A Chathaoirligh, Ladies and Gentlemen, it is an enormous privilege to be invited to address this distinguished House. I am conscious of its history and that this, apparently, is only the second occasion on which the House has permitted somebody the privilege of addressing its Members in this fashion. My feelings of humility and pride are even stronger than they would be in other circumstances.
I am also intrigued by the fact that here I am speaking to an Upper House of a Parliament in the English language especially since your counterpart in the United Kingdom is a House which I, in common with many other politicians, spent the first half of my political life trying to abolish and may in the second half of my political life seek to join. Things change.
Enlargement, as I hope I will make clear, has immense implications for the current Union, the countries seeking membership of the Union and consequently the entire continent. As epitomised yet again in the course of a very efficient and effective Presidency, this Republic is central not only to the activity of the Union but its thinking. Without flattery and with complete accuracy, it must be said that no member country of the Union in its political institutions and among its people so faithfully carries forward not just the day to day reality and obligation of Union membership but the spirit of community in the Union. This may be, of course, evidence of a deeper character of the people of Ireland, or it may be the success in adaptation to fresh political challenges. Whichever it is, I hope the spirit engendered in and by this country in the Community eventually becomes endemic because it should act as a benevolent, communicable antidote to disease in one or two other corners of the Union that suffer from rather more cynicism and rather less effectiveness than does this country.
In my conversations ten days ago in an official visit I made to Cyprus in my capacity as Transport Commissioner, repeated emphasis was given to the critical link between joining the European Union and finding a political solution to the agonies of that island where so many Irish soldiers have served with distinction in the United Nations forces over the years of division. Ten days before that, the Transport Ministers of the central and Eastern European countries that are applying for Union membership repeated their countries' wish to join the Union in order to consolidate the modernisation of their political and civil institutions, to underpin the new democracies and bring fresh opportunities to their businesses and peoples.
For all those applicant countries the benefits of accession could be very substantial. With membership, they will have access to the Single Market and opportunities in world markets on terms negotiated by the Union. They will have closer cultural and social links with other European peoples, the prospect of increased financial and technical support, participation in powerful, well established and stable institutions and the opportunity to influence the actions and decisions made by the world's largest trading bloc, the European Union.
The existing Union members also have much to gain — bigger and growing barrier free markets for capital goods and expertise, greater opportunities for the movement of people and the prospect of an even stronger European voice in the councils of the world. Above all, and this is in the interests of every country, enlargement could secure liberty and stability right across this continent for the first time in history. In our generation, the prospect of gaining those objectives is moving from one of idealistic desire to practical reality.
The task of preparing the existing Union and the applicant countries for enlargement is, of course, huge and, to any sensible person, daunting. Despite the welcome enthusiasm for progress, it must be carried out in the most careful and systematic way in order to ensure minimum disruptions and maximum benefits. The applicant countries are responding to the challenge by making the huge structural and political changes that are necessary to comply with the preconditions set down by the European Council in Copenhagen in 1993. Those relate in particular to the creation of stable institutions which guarantee democracy, civil liberties and the rights of minorities. A further precondition is the establishment of market economies able to compete within the Union and, of course, there is the precondition that they are able to take on the obligations of membership.
The scale of the task of the applicant countries is — I make accurate use of a word that is often used inaccurately — historic. Average GDP in the ten potential member states of central and Eastern Europe is estimated currently to be about 30 per cent of the European Union average, whereas that of the four so-called cohesion states, of which Ireland is one, is now just under 75 per cent of the same average. Ireland's GDP is, of course, way above that figure.
It is obvious that there is a great deal of catching up to do among the candidate countries. Even if the ten potential member states were to enjoy annual economic growth rates that were 5 per cent per year in excess of the average arrangements between the European Union and the candidate countries. Obviously that is an achieved by the European Union it would take them over ten years to reach 50 per cent of the EU average and 16 years to achieve 75 per cent of the Union average. The speed and quality of development differs between the ten applicant states and, therefore, while it is convenient to speak of them as a grouping for the general purposes of describing their performance gap that is clearly not the basis on which their individual capacity to become members will be assessed when the possibility of admission comes to be considered.
While those countries are striving to achieve advances which would satisfy the conditions set at successive European Councils, the Union is following the pre-accession strategy outlined in the Essen summit in December 1994. It has implemented the structured dialogue between the associated states and the institutions and ministries of the European Union and it is working with the candidate states to ensure adjustment in three practical ways. It is offering technical and financial assistance through the FAR programme which provides about 1 billion ECU per year to the Eastern and central European countries and the Baltic states. In addition the European Investment Bank, together with some member states and other international financial institutions are investing significant sums.
The second adjustment mechanism is through the gradual integration of the associated states into the day to day work of the Union. I will give an instance. This year I established a Transport Infrastructure Needs Assessment, or TINA, as everything has to have an acronym in the European Union. I sat next to a man at a lunch some months ago and had a very interesting conversation with him. On his card at the table were written the four letters "LODZ" and I wondered what on earth that stood for. I tried to work it out and thought of "Logistical Organisational Development Zone". Then I realised it was the name of the transport Minister of Hungary.
I established this infrastructure needs assessment, or TINA, as a joint initiative based on the recognition that for enlargement to generate maximum benefit for all of Europe, the development of safe, efficient, environmentally friendly transport between all the member states of an enlarged Union is absolutely fundamental. The contacts and the development taking place through that process is, of course, a natural and practical means of ensuring the operation of effective adjustment between the way in which they run their affairs and meet their needs and the way in which we are seeking to meet our needs and run our affairs.
The third adjustment activity is taking place through the negotiation of market access arrangements between the European Union and the candidate countries. Obviously that is an essential accompaniment to the applicant countries' action to align their legislation with ours and it is an area where the Union must show imagination and generosity if the ideals of enlargement are to become a reality. In my sector, we have a liberalisation agreement on inland waterways, a mandate to begin the process of liberalising road haulage, which is of crucial importance to the central European states, and a couple of weeks ago in the Transport Council, largely thanks to the efforts of the Irish Presidency, I was granted a mandate to negotiate a civil aviation agreement with the countries of central and Eastern Europe and the Baltic states.
In all of these areas practical development is taking place. There is always a connection between access to our market and the achievement and maintenance of high standards of personal and environmental safety, again propelling forward the achievement of modern and efficient conditions.
These are useful beginnings although it has to be said that market access is one area in which the rhetoric of enlargement, colourful though it is, sometimes starts to come into collision with the lack of sufficient political will in some quarters to turn the objective of integration into reality. When the commercial interests of the applicant states start to bite, or seem to bite, into the commercial market of some of the member states, you will start to hear the squeals of pain even before the bites are felt.
Clearly that has to improve because if business and trade are not encouraged as a gradual but sustained process in the associated states, then the development of strong market economies able to compete in an enlarged market will simply not take place with the speed or on the scale that is necessary. In addition to the action being taken by the associated states and jointly between the existing Community and the applicant members, the Community must obviously evolve ways that, in future, facilitate the increase in membership. Clearly, that must involve changes in custom and practice, challenges to established interests and political and economic adjustments that will sometimes be uncomfortable. My watchword as I anticipate all of that and the potential for disruption and agreement is from a Woody Guthrie song: "Keep your eyes on the prize, hold on".
Preparations for change are, of course, under way. The first focus of effort is in the current intergovernmental conference. The Commission made clear in its opinion to the Intergovernmental Conference that if there was to be successful enlargement, three crucial issues would have to be addressed. First, the institutional implications of having an increased number of member states; clearly there has to be balance and adequate representation of the new member states — indeed, of all member states — and of their population in the voting arrangements in the Council. There also has to be a representative electoral procedure for Members of the European Parliament.
Second, existing decision making procedures which require unanimity could frequently result in stalemate in an enlarged Union. We, therefore, need to move to a situation where qualified majority is the general if not the universal rule.
Third, we need to tackle the sensitive but important issue of flexibility. Thought needs to go into developing a system in which some member states can move ahead faster in some fields without undermining the political and economic fundamentals of the Union and without weakening the cohesion between member states. The Commission has already made it clear that, after the conclusion of the Intergovernmental Conference, we will present a number of major documents to prepare for enlargement in line with the conclusion of the recent European summits of Madrid and Florence.
First, we will submit separate opinions on the application for accession from each of the individual candidate countries. Second, we will present a general document setting out a comprehensive approach to the whole enlargement issue. In doing this, we will make a detailed assessment of the impact of Union policies in such areas as agriculture and structural and cohesion funds. Clearly these are issues of direct and great significance to this country. Most importantly, the Commission will have to incorporate the dimension of future enlargement into proposals for the future financing of the EU.
The formal opinions that we produce will need to provide much more than a photograph of the applicant's current situation. There will have to be a realistic assessment of the progress they can expect to make before accession, taking account of the evolution of the Union's acquis and of the changing situation in the applicant countries. In preparing the opinions, the Commission clearly has to respect the injunction of the Madrid Council to ensure that the applicant countries are treated on an equal basis and that each country will be considered on its own merits in a scrupulously objective way without prejudging the results of the assessment. The recommendations in each opinion will naturally have to depend on the situation and prospects of the country concerned.
The task of adapting Union policies meanwhile will obviously involve significant changes that would have to be made, in many respects, even without the prospects of enlargement and most certainly have to be made when the prospect of a Union of 20 to 30 states in the next decades is contemplated.
The imperative for reforming the Common Agricultural Policy, for example, reflects the need to compete successfully and fairly in world markets, the need to enable developing countries to improve their agricultural sectors and trading prospects, the requirement to reduce fraud and waste, the obligation to ensure low food prices for Community consumers and the food industry and the requirement that spending be focused on these areas and on the groups most in need of assistance. These are all good reasons in themselves for continuing the reform process.
In its agricultural strategy paper to the Madrid Council last year, the Commission concluded that the 1992 CAP reform process begun by Mr. Ray McSharry had to continue with sustained and gradual movement toward more market orientated policies with reduced reliance on price support, greater integration of environmental concerns and development of a broader based rural policy to maximise the cohesion effects of the agricultural policy. It goes without saying that the necessary adjustments to the agricultural sector have to be carried out in an orderly, methodical manner which protects the proper interests of rural communities and gives ground for confidence to the farmers themselves about the future.
In addition to agriculture, the Union's policy on economic and social cohesion will also have to be closely scrutinised. The Commission is setting the scene for future discussions by publishing the first three-yearly report on the progress toward achieving cohesion as required by the Maastricht Treaty. The report centres on current and past trends in cohesion and how member states and the EU's policies contribute to reducing the gaps in social and economic development. Against this backdrop we will have to assess what enlargement will imply in terms of future development policies and in funding effort as well as the need for a process of transition towards a new policy and financial framework that will involve progressive integration of the new member states and appropriate adjustment of the cohesion effort within the existing member states.
Some of the enormous sums that have been postulated as being necessary to fund cohesion in an enlarged Union are clearly completely unrealistic. The absorption capacity of funds of any state is not infinite. Funds made available to new members will be limited by the amounts they can use, the amounts they can co-finance and the amounts the Union can afford. The disparities across the enlarged Union are likely to be large. Figures I gave earlier demonstrate that clearly.
There will be an urgent need to attack the major structural problems of some of the new member states alongside continuing efforts within existing member states to promote cohesion and the closing of economic and social gaps. If the Union is convinced of the effectiveness of its cohesion effort within the existing Union, there is every reason to think that cohesion policies will occupy a substantial place in the objectives and the budget of a Union which will ultimately be an economic and monetary union as well as the form of union we have now.
It is essential to emphasise that support to regional development and social regeneration are not sweeteners to the disadvantaged. This is a view I hold with particular passion because of where I come from and the knowledge I have of the way in which the funds provided from the European Union and from taxpayers throughout the remainder of the United Kingdom have assisted in securing a transition from one culture and structure of economic development to a completely different structure and culture of economic development in my homeland of Wales. I deeply resent, therefore, the representation of fiscal transfers, cohesion funds, Structural Funds and so on, made in some quarters as some kind of first aid system for wounded economies. Those transfers are fundamentally necessary if we are to sustain in anything more than the wildest rhetoric the idea of a balanced, cohesive Community that is advancing together and enjoying mutual opportunities in that strength.
The support mechanisms and the structural and cohesion funds are crucial for wider economic development, strengthening the periphery, decongesting the centre, controlling costs, combating and preventing unemployment and for achieving greater competitiveness in a union of economies in a single economic area. One thing is certain: a defensive, introverted attitude to enlargement will bring weakness. Those who take the view that enlargement will inevitably deprive assisted areas of support are defeatist and wrong. I hear the voices, not in a rising crescendo, but more frequently than I did four or five years ago. The reason they are wrong and defeatist is straightforward. This generation is the first in the history of this fragmented and war torn continent to get the chance to create a level of economic and political interdependence from east to west and north to south that will offer an unprecedented guarantee against despotism and strife in a continent that has had a surfeit of both, even in recent times. That opportunity for this generation must be taken.
Enlargement to include countries that have seriously under-developed economies and systems of management and administration cannot be a great and glorious leap of faith inspired simply by political will. Some would even have us think that all the difficulties can be eradicated or at least sufficiently obscured if we only have the political determination. Life anywhere, including in the European Union, is not like that. The process, therefore, must be gradual, measured and deliberate but absolutely determined and certain. Both the condition of the member countries and, even more, the state of the potential member states require that we take that determined but gradualist view.
Recognising that reality does not diminish in any way the belief that enlargement can and will be a mutual advantage, a fresh opportunity and a historic necessity. With the collapse of the communist bloc in Europe we are confronted by the need to develop and apply new concepts of security. There are obvious and changed sources of insecurity such as economic deprivation, poverty, unemployment, social exclusion, extremism, racism and evironmental degradation. There is a danger that the marginalisation of social groups and regions can give rise to fear, intolerance and conflict. In the European Union and in the countries of central and eastern Europe there is a widespread recognition of those realities which gives a sense of urgency to the need for enlargement. Our response must be imaginative and practical for there is acute awareness that enlargement must not, in its very act of application, lead to new strains, tensions, resentments and rivalries.
Speaking in Finland last month the Tánaiste said that what Europe will become tomorrow depends to a large extent on what happens in the next few years in central and eastern Europe. For that reason, enlargement which is both a challenge and an opportunity for Europe, must be a focus of all policies in the Union. In practical recognition of the fact that enlargement will enhance stability and confidence throughout the continent, your Government rightly made preparation for that development a priority for its Presidency. I commend the strenuous efforts of Ministers and civil servants for that objective. That energy must be maintained.
As the deliberations, which inevitably will sometimes be heated and hard, proceed, one reality must be remembered above all others. Just seven years ago, before the Iron Curtain crumbled, many western European countries were paying a huge proportion of their national wealth to ensure that the anticipated threat from an unfree and undemocratic eastern Europe was contained and deterred. As those same nations are striving to sustain and strengthen their new freedom and democracy in the most demanding economic conditions, western Europe must see the practical advantage of investing a much smaller part of its wealth in fostering those advances. There is not a family, firm, city or country in Europe, east and west and north and south, that will not benefit from the serenity that can be achieved by such partnership. We can attain that if we work for it and, because we can, we must.