Mr. John Callinan:

To take the common transit area first, the Government is very concerned about the importance of transit through the UK for goods from Ireland to the rest of Europe and vice versa. Our concern is to have as little complication as possible in that regard. One of the things we have managed to do is that in the move from the negotiating guidelines agreed by the European Council to the next document currently being negotiated - the negotiation directives - we succeeded in getting into the draft a specific reference to the unique geographic issues in terms of transit for Ireland and that this would have to be recognised and addressed. In much the same way as many of the other points I was making earlier, while we have a good hook on which to build, we have managed to assert that as a critical unique factor for Ireland. It is something of which we are highly conscious.

In terms of the concerns relating to state aid that the Deputy mentioned, the negotiating guidelines provide for the possibility of a close trading agreement between the UK and the European Union but, to use the Deputy's phrase, they are very much conscious of need for a level playing field. They make clear that they will not be keen to facilitate an agreement that would have, for example, a much more lax approach under state aid, tax provisions or whatever it might be to give a competitive advantage to the UK. That is anticipated in the EU guidelines and is recognised as something that would have to be prevented, but that in turn becomes part of the negotiating process with the UK.