Tuesday, 19 April 2005
Ceisteanna — Questions.
European Council Meetings.
Question 1: To ask the Taoiseach if the March 2005 meeting of the European Council in Brussels has been finalised; and if he will make a statement on the matter. [6082/05]
Question 2: To ask the Taoiseach the bilateral meetings he will hold on the margins of the forthcoming European Council meeting in Brussels; and if he will make a statement on the matter. [6083/05]
Question 6: To ask the Taoiseach if he will report on his attendance at the recent European Council meeting in Brussels on 22 and 23 March 2005; and if he will make a statement on the matter. [8765/05]
Question 7: To ask the Taoiseach the bilateral meetings he held on the margins of the March 2005 meeting of the European Council; and if he will make a statement on the matter. [8766/05]
I propose to take Questions Nos. 1 to 9, inclusive, together.
There was an expectation among Members that the first parliamentary questions to be answered would be on Northern Ireland issues. However, due to the rules regarding questions, I am required to first answer those on the spring European Council meeting, postponed from last week.
I gave a detailed statement to the House last Wednesday on my attendance at the spring European Council in Brussels on 22 and 23 March which was followed by an interesting debate and question and answer session. I do not intend to give a detailed reply to these parliamentary questions; instead I refer Members to my statement last Wednesday.
In summary, the spring European Council adopted conclusions on reform of the Stability and Growth Pact and on the mid-term review of the Lisbon Agenda. The European Council endorsed the report from the ECOFIN Council on improving the Stability and Growth Pact. The Government welcomes the new measures which underline the continued European commitment to fiscal discipline and strengthen the economic basis of the pact. The agreements reached on the mid-term review of the Lisbon Agenda marked a further stage in Europe's programme of economic and social reform, building on the work of the past five years. In particular, this year's spring European Council recommitted all member states to achieving the European Union's ambitious goals as set out in March 2000 at the Lisbon European Council.
It is obvious the French referendum campaign will be hard fought and the result will be close. At the March meeting of the European Council, did the Taoiseach have discussions with other government leaders who must hold referenda in their countries, such as Denmark, the UK and so forth? What is the Government's view of the trend that may emerge? In the event that the referendum is defeated in France, although I hope that will not happen, will that interfere with the Government's intention to hold a referendum in this country?
Has the Government considered the consequences of the changes in the Stability and Growth Pact? There has been speculation on the possibility of higher interest rates as a consequence, which would have a disastrous effect on hundreds of thousands of mortgage payers. Has account been taken of this by the Government and is there a strategy to deal with higher interest rates should they occur? Is it the Taoiseach's view that although the European Central Bank warned of the possibility of higher interest rates, it will not happen?
There was no particular discussion on the constitutional treaty but, as Deputy Kenny said, a number of countries have decided to hold either consultative or full referenda. Spain has successfully held a consultative referendum. Seven other member states as well as Ireland have confirmed they will hold a referendum. They are Portugal, the Netherlands, France, Luxembourg, Denmark, Poland and the UK. The Czech Republic is considering holding a referendum but has yet to make a final decision. Belgium was considering holding a referendum but it is unlikely now that it will do so.
Obviously, we hope the French result will be a "Yes" vote, although there is little point in speculating. There is an active campaign under way by all sides. I met the former Finance Minister of France yesterday and he gave me details of the campaign. All sides are actively involved and there are predictions that there will be a poll of 60% to 70%, which would be high by French standards. There is an active debate on all types of issues.
The position for other countries is that although a "No" vote would create tensions and difficulties, each country has an obligation to ratify the treaty before 1 November 2006. That process will continue. The Netherlands has made some statements about that but the statements have not yet been clarified. In November 2006, if four fifths of the countries have ratified it, the European Council will debate how to handle it, that is, if other countries have not come up with a solution before then. However, it is too early to play for that. For our part, we will comply with the obligation we gave at the European Council, that we will attempt to ratify the agreement before November 2006.
The principles of the Stability and Growth Pact involve maintaining fiscal discipline and controls, monitoring those controls and allowing the Commission to ensure countries adhere to the criteria set out in the Maastricht Treaty and subsequently in the Dublin Convention in 1996. These criteria still apply. While there have been useful changes and amendments, they are of the type that many countries have been seeking. However, they do not allow indiscipline or anything that would create a problem or undermine price stability. I am sure it will be monitored carefully by the Commission on that basis. It recognises the valid argument that countries with low debt that are involved in development policies do not create budgetary instability and should not, therefore, affect price stability. The European Central Bank is being cautious that countries do not try to use issues on the current side or to use other flexibilities which would not be allowed. That is the prudent line. As it is renegotiated, the rules and the strictures are still there other than in the new areas that are set out. I do not see why it would create inflationary pressures.
What is the position of the Government on the services directive? I have read that the Government took up a position of opposition to the French move to have serious changes wrought in the directive. Does the Taoiseach accept that in certain areas of services, the directive could have a serious impact on employment and on workers' conditions in Ireland if companies could perform to standards in their country of origin? The recent Gama case proves that. There is no reason that such a methodology might not be imported from the new accession countries. What is the current status of the directive? When does the Taoiseach think that the issue will re-emerge?
The services directive has been around for some time. It has been indicated that it would not get sufficient support in its present form. That view has existed since the Irish Presidency of the EU last year. Everyone agrees that a services directive is required, but in all such directives it is the balance that is at issue, what one can live with. Commissioner McCreevy almost immediately after taking up his post said that he did not believe the services directive would get sufficient support in its present form. While the Government has supported the services directive in recent months we have stated that the balance must be correct. We supported the French position because it was a very important issue for President Chirac. That position was that the directive should be sent back for further consultation and review. Commissioner McCreevy will now have to go into a new round of consultations to develop a directive that corrects the imbalances that were identified. It became a big issue in France, with large marches taking place against it by organised labour, but similar questions have been raised in many countries, including Ireland.
I do not know when the issue will be brought forward again, but I imagine it will take the better part of a year for all the consultation to take place.
I supported strongly my good friend Jacques Chirac in the debate. We were in favour of the services directive, but so was President Chirac. At the meeting, very few people argued that it should stay in its present form. I can only recall two or three who spoke in favour of it staying in its present form. Prior to Christmas, the Commission conceded that it would not get sufficient support in its present form.
I can only say to Deputy Rabbitte that it will not be that easy. As with other directives, everybody states they are in favour of the principles while being opposed to the details. There are different sides to the argument. President Chirac is not seeking anything extraordinarily unreasonable on this issue, from what I have heard of his presentation, not only at the last European Council meeting but at a number of such meetings. The interpretation of the directive, particularly in France where there have been large protests against it but not only there, was that it was seen as inflexible, unbalanced and unhelpful. This relates to the fact, which is feeding into the French referendum campaign, that unemployment in France has exceeded 10% for the first time in a long time. The French economy is in quite considerable difficulty and this is having a negative effect on political life there. They have reverted to the type of unemployment rates that have not been seen in France for a long time.
On nuclear power, which arose in item No. 47 in the summit's conclusions, what was the Government's position about building what is called "an international thermonuclear experimental reactor"? It is a nuclear fusion project. Mindful of the concerns from the RPII about Sellafield perhaps, was the Government in a position to offer a view or to make any meaningful statement on the matter? Notwithstanding the seismically active area in which it is to be located, some €4.5 billion will be required to build such a plant and billions more to run it. Was that financial question raised in terms of overall EU budgetary considerations in the EU vis-À-vis the research funding that is going to non-nuclear energy options, which is not far from the research money going to nuclear options? Will the Taoiseach say whether the Government has a view on climate change, a matter which was also raised at the summit? Were views expressed on that, given that the target of reducing CO2 emissions by 68% to 80% by 2050 was completely left out of the conclusions? Did the Taoiseach express a view as to whether the Government will meaningfully embrace those targets? If not, what is the Government's view? Does it see nuclear power as a way of reaching those EU targets?
A mid-term review of the Lisbon strategy was carried out at the summit but does the Taoiseach consider that the strategy is on course? Five years ago, the Taoiseach pledged the strategy would have a decisive impact on the eradication of poverty by 2010. Some 68 million people in the EU are currently living in poverty. Is that seen as progress? Can the Taoiseach say whether lessons from the Danish welfare system will be used to try to make any meaningful impact in eradicating poverty, given our own problems with the worst rate of relative poverty in the 25 EU member states? Will the Lisbon strategy on eradicating poverty be put on track, as it does not seem to be at the moment?
The conclusions as they relate to the Lisbon strategy for this year have followed the process I outlined in answers to questions last week. We have had two reports: one following our request last year for Commissioner Wim Kok to undertake an update for the mid-term review, and the Commission's comprehensive assessment of where the Lisbon Agenda currently stands. Ireland is by no means the worst in any of these areas under any of the indicators. I do not know where Deputy Sargent gets his figures but in terms of employment, social inclusion, welfare supports and dealing with marginalised communities, we are in a stronger position per capita, particularly regarding unemployment, the real indicator in these areas, and in terms of social provision.
It is disappointing that because of economic stagnation in 2001, 2002 and 2003, which continues in many countries, though thankfully not this one last year or this year, they have not been able to make real progress on the generation of sufficient jobs in the labour market, so that unemployment rates do not drift higher, as they are doing in France and Germany and increasingly in Italy.
Good economic growth generates the resources to put money into community development, poverty reduction and minority areas. We are continuing to put resources into these areas. They will not solve all problems over a short period but will bring significant improvements. Such improvements have also been made on a European level. The Commission is urging that more money be put into research and development to build a knowledge-based economy with high-quality jobs, an economy which will embrace ICT and other technologies to generate more employment and better quality jobs.
Deputy Sargent knows my view on nuclear issues. We are not a nuclear country and do not support nuclear development. We would like to see fewer resources put into it and to see less nuclear capability in existing member states. Resources made available through the EU Commission budget to help countries on the periphery of Europe, such as Ukraine and Belorussia, are not meant to assist them in their nuclear capabilities. However, some member states are deeply embedded in the nuclear industry and are unlikely to become less so in the foreseeable future. We do not support that situation. In recent years, Germany has set a target date for closing its nuclear plants and ridding itself of nuclear capability, a significant step with which Deputy Sargent and I agree.
We would have preferred to see the climate change targets retained. There was a major debate on the issue. Some people thought the target date was too far away, others did not want one and others thought it meaningless to set a date of 2050, which is 45 years distant. It was felt moves should be made more quickly and that the 2050 date would be seen as a pious aspiration. The original target date selected was 2010——
People felt that 2050 was too far away and that action should be taken much earlier. There is not an agreement on when people should achieve them, but EU policy is that they should be achieved and as much progress as possible made within the period of this plan. Then we can have a review to see where we are at and have another planned period set to step it up. It is not meant to try to press it out in a way that would be meaningless, particularly now that Russia seems prepared to join up to the Kyoto protocol, there is involvement with China and there is still pressure on the United States. To stretch it out into the long term looks too much like a pious aspiration. Those who are arguing for that include my Danish colleague and others. However, that is not a meaningful date and that is the reason it was dropped.
I wish to ask the Taoiseach two questions regarding his comment on the Lisbon Agenda in respect of the importance of competitiveness. For young people, some of whom are in the Visitors Gallery, the extent of research and development that takes place in this country is far from what it should be. In the context of the Lisbon Agenda, does the Taoiseach see a problem here? Given the spread of our universities and colleges of technology, there is no correlation between them and business to be a magnet for the attraction of heads of faculty to do that kind of research. For example, many universities in the United States can offer serious monetary and other packages to heads of faculty, professors, Nobel laureates and so on. This is a huge attraction for those at the higher levels, at the cutting edge, not to be involved in Ireland. Does the Taoiseach see that as a problem for the future and, in terms of the Lisbon Agenda, how does he see Ireland fitting in with that?
The Taoiseach said last week that the review of state aid rules, which is being undertaken, must be Lisbon sensitive if Europe is to remain an attractive location for future global investment. He also said that the wording proposed by Ireland was included in that section. What does he mean when he says the review of state aid rules must reflect that? Arising from the wording that was inserted at Ireland's proposal, what does this mean for us in the Irish context?
On the first issue, research and development, I will make three comments. First, because we did not have the resources, effectively until 1998, research and development only had a small budget. Now the budget is several hundred million euro, but probably the budget will never be sufficient. Hopefully, what we have done in Science Foundation Ireland and in the PRTLI programmes will allow people to compete for research projects in the universities and will make the universities set out their case for researchers. This allows them to bring in top class people, Irish and non-Irish, to our universities and to build up a proper research and development base.
We have also had to make the amendment I raised here previously. With our low corporation tax there was a disincentive where people could not write off tax because they were doing so already. The former Minister for Finance, Mr. McCreevy, made changes in the Finance Bill a few years ago to allow this change and it has got us back into a positive position. We spend a sizeable proportion of the budget on research and development. That is not to say that there are not always demands for new projects.
Deputy Kenny's second point is correct, at a European level our figures compared to other parts of the world, not just the United States, are not high. That is why the Commission proposal to seek 1.27% in the financial prospectus shows a significant increase, approximately 2.5 times the increase in the budget. Mr. Prodi, President of the outgoing Commission, felt strongly about that. The Commission believed from its examination that one of the reasons Europe was not reaching the kind of vision set out in the Lisbon target was that is it was not innovative or creative enough and not enough product development was taking place in Europe generally, thereby giving competitive advantage to India in information and communications technology and Asia in other products. I support that.
The Deputy is correct that the US is astronomically ahead of Europe in terms of the contracts available in Europe for quality researchers and research studies and projects. Ireland has stolen the march a little, although we are not the only country, in terms of attracting people back. A good study conducted last year, which was reproduced in The Economist or The Financial Times, demonstrates starkly that Europe is not in the ball park on these issues.
That relates to the Deputy's question on the Lisbon Agenda. If one sets down the criteria by which one wants Europe to be competitive, dynamic and reach certain targets by 2010, when it comes to implementation of policies, these need to be followed. It is one thing to write them into the Lisbon Agenda, they must then be followed. Without mentioning individual companies or products, we have had quite a few battles with the Commission and the system in the recent past regarding the inconsistencies of the policies. This is what I mean by a Lisbon-friendly policy. If one says that is the policy, one should not then work against it when it comes to dealing with companies based in Europe in a way that makes them less competitive in terms of investments in Asia, India or China. That is what they do at times.
While we are all aware of the case of one company, I do not want to mention it. If a large company wants to spend an enormous amount on developing a product, it is hardly likely that it would develop the product because it is not innovative, new or will not control the new market. A company will hardly create, for example, the microphone in front of me and spend billions on it to make sure the microphone is inferior to that which is currently available. I have never seen a person who tried to do that. Unfortunately, the way the criteria work, that is almost what the Commission says. If one cannot prove authoritatively that the product is innovative, the Commission says one cannot prove and, therefore, state aids cannot be used. I disagree with this and that I why I have raised it. The Commission argues these issues forever but I do not think it is helpful.
The result is that we rarely come up against a European competitor for most of the major projects being chased by us in the biopharma and pharmaceutical sectors. We have competed against India, Singapore and elsewhere for the past five or six projects in which I have had an involvement. That is also happening to other European countries. Europe's objective should be to take on outside competition rather than trip itself up internally. Some countries still do not understand that argument.
Cad é an scéal anois maidir le stádas na Gaeilge san Aontas Eorpach? An féidir leis an Taoiseach a rá don Teach cén dul chun cinn atá déanta? Where is the Government in pursuing its project for the recognition of the Irish language as both an official and working language of the EU? Was this matter addressed during the March meeting?
My colleague, the Sinn Féin MEP, Bairbre de Brún, met the Commissioner for regional development, Danuta Hubner, yesterday. Among other issues, she raised the case for a PEACE III programme of funding for the Six Counties and the Border counties after 2006. Are the Taoiseach, his Government and his representatives at EU level actively pursuing a new PEACE III programme for the period after 2006? We all welcomed the extension of PEACE II until that time, but there is no information for the period after.
Has the Taoiseach pressed for a new fund, and does he agree that it is important that community representatives and those at the coalface of community action should have a direct input into the formulation and implementation of any new PEACE programme? Does the Taoiseach agree that future funds should be built on and geared towards the achievement of the twin goals of reconciliation and social inclusion, critical elements necessary to combat a legacy of division perpetuated over many years?
I would like to take the second question first and return to Irish language provision thereafter. We want to have a PEACE programme after 2006 and raised the question over the last year. I managed to insert it into the conclusions of the European Council last June, when I was in the chair.
I would not have been able to do so had I not chaired the meeting. Since that time, the Irish and British Governments have made a joint submission. Prime Minister Blair and I signed that some time ago. Regarding the involvement of people in that programme, as I understand from a previous debate in this House — I believe on the 1994 programme — there is engagement by both Northern Ireland and the Southern Border counties and I have no difficulty with that. I am not sure what process is used by the relevant Departments regarding financing and putting it together, but I have no difficulty with involvement. I believe that we passed a resolution to that effect in the House.
Regarding the Irish language, since Christmas our permanent representative, Ambassador Anne Anderson, put forward a detailed position at COREPER regarding the paper that we commenced during Ireland's Presidency. That was well received although there were obviously a great many questions from people about its ramifications and whether it might affect issues in their countries. Subject to correction, I believe it is a fair assessment to say that we have answered most of those questions. Austria had several concerns. I have since spoken to the Chancellor, Wolfgang Schüssel, and I hope that I have allayed his concerns about all the issues that he raised, subject to its being put in writing.
The Prime Minister of Spain, Mr. Zapatero, and his Foreign Minister, Mr. Moratinos, are fighting a separate battle that feeds into our issue, namely, that of regional Spanish languages gaining recognition. He had made a commitment and is fighting that issue which is not the same as ours. Irish is our constitutional language and Spanish is theirs. The regional languages are therefore part of a different context. However, those languages are spoken by substantial numbers of people and he wants to find a political resolution. That issue, which is connected with ours, although I will not call it unhelpful, does not make life easier since it opens the question of regional languages in other countries.
I intend to travel to speak to the Spanish Prime Minister, Mr. Zapatero. I am not sure exactly when that meeting will take place, but it will take place soon. We will examine the matter and try to find a way of making progress together. Spain does not oppose the Irish proposal by any means, but we need to consider how we can process the two issues separately because the legal base is different for each of them. I hope to have a meeting with Mr. Zapatero shortly to discuss the matter. Subject to that meeting, I think the Irish position is enjoying a good level of understanding and support on all sides. I do not wish to suggest that Spain opposes the Irish proposal, because it does not, but we have to be mindful of the Spanish position as we try to find a resolution to our issue.
May I ask the Taoiseach about representations he made in respect of State aid? I refer specifically to the decision to veto the provision of State aid to assist the expansion of the Intel plant at Leixlip. Has the Taoiseach received a response to his representations? What was the response he received at the meeting?
May I also ask about the amendments which have been made to the Stability and Growth Pact? I refer to the prospects the amendments open up in this country. They can enable the borrowing for capital purposes that is necessary, given the extent of this country's infrastructural deficit. Does the Government have any plans in that regard?
I remind the Deputy that the veto was not used. The Government reached an understanding with the company, which did not want to pursue a full investigation or inquiry into the matter. An understanding was reached that the Government would not pursue that approach. The comments I made earlier were relevant to the Leixlip project and other projects. Regardless of any cases which might be made by the Government, I am interested in how this entire area is defined at EU level. The EU should assist companies which are trying to pursue a developmental and innovative role, in line with the Lisbon Agenda. Senior Intel officials in Ireland and abroad decided not to pursue the State aid issue.
It is clear that the changes in the Stability and Growth Pact allow for an expansion of certain programmes. It is obvious that the issue will have to be examined in the context of budgetary and other issues. The Department of Finance has decided to spend 5% of GDP on infrastructural development, which is probably approximately 2% higher than the average. I think it is a higher percentage than that being spent in any other EU member state. It allows for the consideration of a flexibility that would go beyond that — that is a correct interpretation of it. I argued — I do not suggest that I achieved the change alone as I was joined by many others in making the case — that if a country has a low debt, as Ireland does, it should benefit from an increase in the funding allocated to projects which alleviate the infrastructural deficit. We could be on 60 but we are on 30. If one includes pension funds, as one can if one interprets one's accounts in the way I interpret them, we are probably on about 23. We do not include the pension funds, but one can argue the case for their inclusion as I would have done if I had been at the meeting with the Commission today. I am sure Ministers will return to that issue when they prepare the Estimates for next year.
I wish to ask the Taoiseach about the European Council meeting and the EU in general. Are the nuclear powers setting the political and military agenda? Does he accept that such concerns will emerge during the debate on the EU constitution? The Taoiseach mentioned that members of the Government do not support the nuclear industry and nuclear armaments. Is it not the case that certain Members of the House support NATO? Do some members of the Cabinet support the nuclear industry in the EU?
For a long time, this country has had a policy of not supporting the nuclear industry. In so far as any resources have been committed at European level, it has only been done to help deal with old reactors in eastern Europe or in some of the new accession countries that are still under discussion.
At European level, there is rarely any attempt by countries to fight any nuclear line, particularly since Chancellor Gerhard Schröder and his Government took a strong stance on the issue. That will remain the policy position. There are countries with nuclear reactors that do not see themselves changing in the time ahead. We had that problem with EURATOM because we argued to open the debate but unanimity on the EURATOM conventions was needed and if there was not unanimity, we could not proceed, even though a strong bloc of countries supported a reconfiguration of EURATOM. We have continued to campaign for that to be dealt with because it is a dated agreement. We should try to deal with it in a different way.