Pat Rabbitte (Dublin South West, Labour)

The most important item agreed at the recent summit was the budget or the financial perspectives from 2007-13. Apart from that decision, the overall Presidency could scarcely be described as visionary or exciting. The references in the conclusions to the future of Europe suggest no sense of urgency in tackling the political and institutional issues that arise from the rejection of the proposed treaty on the EU in a number of states.

Apart from the important matter of settling the budget, there is a sense of a Union that is marking time on some of the major issues. The financial perspectives, an inter-institutional agreement between Parliament, Council and the Commission on the main budgetary priorities, sets the framework for Union expenditure over those years. It is a critical component of the EU structure and includes areas such as funding of the Common Agricultural Policy, improving competitiveness, research and development, and cohesion between the regions. I welcome the commitment to observe the earlier agreement in respect of the CAP.

We should not evaluate the budget as an elaborate technical exercise of balancing the books on a European scale. Far more importantly, the financial perspectives for 2007-13 are the outcome of a series of explicit and implicit political choices and trade-offs, made by governments and influenced by the Commission, member states, the Parliament and the incumbent British Presidency. The Barroso Commission seems to be finding its feet and finding a balance between two different views of the way forward. President Barroso and his colleagues must address the practical problem of efficiently managing the interaction of a Commission of 25 members. For Ireland, a far more important issue is where the balance of power in the Commission will settle. It is between Commissioners who favour the defence and enhancement of the European social model and those who favour a return to unbridled market economics. There is no doubt the character and political orientation of the Commission and of the EU has changed. There is no doubt the disaffection of many European citizens is directly related to that change. The priority that used to attach to enhanced social cohesion and protection is no longer always evident.

Let us recall that Jacques Delors offered the European trade union confederation and affiliated national trade unions a deal. The core of that deal was that, in exchange for trade union support for the establishment of the Internal Market, the trade unions would get a strong social dimension, including social dialogue, social policy, health and safety policy, or to summarise, a well-balanced approach taking into account the social impact of the Internal Market legislation. There is now a strong feeling that some supporters of the services directive, for example, are attempting to undermine that balance.

All of us, not least the Government, underestimated the challenges and the scale, by comparison with the United Kingdom, of workers from new member states coming to work in Ireland and greatly benefiting our economy, as referred to by Deputy Kenny. Because our economy has been able to accommodate larger migrant inflows than was predicted, the process has not been accompanied by regulation, monitoring or invigilation of labour standards. The policy of zero-level regulation and minimal enforcement invites difficulty. Displacement is not a figment of the imagination of trade unions and exploitation is the other side of the displacement coin.

These facts of modern Irish life cannot be dismissed as merely anecdotal evidence. There is nothing anecdotal about the cases of Irish Ferries and Gama and several more minor, less well-known but no less serious cases. The Government's attitude is to let the market rip. If the macro figures are okay, it turns a blind eye to abuses and dangers.

There is nothing anecdotal about the Laval case in Sweden, now referred to the European Court of Justice. Commenting on the Laval case, the party of European socialists observed:

Some media in Europe have described this case as an example of protectionist or even xenophobic trade union action. The fact is exactly the opposite. The trade union movement in Sweden is fighting for nondiscrimination: workers in Sweden should have the same conditions regardless of their nationality and there should be fair competition among companies.

I have been making the same point here and I agree with the Minister for Enterprise, Trade and Employment, Deputy Martin, when he told my colleague Deputy Broughan that he viewed:

with great concern the potential social implications of the displacement of workers on established conditions in favour of those willing to do the same jobs on much poorer conditions... We do not want to see people building competitive advantage based on poor wages, casualisation of labour, low health and safety standards or other compliance practices.

The Minister referred to a recent development, not just confined to Ireland, whereby workers from Eastern Europe are being recruited on the basis of a contract for services, that is, on a self employed basis. In such circumstances, Irish legislation protecting employees would not apply.

I agree with the Minister and I regret neither Deputy Martin nor this Government have taken any steps to address the difficulties highlighted. Until now the Government has been nodding assent to the services directive which, if approved as originally drafted, will seriously exacerbate the phenomenon I have highlighted.

In paragraph 21 of the Brussels Conclusions the Council looks forward to receiving an amended proposal on the draft services directive from the Commission. The Parliament is due to have its first reading of the draft directive in mid-February and is scheduled to vote on the Gephardt report to the Parliament on 16 February. Speaking in January at a press conference at the start of the current Austrian Presidency, President Barroso said that very soon after the Parliament's vote the Commission will publish a revised proposal as requested by the European Council last December.

I welcome President Barroso's commitment that the Commission, along with the Parliament and the Council, hope to come up with what he called a balanced solution. From reports of that press conference I understand the President repeated the term "balanced" several times. He said he wanted a proposal that would provide what he called "value-added" but which must also take into account the concerns of certain sectors and of certain member states more than others. I ought to have said that I propose to share time with Deputy Ruairí Quinn.

Like our sister parties across Europe, the Labour Party is especially concerned about the country of origin principle. The so-called country of origin principle is not a principle at all. It is a shortcut to liberalise markets that is advocated by interests who do not believe in common standards or raising standards to a universally accepted minimum. The country of origin principle boils down to the idea that if something is good enough for where I come from, then it is good enough for another country too. If that approach was applied across the board, there would be no common protection laws for consumer goods, no common entitlement to equal pay for women and no European environmental laws. The Labour Party believes in freedom to provide services across European frontiers. However, it must be in accordance with common and agreed future standards rather than tolerating the existing worst standard in whatever member state as an acceptable minimum for all.

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