservedly welcomed German unification. It looked forward to the positive and fruitful contribution that all Germans can make when the German Democratic Republic is integrated with the Community. It was confident that German unification, which is coming about as a result of the freely expressed wish of the German people, will be a positive factor in the development of Europe and the Community.
I believe that an irreversible momentum has developed towards the unification of Germany. As a nation itself affected by division, we in Ireland can, more than others, understand and identify with the emotions of elation among the German people in both existing states. As someone who, as a Member of the Oireachtas and as a Minister of State, has been involved in the intensification of German-Irish parliamentary relations, I wish to express my own deep satisfaction that German unification is taking place and that it is taking place, in the words of the Presidency Conclusions of the recent summit, under a European roof.
The Federal Republic has, since our accession, amply proved itself as a friend of Ireland in the Community, a partner which has shown solidarity and understanding for our concerns and interests. I am therefore very happy that it is a European Council meeting in Dublin that has expressed a warm welcome for German unification. I know that this is deeply appreciated by our German friends.
The Strasbourg Conclusions set out the views of the European Council on how developments in regard to the German Democratic Republic and other countries of Central and Eastern should be handled. Those conclusions were wise and fully deserved the support we gave them. But it would be idle to deny that the momentum towards German unification had given rise to varying degrees of anxiety in different countries. I believe that the warmer tone of the Dublin conclusions reflects credit on the success of the diplomatic efforts of the Federal German Government and the concrete steps they have taken to ensure that the external aspects of German unification contribute positively to stability in Europe, something that is of vital importance to Ireland, no less than to other countries.
In regard to a more immediate Irish interest, the funding of Community structural policies, it has now been made crystal clear that the costs of integration of the German Democratic Republic into a united Germany and into the Community will not in any way affect the agreements reached on the funding of the Structural Funds up to 1992. The position thereafter remains to be determined. The Commission's paper on German unification prepared for the Dublin Summit refers to the absence of a reliable statistical basis for the application of Community structural policies once the current territory of the German Democratic Republic becomes part of the Community. It says, however, that it can be assumed that it is beset by the same type of problems as are encountered by other regions of the Community and that it will therefore be eligible under one or more of the structural policy objectives.
It has, of course, always been the position of this Government that the achievement of economic and social cohesion in the Community is a Treaty objective in its own right, by no means applicable only for the period during which the Single Market is being created but rather a continuing imperative over the longer term. It will, therefore, be our position that there is a continuing and, indeed with the prospect of EMU, an increased need for structural policies and support after 1992 and any funding after 1992 for parts of what is now the German Democratic Republic will require a commensurate increase in the Community resources devoted to structural policies and a consequential increase in the Community budget, a subject on which I shall have more to say later.
In public debate on the implications for Ireland of German unification and of the developments in Central and Eastern Europe, questions have been raised, going well beyond the implications for the structural funds as to whether there would be adverse effects for us. So far as German unification is concerned, the Commission paper already mentioned concluded that it would have a positive effect on growth in the Community as a whole. This is an important point because in discussions on this subject there is an undue tendency to look upon the situation as a zero sum game, where if others gain, we must lose.
I consider the arrangements endorsed at the Dublin Summit to be highly satisfactory from every point of view. We are welcoming 16 million people into the Community, who, I am convinced, will make a very valuable contribution. No revision of the Treaties or lengthy negotiations are required. The fact that the Community will be kept fully informed of agreements between the two German states and that the Commission will be closely involved with the work, ensures that practical difficulties can be dealt with. Transitional measures taking effect from unification will permit a balanced integration based on the principles of cohesion and solidarity, and on the need to take account of all the interests involved. Derogations from Community regimes will be permitted during the transitional period but they must be kept to the minimum required so that full integration can take place as rapidly and as harmoniously as possible. There are obviously a number of important issues, such as access to German Democratic Republic markets, the application of State aids, agriculture and fisheries, which will have to be carefully studied in order to find the most suitable transitional measures and adaptations.
The developments in Germany and in the other countries throughout the region are bringing ever closer the attainment of a new Europe, a continent emerging from a long period of ideological conflict and, indeed, national rivalries and dedicating itself to democracy, human rights and the rule of law. For this to become a reality the countries of Central and Eastern Europe need our help, not to replace their own efforts but to supplement them.
A wide range of measures are on hands through which the European Community will assist the countries of Central and Eastern Europe: the establishment of the European Bank for Reconstruction and Development, the conclusion of trade and co-operation agreements between the Community and most of these countries, and the Community's programmes on professional, trading or student exchanges which are soon to be realised. It is obvious that the development of the Eastern European economies will greatly depend on the flow of private investment for their success. For this reason the European Council wished to encourage the transfer of private capital and investment towards these countries, and asked the Commission to study the implementation of the most appropriate accompanying measures. The Council agreed that action within the framework of the Group of 24 should be extended to the German Democratic Republic, Czechoslovakia, Yugoslavia, Bulgaria and Romania. Discussions are to start forthwith on association agreements with each of the Central and East European countries, specially tailored to the needs and circumstances of each individual country. The agreements will include an institutional framework for political dialogue. We fixed the objective of concluding those agreements as soon as possible on the understanding that the basic conditions with regard to the principles of democracy and a transition towards a market-oriented economy are fulfilled. From these measures it can be seen that the Community has taken a leading role in supporting the emerging democracies of Eastern Europe so as to underpin their political and economic structures.
As many of you will know, the Taoiseach and seven Ministers held very useful discussions with Prime Minister Calfa of Czechoslovakia and his delegation in Dublin yesterday, covering both the EC aspects and bilateral issues, in particular the ways in which Ireland can be of assistance to Czechoslovakia as they transform their political system and economy.
The domestic changes which have taken place in Eastern European countries have their counterpart in foreign policy. Co-operation is replacing confrontation and this trend is leading the world ever farther away from the confrontation which at times threatened humanity with the ultimate catastrophe. Concrete steps are also being taken to end the military rivalry. For more than 40 years each side had sought to outdo the other in the numbers and destructiveness of its arms. Happily, a series of disarmament negotiations currently taking place promises to bring an end to this dangerous and senseless arms race. This outcome will release economic resources to serve real human needs.
In many ways the most important result of the meeting of 28 April was that the European Council confirmed its commitment to political union. This decision was taken unanimously. The idea of political union is, of course, not a new one in the Community. The first line of the Rome Treaty reads:
Determined to lay the foundation of an ever-closer union among the peoples of Europe.
The opening lines of the Single European Act remind us of this commitment and speaks of the will "to transform relations among the States into a European Union".
The issue of political union has come to the forefront at this time because we must ensure that the Community has the strength, the resources and the institutions to develop its own integration and to maintain its own specific weight and influence. In no other way can we cope with the rapidly changing conditions on our Continent.
The European Council agreed that the Foreign Ministers should carry out a detailed examination on the need for possible Treaty changes involved in: strengthening the democratic legitimacy of the union; secondly, enabling the Community and its institutions to respond efficiently and effectively to the demands of the new situation; and, thirdly, assuring unity and coherence in the Community's international action.
The Council also asked the Foreign Ministers to put forward a range of proposals rather than one specific model of a structure for political union. The Council at its June meeting will discuss and assess these proposals. The Foreign Ministers in their report will obviously cover such matters as the respective role and functions of the Community institutions, the balance and coherence between them, ways of reinforcing the Community's voice internationally, and ways of strengthening internal cohesion.
A theme that is receiving increasing attention in the context of political union is the principle of subsidiarity. I dealt with this at some length in my speech in the Dáil last week to which I would respectfully refer Members of this House.
I would also like to emphasise that the present developments relate to an economic, social and political Community. With regard to security, our Community partners wish the NATO alliance and their membership of it to continue. They also wish to have the US involved in European defence through the NATO alliance. It is in that forum that they discuss defence and military matters.
The Conference on Security and Co-operation in Europe is the forum in which our contribution can best be made. Together with our partners in the Twelve, we regard the CSCE as a particularly useful and promising development in international affairs.
At its centre is the Helsinki Final Act drawn up in 1975. The Final Act encompasses a number of basic principles which Ireland has always strongly advocated. These include the rule of law, reduction of tension, cessation of the arms race, the right of individual countries to pursue their own path, and respect for human rights and fundamental freedoms. We believe that all these principles must be scrupulously observed if peace and security are to built on a firm and lasting basis.
The CSCE process, as the European Council stated on 28 April, "will serve as a framework for reform and stability on our Continent". The spirit on which it is based recognises that the existing state of relations in Europe can be transformed only be peaceful means; that all the participating states have a shared interest in security and co-operation; that they must all take part on the basis of full equality; and that the entire range of our relations must be treated in a comprehensive manner and differences among us addressed openly and honestly.
At a time when radical and sweeping change is taking place at an extremely rapid pace, we are fortunate to have an arrangement such as the CSCE already in place. It is essential to provide a pan-European framework in which the international dimension to these changes can be given shape and embedded in a stable structure. This has to involve all the countries of Europe, as well as the United States and Canada. The European Council expressed the desire that the CSCE be balanced in development encompassing "notably the development of pluralist democracy, the rule of law, human rights, better protection of minorities, human contacts, security, economic co-operation, the environment, further co-operation in the Mediterranean and co-operation in the field of culture".
We believe that the summit meeting of the CSCE due to take place at the end of this year will bring this process to a new level. We expect that this meeting of the Heads of State or Government of the CSCE countries will lay the foundations for a lasting peace where confrontation and military rivalry will have no place. This will be a community of European and North American states in which conflict between East and West will be as unthinkable as it is today among the Twelve members of the European Community. This is an enterprise in which this country has a full part to play.
I want to conclude my remarks by reviewing some of the other issues which have been of importance during our Presidency, namely the Single Market and economic and monetary union. With regard to the former, some 60 per cent of the necessary legislation has been passed, and we are on target. I would like to emphasise that the momentum of work on completing the Internal Market has been fully maintained during the Irish Presidency. The Internal Market Ministers, meeting informally in March in Dromoland Castle, agreed that "substantial progress has been made and the pace is still good". The European Council in Dublin expressed satisfaction with progress achieved so far towards establishing the Single Market. During the next few weeks there will be two Internal Market Councils, and we also expect important decisions to be adopted in the area of energy procurement, air transport liberalisation, communications, insurance, clean cars, a public procurement enforcement directive, testing and certification of products, food standards, animal and plant health and right of residence.
Economic and monetary union (EMU) is a priority item on our Presidency agenda. The Special European Council called for the preparations for the Intergovernmental Conference on EMU, scheduled to open in December 1990, to be further intensified. The objective set at that meeting is for the IGC to work rapidly with a view to ratification of its results by the member states before the end of 1992.
Ireland's approach to EMU is positive and broadly favours the pragmatic and structural framework which is outlined in the Delors report on EMU. The report recognises the need to maintain certain balances which we would regard as essential if EMU is to be sustainable. First, there must be a balance between advances in the economic and monetary areas and, secondly, there must be a balance between moves to EMU and the strengthening of the economic and social cohesion of the Community. Provided these balances are maintained, we believe that EMU can bestow significant economic, social and geo-political benefits on the Community as a whole.
The Government are aware that closer integration may pose risks for the more peripheral regions of the Community. In this context, we take the view that market forces and proper domestic management, while vital to economic dynamism, cannot by themselves be relied upon to correct regional imbalances. Measures to reduce regional disparities are required if we are to avoid the spectre of population flight from regions deficient in capital and technology. The precise form which these measures should take will be a matter for debate as the final shape of EMU begins to emerge.
The initial concentration of the Irish Presidency was on Stage 1 of EMU, which is to start on 1 July next. We had to establish the procedures to be followed during this stage. Agreement was reached at the ECOFIN Council in March on two decisions designed to strengthen the co-ordination of economic policies in Stage 1 of EMU, particularly through more intensive multilateral surveillance. On the basis of these decisions, the Irish Presidency put forward procedural proposals for the implementation by Council of multilateral surveillance of member states' economies and agreement has been reached on these procedures.
The IGC which is to begin in December will be concerned with Stages II and III of EMU. The task of the Irish Presidency is to ensure that the necessary preparatory work is carried forward. The Commission had undertaken to prepare a paper setting out the costs and benefits of EMU and their proposals for its final shape. This paper was made available in March and was discussed at the informal ECOFIN held in Ashford Castle on 31 March. This meeting also had before it reports from the Monetary Committee on monetary union and the proposed European central bank system and on budgetary policy in an economic and monetary union and, as I have already said, the discussion revealed a considerable degree of agreement on the design of a future economic and monetary union.
Much work remains to be done and Ministers will contine their discussions on the design of the system and the problems of transition. ECOFIN will discuss these issues further in June with a view to reporting to the European Council meeting in Dublin at end-June.
Ireland holds the Presidency of the Community at a time of unprecedented developments on our continent. The issue of Central and Eastern Europe, German unification, political union, EMU and the Single Market, to which I have referred, are all interlinked. I believe we can take pride in the activity of the Irish Presidency on these important areas and that we can consider ourselves privileged to contribute in this way to European history.
Tá áthas orm bheith i láthair sa Seanad ag an díospóireacht ar ghnóthaí Eorpacha. Beidh mé ag éisteacht go haireach le gach a mbeidh le rá ag Seanadóirí i rith an lae. Ní inniu ná inné a thug Éireannaigh aghaidh soir ar an Eoraip don chéad uair. Is de dhlúth is d'inneach shaol na hEorpa na hÉireannaigh le 1,500 bliain. Rinne siad camchuairt na hEorpa, siar agus soir, ghlac siad páirt mhór in imeachtaí na Mór-roinne ársa seo. Inniu arís, tá an Eoraip lárnach do chúrsaí agus do pholasaí na hÉireann agus don sé mhí reatha tá Éire lárnach san Eoraip sa mhéid gur againn atá Uachtaránacht an Chomhphobail.
Is ábhar mórtais agus sásaimh dúinn an cúram seo a chomhlíonadh ag uair seo na cinniúna i stair agus i gcor na hEorpa. Dhá scór bliain ó shin inné sea a foilsíodh Forógra Schuman. Tar éis na mblianta sin uilig tá go leor le ceiliúradh againn. Tá mé buíoch an deis seo a bheith agam sa Seanad labhairt ar chúrsaí Eorpacha.
At the outset I would like to thank the Minister for her contribution and I would like also to make reference to something other than the Summit. I would like to compliment the Taoiseach for going to Belfast to represent us in a dignified fashion which contrasted so marvellously with the activities of Mr. Paisley, who is more like a throwback to the Stone Age.
I will deal with what the Minister has been talking about in the Dublin Summit and in Europe. We are living through historic times, not of our making or of any single country's making in the Community. We were indeed fortunate to hold the Presidency during part of this historic period.
There was much more hype than substance about the Summit in Dublin. The Minister mentioned the unanimous decision to go for political union. The Foreign Ministers had to sit down and decide what was political union. I suspect political union means different things to different people. The Minister also mentioned there was agreement on pushing ahead with the completion of the Internal Market and going for economic and monetary union. That is all very desirable in my view but not everybody would agree with me. No reference was made as to how it will affect our neutrality, our sovereignty in relation to economic, monetary and fiscal matters.
The Taoiseach is parading as the great European but that conflicts very much with what is happening in practice. How can the Taoiseach reconcile the move towards a Single Market when we impose the 48-hour restriction at the Border, preventing the freedom of movement of goods from one part of this island to the other? Does that not contrast with Fianna Fáil's declared policy over 50 years of trying to unite this island? This restriction is just reinforcing that artificial Border. The only people in my view who are benefiting from this are the terrorists, the smugglers. I said at the time it was introduced it was a foolish restriction since it could not be controlled. How was the smuggling going to be stopped if the movement of animals as large and as smelly as pigs and cattle could not be stopped? How can the smuggling of items as small, as valuable and as inconspicuous as cigarettes, tobacco, spirits, electrical goods and so on be stopped? It has not happened.
Due to an initiative I took in the Parliament, the Commission asked the Government of the day to carry out a study on prices on both sides of the Border. That study was carried out by the ESRI and it was very revealing. It showed that the difference in prices was not always due to taxation. For example, when all the taxation was taken off a bottle of whiskey on both sides of the Border, a bottle of whiskey made in Cork costs £2.05p more in Dundalk than in Newry. The Government were supporting traders who were fleecing the consumer. That was hardly a very clever move. Twelve months later the ESRI examined the situation again. They reported there was no significant difference in the rate of flow of goods from North to South despite the 48-hour restriction. I had already obtained that information from Irish Distillers. Some estimates have put the amount of whiskey smuggled from the North as much as one out of every three bottles consumed in the South, having been made in the South in the first instance.
What have we achieved by putting on this restriction, apart from reinforcing the Border? We have denied the ordinary citizens the benefit of cheaper goods. We have not stopped the flow of goods. The flow of goods is not coming via the smugglers who are terrorists. That is what we have achieved by this restriction. That is hardly a very good European act from a Taoiseach who has been parading himself as the great European for the past number of months.
I could give more examples. We are talking in terms of a Single Market with freedom of movement of services in addition to goods. What did our Government do? In relation to the non-life insurance sector the Government ask for and get a derogation of seven years. That means that people on this side of the Border will be paying a higher price for insurance than they would otherwise have to pay. For example, it costs two and a half to three or four times as much to insure an ordinary family car South of the Border as it does North of the Border. If one goes North, gets an insurance certificate for a car and takes it back to the South one is not allowed to tax that car because the car has not been insured in this jurisdiction. That is hardly a very European act on the part of the Government. It is imposing extra costs on us because the cost of insurance in the non-life sector now is a real impediment to our competitiveness in many areas forcing some companies out of business particularly companies along the Border area. These are issues which have to be faced up to more honestly. It is not just good enough to say we will be good Europeans and do the opposite in practice.
Monetary union will be of benefit to the Community as a whole and, hopefully will benefit Irish citizens also. The present cost to the Community of having 12 different currencies is quite high. There is the risk factor in the exchange rate and the exchange rate costs. Anybody who is familiar with travelling around the 12 countries of Europe will know how one can get caught on costs in changing currency apart from the inconvenience of not being able to use coinage of one country in another. Let me outline the cost. Two years ago I had an exercise carried out by a banker. He was asked to change IR£100 into the other 11 currencies and back into punts again. I ended up on paper with £46 out of the £100 I started out with having bought nothing, achieved nothing except keeping the banker happy.
Nationalise the banks.
God knows nationalisation in Eastern Europe ought to have given us all a fair lesson on how ineffective, useless and dangerous nationalisation can be.
I would remind the Senator that the French Government in the early eighties went on a programme of nationalisation but beat a hasty retreat, badly battered, having damaged the economy very seriously. I do not think the Socialist Government in France will repeat that mistake. I would remind the Senator also that the Socialist Government in Spain privatised 23 publicly owned companies in their first 12 months in office and when asked by a British Socialist how could they reconcile that with being a Labour Government he got the reply from the Spanish Finance Minister, "Sir, we are interested in results and not in ideology". I would remind the Senator also that the New Zealand Government, a Labour Government, are on a programme of privatisation. If he is not satisfied with that he can have a look at the Swedish situation where socialism has been in power for more than 50 years now and they are on a programme of privatisation. I do not think nationalisation is the answer to the problem with the banks.
Monetary union will benefit the country as a whole. It will make our companies more competitive vis-à-vis other trading blocs, particularly the US and Japan. We will lose some of our sovereignty in relation to fiscal and monetary matters. I am not sure that is too bad a thing because we have been at times in the past 15 years exceedingly reckless for political reasons, with enormous damage to this economy and the kind of activities that resulted in driving hundreds of thousands of our people out of this country because of the damage done to our economy.
I am sure most people have been wondering what the Presidency has got for us as citizens of this country. Frankly, I do not see any material gain. In some areas we are at a loss. I am particularly concerned about what seems to be the subservience of the Government to the pressures, from the US in particular, in the GATT negotiations. We have a Commissioner responsible for agriculture and rural development, I am sorry to say he is the first Commissioner in the history of the Community who brought in cuts in agricultural prices right across the board last year. I should not be too surprised because the same Commissioner, when he was Minister for Agriculture in Ireland, presided over a decline in farm incomes of 55 per cent in real terms in the space of two years. He seems to be intent now on going along with the US pressure to get rid of all supports for agriculture over a period of about ten years. The Americans, while preaching this kind of thing, are in practice supporting their own farmers to a greater extent than Community farmers. The total American support for their agriculture is roughly the same as that for the Community agriculture but the Americans have only got one-fifth of the number of farmers we have and they have four times as much land.
We are facing into a situation, I am afraid, that unless the Commission on our behalf takes a stronger stand in the GATT we face ruination for a large sectors of our farmers. The cereal farmers particularly, are already in dire straits. The price of feeding barley today is 30 per cent lower in real terms than it was ten years ago and it is the same for other cereals. Cereal farmers will no longer be able to stay in business the way things are going. The Commissioner seems to have little sympathy for them.
The beef farmers for the past three years with winter beef fatners have been losing money. Again, there seems to be no urgency in the Commission or no interest in changing the beef regime, which is resulting in virtually all the support from the Community going into the pockets of the beef barons, into storage costs and so on rather than into the pockets of the farmers. The Community taxpayer today is paying for every animal that is slaughtered to the tune of about £250 and yet farmers are losing money. That £250 is not going to farmers. It is going to the beef barons to enable them to supply cheap beef to the Middle East and to the cold stores when the beef is bought into intervention.
The sheep farmers have suffered in the last couple of months a drop of between 30 per cent and 40 per cent in the price of their lambs. Only last week I spoke to a butcher in Cork and he told me that the price he was paying for meat this year per week is £500 down on the price he was paying last year. The farming sector, apart from dairying, has been in very serious trouble for some time and dairying is now heading into a situation where they will get a 20 per cent drop in the price of milk this year and, according, to the retired Secretary of Bord Bainne, there will be another 20 per cent next year. I am not sure if the man is right, I hope he is not. If that is the situation then I am afraid we will have a massive depopulation of the land in Ireland. Where will they be employed? We do not have alternative employment for them.
Much talk has been thrown around loosely about cohesion, rural development and so on. A lot of that is pie-in-the-sky; it is a nice objective to have but unless you back it up with the resources to achieve what you are talking about, it will leave a lot of people disillusioned and disappointed.
I will give some idea of the prospects of having economic cohesion. If we in Ireland were to grow, economically, at twice the rate of the other European countries, which is a most unlikely event, given our history, it would take us roughly 30 years to catch up to the Germans, about 28 years to catch up to the Danes, 25 years to catch up to the Belgians and so on. If we want the standard of living of these countries in our lifetime, the only way I can see us getting it is to get up and go there. I am not recommending that, I am just telling the Minister the fact.
There are many other items the Minister spoke about, particular German unification. That is a subject dear to my heart. As one who studied in Germany in the sixties and visited East Berlin before the Wall went up and after the Wall went up, I am naturally delighted that that unnatural and cruel division has gone. One had to see it in practice to realise how cruel it was, to see parents on one side and their children on the other side and they were unable to visit each other. It was an appalling and cruel regime.
Of course it was socialism.
It was not socialism, it was Stalinism in case Senator Ryan did not recognise it. I am not blaming socialism for all the ills there but I blame a lot of the socialists in this country that they did not criticise what is happening there. They were only too glad to extol the virtues of all things in Eastern Europe. Again and again, I was told that there was no unemployment in Eastern Europe, there was no unemployment in Russia and so on, Senator Ryan was at the meeting when I was told that. I was possibly told it by the Senator.
Never.
Now we know what they had in Eastern Europe. In any case I am glad to see German unification coming about. I am also glad to note that Chancellor Kohl said it would not be at the expense of other members of the Community. I will take him at his word for it. There will, however, be a cost. There is always a cost. The biggest problem we will face as a nation from what is happening in Eastern Europe — let me add, I am glad it is happening — is much stiffer competition for mobile capital. It will be that much more difficult for us to attract foreign industry whether it is Japanese, American or European given the changes that are occurring there. There are skilled people in these countries, cheaper labour and, of course, proximity to the main markets of the community. We will have a tougher battle on our hands to get mobile capital and multinationals to set up in this country. I thank the Minister for her contribution and I wish the Government well for the remainder of its Presidency.
I would like to welcome the address by the Minister of State on current developments in the European Community. It was a very comprehensive and very positive address to us and also a very clear one on the extraordinary developments that have been taking place. It is gratifying to us on both sides of the House that it should be an Irish Government that should be in a position to forward and contribute to these developments in a very non-partisan manner. I would also like to pay tribute to Senator Raftery's remarks, particularly when he was labouring under very considerable difficulty in putting together his excellent comments.
Much of the European situation at the moment has been totally overshadowed by the developments in Eastern Europe generally, in particular by the developments in East Germany. There has also been a certain degree of apprehension. Twelve months ago these developments did not seem conceiveable in our lifetime but now that they are happening, where will they lead us? Hopefully, it will be in a peaceful direction. Certainly it would be a very brave person indeed who would forecast some of the possible implications of the current developments.
It is tremendously encouraging that the unification of East and West Germany is happening first of all on such an extraordinarily agreed basis considering the antagonisms and rivalries of the Cold War which existed until recently and also the very profound and deep fears in Poland and the Soviet Union regarding German history. It is gratifying that the Soviet Government have taken the attitude they have in relation to German unity.
Perhaps in some ways it is even more gratifying that the Poles have done so. They have asked, and have rightly been admitted to, the Four plus Two conference and to other conferences. Their basic attitude has been very positive. I feel this is not just purely on an economic basis. It seems to be a genuine carry-through of the sort of sentiment and feeling on which the European Community was founded. That was the sentiment by which the Germans and French came together originally for the coal and steel plan, which has so many momentous economic consequences. We are constantly referring to them. In some ways it was much more important that the peoples of Germany and of France could come together after such a dreadful war and resolve and effectively banish the likelihood of any further conflict between their countries. Let us hope in some sense or manner that this is what will now develop between Western and Eastern Europe, including the Soviet Union. It is not all necessarily positive in that direction. The head of the Polish Solidarity Party was very concerned about many of the developments, for example, the situation in Yugoslavia. Are the developments in Yugoslavia and in the rest of Eastern Europe really going to lead to Strasbourg, to an enlargement of the European Community, perhaps in an association form but nonetheless in a basically peaceful and economically beneficial manner or will they lead to a sort of Sarajevo situation? Certainly there are some very uncomfortable signs that would suggest that it will not necessarily all lead in the direction of Strasbourg.
The European Community have a particular responsibility to the peoples of Eastern Europe who have gone through an appalling period as regards human rights and when given the opportunity to indicate their views they did so conclusively and overwhelmingly. They have also been going through a period of severe economic deprivation which is one of the great problems at the moment in the Soviet Union. We all think of President Gorbachev in a very warm manner. We welcome glasnost, we welcome perestroika but that is not necessarily the view of many Soviet people. I understand it, domestically President Gorbachev is quite unpopular and people see that the economic situation there in many ways has not improved; in fact, it has deteriorated. There are far fewer goods in the shops and there are far longer queues. It would be tragic indeed if this were to continue and we were to see once again some sort of monolithical or repressive regime, military or otherwise, coming to the fore. We can do a certain amount about the Soviet Union, perhaps not all that much, but the European Community can certainly do a great deal as regards Eastern Europe, Hungary, Czechoslovakia and Poland. I am not sure that there is the degree of unity, of urgency, among the European Community in relation to economic aspects of Eastern Europe. In one sense it is a pity that the German issue has over-shadowed to such a great extent the far, far greater difficulties in Poland and in Czechoslovakia and in the other Eastern European countries. East Germany was perhaps the most prosperous part of Eastern Europe. It has the enormous language advantages, integration advantages, historical advantages, cultural advantages and so on of being united with West Germany which is so prosperous it is able to make such extraordinary gestures, and it has recently, in relation to the Ostmark and the Deutsche Mark.
It would be a great pity if some means cannot be found to transform the economies of the other countries of Eastern Europe, of Poland in particular. The problems there are daunting. There is a huge foreign debt there, something like $30 billion. Their industry is totally uncompetitive with any Western European industry. There is an almost complete absence of modern infrastructure, one could go on and on. One does wonder what steps could be taken. I know some mentioned by the Minister have been taken in the European Community. If there is economic collapse there will be chaos in Eastern Europe and what a pity that would be after the tremendous hopes that have been raised after so many years of darkness.
I would like, if I may, also to come back to home and in a sense to a very domestic situation. The Taoiseach, not as Taoiseach, but in his role as President of the Community visited Belfast. I was present at that address. Far more important than any impression I might have of it one way or another, the very sensible, restrained but extremely effective speech he made there had an enormous effect on a very influential audience of people in Northern Ireland. It may well be that the Taoiseach's visit and address in Belfast were the key feature of this Presidency. It did an enormous amount of practical good in terms of the mutual advantage, of commonsense, of relationships on a peaceful, economic basis between all the people of this small island. Again, I would like to welcome the Minister.
Cuirin fáilte roimh an Aire. Is réasúnta a annamh is a bhíonn sí linn. Tá a fhios agan go bhfuil sí gnóthach agus go bhfuil a lán oibre idir lámha aici, faoi láthair go speisialta, agus mar gheall air sin cuirim fáilte roimpi, agus go speisialta os rud é go bhfuil sí sásta fanacht anseo b'fhéidir i gcomhair an chuid is mó den díospóireacht agus éisteacht leis na rudaí atá le rá againn. B'fhéidir gur comhartha níos fearr ar an Seanad é an díospóireacht atá ar siúl anseo inniu ná na rudaí a tharla inné, agus b'fhéidir gur comhartha níos fearr é ar conas mar is féidir linn sinn féin a iompar agus ár gcuid gnó a dhéanamh ná na rudaí a tharla inné. Tá cuid mhaith gur féidir a rá faoi na hathruithe. Tá difríocht idir an focal "forbairt" i nGaeilge agus an focal "development" i mBéarla. Tá míniú dearfa leis an bhfocal "forbairt" nach bhfuil leis an bhfocal "development". Is ionann "development" agus athrú. Níl aon bhrí le "development" gur dul chun cinn atá ann i gcónaí. Sin an linguistic treatise anois.
There are a number of points I should clear up first. When I said to Senator Raftery that we should nationalise the banks, I was simply throwing — if I can be forgiven the pun — a red rag in his direction and I got an entirely predictable response. We do not need nationalisation any more. Like Adam Smiths economics, nationalisation is a product of the early 19th Century, a time when many studies and other forms of information and State regulation were unheard of and when the only possible method of State intervention in the economy was by direct ownership. There are so many other methods of State intervention now and I have no real problem about them. My concern is about who controls the economy, not who owns it, because I believe that to a considerable extent in any civilised economy, ownership and control are not necessarily synonymous. That is certainly true in the case of land. As a matter of interest, ownership of land does not necessarily give a person control over it because we have introduced planning regulations, building by-laws, and so on which severely impinge on the ownership of land and it is possible to do that in many other ways.
Nevertheless, in certain areas of life, a considerable degree of accountability is necessary. It is part of the mythology of old-style and antiquated pre-market economics that there is some sort of overlap between, for instance, the manner in which the market in white goods or consumer goods operates and the manner in which the market in money operates. One is a real market, the other is, effectively, a quasi-monopoly by a group of people who have the same interests and simply manipulate that market to their own interests without any reference to the consumer of their service. There is a fundamental difference; one is a real market which responds to the consumers, the other is a market which is controlled by speculative interests and which operates on the basis of speculative greed and nothing else. That is the reason currencies inflate or deflate and interest rates fluctuate. It has nothing to do with reality but has got a lot to do with the interests of a small number of people in every country. That is why financial markets deserve and need careful regulation.
I agree with what Professor Raftery said about the Irish insurance business. It is a pity people did not extend it to the Irish banking industry because it is not, as the small industries section of the Confederation of Irish Industry has frequently demonstrated, operating in any sort of competitive environment, as the local authorities discovered when the two banks together decided by a mysterious coincidence, which they have always insisted was not collusion, to do the same thing at the same time with every local authority, namely, to impose charges. That was quite outrageous and any other civilised country would have brought the two major banks before an anti-trust court on the sport on the grounds that they colluded in a major conspiracy to extract large sums of money out of the public purse without any reference to the market, to competition or anything.
The introduction into that cosy collusion of banks from countries where they are used to real competition within the banking system, would do the country a considerable amount of good. Having observed the intricacies of the extraordinary arrogance of the Irish banking system, I have no sympathy for them, though I have for their employees. Irish banks have done nothing for Irish society but to reorganise their labour force so that they can employ more and more cheap labour, to reorganise their charges so that they can charge more and more for a deteriorating service and, at the same time, manage to make grotesquely enormous amounts of money for themselves that are entirely out of proportion to the needs of a bank in a developing economy.
There is so much that could be said about the Irish banking system, about, for example, their definition of a long term loan is about half the term of a medium term loan as defined by a bank in West Germany. A long term loan from an Irish bank for an Irish businessman is about five years. A medium term loan for a German businessman from a German bank is seven or eight years and a long term loan could be anything from ten to 15 years. The second point is in relation to their determination in assessment of risk. The sort of risks that Irish banks are interested in taking range between zero and zero. Press releases issued by the Confederation of Irish Industry small industries section indicate that for a small businessman to get a loan of about £10,000 from an Irish bank he would need to have about £50,000 worth of security. Not only are the banks not happy with an equivalent level of security but they want multiples of it. Banks in other countries actually take risks. They assess the quality of an individual's idea, whether it will succeed in the marketplace and they bankroll it on the assumption that their risk assessment is better than their competitors and that they are going to end up winning overall. They know they may back some losers but overall their own strong, well developed commercial sense will enable them to assess what risks are worth pursuing.
It is worth mentioning that in those allegedly model developing new industrial nations in south-east Asia, the banks are severely constricted by the state authorities as to who they can and cannot lend money to. It would be an interesting study to look at the intervention of the state in places like Taiwan and South Korea and, indeed, in Japan in ensuring that the credit and money market operate in a way that is beneficial to industrial development. The interesting common theme, of course, is state intervention. It is because of the appallingly uncompetitive nature of much of the Irish financial services sector, that I believe Irish Life should stay in public ownership. It is a useful instrument to push a whole area of personal privilege which is, effectively, the banking and financial services cartel. This is a personal privilege for a small number of people instead of what it should be, a service to the consumers of the financial services they offer. That is why it is a great pity that the Irish insurance sector is getting this seven year moratorium. We have all been ripped off.
Anybody who bought the Irish and British papers during the storms in February will know this. The British papers were swamped with advertisements from consumer/customer-orientated insurance companies offering people a variety of ways of making speedy contact with their insurance companies and telling them what to do to deal with the damage quickly. The Irish insurance companies ran for cover, kept their heads down, and six months later started complaining about all the costs they had incurred.
One of the questions I would like to debate with Senator Raftery is the way his commitment to the free market ends about one yard from the door of agriculture. He is a great believer in fixed prices, in controlled markets, and so on, for agriculture, but for everybody else he believes in competition. Irish agriculture, in particular, could do with a good dose of the free market. It is the one area of Irish society which is almost entirely protected from most of the mechanisms of the free market. It is an area which had guaranteed prices until recently. It has had guaranteed prices, guaranteed sales, guaranteed markets; a socialist dream. If socialism, as Senator Raftery believes, does not work, I am fascinated as to why he has insisted that it not only works but it must keep on working in the area in which he is interested.
It is not working.
I am intrigued by the way the agricultural lobby and the economists who lecture everybody else about the virtues of competition, keep their mouths firmly shut about the cartel anti-consumer basis of the Common Agricultural Policy. The Common Agricultural Policy as it operates is anti-consumer, anti-quality, anti-initiative and is anti-everything. It is based on guaranteed prices and all we are arguing about is adjustment to those guaranteed prices. There are many intricacies in it, some of which I do not understand but every year the demand is for an increase in agricultural prices unrelated to productivity growth and the market. If my colleagues and friends in the trade union movement were to demand wage increases that were unrelated to the performance of their companies, unrelated to the international market, they would get a lecture on patriotism and common sense. The one great sector of allegedly productive enterprise which gets no such lecture is agriculture.
I am astonished, in terms of the development of the European Community, at the level of unwillingness to address the NESC report on Ireland and the EC and, in particular, the prospects for 1992. The NESC report is one of the most magnificent pieces of intellectual critique of the Cecchini report that has been published. It actually takes the Cecchini report apart and says that the basic theory of trade on which Cecchini was based is wrong, is increasingly accepted to be wrong and that there is no guarantee that free trade between countries of differing degrees of development brings about an equalisation of development, which is the presumption of classical trade theory.
The level of assumption contained in classical trade theory, as developed in the NESC report, makes the mind boggle. Without getting involved in too much heavy theory, and since I do not have the report in front of me, the essential assumption of the NESC report is that there is no guarantee that exposure of a large group to a single market will guarantee an equilibrium between all the regions. In other words, there is no guarantee that trade and growth will eventually balance out at roughly the same level within the entire market.
Anybody who has watched the development of the United States, or who has watched international trade, would have good reason to suspect that that was true but apparently it took the science and profession of economics the best part of 200 years to realise that what everybody else had seen to be true was true. The NESC report pours an enormous amount of cold water on the theoretical model on which the move to the Single Market was based. They suggest that the solution to that problem is much more accelerated economic and monetary union going well beyond even what President Delors of the Commission wanted. They talk about a single European system of taxation to ensure the level of distribution of resources needed to balance the economies of scale, the critical issue, which will guarantee permanent superiority to large scale indigenous industries on main land Europe. Even if they are not large scale they are well above the level of structural funds that are currently being offered to this country.
That is the essence of the critique of the present position. It seems to suggest that unless we move in that direction there will be permanent inequality between the well-developed and the less-developed parts of Europe. This system is modelled on the relationship between developed economies and underdeveloped economies generally or, indeed, between the well developed and under-developed parts of the United States. A very good example of a single market operating within the United States has not produced a levelling up of income levels in different parts. That is one of the most horrific areas and it deserves further study and reflection.
The Government group which reported on the quality of Irish management had very little that was complimentary to say about it. In fact, they were highly critical of Irish management. It fascinates me the way so much of our time is taken up criticising the Irish work-force and so little with criticising management in industry and business. According to the NESC report, which was not written by the trade union movement, Irish management is hopelessly inept, under-educated, under-trained and lacking in the sort of perspective that management should have at the end of the 20th century. Indeed, there are many symptoms of this, including the relative lack of any sort of competence in a foreign language among people who claim to be our future leaders in a single market.
The potential for disaster from the Single Market is enormous and it is not a question of us taking our opportunities. It is the fact that there are inherent economies of scale which operate to the benefit of large complexes in Europe, which the NESC report identified as the basis on which they achieved their superiority, which a single market will not eliminate. That is the NESC report's position on what they regard as a well-developed theory.
A school of economics in San José, in the United States has begun to look at the whole free market theory of economics and to raise serious questions about the alleged equilibrium which always occurs in a free market. They suggest that winners should stay winners in many of the areas of industry where knowledge is important, and that is in most of the high technology industry. If one has the knowledge one stays ahead; if one is lucky and gets ahead one stays ahead. We are presuming that we will benefit if we simply open our eyes and shape up a little because of the inevitabilities of a particular economic model but, in fact the economic model on which all that is based has now been debunked. We ought to take a careful look at ourselves because recently things have been said and written about us in terms of economic development which should give us cause to think.
I am grateful to Professor Joe Lee, Senator Raftery's colleague, for digging up figures that the rest of us had, perhaps, forgotten. These figures show that in 1917, when we were part of the United Kingdom, this island was among the richest places in Europe. Our per capita GNP was ahead of Sweden, Norway, Denmark, Finland, and slightly ahead of Austria. The only countries in Europe which were significantly ahead of us in terms of per capita GNP were mainland Britain and Germany. We have managed to sit still for 70 years while all those small countries like Sweden, Norway, Finland, Austria, Denmark and Holland have managed not just to grow but to leave us so far behind as to be invisible in their wake. We have used excuse after excuse — our peripheral position, through our being involved in a War of Independence and our isolation during the Second World War — forgetting that some of these countries who were in the middle of a war in 1917 had to fight a second World War when they were occupied, their economies destroyed and had to live with equal peripheral problems and yet survived and developed.
In relation to the social side of the European Community all those countries managed to develop and pass us out while they were under the influence of democratic socialism, developing comprehensive welfare states based on good services, taxation paid for by everybody and a considerable degree of state intervention in the economy. It is peculiar that those of us who sought for years to have Tara Mines taken into public ownership have now seen that happen, but it is the public of Finland, and not the public of Ireland, that now own it because the state-owned Finnish mining company bought Tara Mines.
When I refer to state intervention, I am not talking about the bureaucratic dictatorial type nonsense that has blighted Eastern Europe but state intervention on the basis of a democratic and socialist model of what a society is about and the values that motivate a society which has produced among the best economic records in Western Europe. It has worked, and worked better than either the United States model or any other model I know of, in terms of combining economic development with good social cohesion which make the economic development achieve some worth while values. The evidence is there and it is overwhelming.
It is, therefore, pathetic to see the Irish business lobby manage to blackmail our Government into running away from the limited social charter that the European Commission has proposed; a limited social charter that goes nowhere near the sort of rights that workers and poor people employ in most areas of northern Europe and in the most developed areas of Europe, including Western Germany; a social charter that did not even go all the way. We have diluted that on the basis of an ideological model of economic development which is entirely detached from the reality of European economic development over the last 70 years. All those countries developed a welfare state. They did not wait for economic development. They developed together and created social cohesion which has enabled those societies to deal with change in the marketplace, changes in technology and in political terms. They deal with all those matters in an effective and humane way.
We in this country cast one eye in the direction of the most primitive economy in the world in terms of its concern for the people who work in it, the United States, and one at an economy which is attempting to emulate the United States, and we forget that there is the whole spectrum of Europe which, in spite of the propaganda, is a very successful growing economy. It is an economy which has managed to do a number of remarkable things. It has managed to take the environment seriously; it has managed to achieve good levels of economic growth and it has managed to provide comprehensive welfare in terms of income, health services, education, and so on, for its people. That is the model we should be looking at instead of being blinded by the propaganda of those who would simply like, for reasons of their own greed, to get the sort of American tax system which has rewarded the very rich and, as it turns out, has penalised the very poor. The average American worker actually pays more tax now than he paid 14 years ago, but the rich American worker pays substantially less. That is the American tax reform model. It is a disgrace that we ran away from the social charter. It was limited, but we ran away from it and we diluted it, not because of any rational basis but because the Irish business lobby did not want their slice of the cake in any way cut by the rights of other people.
There are a few things that should be said about the political developments in Eastern Europe. I do not know where people got this notion that people who stand on the left in the democratic process here had anything in common with Eastern Europe. I was one of the first patrons of the organisation that was set up here after the Stalinist government of Poland suppressed Solidarity and I did that because I had supported Solidarity from the beginning. What depresses me now about Solidarity is that having got rid of one blind and mindless ideology Poland is now apparently in the process of replacing that with an equally blind and mindless ideology from a different position of the political spectrum which will cause almost as much human misery as the one that was there before.
Anybody who has had the doubtful experience of living under a real Friedmanite economy, as the people of Chile did during the period of a dictatorship, will realise that Friedmanite economics can do as much social damage as any State planned bureaucratic Stalinism can ever do and I regret that. Still, I believe workers have the right to organise. I found it ironic, incidentally, that at a time when we were all championing free trade unions in Poland, the United States was suppressing a free trade union. They were suppressing the union the air traffic controllers were organising. They sacked them all and dissolved the union. If the Soviet Union did that now we would have economic sanctions against them on the spot.
I am also a little bit fed up with people pointing at the left. I am not so sure how happy Senator Rafferty is to be a member of the International Christian Democrats who count amongst their members ex-President Duarte of El Salvador who presided over death squads, murders and assassinations. I would not like to have that sort of company in any international organisation of which I was a part. I am not a part of any international organisation which would recognise Soviet-style bureaucratic State dictatorship.
He was tortured by the army.
As President, he also presided over death squads, murders and assassinations on a grand scale and became a figurehead for the same army. Why he did it I do not know but he did it. I am not judging the man's motives; I am simply judging his actions. The British Tories organised to get respectability for a fundamentalist and fascistic government in Turkey which is in the process of suppressing human rights in Turkey and which locked up one thousand people for simply holding a May Day demonstration less than a fortnight ago. They lecture the rest of us about the fact that we use the same term about ourselves, we call ourselves socialist.
I am delighted that the intellectual playing pitch has been levelled by the end of what happened in Eastern Europe. Stupid irrelevancies attempting to brand us as somehow connected with what happened in Eastern Europe are now part of the past. I was in Eastern Europe back in 1975 and I know what it was like. I am glad it has all gone. Nobody could regret its passing less than me.
As far as I am concerned, the intellectual world is now much more open and we can look at the realities and the values which motivate people. Those values are social solidarity, a sense of community, a sense of belonging and a feeling for security. It is socialism that can provide those things and no greedy, competitive self-centred ideology has ever succeeded or will ever succeed in doing it. Whatever the short-term gains that can be claimed, we will ultimately win because we subscribe to the values that ordinary people subscribe to. Sooner or later those sort of values will take over in the way that parliamentary democracy, which was a pipe dream 200 years ago, will take over sooner or later.
What is going on at present is extraordinary. People talk about rescuing and keeping President Gorbachev alive and then demand that Germany should be integrated into an anachronistic military bloc that has now outserved its usefulness. Can somebody explain the logic to me of keeping American troops in Europe? Can somebody explain to me what we want them for? Who are they defending us against? Will those who tell us that they are there to defend us against the possibility of the resurgence of Stalinism, which I suppose is a possibility, and who tell us that Stalinism is the greatest evil in the world, explain to us why most of the governments who want to keep troops in Europe to defend us against an almost dead Stalinism are busily repairing their communication lines with the one large Stalinist Government that is left, the elderly murderers who killed young people in Tiananmen Square less than a year ago?
I am fascinated by the hypocrisy of western governments who are celebrating the end of Stalinism on the one hand and, on the other hand, are consorting to support, continue and preserve Stalinism in China because it happens to be in the interests of western governments to forment dissent and difference between the Soviet Union and China. They happily ignore the massacres. I will not, as a socialist, ignore what was done in the name of socialism in China less than a year ago. It was murder, it was a massacre and it was a disgrace. It is a disgrace that most western governments are now quietly pretending it never happened and opening again their contacts with China.
China should be boycotted and should be kept out of all international circles until the murderers are got rid of and until the democracy that the people of China want is restored. It is because of all that and because of the hypocrisy, the double standards and the lack of any sort of moral values in the foreign policy and the western powers, that it would be outrageous if we abandoned our neutrality. At least our neutrality will enable us, if we want to, to look at the world, not through the tinted glasses of a military bloc which is looking for a new excuse for its own existence but, instead, to look at the reality of life which is that there are countries which call themselves democratic while they are suppressing human rights. There are countries which call themselves socialist that have murdered workers and there are countries that call themselves free that are the antithesis of that. We should be looking for freedom, democracy, human rights and the right of ordinary people to have an ordinary living.
Many of the countries that Western Europe and North America are now supporting are the antithesis of those values. In Taiwan and South Korea workers are being brutalised, beaten and arrested in the interest of big business. It has been suggested that we should somehow get ourselves entangled in an international alliance based on some sort of military orientation. Who would we be defending ourselves against? I am fascinated by this view that we have to give up our military neutrality now. Who are we going to defend ourselves against? I would like somebody to tell me, if we are going to enter into a defence alliance, against whom are we going to defend ourselves. Where is the military threat? I am not aware of any. The Soviet Union is collapsing so fast that it could not possibly threaten anybody militarily at present. It was a bigger threat when we were neutral, and when we believed we were neutral, than it will ever be now when people want us to abandon it.
Is it simply that the price we must pay for getting a few more crumbs from the rich man's table in Germany and France is that we must abandon the last little bit of independence we have? The particular irony must be that, on the one hand, those of us who believe that we should maintain a level of national independence here in our own interests are criticised by those that at the same time stand up and cheer as Lithuania, Latvia and Estonia assert their right to a little bit of national independence and a little bit of a right to look after their own interests. Why is it good for those people to reassert their right to separatism and to independent existence while we must pretend it is a bad idea? I would like to know.
I am not going to go over ground that has been covered already but there are a number of points I would like to make. At the outset, I would like to refer to comments made by Senator Raftery who suggested that there was more facade than substance in the special Summit that took place in Dublin last week. His comments are not ones I would agree with. Commentators, not alone from here and Europe, but from outside Europe, agreed that a major advancement was made at the Dublin Summit towards political union within the EC and that target dates have been set which will be met both on economic and monetary union and political union between now and 1992. There is absolutely no doubt that comments which were made in international newspapers were positive in all aspects on that Summit. I do not think we should underestimate the value of the Presidency of Ireland of the EC over the past few months because it has done an enormous amount of good for this country and for Europe also. We should not either underestimate what the Taoiseach has done, not alone by his visit to Belfast but by his worldwide efforts both for Europe and in a search for peace throughout the world. Indeed, we should give due credit to the Ministers who have been working extremely hard during this six month period.
There are a few points that I would like to address to the Minister. In particular I would like to come towards this question of aid. The extension of aid programmes to Poland and Hungary and association agreements with the German Democratic Republic, Czechoslovakia, Yugoslavia, Bulgaria and Romania have been mentioned in the Minister's speech. However, if aid is to be given to these countries from the resources within Europe we must not forget the aid which is extremely necessary to be given to Third World countries. The poverty trap in which Third World countries find themselves at present is increasing. They are going deeper and deeper into debt because of historic borrowing from countries outside the Third World. They are unable to repay not alone the moneys borrowed but even the interest on those moneys. Therefore, Third World countries are getting deeper and deeper into a quagmire from which I do not think they can emerge. I hope when we are speaking about aid being given to countries in Europe we should not forget the need for a continuance of aid to the countries outside.
The European Bank for Reconstruction and Development is being set up and of course that will be for reconstruction of countries on the European continent. The unfortunate thing is that there is a limited amount of money available and if it is to be put into a single bank it will be taken from the fund that could be available to Third World countries.
Much has been said about the reunification of Germany. I believe, as do most people, that it is a very positive move to have this reunification take place because there is no question but that there is only one Germany. We had two political entities for too long and because of the fact that we had political entities it appeared as if there was a conflict between the people of Germany on either side. There was no conflict between the people in these states, there was a conflict on the political stage. There are some worries about a reunified Germany. I do not have any great worry in this regard because I feel that the German people themselves have learned from what happened during the two world wars. The lessons of history are there for the present German generation and I have absolutely no worries about that. I am sure they will form a democratic unit within Europe.
The cost of integration and its effects on Ireland and other peripheral parts of the EC have been mentioned by many commentators but I feel that there is in Europe now an indication from all countries that the Social Fund has to be used to bring up the countries which are less well off rather than to have a levelling down in terms of economics. I hope the effects of the reunification of Germany will be extremely positive.
We are living through historic times of change not alone in Europe but in the world in general. We see that efforts are being made of a very positive nature in South Africa to try to bring together the two conflicting sides of the political and ethnic sectors. I wish both De Klerk and his people and Mandela and his people well in their efforts to bring about changes in South Africa which will enable the South African people of all shades of colour and creed to live together in peace in a country which could be of tremendous value to the world as a whole if it emerges as a peaceful nation, a country which has enormous resources within itself for good throughout the world.
There are changes, as the Minister said, in the foreign policy of the major powers which is based now more on cooperation than confrontation. In the context of Europe this is very positive because we were in a sense sitting between two major super powers and, of course, we were in danger if there was ever a confrontation between these super powers. In recent talks with some members of the Supreme Soviet this point was brought out very forcefully. It was said to me that there is no going back to pre- perestroika. If they go back to pre-perestroika, pre-glasnost and a pre-Gorbachev era, they go back to a Stalinist era, they go back to repression, back to an era that none of us wants to see again. It was said by members of the Supreme Soviet that it should not be forgotten that Russia still has the biggest army in the world. The numbers have not been reduced.
There is a danger that in the changes that are taking place in Eastern Europe there could be a re-emergence of ethnic religious conflicts. The break-up of the USSR will not come about without major problems of a religious and ethnic nature. Therefore, in a break-up of the USSR we have to be careful it is not broken up by force. If there is to be a break-up it should be done on a peaceful basis. A former Deputy Foreign Minister of the USSR said that they will still remain a superpower but they hope that superpower will be one not of Bismarck but of Pushkin.
Senator Ryan referred to neutrality and the dangers with which we would be confronted if we entered into any military alliance. It seemed to him that we were being pushed into entering a military alliance. I do not think there is any danger that Ireland will be pushed into any military alliance. Our neutrality is a very positive neutrality and will be respected.
The question of free trade within Europe is of vital importance to us. Unfortunately, we have been lesser partners because of the fact that there were too many barriers within Europe and we, being on the periphery, had to contend not alone with physical barriers but barriers of paperwork, different rates of tax and so forth. The integration of Europe will be of major positive advantage to us. Europe at present — even before 1993 — is the biggest trading bloc in the world. As far as I know 25 per cent of world trade emanates from Europe. It has gone ahead of Japan and the United States. In the United States at present there is a realisation that the economic integration of Europe will be a threat to the United States in terms of its world trade. The United States, in cogniscance of this, are now advancing a free trade area between themselves and Canada. People seem to forget that Canada is a major trading nation. In fact, Ontario as a state does more trade with Japan than the United States does. That gives an indication of the amount of trade that can be done between the United States and Canada.
The problems associated with agriculture and what has been happening in agriculture over the past number of years have been mentioned here. There is an indication that agricultural output may be changed and that support will not be given except to individuals rather than to crops or animals. If Eastern Europe is to develop we must realise that in Eastern Europe there is some of the best agricultural land in the world which has been under-utilised for many years. If proper development takes place in these newly emerging democracies of Eastern Europe with investment from the EC and other places and if the agricultural output of those countries is brought up it will affect what happens to agriculture in this country. Equally, in certain countries in Africa there is a re-emergence of an agricultural policy and if they become self-sufficient in their production of food agricultural prices will come under threat and farmers in this country and in Europe will face problems which they might not realise at this stage.
I do not wish to delay the debate except to say that it has been mentioned again that our training in languages has been deficient. There is no question about that. However, it is being addressed at present in many schools and all we can ask is, as is being done in other countries, may be it should be a policy of Government, that at the lower levels in schools there should be a commitment to teaching languages other than English and Irish. English is a very widely used language in world trade but people like to buy and sell in their own language. It is important to know the language of the person to whom you are trying to sell. If you are buying from them it does not make any difference what language you speak.
This is a useful debate at this time, during Ireland's Presidency of the EC, and I would like to compliment the Minister on the amount of work she has done since she took up office. She has done extremely well in it and I am sure that with the continuance of our Presidency over the next couple of months we will see many changes which will have many positive advantages not alone for Ireland but for the EC in general.
At the outset, I should say how much I appreciate and support the sentiments which were expressed by my colleague, Senator Ryan and his defence of the left and left wing ideas in this country. We have certainly been at the receiving end of a lot of ill-thought out and badly formulated attacks which had no basis at all in reality. However, that is somewhat away from the topic before us today, which is the whole question of European unity.
I welcome the initiative taken to introduce this debate here today. It is very important that we concentrate our minds on what the implications of European unity are for us. Firstly, it is very important that we address the question of the political implications for this country. Will, for example, the European Parliament need more power? Can we anticipate that the European Parliament will become bigger and bigger? As the European Parliament gets bigger and bigger is it not reasonable to assume that the Irish voice in the European Parliament will become more and more marginalised? At this stage this country has 15 members in the European Parliament. I do not doubt that they are doing a good job and so on, but at the same time it is 15 out of 518. We are rapidly approaching the level of 1 per cent representation if it keeps expanding the way it is going. As that expansion takes place, I have great reservations as to what will be the capacity of Irish parliamentarians to make an impact in an ever-increasing European Parliament. What, for example, will be the relationships between the national Parliament here and the European Parliament? Will the role of the Oireachtas be diminished as Europe becomes more united and stronger? If that diminution takes place what are its implications for us? Do we understand them? If we do understand them will they be acceptable to us? I am not aware of any concerted or coherent debate on this. What will be the effect on our neutrality as Europe expands? Have we the critical mass of expertise to properly address these issues? Should we be using greater resources into teasing out what the implications are?
I repeat that I welcome this debate to the extent that it is an introduction. It is a very welcome step in trying to raise people's consciousness of what the implications of the developments in Europe are for this country. I do not think we have given very much thought to what will be the effect of this 20, 30 or 50 years down the road. What will be the effect of it on Irish culture? What will be the effect of it on our Irish heritage? Will it become enriched? Will more Europeans come over to participate in it or will it become more marginalised for the Irish? These are questions which have received scant attention and they are very important.
We are seeing a depopulation of rural areas. These are the centres in which the dominant Irish culture has been based over the years. What is going to be the effect of the increasing levels of depopulation in those areas and how will European unity affect those? What will be the effect of growing urbanisation? As of now, something of the order of 50 per cent to 60 per cent of the population live in cities and that figure is going to increase. What will be the effect of that? What will be the implications on organisations such as the Gaelic Athletic Association? Parish teams in rural Ireland at present cannot get 15 players on the field where there has been a rich tradition of Gaelic games and so on. What is going to be the effect on music, dancing and so on? We have not given very much thought to this and that is a pity. It is very important that we try to get some sort of national debate going on it.
These are secondary matters to what has dominated the debates and the considerations in relation to the European Community. What has dominated them has been economic considerations. I agree with Senator Ryan who said that we have potential for a disaster in the Single Market. We have had the Cecchini report and all that entails, and the debunking of it by the NESC. I wish to repeat how much I welcome and appreciate the content of that report. It was very timely and very appropriate. It was in many ways a confrontation with reality that this country badly needs. Certainly we were not on the way to living happily ever afterwards in the context of a Single European Act. Much nonsense has been spoken about it. Much euphoria has been created about the Single European Act. There are some very unpleasant aspects of it to which we should be giving a lot more attention. How will the gains in 1992 be distributed? Will it simply work out for the best or will there be more people who will be more and more marginalised? Will the various structures which are supposedly designed to stop the drift to the centre be effective? I have my doubts and I have my doubts in terms of our commitment and our capacity to adequately state our case in Europe.
My own feeling, for what it is worth, is that our main impetus in Europe has been, as it were, based on the principle of the politics of the next five minutes. You go in, you get whatever you can for now and something will turn up in due course and, in any case, why worry about it because the longest time span in any political life is to the end of the present Oireachtas which, at a maximum, is four and a half years away? We have been very reluctant and somewhat careless in our planning for the long-term and in thinking out what will be the long-term effects of these developments. We are now being carried along again in something of a euphoric state, through the European Presidency. The whole tone of its presentation is a euphoric one. We are not confronting the down side of it.
The Conference of Major Religious Superiors tells us again and again that there are of the order of a million people who are impoverished in this country. That is one-third of the population. It has not been featuring very much in terms of the Presidency. It has not been featuring to any great extent in regard to what is to be done to alleviate that problem, what is to be done, for example, about the thousand or so homeless children who exist in this country. In today's paper there is an anguished letter from Fr. Peter McVerry struggling to get some sort of a response to these matters. Again, they do not seem to have been put on the agenda.
These are the realities of present day Ireland. There is the growing depopulation in the west, the move again towards the centre. That is not receiving very much attention. There is the question of the Irish language. I hope I am not misquoting somebody but I remember some article in the last week or so referring to its death. We are not making many meaningful efforts to try to reverse these things. Perhaps they are skeletons in cupboards which are best left there and which nobody wants to consider or look at but they are not featuring. They have been written out of the show. They are not part of the agenda. At the same time, they are fundamental to the people who are afflicted by them and there is that fundamental problem of the million or so people who are marginalised and impoverished in the country. That is a staggering statistic and yet it receives very little attention.
We are faced with this deluge of the thinking processes of the right, the anxiety for enterprise. My goodness, look around at some of these people. They tell you they are capitalists. The one thing that strikes me about them is that if they are capitalists they certainly are not very successful. Most of them are spouting capitalist propaganda and at the same time they have their hands out looking for grants here, there and everywhere. My attitude to these people, speaking as somebody on the left, is if they are capitalists then go do it but for the love of goodness spare us the bother of having to listen to the propaganda on the one hand and the demands for the State to intervene and prop them up on the other. These people simply cannot have it both ways and it is time they were confronted with the question of who they are or, for that matter, an even simpler question of who they are not.
There has been some talk about social dialogue, the need for social cohesion. I am not sure that enough effort has been put into that. Certainly many of the social problems have been glossed over, brushed aside. People do not want to know about them. What about the problems of the various elements of the underprivileged? Again, they do not really feature.
I will turn to some aspects of industry and the need for infrastructure. I certainly agree with Senator Lanigan when he speaks about the need for more languages. There is need also to address very fundamental issues in relation to education, very fundamental issues in relation to the values which underpin many of the anxieties which manifest themselves in the educational sphere. Is it desirable and is it good that in this country you see tremendous competition on the part of students to get into what can only be described as the safe professions, those professions where, as soon as one enters them, to a large extent you could say it is a licence to print money? What have we been doing about that and what will be the role of Europe in relation to these matters? If we are talking about industrialisation and generating jobs and business than I have to ask how can that philosophy be reconciled with this headlong anxiety, grind schools and all that that entails, doing the leaving certificate over and over and in some cases over again, in an attempt to get into the big point colleges?
With the height of respect to the professions that are served by the students who come with these large numbers of points, I am sure they do a very good job but they are certainly not at the forefront of economic development by any standard and that raises fairly fundamental questions. All of these ideas are relevant to how we are going to get on in Europe, and Europe is moving away from the idea of subsidising the regions and so on. We are now moving towards this concentration in the centre and unless we can make a very coherent case to revoerse that for effective Structural Funds and so on, then the drift will continue. What is the effect and is it desirable that Dublin has become as large as it has? The population of Dublin in loose terms is now one million — one-third of the population centred in one spot. Will it become even larger or will Dublin move on to Brussels or to Paris? I am not sure that it will not. Look at the changes taking place — the way people are drifting to these places, to Paris or wherever. Quite a large number of these people will never return. All this has fundamental ramifications on the way this country will be in 40 or 50 years' time. It often bothers me that the people who set themselves up as pillars and defenders of the values of Irish culture and heritage — and I do not include myself in that group of people — seem quite indifferent to the whole thing draining away before their eyes.
I would like to be specific in one area of industry and that is the food industry. Here we are again facing very fundamental changes in this area and we do not seem to be getting our act together to the extent that is necessary. I welcome the moves which appear to be taking place in Munster in County Cork where there seems to be a realistic prospect that Mitchelstown Creameries and Ballyclough Co-operative are going to amalgamate. This can only be seen as the beginning. It has been calculated that if we are to become serious players in the food area then we are talking of perhaps as few as three co-operatives in the whole country. We are hastening very slowly in that direction but each day that development is postponed we are further damaging the capacity of the food industry to make a meaningful impact in Europe. It is very important that we get branded Irish products onto the European market so that they will be able to establish a consumer loyalty. We have not been very successful so far in that.
I welcome the debate to the extent that it is an introduction to trying to get some sort of a national debate going on what all of these developments mean for us. I regret we have not been more vigorous in discussing and debating the implications of the developments in Europe for Irish culture, language, traditions and so on and how they will survive in an integrated Europe in 50 or 100 years time.
I will be very brief. I just want to respond to one or two points made by Senator Ryan. He was talking about neutrality. I would like to see our neutrality preserved just as much as Senator Ryan. We must admit to ourselves that our particular brand of neutrality is really a western style neutrality. I can see a situation, perhaps in the future, when we may be called upon to protect our new family of Europe. We have an economic union at the moment, we are heading towards a political union and I think just as we are taking out insurance to protect our families and our homes, it may be necessary to take out a little insurance with regard to defence as well. I am not talking about aggressive behaviour. We have a defensive Army at the moment, not an offensive one, and I would not see any great difficulty in perhaps liaising with some of the other armies of our European partners and protecting the political union if necessary. There is no policy about this at the moment. That is just a personal view. I would not get too hung up about it.
I want to make another point and it is about what happened in Tiananmen Square, which Senator Ryan referred to. I do not approve of that, he does not approve of it and I do not think any right minded person would approve of what happened in Tiananmen Square. However, I would not agree with cutting off diplomatic relations with China. If we want to influence people surely we can do this better by talking with them than by not talking with them. We should preserve diplomatic relations with China. I do not know if Senator Ryan has ever met any Chinese people but, if he has, he probably found that they are a gentle, cultured people. On a personal level, Chinese people abhor violence. What happened there was uncharacteristic. I hope never to see a repeat of it. They are people with a civilisation that goes back 4,000 or 5,000 years. It was a wide ranging speech the Senator made. I do not know how China came into his speech because I thought the debate concerned Europe. I only felt the need to respond to those two points.
I welcome this debate. I welcome the Minister to the House. As she points out in her speech, this six months is a very significant time for this country because we are heading up the political structures of the European Community during one of the most exciting periods in the history of Europe over the last 50 years or so.
I would like to compliment the Government on the handling of these various events here and, along with them, the huge commitment there has been and continues to be from the staff in various Departments, including Foreign Affairs and others, and the staff brought in and seconded from State companies. It has been a considerable achievement which should reflect to the benefit of this country.
In regard to the European Community and issues relating to it at this time, obviously the central issue in all of this is the question of the unification or the reunification of Germany and the debate these days on whether or not this should occur, the extent to which it should occur and the extent to which people in the Western democracies should fear such unification. I am one of those who welcomes it in the most unqualified sense. There is nothing in 1990 that can stop the people power that exists in Germany today. The overwhelming ambition of these peoples of the same political background, cultural background, language, music, is to come together and be the country they had been originally, and no power on this earth can impede this type of development.
For a number of reason I do not have any real fears for the future security of Europe because of this unification taking place. It is very interesting that after the Second World War the two major defeated powers, Germany and Japan, have in the last 40 years to 50 years become two of the most powerful nations in the world today, but the competition the Japanese are into and the competition the Germans are into is economic competition. There is an interesting parallel between the two countries. Of all the major countries in the western world today they are in fact the most pacifist. The problem in the Far East is even getting the Japanese to have an adequate defence policy rather than having too many soldiers.
We have got to be impressed as well by the behaviour of German political leaders since the Second World War. They have developed a democracy out of the ashes. It has been an impeccable democracy, good political management, incredibly fine economic management. In the development of the new Europe in the European Community if a prize was to be awarded for the group which is the most European in outlook, the Germans would receive it for being the most European in outlook. With this development of a powerful Germany between East and West, they themselves in their own country seek a stronger Europe. I believe the only way to stop Germany dominating the Europe of the future is through the development of these structures we are talking about, where the European Community is concerned, the Single European Act, economic and monetary union and political union. The stronger the peoples of Europe can make this European union the less dominant obviously will Germany be in that complex. In fairness to the Germans, they are the nation in Europe pushing strongest of all for ultimate European political union, thereby illustrating that they are not hellbent on a major nation state as in the thirties and in the forties. For those kinds of reasons I do not think we have too much to fear.
The economic power of Germany today of course is immense. One of the reasons this unification of Germany can even take place is because, in the first instance, of the wealth that exists in West Germany. The staggering cost of incorporating East Germany with West Germany can only be tackled by a country of such immense wealth as West Germany today.
It is a strange turn of events where the security of Europe is concerned to reflect on the fact that today there are huge contingents of NATO troops in West Germany from the United States, from Britain and other European countries and the West German Exchequer is largely paying for this party. It is an incredible phenomenon that in 1990 part of the price West Germany has to pay for the incorporation of East Germany politically with it is payment out of the German Exchequer for the Russian troops who for a limited period will remain on German soil. It is a strange turn of events no political commentator could have forecast a year ago, or even dare to even reflect on, that Russian troops on German soil in East Germany are being paid for by the German economy. In regard to the UK, who pretend to be a little bit negative about the German issue — for very understandable historical reasons — it would be in their best interests if they fear such German power, to get on the train with everybody else on economic and monetary union issues, Single European Act issues and political union. In my view, impeding this development is really counterproductive to their interests.
It is very healthy to see the enormous endorsement there has been in East Germany politically for becoming part of West Germany and part of the European Community, the very considerable success there was in the recent general election in East Germany and the massive support for the Christian Democratic Party in West Germany with whom our party is aligned in the European Parliament. It was a massive vote of confidence. It was an approach adopted by Chancellor Kohl and it is very interesting to see these events develop. The only answer to any question of German dominance is to be very enthusiastic about the strongest possible integrated Europe. That is the best defence and guard against any undesirable developments there may be in the future.
It is a heady experience to live through this time when the Warsaw Pact seems to be crumbling, when the Americans are talking about hugely reducing their defence budget, when was seems to be out of fashion and where the real competition in the world is in the area of exports and economic growth. Again, in this area of exports and economic growth the outstanding examples have been Japan and Germany.
The Council of Europe has a very useful role to play in these developments because, unlike the European Community, it has a somewhat wider base and has already accorded special status to Hungary, Poland, Russia and Yugoslavia. There is even the possibility in the future of European co-operation in the Council of Europe by Russia. Such strange events have happened in recent months that it is not too far-fetched to imagine that at some time in the future there will be some type of Russian participation in European institutions, because at the end of the day it is part of Europe, certainly the Russian part of the Soviet Union is a part of Europe.
There are challenges, of course, for this country. There is real concern in this country. There is real concern in the farming community. Will these developments in East Germany, Czechoslovakia and Poland, to which the European Community is committed and to which there is going to be a substantial transfer of resources, affect the commitment to the Common Agricultural Policy? Will it affect funds coming to this country through industrial policy, social policy and regional policy? Of course, these things need to be guarded against, but I do not think a country as small as ours which has done so well in the European Community can or should attempt to impede the development of a greater Europe.
On balance, there are benefits to this country. In recent months we have seen a succession of delegations coming here from Hungary, Czechoslovakia, Poland and from Russia and of trade links developing with CCT and business people involved in this country. The integration of Europe and the bringing of these Eastern European countries into the free world presents an opportunity for Irish industry and for the Irish farming community to emphasise the positive, to get into these markets and to play our part in picking up what bonuses there are to be gained through this extension of the European Community and the bringing of these countries in Eastern Europe into an association of some form or another.
Senator Upton questioned whether the role of the Irish Parliament would be diminished through this process, and of course he raised a very good point. The issue of whether the role of the Irish Parliament is diminished is not just a question that has arisen today. I do not think it is arising specifically because of events in East Germany, in Czechoslovakia, Hungary or Poland. It is an issue which might reasonably have been discussed over the past ten years. In my view there is no doubt whatever about the role of the Irish Parliament. Both the Dáil and Seanad have been and continue to be diminished and it is a very serious issue. There are unquestioned transfers of power and these transfers of power are continuing under the Single European Act under proposed economic and monetary union and ultimately through political union. We are politically agreeing to this transfer of power because we believe that this transfer of power and this involvement in Europe is in the better interests of this country. There are problems about this diminishing of power of the Oireachtas and I think we could be doing more to protect it.
There are a couple of issues I would like to refer to there. We are a sovereign Parliament and many of our Members have a very healthy interest in policies that are being developed by the Commission in Brussels and policies being adopted by the various Councils in Brussels. We are Members of a sovereign Parliament and it would seem to me that for any parliamentarian in this country who wants to develop a healthy interest in Common Agricultural Policy, in social policy, in industrial policy, in political policy cannot begin to do that work effectively without occasionally visiting the institutions of the European Community. The European Parliament Members are in a different situation entirely — we are not talking about them; we are talking about the Members of this Oireachtas.
Given the strength of the Executive of any Irish Government, and strength a Minister has — the back-up, the staff, the access to travel and so on — the individual parliamentarian here is powerless to challenge the system because of the sparsity of resources. I find it absolutely staggering that a situation obtains today, for example, where any of the four of us who are here present who had a very serious interest in an aspect of national policy and who wanted to go to Brussels next week to follow up what needed to be done in Brussels would find that there is no institution in this state to which we can apply for the reimbursement of travel or subsistence. I think that is outrageous.
I was in touch recently with the European Community Office in Dublin about such an issue. I asked if funding was available there and the answer is that there is not. It did not apply to any specific interest I had in a special trip but just to establish the principle. There is a possibility that later on in the year in October or November some funds might be available in the European Community office for one visit for a limited number of people. I find it outrageous, in the case of Members of the Dáil and Seanad who have a serious interest in getting to Brussels to follow up a serious question of national policy, to endeavour to bring the benefit of their wisdom to this House or to the Dáil and to get an input into national policy, that the resources do not exist and that there is no system or structure to allow for the reimbursement of an air ticket. It is a simple little issue, but when you reflect on it it is an indictment of how we ourselves are allowing the role of the Irish Parliament to diminish.
We have voluntarily transferred power, as I said, through the Single European Act through initial membership of the Community, through monetary union or through political union. We have done it voluntarily, but we have not put the checks and brakes into the system to allow us control what we should be able to control and to allow the type of considered debate there should be in the two Houses of Parliament in this country.
In parallel with that, there has been this issue which we have discussed recently in the Seanad and I am referring to the question of the establishment of a foreign policy committee. If you look at the motions on our Order Paper it is interesting that about half of them are concerned with foreign policy issues today because foreign issues are now so dominant and have such a dominant effect on the Irish economy. These questions relate to this. Most of us, on both sides of this House, sought the establishment of an Oireachtas foreign policy committee. We were able to point out that we are the only democracy in Western Europe which does not have such a committee today. It seems to me past time for the emergence of such a committee for which there is such strong political demand in the two Houses. If such a committee emerged it could be used as the conduit through which the issues I am talking about could be discussed with lesser pressure to take motions in the two Houses. They could be discussed in committee and this whole question of monitoring the performance of Ireland in relation to European institutions could also be taken in hand.
I would ask the Minister to reflect on what I have said in relation to this foreign policy committee because the response of the Government recently in that area was inadequate. The response was that at this time such a committee would not be established. One of the reasons given was that because we were involved in the six months Presidency of the European Community there was not really the time to do much about it. I take that point but, having said that, given that that six months period is practically up and that the matter to be set in train does not require much activity in the very beginning, I think there should be a commitment in principle. The Government said it was an issue they would continue to look at. I would like to tell the Minister — and I would ask her to convey it to our own Minister and to the Taoiseach when she has the opportunity to speak to him — that there is a very strong desire in the Seanad that a foreign policy committee should be set up.
I welcome the recent announcement of the intention of the Government to establish an embassy in Poland. We spoke about this recently when we spoke about Eastern Europe in the debate here. At that time, and until this recent announcement, there had not been a single Irish embassy in Eastern Europe — most of the Eastern European affairs, I believe, were handled from Austria. I made the point that it was past time that this should happen; and, given our slim resources, it is unreasonable that there can be more than one, I presume. The choice of Poland I find a little odd. I would have thought Hungary more central. But, be that as it may, I welcome the development of this link with Poland, which presumably will link us up with many of the other countries in Eastern Europe.
I had the privilege to attend a conference in Washington two weeks ago about a lot of issues such as this and we had a very enlightening speech from a member of the Parliament of Poland who was the leader of the parliamentary group in the Polish Parliament from Solidarity. Certainly, it was a revelation to see what freedom means to these kind of people and to imagine the contribution they are going to make in the future in the affairs of Europe.
I do not have very much more to say, a Leas-Chathaoirligh. In Ireland we have not adopted any Irish position yet on European union. Some other countries have established a definitive position in that area. It is probably desirable that we do so also. There is probably scope for debate in that particular area. On neutrality, I do not think we have serious problems. The NATO issue is an entirely separate issue. The Austrians are making a very valid point, drawing comparison to Ireland in their desire to be in the European Community without wanting to become part of NATO. That is my contribution to this. Finally, I would like to ask the Minister to bear in mind the views I have expressed and which have been expressed by a large majority in this House in relation to this whole question of a foreign policy committee.
On a personal level I support that and I said that last Saturday. The Government do not share my views as of yet but I will certainly bring your views to the attention of the Government.
Thank you very much, Minister. It is nice to know that we have the Minister's support. I would expect that from a Galway lady.
I, too, would like to welcome the Minister here this afternoon. I would like to congratulate the previous speakers. I will not go over any of the ground they have covered, which is often a tendency in the House. I would like to deal with a specific issue. While the motion takes note of developments in European Communities, I would like to raise one non-development — and I feel is an important non-development — in the EC at present.
I am referring to the policing implications of open borders after 1992. There is no evidence that I have that the Government or the EC have addressed or are even preparing to address the policing implications post-1992. Ireland must be vigilant to ensure that drug dealers, terrorists, illegal arms dealers, do not have a field day or do not, in fact, threaten the State after 1992. There will be a danger that these criminal elements will use this State as a base for farming out their criminal activity to the rest of Europe. I believe that Ireland, in its role in the Presidency of the EC, should from now on make it a priority that plans are completed prior to 1992 to ensure that this sinister threat is not realised.
There is no doubt about the commitment of the EC to open borders, to remove barriers of all kinds — physical, technical and fiscal. Citizens throughout Europe will have free movement across national frontiers after 1992 without any systematic checks on their identity or, in fact, on their goods or personal belongings. Community manufacturers will have free movement over frontiers. There is no doubt about the commitment of the EC to ensure that this takes place. But the EC has not addressed itself to the criminal implications and the implications for the growth in what is now a criminal industry.
I would like to compare the situation in Europe post-1992 with that of the United States at present. In the US at present there is a policing system consisting of state forces with an overall, non-uniformed, countrywide police body — the FBI. There is great dissatisfaction in the US with this situation. It is accepted now in the US that certain criminal activities, especially drug trafficking, is totally out of control. The same situation will apply in Europe post-1992. There will be individual police forces with no overall body to co-ordinate their activities. In fact, we will not have a body similar to the FBI in existence. We will have a worse situation than the US have at present. One has only to look at the way US criminal activity and, as a consequence, US society have developed because of that. The police forces have failed to contain the growth of criminal activity. About a year and a half ago the idea was promoted to create a European uniformed police force with authority to cross borders and arrest suspects for certain types of offences, for certain scheduled offences like drug selling, arms trafficking, terrorist activities and other offences. We have heard nothing of that of late and I wonder would the Minister inform us if discussions have taken place in the Trevi Ministers meetings with regard to this.
I would just like briefly to refer to the drug traffickers. These people operate on a multinational basis which knows no boundaries. The war against criminal drug organisations will be lost unless the EC co-ordinate the police forces of Europe in attempting to curb the growth of the illicit drugs industry. It is frightening to note that just between 5 and 10 per cent of drugs are recovered by the security forces of Europe each year. Open borders will facilitate even more than at present the distribution of drugs throughout the European Community. I believe it is important to have a coordinated plan ready to cater for this, to control this and to ensure that the drugs industry is reduced and controlled and that Europe does not become like the United States in this respect.
An essential ingredient in the open border situation to fight against crime is the harmonisation in the European Community of the various laws. In the event of disparities within different legal areas, especially in the area of sanctions, penalties and so on, there are disparities between the countries in these areas, as there are at present, criminals will concentrate their activities in the countries which have least penalties and where the consequences of being brought to justice are reduced for the criminals in the area. They will concentrate their activities in these countries and farm them out to the various other EC nations.
A similar area which has to be tackled is the harmonisation of the police forces in terms of manpower, training, provision of equipment and so on. Where these are deficient there is less chance of criminals being brought to justice. They will concentrate in these countries as well because the risk is lower of being brought to justice. I would like to ask the Minister — I ask her in the context of the Government holding the Presidency of the EC — if any consideration has been given by the EC to the harmonisation of the police forces in the terms that I have mentioned, manpower, training, the provision of equipment and so on.
I would like to refer to a matter which was raised about 12 months ago. I would like the EC to look at the international banking situation and its role as an unwitting facilitator for the depositing of the proceeds of criminal activity. International banking legislation and conventions of secrecy at present facilitate the safe disposal and concealment of vast profits from criminal activity throughout Europe. While we must accept — I would be the first to accept this — that the confidentiality of legitimate financial transactions must be maintained progress must also be made to devise means to detect funds from criminal activities in the legitimate banking system. Proposals must be drawn up to make the laundering of such money impossible. This, I believoe, is very important in the control of criminal activity post-1992.
Over the past few months we have welcomed in this House the movement towards German unity which has gained momentum. I welcome as well a growing relationship with Eastern Europe. I wonder have the EC considered the policing implications post-1992 of the opening up of Eastern European borders especially the German border? With German unity there are obvious policing implications with the role of the Eastern Europe police forces. These forces were trained and conditioned in totalitarian states. Have we studied their approach, their systems, their attitude towards their policing work? I would be delighted to hear from the Minister if the EC have considered the policing implications throughout Europe of a united Germany.
I would like to refer to an experiment that has taken place in Central Europe known as the Schengen Agreement. This agreement was drawn up between some countries in Central Europe as a kind of a test case for open borders prior to 1992. I understand that difficulties have arisen with regard to this. It is ironic that when the Trevi Ministers were meeting in Paris in December last that on that very same date West Germany sought a deferment on the signing of the codicil to the Schengen Agreement. At the very same time as they were asking for that deferment the Trevi Ministers adopted a joint declaration on improving police co-operation with a view to 1992.
The codicil the Germans refused to sign is designed to advance further the integration of the five signatories. The schedule deadline under the Schengen Agreement have not being achieved. The Trevi group, which was set up in 1975, have been considering since then the issues of policing the EC after the removal of internal frontiers. The group was set when the European Council decided that Community Ministers for Justice should meet to discuss matters arising in the area of their responsibilities and, in particular, in relation to law and order. The only outcome of these deliberations to date is that there was a joint declaration in improving policing co-operation with a view to 1992. This was made just in December of 1989, four years after the Trevi group deliberations.
The citizens of Ireland and Europe urgently need reassurance on the policing implications of the whole area and the threats of a growth in criminal activity after 1992. I await with interest the reply from the Minister on this. I may be a bit repetitive on this issue but I am glad the Minister is here because I raised it when she was here briefly on an Adjournment motion in February. The Minister then made no response whatsoever to the issues I raised that night. I now welcome the response from the Minister. If she cannot give me information I will be happy with her guarantee that the Government in their Presidency of the EC will address this situation as a matter of urgency and report back to both Houses prior to the end of that Presidency.
I welcome the opportunity of speaking on this motion today. I would also like to welcome the Minister to the House. I want particularly to cover matters relating to the agricultural sector because in this area significant and dramatic changes are taking place and will take place in the times ahead. There is no doubt that the nineties will be an era of great change right across the board and the pace of that change seems to be accelerating very rapidly.
In the agricultural sector, 12 months ago three items were of concern, the ongoing reforms of the Common Agricultural Policy, the 1992 Single Market and the GATT negotiations on agricultural trade. These three matters determined what would happen in agricultural policy right through the nineties with the further fact that monetary union in Europe was having an impact somewhere down the road but was not of major consequence. These factors are still extremely relevant but we now have to build into the equation the possible impact of the dramatic changes in Eastern Europe which took place during 1989 and which are still ongoing.
On the question of the impact of the changes in Eastern Europe, I want to make a brief comment. In the immediate future, perhaps we are speaking about three or four years, a number of these countries will provide us, as part of the EC, with a very good market for food, for the sale of food products, but after perhaps three or four years have gone by I believe — others will share my views — that these countries, having regard to their climatic conditions, their soil types and their level of industrial approach to matters, with free enterprise obtaining, will, in fact, become with the aid of technology and so on, net exporters of food rather than importers. For that reason there will be major consequences.
It is inevitable, of course, that the EC countries will want to increase trade with the Eastern European countries in the future. My view is that it is vitally important that whatever trade agreement or import arrangements are made between the EC and Eastern Europe the cost of those agreements should be borne by the EC entirely and not by the agricultural sector if it exclusively relates to agriculture.
There is a further dimension, the re-unification of West and East Germany because West Germany, as we all know, has been the main payer into EC funds up to now. With the re-unification of Germany, a reality in the short-term, it is logical to believe that West Germany will not be in the same position to contribute to the EC coffers as it has done in the past. This could have major consequential effects for certain countries in the structural fund context, particularly for peripheral countries like ourselves.
I have referred to the three areas of change which are still there but I would also like, in addition to talking about the reforms of the GATT negotiations and the 1992 Act, to make a brief comment on certain areas of policy which should be high on any agricultural agenda at present. These are milk prices in the context of rationalisation of the dairy industry, TB eradication and environmental policy. All of these have a very big bearing in the whole European scene and are not just insular or confined to the Irish position.
The process of reforming the CAP, as we all know, is at a very advanced stage. In February 1988 the EC heads of government reached agreement on the level of the CAP budget for the following five years and also agreed to put in place a system of severe penalties to prevent spending in excess of the budget allocation. These systems of control, referred to as budgetary stabilisers, range from quotas on milk production, which we are all very familiar with, to severe price cuts for cereals. The milk sector, in particular, has benefited to date from the quota system. We are very substantial nett beneficiaries from the European scene. Last year we benefited to the tune of £900 million in the agricultural sector and that, right through the economy, is a very major factor and something that if we were to lose would have very dangerous effects.
The milk sector has benefited quite significantly from the quota system. However, in the other main sectors, like beef and cereals, the level of intervention prices has been cut drastically — the same applies to milk of course — and the level of intervention has been reduced. The EC Commission has justified that development quite clearly to all and sundry by saying, "The CAP is now more market-orientated". It is, therefore, in my view clear that the EC Commission will never again allow butter mountains, grain mountains, beef mountains. It also means that farmers and the food industry must become less reliant on intervention and other supports and more aware of opportunities in the EC market-place.
As far as the EC Single Market in 1992 is concerned, there is a lot of talk about it and perhaps a lot of people do not give it the attention and realisation that it deserves. It must be recognised that a major implication of the Single Market for Ireland is regional specialisation within Europe in the sectors or industries where Ireland holds a degree of comparative advantage. Not every sector or industry in Ireland will survive the competition of the Single Market.
It is necessary, in my view, to select winners and to pick out the areas where we can do best, to identify the sectors most likely to be competitive and allocate the necessary resources, particularly for research and marketing, to these sectors. Our main sectors, I would suggest, are the agri-food sector, based on indigenous food, raw materials and a clean environment, tourism based on our natural advantages and resources and high technology brain power developments based on a highly educated qualified workforce. These areas I believe are the ones of greatest importance.
I will confine my remarks in the main to the food sector. The 1992 Single Market programme, while offering market opportunities to Irish farmers and the Irish food industry, will pose many challenges. I want to draw attention to some of these. Firstly, increased competition can be anticipated in the overall EC food market and in some sectors there will be increased competition from imports in the domestic market. Secondly, a rapid rationalisation and increased concentration in the food industry in Europe can be anticipated. It has been predicted that by 1995 the European food industry will be dominated by 100 companies with an average turnover of about £2 billion.
That will lead to greater efficiency but, unfortunately, it will remove a large element of competition from the scenario. This development presents a major challenge to all those concerned with agriculture — such as farming organisations — to achieve a fair balance between the need to get Irish firms big enough, on the one hand, to compete in Europe and the need to maintain adequate competition and outlets for the produce of our farmers. There is a well defined and accepted policy that no processor in any sector should control more than 40 per cent of the total capacity. That is very important. I want to refer briefly to the monopoly legislation, I believe that that kind of formula should be deeply enshrined in that.
The GATT negotiations are extremely important. In fact, a position has been arrived at where the GATT probably has a greater influence on the EC situation than the EC can influence upon itself. In addition to the pressures for changes within the European Community, pressure for increased access to the EC market by non-EC countries is now a factor of major importance. The GATT negotations in agriculture are expected to be completed this year. It is my view that the proposals put forward by the United States to eliminate all protection and support for agriculture are not a basis for negotiations and are utterly unacceptable. The US proposals to replace all price and market supports for agriculture with world prices and a type of income support in the form of a cheque in the post is not acceptable, I suggest, to Irish farmers or, indeed, to European farmers. We have a strong lobby at the moment from the US and the CAIRNS countries like Canada, New Zealand, Australia, South American countries and others that in fact we wind down our price supports and have them eliminated totally by the year 2,000. That, I believe, would be the death knell of Irish agriculture and, indeed, of the Irish economy itself.
I suggest the EC must formulate its own agricultural policy to fulfil the EC's own objective and ideals and not satisfy pressures exerted by external forces. Long-term agricultural policy within the EC must continue to recognise the fundamental role of the family farm as a basic unit of production and as the mainstay of rural society. EC price policy for farm production must take full account of the cost structure on efficient family farms and must reward farmers with incomes which are in line with non-agricultural incomes. As the norm, farmers wish to generate their incomes from their farm production. It is, of course, recognised that farms with inadequate resources in less favoured areas will require alternative income sources or income supports.
The EC must continue to demand the right, agreed within GATT over 20 years ago, to protect its market from the low prices and fluctuations in the world markets. The EC must also continue to demand the right to operate whatever internal measures are necessary to stabilise its own market or to stabilise producer incomes. Thus, the EC negotiators in GATT must not make any commitments which would undermine or erode the basic instruments of the CAP. Having said that, it is fair to acknowledge and recognise that the influence of the CAP is enormous. It is a powerful trading arm or grouping.
Agriculture is not the only area that commands attention within the EC. From our point of view, while 42 per cent of our net exports are agricultural it is a matter of great importance. The EC must not, however, operate its agricultural policy in a manner which destabilises export markets or seeks, through subsidies, an increasing share of world markets. To achieve this objective it is necessary that the principle of supply management be added to the existing principles of the CAP. The CAP must gear Community farm production to the needs of the Community's 325 million consumers — that is a very significant and sizeable market — and also the external demand provided by the EC's traditional share of world markets.
At present, the EC internal market accounts for 89 per cent of total milk production, 90 per cent of total cereal production and 97 per cent of total beef production. The EC is not self-sufficient in these various commodities but almost so and there is a very slender, narrow line between surplus situations and positions of scarcity. While demanding the right to maintain its traditional export shares the EC must not allow the relatively small percentage of production, which is above internal market requirements, to undermine the price for total production.
A supply management policy by the EC would be effective only if suppliers of competing imported products, such as cereal substitutes, vegetable oils and oil seeds, could also be stabilised. The rebalancing of import production is an essential element of supply management. All agricultural exporting regions of the world, particularly the United States and the CAIRNS group of countries, as well as the EC, should have a strong interest in promoting the greatest ability and highest prices on world markets. The achievement of better balance on world markets would in itself reduce the level of support necessary in exporting countries.
The farming organisations and the producer groups right through the various countries are having close dialogue and close liaison in this whole area. I suggest, in fact, that in the context of the GATT negotiations solutions will best be found through co-operation with the supply management framework rather than through conflict, price cutting or subsidy wars which ultimately would be to the benefit of only corporate trade interests and would be to the detriment of farmers in all countries and regions in the world. Even in the most favourable policy areas I have so far referred to there is a major marketing challenge for the Irish food industry which is the link between the Irish farmer and the final consumer in France, Germany, the United States, UK or wherever.
I want to give a few figures to illustrate that, virtually, we have not gone into the market-place at all. In 1989 only 12 per cent of our national beef exports went to continental EC markets, 26 per cent went to the traditional UK market, 48 per cent went to non-EC countries, which are totally dependent on EC market supports, such as export refunds and storage aids, and 14 per cent was sold to intervention. This is an appallingly bad marketing performance bearing in mind that a continental market is the best consumer market, having, as it does, 325 million customers for beef and we, of course, naturally enjoy free access to that market. It is essential that our single largest export industry is put on a more secure basis. The most secure outlet is clearly the EC consumer market. There will be no solution to the problem until the seasonality question is overcome. This must be tackled whether it relates to beef, milk or any other product. For this reason there is a major task facing the Government and the EC Commission to ensure that the beef industry is put on a better and more stable footing. Winter fattening of beef must be taken into account. In recent times there has been little or no money from beef production, particularly winter fattening. Indeed, there is little or no money in beef farming generally nor is there money in cereal farming. In any context, with the exception of those who have milk quotas, it is very difficult for farmers to make money.
I should like to refer to the dairy sector. Though the last two years have been quite successful in terms of milk prices, there was an increased reliance on basic products such as butter and skim milk powder, to absorb Irish milk supplies. In 1989, for example, 68 per cent of our total dairy production went into butter and skim milk powder in comparison with 61 per cent the previous year. Our dependence on the non-EC markets for our dairy exports is also too high. Forty-seven per cent of our dairy exports went to non-EC countries in 1989 with the help of export refunds. We have to realise that that is something the taxpayer in Europe will not continue to tolerate. We have got to find markets within the EC.
Bearing in mind that market support mechanisms, such as intervention and export refunds, are coming under pressure from both internal EC forces and external GATT forces, there is an urgent need to get our act together so far as marketing is concerned. We joined the EC in 1973 to gain access to a large and lucrative market. Seventeen years on we are still struggling to achieve our fair share of that market.
On the question of milk prices, the current weakening of dairy commodity prices highlights once again the urgent need to improve efficiency and minimise assembly and manufacturing costs. Independent reports suggest that as much as 5p per gallon can be obtained by more rationalisation and more efficient processing at secondary production level. That is the first issue that must be tackled.
In 1989, as I have said, 68 per cent of Irish milk was processed into butter and skim milk powder but only 23 per cent of Dutch milk, for example, was processed in the same way. Those are telling figures. The same position broadly would apply in Denmark and in other European countries.
We cannot compete price-wise for the gallon of milk on the open market if we continue to use the traditional method of disposing of milk. A promotion campaign is needed to highlight that milk and milk products are a natural food source and provide an abundance of nutrients. I suggest that the co-responsibility levy be reduced to 0.5 per cent and be used solely for the promotion of dairy products with an allocation of 0.5p per gallon for all dairy processors.
Over the last two years EC dairy market price supports have been progressively reduced in line with the improvement in world market prices. These supports must now be increased in tandem with the weakening of the commodity price. It is vital that the Commission accepts that Irish dairy farmers will never again accept cuts in quotas to dispose of surpluses. Frankly, while we have not succeeded in the marketplace, as an interim measure, we need something to close that gap.
There is another vital point I wish to raise. That is the question of bovine TB eradication which is very important in the context of the years ahead, particularly in relation to 1992. Recent reports have suggested that the incidence of this disease could be as much as 33 per cent greater than is currently on record. It is because of this serious underestimation that ERAD are totally incapable of supporting their functions. Farmers pay £25 million per year through the disease eradication levy but it would require another £10 million to £15 million to make any impact in this regard.
For round testing to be meaningfully adopted a number of fundamental conditions need to be met. The quality of testing must be improved to remove all infected cattle. Present reports show that between 23 and 33 per cent of reactors are being left undetected and so remain in the herds. A greater quality control of practitioners' work should be established and those who do not meet the standard should be removed from the programme. I would also suggest that adequate compensation be paid to herd owners whose herds ae restricted due to TB as an essential factor to reduce the severe financial and mental hardship endured during a TB outbreak. At a minimum, reactor prices should be restored to their pre-15 January 1990 level. Any extension of the restriction period should be marked by a pro rata increase in compensation and income supplement. I am talking here about replacing the 60 day restriction with a 90 day period.
The vital question in this area is the cause of the infection. There is a wide-measure of opinion to suggest that wildlife are the cause. If it is positively established that this is so, all such sources of infection should be removed at the same time as the infected cattle are removed. There is no point in removing the infected animal if the cause of the infection is left behind. In regard to protected species and so on, I suggest that this aspect be taken on board by the Department of Agriculture. As a condition of embarking on a meaningful round of testing, £10 million to £15 million more is required in addition to the £25 million farmers are paying at present.
Farmers must have regard to environmental matters. In the past two years the farming community have spent £200 million on pollution control facilities. One accepted independent survey suggests that another £400 million is required to be spent by farmers on environmental control to comply with the various EC regulations on effluent disposal and related matters. If the Government are serious about protecting the environment they must immediately update the costings in relation to grants for agricultural development. It is necessary also to introduce an efficient and speedy process for dealing with applications. The Government will have to see to it that practical and reasonable conditions are attached to planning permissions to ensure that good farming practice is maintained. The return on investment on pollution control facilities is small for farmers and a mechanism will have to be found to advance loans at low interest rates — low interest rates must mean rates in a single figure — for such developments. Proper tax incentives must be available.
I want to remind the Senator it was indicated by the Leader of the House at the commencement of this debate this morning that Members should limit their contributions to 30 minutes.
I will be brief. There are two or three other points I wish to make. Environmental legislation needs to be updated. There will be a big drain on our economy if it has to meet the various suggestions I talked about but if it does not we will not be at the races in 1992 or in subsequent years.
Economic and monetary union will play a major role in dictating the future economic policy for Ireland and we must be very conscious of that. In compliance with the wish of the Chair, I will conclude in a few moments. What I have said leads to a number of important conclusions. The policy environment at EC level facing Irish farmers and the Irish food industry is rapidly changing due to both internal EC developments and external pressures in terms of the GATT negotiations.
I am confident that if the necessary adjustments are made in our agri-food sector it has a real future in the EC market place. The need to get the national economy, including the public finances, into shape should be self-evident. If we respond to the realities of the market place and the increased competition which is inevitable, then the 1990s will see a prosperous Ireland. If we ignore the realities, there will be a prosperous Europe but there is no guarantee that Ireland will achieve its vital share of that prosperity. Finally, I thank the Chair for his indulgence and I apologise if I have overstepped my time limit.
I would like first to say what a pleasure it is, as always, to have the Minister of State in the House. I would like to preface my remarks with a couple of general remarks because I happen to know the Minister's views on one or two very important issues, not that I am privy to her private ear but I do listen to the wireless. I was delighted to hear her contribution not long ago in which she admitted that on a personal level she was in favour of a foreign affairs committee. I very much welcome that and I know that there are quite a number of members of the Fianna Fáil Party who have this conscientious understanding of the necessity of a foreign affairs committee. It has been expressed publicly before and I do not believe I am placing this extremely gifted Minister in any difficulty by repeating what she said.
I sympathise with her in the European context because it must sometimes be a little embarrassing to represent the only country that does not have a foreign affairs committee formally established. We do have a foreign affairs committee of a kind. I admit its defects but one was established initially by Deputy Michael Higgins and myself. If continues to function from time to time and does some useful work but, or course, it would be greatly strengthened if it was recognised and given some official status. I hope the Government will ultimately come to the conclusion that a foreign affairs committee is necessary, as I think an increasing number of Fianna Fáil members also believe. Perhaps I will be able to return to this and to illustrate where this is germane to the issue and why I think it should be so.
I also would like to say that I find it rather insulting that statements issued from time to time, not of course from this Minister but from certain official sources, suggesting or implying that we as public representatives are less reliable than the civil servants of the Department of Foreign Affairs in Iveagh House. This is a deplorable attitude and I hope it will be vigorously stamped upon in public.
The debate today is not really about a foreign affairs committee; that was just a preamble. The debate is on a motion asking Seanad Éireann to take note of developments in the EC and so, of course, we should. What are those developments? Actually the developments that are most significant take place principally at the moment outside the EC and what happens in the framework of the European Community is very largely reactive. It is reacting to unexpected, unanticipated developments, both political and economic, outside the immediate confines of the European Community. Those developments are of course what are referred to as the liberalisation and democratisation of certain régimes in Eastern Europe. I would like to look very quickly at one or two of those and ride one or two of my own little hobbyhorses.
First, there is the question of German unification. It is presented almost as if the consent of the other nations of the EC was actually necessary for this process to take place. This is not the case. It was inevitable. We were actually presented with a fait accompli. I do not think there is any doubt about that. That fait accompli has certain consequences because what will occur is the creation of an enormously powerful centralised financial unit right at the heart of the European Community. There was a debate in which some of these issues were raised last night and one of the contributors referred to the late Dr. Ludwig Erhardt, the magician who created the Wirtschaftswunder, the economic miracle of Germany in the 1950s. He quoted him as saying he believed that the development of the Federal Republic of Germany was so strong financially that it would ultimately be able to bear the cost of unification on its own shoulders. That may be, but I believe there is a displacement effect which we are right to monitor in this country.
That displacement effect involves interest rates. I was very, very interested to hear my distinguished colleague, Senator Hourigan, refer to the necessity for interest rates in single figures for farmers. I wish him luck. I wish us all luck. The Minister knows as well as I do that the current overdraft lending rate here in the principal banks is 18 per cent and may go higher as a result of the economic aspect of the displacement effect of German unification. I hope it does not and I hope that we as a peripheral and poor nation do not have to shoulder too much of the economic burden of unification.
As unification arrives it is perfectly clear to me, and to everybody else, that the reunited Germany will certainly be a member of the European Community. The greater Germany will be one of the Twelve or whatever the number happens to be at that point. That also has implications in terms of policies already enunciated within the Community such as freedom of movement for workers, capital and so on. We are already seeing some spin-off effects of this in the job market. I understand the availability of an enormous market of cheap labour in Eastern Europe is already affecting the capacity of the German market in particular to absorb Irish labour which had up until this year been a moderately significant, but certainly growing, element in mopping up our unemployment figures. First of all the developments in the European Community are reactive and, secondly, those reactive developments have consequences for us in Ireland. I do not think, however, that we should be entirely selfish.
I would like to remark on one point that is very clear from the Minister's speech — she is not alone in this although it may be inadvertent. Her speech is very much an inward looking document. We are looking into the concerns of what is basically the Continent of Europe. We are talking about equalisation, the economic benefits and so on and assisting Eastern Europe. We all know that this is not out of the goodness of the heart of the Economic Community; it is for very clear motives of economic and political advantage. I would like to draw the Minister's attention to a discrepancy here. The Minister will know that the countries of the Southern Hemisphere — the countries involved in overseas development aid — have appealed over the last year or so to the European Economic Community to establish certain things — in particular a development bank for the Southern Hemisphere countries and for the disadvantaged bloc — and they were immediately and brusquely turned down. They asked for the transfer of personnel, civil servants and a number of other demands, all of which were turned down. Yet, what do we see in the Minister's speech — she is an important messenger from Europe to us? We discover that all those things that were denied to the most needy in the world are being granted to our separated brethern in Eastern Europe. I would appeal to this Minister to consider the possibility of making some representations to our partners in the light of our own history and tradition as a peripheral colonised and exploited section of Europe historically. We should not forget our past or our obligations to those who are now in the position in which we found ourselves tragically in the 19th century in terms of deprivation, famine and depopulation. Our special position historically enables us to speak with passion to whatever is left of the conscience of Europe.
Our special position also affects another aspect of European policy, and that is security. There has been a nibbling away at our position over the years. Worrying statements have been emerging about the role of defence in security and the necessity for Ireland to take a part in the defence of the Community, and from one point of view this is understandable, but the Irish people, for whatever muddled reasons and from whatever unclear political and historical background, cherish the idea of neutrality. In our special position as the only neutral country in the Community, we can advance the notion of positive neutrality. We can ensure that the American intervention which seeks to drive both sections of the united Germany into the arms of NATO is resisted. It is in the interest of peace that this attempt to colonise a united Germany, an extraordinarily powerful Germany, this devisive policy aim of the United States of America, is strongly resisted. In the light of our special history we can do this without causing undue difficulties or offence.
I want to turn now to one or two other matters relating to the reunification of Germany. I understand, and the Minister will be able to confirm this, that the Government of what used to be called the German Democratic Republic — East Germany — have agreed to compensate some of the surviving victims of the Holocaust, in particular the Jewish victims, and I welcome that. In other words there will be parity throughout Germany. I was in the Middle East and I was watching on the World Television News developments in Berlin a couple of weeks ago and I was horrified by a number of things I saw. One dealt with the other countries, Poland and Hungary. People who had been evicted from their house and taken to the concentration camp returned with an Israeli television team and were surrounded by a group of young children. One boy raised his arm in a Nazi salute and said: "Heil Hitler". On the door of the house that had been taken over by a Catholic Polish family a swastika was found.
During that same week I saw on the television newsreel footage from Berlin where gangs of rioting youths had broken into certain nightclubs and other premises shouting slogans against the homosexual citizens of Berlin who had attended these places at social functions. I would like to remind the Minister that the people who were persecuted on the basis of their sexual orientation under the Nazi régime have never been compensated, although they were the first to be imprisoned in the concentration camps, they were the first to be medically experimented upon, and they were the first to be murdered. When I asked at a conference in Turino why this was so I was told that some of them in the fifties or sixties had applied for compensation and the response of the German Federal Government was to put them back in prison to complete the sentences which had been imposed upon them during the Nazi régime. I sincerely hope that in this reunited gloriously liberal Germany this appalling stain on the honour of Germany will be examined and scrutinised.
I would also like to mention the situation with regard to Israel. This is a very appropriate time to do so during our Presidency of the European Community when we have a pivotal role in foreign affairs. While we have soldiers engaged in a wonderful, honourable and professional peace-keeping role in the Lebanon, we might have seriously examined and brought to fruition the establishment of full diplomatic relations with a resident Israeli Ambassador in Dublin. Why has this not happened? The Israelis now have relations with every other member of the European Community. Once again we are out of step. The Israelis have exchanged Ambassadors with the Romanians and the Bulgarians. We chose to have an ambassador in Teheran, but not in Israel. That is dangerous. Although I am a supporter of the state of Israel it would free me to make the kind of trenchant criticisms I would like to make of the current situation in Israel which I can do from the inside in an informed and balanced way, if I felt in a spirit of fair play there was somebody here on the spot to answer whatever I or other people had to say who are honestly critical of Israel. I ask the Minister to consider this in the European context. Another example of where, in terms of European foreign policy and at the moment when we hold the chairmanship of the group of Foreign Ministers, we are again out of step on this issue.
In this context I should like to mention Tibet. In the European context the Dalai Lama has been honoured. He has been allowed to address the European Parliament; he has made certain strong but gentle statements. The reason I honour the Dalai Lama — and the people of Tibet through him — is that he is one of the few world leaders who is genuinely moral and who can therefore, be both strong and gentle. I am very glad to have had it confirmed officially from sources in Dublin that, in the exchange of letters that took place consequent upon our mutual recognition with the People's Republic of China there was no recognition of a boundary incorporating Tibet. I wish that to be placed on the record of this House. There is no moral or intellectual reason for us accept the Chinese Government's claim to Tibet. We can help this small, honourable and brave people who are at the dangerous end of a policy that amounts to genocide by the Chinese Republic. Again I ask the Minister to consider can we not move towards the less cautious attitude in this matter of the European Community as a whole? These are important broad matters and I hope they will be looked into.
I would like to end on a less broad, in fact considerably narrower, note. I would like to invite the Minister to take very cautiously the urgings of Senator Hourigan with regard to the TB eradication scheme because I am sure the Minister knows, as I do, that the evidence does not condemn the badger to be gassed. The major scientific studies done in this area have failed signally to demonstrate a direct causal connection between the low level TB infection incidence in the badger population and the incidence of bovine TB. I do not really think it is within her remit but I hope, if it is, that she will be cautious of it.
I would like to ask the Minister to exercise her goodwill, of which I am convinced, and her caution in another area because she mentioned in her speech — Structural Funds. I have a very particular interest in this matter because a significant sum was allocated under one of these headings for the development of the James Joyce cultural centre in North Great George's Street. It then appeared to me that significant attempts were being made to divert this funding to another project sponsored by Bord Fáilte in the north city, which I also welcome. I would like to report to the Minister the fact that I have since had contacts with both the Minister for Tourism and Transport who was most helpful, and with the head of Bord Fáilte, who is now also most helpful. However, I believe this is an area which could do with the Minister's benign monitoring to ensure that this project is brought to fruition by 1992 when one of the world's largest and most significant scholarly conferences in the world of literature will take place in Dublin which will bring a couple of million pounds worth of tourism into the city and when it is hoped to open this cultural centre. That will do a great deal for tourism because by this cultural centre, you have an opportunity to disseminate through academic centres, through universities, through this kind of contact, an information network on the desirability of Ireland as a location for cultural tourism.
I am sure the Minister realises that in this area I really do know what I am talking about and I am continually asked to broadcast on American television. The "Good Morning America" programme team are over at the moment and the one thing they are interested in is James Joyce and Dublin. Ireland of the Welcomes has an article by me about Bloomsday. Sometimes I feel like Myles na gCopaleen when he said: “I declare to God if I hear that word `Joyce' one more time I will surely froth at the gob”. In the interests of Ireland and tourism I will froth endlessly at the gob but we would like the kind of support which the Minister so graciously indicated to us in the past, her motherly concern for this very important project which I believe now has the sympathetic interest of the Government and of the tourist agencies in this country.
I would like to thank those Senators who made very valid, interesting, informative and supportive contributions here today. I do not intend to go into each individual point raised by the Senators but I will try to cover a broad range of points.
First, I will talk about what Senator Raftery had to say with particular reference to the GATT. I would not for one minute put myself forward as an expert on agricultural matters, or indeed on the GATT negotiations, but I think it is important to point out the actual position. As he said, the US and some other countries are advocating full liberalisation of agricultural trade and indeed the elimination of practically all subsidies. As he rightly said also this is inconsistent with what the US themselves are doing at home because their Farm Bill proposes continuation of the very high level of subsidisation of US farm produce.
The Senator is wrong in alleging that the Community, or indeed Ireland, is subservient to the US on this matter. We do not believe that the final result of the negotiations which are now taking place will accord with what the United States propose. The US approach should be seen as a negotiating stance rather than a definitive point of view. One of the main objectives of the Uruguay Round is to achieve greater liberalisation of agricultural trade through improved market access and strengthened rules on the use of all subsidies. Senator Raftery cannot object to this, given as another one of the Senators pointed out to him his views on the 48-hour rule and non-life assurance. The Community remains fully committed to the principles of the CAP and the Irish Government — I am sure it is not necessary to repeat this — will ensure that the interests of our farmers are protected.
Going on to Senator Raftery's point in relation to the 48-hour rule, this rule, of course, in no way contradicts our support for the Single European Market. I would remind Senators of the situation the 48-hour rule was designed to deal with. In 1986 Customs and Excise staff estimated that there were 3.6 million shopping trips, that is more than one trip for every man, woman and child in this State, from South to North. The estimated value of goods imported on these trips in that year was more than £300 million with large amounts of revenue lost as a result to the Exchequer. In the three years, 1984 to 1986, £800 million was imported. This was fiscal, not genuine travel for which travellers' allowances were originally intended. In fact, this traffic constituted a major distortion of trade. Southern traders were losing out, not because they were uncompetitive but because of the exploitation of tax differences, although of course I would have to agree that the pre-tax price of some goods is higher here. We are strongly in favour of tax harmonisation in the Community and indeed we recently introduced in the budget the reduction of the standard VAT rate from 25 per cent to 23 per cent.
Going on to Senator Upton's comments, he referred to the possible increase in the powers of the European Parliament and he was very concerned that might be a diminution of the powers of both the Seanad and Dáil Éireann. That, of course, is some of the matters that will be examined by the Foreign Ministers and on which they will report to the European Council in June. The European Parliament quite reasonably has its own particular views. Not all of the member states would go along or even go as far as the European Parliament Members would like to go with their powers but the first step in the preparation of the European Parliament's position will take place on this day week when the Parliament in Strasbourg have their pre-conference conference before the Intergovernmental Conference at which all of the member states, the parliament and the Commission will be represented so that they can put their views forward, let us know what they would like to see happening and give the benefit of that to those involved in the Intergovernmental Conference.
The neutrality issue I dealt with in my speech and I would refer Senators to that speech. I agree with the remarks that he and indeed other Senators made in relation to economic and social cohesion and the great need there is to counteract any negative effects there might be because of the Internal Market and because of the effect of economic and monetary union on peripheral regions. I raised this as the occupier of the national seat in the context of the first discussions of the Commission paper on economic and monetary union which were held in Ashford Castle at the end of March. Senators will wish to know that the Minister for Labour, as President of the Social Affairs Council, has taken action to ensure the expeditious processing of the commission for social action programme which was another point mentioned by Senator Upton. The intention is, of course, that before the end of 1992 all of the proposals in this very large and indeed complex programme will have been examined and acted upon.
Senator Upton also warned of centralised concentration in the move towards greater economic monetary and political union. I believe, with respect to the Senator and I am sorry he is not here, that those words coming from him ring rather hollow when one considers that his political party was a partner in a Coalition Government which made a decision to stop a decentralisation programme which had been started by the previous Fianna Fáil Government. I am glad, of course, that since 1987 that position has been reversed and all of us, including Senator Upton, can see in regions throughout the country decentralisation at work at its best.
Senator Neville's comments related to the policing of borders after 1992, drug related matters, terrorism and so on. I could give a fairly lengthy response to him but to do so would be holding up the business of the House for too long; therefore I will confine myself to just a few comments. A series of compensatory measures, as a number of Senators would know about, designed to counteract any benefit which would arise for terrorists or drug traffickers and criminals, which would follow on from the reduction of frontiers from 1992, is under examination in the Trevi group. He talked about the Trevi group and all of the issues he talked about are being looked at in the context of that Trevi group and examined. Of course in due time they are going to come forward with proposals.
In relation to drugs, this is something that a number of Senators were concerned about. As a result of an initiative by President Mitterrand there was a high level co-ordinators group set up to deal with the whole drugs issue, not just the specific matter of drugs themselves but that very important matter of money laundering as well. That high level group is due to report to the European Council in Dublin in June. In fact, the European Council meeting that took place on 28 April asked that they speed up their work and produce this report for the Heads of State in June. I think that is important. The Irish representative on the group that is now known as CELAD is the former Garda Commissioner, Eamon Doherty. Looking back on his experience as Garda Commissioner there is nobody more qualified in the country than that man to represent our viewpoint in that area. People in this House and in the other House, and indeed throughout the Community, are very concerned about that whole issue relating to drugs.
I think there is a marvellous feeling that things are happening in the Community, and one of the most positive elements of that has to be German unification. Senator Norris is right to say that the Community does not have any veto over that, or cannot tell Germany whether it can unify, but I think it is important that that unification is taking place under, as the European Council termed it, a European roof and I think it is important that it should take place as harmoniously as possible, with as little distortion as possible to European markets and to the European monetary system. It is very important that there should be an involvement by the member states at the heart of what is happening in Germany. If we are going to accept the German Democratic Republic into a Community as part of a greater Germany so that we end up with 12 member states at the end of the day then it is important that we have to be fully informed at all times of what is going on. We are greatly indebted to Foreign Minister Genscher and Finance Minister Vizil who have come along to ECOFIN meetings and to General Affairs Council of Ministers meetings to keep us fully briefed at all times on everything that is happening in regard to the German unification question.
The cultural aspect was mentioned by a number of Senators. I think all of us are genuinely concerned that we preserve the great diversity and richness of culture of the member states as a whole and indeed not only of the member states but of countries outside the EC. Council of Europe countries as well as Central and Eastern European countries are very concerned now to become active and involved in many of the cultural aspects of the Community. Next week we will have an opportunity in Brussels in the Cultural Council, chaired by myself, to look at areas of possible co-operation or areas in which involvement by Central and Eastern European countries and EFTA countries might be possible in the whole Community culture. In this context the Irish language is, as one of the Senators said, extremely important. There is no harm in pointing out that at least three Ministers I know of have used an opportunity as it arose in the context of Council of Ministers meetings to use the Irish language — myself, Minister of State, Pat the Cope Gallagher and the Minister for the Environment, Deputy Flynn. That is something that is positive. It reminds our colleagues in the European Community that we have a minority language, as it is called in terms of the European Community, and that there are members of the Government here and indeed people in the country generally who use that language, who are very concerned to preserve it and preserve all that goes with it in relation to Irish culture.
One of the Senators talked about the question of gains for the citizen as a result of the Irish Presidency. The greatest gain of all must be the great sense of pride in every Irish man and every Irish woman at how well the Presidency is perceived not just in the European Community itself but indeed on the international stage. After all, the EC is an international player now and I think that is genuinely recognised. There is a sense of pride that we have achieved a great deal for the European Community, that we have managed to get rid of the suspicions that were there between the European Community and the US, that the President of the European Council, Mr. Haughey, our Taoiseach, was able to go to the US and establish this very special relationship that now exists and which was endorsed by the European Council on 28 April. That has been a positive achievement not just for Ireland as a member of the European Community or for the Government or indeed for politicians but indeed for the citizen. There is a sense of pride as well that Ireland holds the Presidency of the European Community at a time when the history of Europe is being re-written, at a time when the architecture of Europe is being re-drawn, that our place in the history that is now being written in Europe is assured. That is important. It is also important and a great pleasure for our people to hear from foreigners, representatives at political and other levels from other member states, compliments being paid to the Irish Presidency because of the businesslike approach they have adopted to the Presidency. That is the kind of approach that all of the Irish Presidencies under various Governments have adopted throughout the years. We have always been known for getting the work done and pushing the agenda we inherited at the beginning right to its limits by the end of our six months. When we come to 30 June there will be substantial achievements that we can point to arising out of the Irish Presidency. On top of that, and perhaps a bonus, has been the informal meetings that have been held here. We have achieved a great deal for Irish tourism from those informal meetings. We welcomed very important visitors to every part of the country, not just to the capital, but indeed spread over all the regions of the country. That has been important. That has been publicised worldwide and that can have benefits from a tourist point of view after the Presidency is over, and indeed way beyond this year. That is important, it is significant, and if the country had to pay for the kind of good positive publicity it has got out of those informal meetings, we could not, in all conscience, spend that kind of money.
I would like once again to express my sincere thanks to all the Senators who contributed here today. I hope that we will be back with a further debate on European affairs before long. It is important that Senators should be as well informed as possible in relation to what is happening within the European Community. Of course, the Government and those involved in the Presidency are always prepared to be as helpful as possible in regard to Ireland's Presidency of the European Community.
Tá mé buíoch de na Seanadóirí. Ceapaim go raibh díospóireacht mhaith againn, gur deileáileadh le go leor de na ceisteanna atá á bplé faoi láthair ar stáitse na Eorpa agus beidh mé ag trú le teacht ar ais arís ar dhíospóireacht eile.
It is intended that we sit on Wednesday next week. I would like to thank the Minister for her comprehensive statement on European affairs to the House today. I would like to thank her, also for the comprehensive replies she gave to the questions and points raised during the debate.
