Bertie Ahern (Dublin Central, Fianna Fail)
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I welcome this opportunity to speak to the House on the current situation in the European Union. As we come to the end of the year, it is timely to look back and reflect on the main events in Europe and their implications for the future. Without doubt, the referendum results on the European constitution in France and the Netherlands were a wake-up call for all Europeans. We cannot deny that the rejection of the European constitution in two of the founding members of the European Union was a severe blow. However, the referendum results also serve as a spur to drive forward debate on Europe in all member states. We have an opportunity to have a good, serious and factual debate about what Europe has done for us, what we have contributed to the Union and where the Union is going in the future.

The European Council took advantage of this opportunity when it initiated a process of reflection and debate in all the member states at its meeting in June. For our part, the Government is committed to ensuring that our national debate is open and inclusive. The National Forum on Europe is playing a key role in taking it forward and is facilitating contributions from all sectors of society. The Government has published the White Paper on the European constitution to help inform the debate. The Department of the Taoiseach has produced a user-friendly report on Ireland's goals and objectives in the Union. Both the White Paper and this report have been circulated as widely as possible. In addition, the Department of the Taoiseach has today launched a new website which will make available key documents outlining the Government's position on Europe to aid the debate.

The outcomes of the French and Dutch referendums undoubtedly suggest a level of disenchantment with the direction of the European Union. It may be that European citizens feel that the EU does not support them sufficiently in the issues they must face in their daily lives, such as unemployment, social justice, the fight against cross-border organised crime, terrorism and the challenge of integrating immigrants. Self-doubt and a lack of direction in the EU are bad for Europe and bad for Ireland.

The benefits our EU membership has brought us are well known. Aside from the important direct financial benefits reflected in a net transfer of resources to Ireland of approximately €35 billion, we also receive very significant indirect benefits. Since we joined the EU, our identity, national self-confidence and our sense of place in the world have been greatly strengthened. Membership of the European Union has also been the critical ingredient in breaking the cycle of poverty and emigration which held this country in its grip for more than a century. We are justifiably more confident and more optimistic than at any time since the foundation of the State. Our European Union membership has played a vital role in this transformation and we must not take this for granted. We need to continue to work hard to promote and protect our national interests in the EU and, equally importantly, work for the success of the Union as a whole.

Ireland continues to punch above its weight in Europe. In recent weeks one Irish citizen, Catherine Day, succeeded another, David O'Sullivan, in the top post in the European Commission. Also during the year, the Government succeeded in securing official and working status for the Irish language in the EU. While its continual success is a core national priority, I do not want to play down the very real fears that many people in the European Union have, including people in Ireland. People fear a loss of jobs to low cost countries and a race to the bottom in social standards. They are struggling to come to terms with immigration. Many citizens are suspicious of economic reform when it seems to bring only pain and very little evidence of any gain.

However, we must recognise that the world outside the Union is changing rapidly. When the economies of China, India and the other emerging economies were putting in place the policies and investments necessary to harness globalisation to the development of their national economies, Europe's focus was inwards. We struggled to cope with the aftermath of the collapse of communism, the fall of the Iron Curtain and the reunification of Europe after decades of division. We worked to ensure the institutions and the common policies of the greatly enlarged European Union were strong enough to protect and promote the interests of all its people. We need to make Europe work, but we cannot do this in a vacuum. We also need to look out at a world that has changed dramatically over the past ten years.

Last month, an informal meeting of European Union Heads of State or Government at Hampton Court discussed the challenges facing the Union. The European Commission submitted to the meeting a useful report, European Values in the Globalised World. It was sobering to be reminded that there are now 19 million people unemployed in the Union, that over the coming decades, Europe will change from having four people of working age for every elderly citizen in 2004 to a ratio of 2:1, that Indian universities are turning out more than a quarter of a million engineers every year and that research spending in China is set to catch up with that in the European Union by 2010. Twenty years ago, just 10% of manufactured goods came from developing and emerging countries, but within 15 years China's and India's shares alone could be as high as 50%. In 2004, China's share of global merchandise trade surpassed that of Japan.

The meeting at Hampton Court showed the willingness of the European Union Heads of State or Government to work together to deal with these challenges. While many of the levers of economic reform are in the hands of national governments, there remains much that we can do together in Europe to support our national efforts. At Hampton Court, I emphasised the need to take the bigger picture into account when we are developing and implementing EU policies. A particular example is state aids. Too often we behave as if competition between the member states is on the same level as the competitive challenge we face from China and India. We must take broad economic considerations, particularly the challenge of globalisation, into account in all areas of EU decision-making.

I welcome Prime Minister Blair's encouragement to Europe's leaders to confront the challenges we face. However, if we are to equip a Union of 25 or more member states to deal with those challenges, we will inevitably return to the European constitution. Some 13 countries containing a majority of the Union's citizens have ratified the constitution, including two in national referendums. Given the current situation in the European Union and the fact that we are engaged in a period of debate and reflection, I do not see a national referendum on the European constitution being held in the lifetime of the current Dáil. Nevertheless, while the ratification process may be suspended and the future is uncertain, I cannot see the European constitution going away indefinitely.

The setback in the ratification process for the European constitution does not mean that business in Europe has come to a halt. The reality is quite the contrary. Two issues that will be the focus of our attention in the coming weeks will be the negotiations on the future financial perspectives and the Doha development round of trade negotiations in the World Trade Organisation.

The failure of the June European Council to reach political agreement on the financial framework for the period 2007-13 reflects the current state of uncertainty. On future financial perspectives, it is very important that we reach a deal at the European Council in December. Europe badly needs some successes. We need to show our people that the Europe of 25 can take the key decisions affecting the future of the Continent. We came very close to agreement in June. It will be important to retain as much as we can of the good work done during the Luxembourg Presidency as we work for agreement next month.

The October 2002 agreement on CAP funding is a central element of the European Union's financial perspectives. Agriculture is one of the most sensitive issues in the WTO's Doha development round of trade negotiations. The far-reaching CAP reforms agreed by the Union in 2002 and 2003 were a major contribution to the Doha development round of trade talks. The Government is strongly in favour of a successful and balanced outcome to the Doha round. We know these negotiations are important for the future development of our economy and hold great promise for the integration of poor countries into the global economy.

I mentioned some of the challenges facing the Europe of the 21st century, challenges that can only be addressed by states working together. This in itself poses another challenge, that of making enlargement work and continuing the enlargement process. The ten new member states which joined on 1 May 2004 are adapting rapidly to the Union and are making an important contribution to its work. The European constitution provides that membership of the Union is open to all European states which respect its core values. It is on this basis that the ten new member states joined the Union. Similarly, we look forward to the accession of Bulgaria and Romania.

I welcome the opening of accession negotiations with Croatia and Turkey. The opening of negotiations with Croatia shows that the European Union is determined to support peace-building and reconstruction in the western Balkans. The perspective of EU membership for these countries will help underpin political stability in the region and the need to rebuild their economies after the vicious Balkan wars. The opening of accession negotiations with Turkey is a welcome step forward in the already close relations between the Union and this important and influential neighbour. The negotiations are likely to be long and difficult, and their outcome, as in any negotiation, cannot be determined in advance. However, the objective on both sides is membership.

The European Union is at a critical juncture in its development. We must meet the immediate challenges of achieving agreement on the financial perspectives and the WTO Doha development round. We must also look to the longer term. While the outcomes of the constitutional referendums may have cast light on the concerns of the citizens of Europe, they also brought into focus the wide degree of agreement on what Europe needs to do to meet these concerns.

Europe is already deepening co-operation between the member states in the fight against international crime, terrorism, illegal immigration and trafficking in people and drugs. The Hague programme, which the European Council adopted a year ago, provides the basis for much of our common effort in this area. In this age of globalisation, when goods, services, information and communications flow relatively unrestricted across our borders, we must work together to prevent international criminal syndicates, drug traffickers and others from exploiting our more open world for their own criminal ends. The role of the European Union in breaking up international criminal gangs, preventing terrorist attacks and securing our borders against people traffickers and illegal immigration is not well understood or appreciated by many people. However, it is critical to the security and functioning of our communities. It is an area where significant improvements in co-operation between member states have been introduced and where we will see more progress in the years to come.

The creation of the Internal Market has been of immense benefit to the people of Europe. Work on the Internal Market remains important as we seek to remove unnecessary barriers to growth. We, together with the UK and Sweden, have granted free movement to workers from the ten new member states. This has been a positive experience for us. The new workers are making an important contribution to our economy and our society. I look forward to the other member states, which have not yet opened up their labour markets to the ten, adopting a similar approach.

We also need to push forward the EU's legislative agenda on the Internal Market. The draft directive on services has attracted much controversy, reflected in the huge number of amendments the directive has attracted in the European Parliament. The vigorous discussion in the Parliament of this important directive shows that the concerns about its implications, particularly from workers, are being taken into account in the EU's legislative process. The principle of a free market in services is one that we have long supported and will continue to support. With 70% of the modern economy devoted to services, it is essential that we create a real European market in services. However, it is the Government's view that there must be adequate safeguards to ensure that the services directive does not result in a race to the bottom in terms of labour and environmental protection.

Europe needs to do more in the world. It is already the world's largest donor of development assistance and plays a key role in promoting peace in regions of instability and political turmoil. It leads international efforts to support the reforms of the United Nations proposed by Kofi Annan. However, it needs to expand and deepen its engagement with the world in the years to come on the basis of our common values. It must promote its commitment to effective multilateral institutions and its solidarity with the poorest people in the poorest countries.

Our fellow European citizens in each of the member states are now holding similar debates on Europe. I am confident that our collective thoughts and ideas will provide direction to the Austrian Presidency in the first half of 2006 on how the Union of 25 should advance to ensure that the expectations of all its citizens are fulfilled.

When I report to the European Council next year on the outcome of our national debate, I want to say that there is a deep-rooted commitment in Ireland, a commitment that is shared by almost every party in this House, to Europe's values, to the success of the European Union and to the continuing construction of a Europe that reflects the needs of our people. As we face a rapidly changing world, I am more than ever convinced that our EU membership is fundamental to our continuing economic and social success and to the future of our young people.

Bernard Allen (Cork North Central, Fine Gael)
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As I have frequently stated, Fine Gael is a strong supporter of the proposed constitution for the European Union. The proposed constitution simplifies the operations of the EU institutions and the decision making processes within which the Union functions. It incorporates a charter of fundamental rights for all citizens and gives national parliaments a new role in the scrutiny of decisions at European level. The document is good for Ireland and good for Europe. It has been decided that we should have an EU-wide period of reflection following the results of the referendums in France and the Netherlands, which have made it impossible for the proposed constitution to be ratified by all 25 member states within the timeframe originally envisaged. It should be borne in mind that reflection only gets us so far, however.

I strongly believe that Ireland's membership of the European Union has profoundly benefited our people in economic and social terms. Irish people have the right to travel, work, study and reside in other EU member states. The EU has challenged endemic inequalities in our legislation and in how we do things here. It has championed the case for environmental protection. Irish companies enjoy substantial economic benefits as a result of this country's membership of the EU because they can trade freely with 24 other European countries, thereby accessing a potential market of close to 500 million people. The EU is the largest political, economic and social bloc in the world. People recognise that there have been real and tangible improvements in their quality of life in the three decades since Ireland became a member of the EU. Recent research undertaken by the European Commission showed that Irish people are discerning and can recognise a good thing when they see it. Nine out of every ten Irish people feel Ireland has benefited from EU membership. Three quarters of the population believe that EU membership is a good thing.

I have mentioned these statistics to put another important statistic in context. I refer to the European Commission's finding that half of all people in Ireland have no opinion on the proposed European Union constitution. We need to consider, in light of that statistic, what is at the root of the fundamental disconnect between the EU and the proposed EU constitution. If 90% of people believe that Ireland has benefited from EU membership, why do many of them have no opinion on the proposed constitution, which is an important document? It is clear that more than reflection is needed in respect of the proposed constitution — something constructive has to come from this period to address the gulf between EU citizens and the proposed constitution. I recently read an opinion piece on this issue written by a representative of the Institute of International Affairs in Rome. The writer argued that the EU's failure to put forward a credible argument for why the proposed constitution is needed is at the heart of the current difficulties.

The European Union needs direction and clarity of purpose and aim. It needs to engage in a two-way process of communication with citizens. Not only should it listen to the real concerns of its citizens about the EU, but it should explain the Union's role and responsibilities. The European Commission should make a strong and concerted effort to inform the public of its role, to explain how it operates and to send officials to public meetings in member states to speak on issues of importance and concern to citizens of the EU. Such an effort to strengthen the Union's democratic engagement with its citizens would be warmly welcomed in all member states. The national Governments of EU member states need to engage openly and honestly with their electorates about developments at EU level. Rather than approaching issues half-heartedly, we need to interact fully with the EU in many areas. The National Forum on Europe, which is examining its role in the context of the current period of reflection, must come out from behind the castle walls and go to the people to listen to their views. There is little point in hiring hotels and inviting people to listen to speeches. A more dynamic form of interaction, which allows for real debate and a real exchange of views, must be prioritised. I am not just saying that here — I have said it at meetings of the forum's steering committee. It is too often the case that the forum's activities are remote from the people. We need to break down the psychological barrier that has been put in place as a consequence of the decision to pursue the forum's activities behind the castle's walls.

I would like to speak about the issues of concern to people in Ireland today. Having listened to such people in recent years, I know that many of them are worried about the possible loss of jobs to the new accession states and the instability it will cause. They have observed the drift of jobs from their own areas to the eastern parts of the European Union, which is having a negative effect on their opinions of the EU and the process of enlargement. Many people concerned about the pace of EU enlargement believe it may be appropriate, now that the Union has expanded to 25 member states, to take time to assess the effect of enlargement on present structures. They also believe there are question marks over the ability of the EU to absorb further member states. The next EU enlargement may take place in just over a year, when it is scheduled that Bulgaria and Romania will join the Union. Accession talks are in progress with Croatia and Turkey. The opening of talks with Croatia has raised expectations across the Balkan region about future EU membership. Ukraine and Georgia will also seek EU membership at some future time. Such countries may have a valid political argument in favour of their membership of the Union, but I remind the House that many people are worried that too rapid an expansion will weaken the EU. Rapid EU enlargement may be part of the agenda of some member states which do not wish to see a strong and vibrant EU. Such countries believe that rapid enlargement will lead to the weakening of the EU as an economic unit. It is certain that the United States subscribes to this concept.

The riots in French cities and towns in recent weeks have struck a chord with many people in Ireland who equate the riots with immigration problems. They wrongly link such problems with the possible accession of Turkey to the European Union. Having had the privilege of visiting Ankara and Istanbul in recent times, I am convinced that Turkey can play a vital role in the EU at a future stage. As the political process is not always in tune with the thought process of the electorate, however, we must enter into a strong dialogue with the electorate. We should listen to the opinions and fears of the people, rather than lecturing them on how wonderful the EU is. If we are to address the electorate's concerns, we should put forward our view of the EU and Ireland's place within it. We should articulate what Ireland wants from the Lisbon Agenda and how it will get it. We need to explain why enlargement is a good thing and outline the opportunities it has brought to Ireland. We should explain why police and judicial co-operation, for example, is important for all EU citizens. We need to show that the EU has a role on the international stage and a responsibility that runs in tandem with that. Fine Gael has clearly stated its position on EU developments in security and defence. It has put on the record its ideas on how the EU and Ireland should move forward in this regard. While there can be no doubt about Fine Gael's position, the approach of the Government in making policy decisions in this important area by stealth serves to build the electorate's suspicion and resentment of the European Union. The people want open and honest debate on this and other EU issues. We have to call things as we see them.

The last time he spoke on European Union matters in the House, the leader of Fine Gael, Deputy Kenny, was deeply critical of the United Kingdom's attempts to link a new deal on the UK rebate with a further scaling back of the Common Agricultural Policy. This deadlock has continued in recent days, as the UK Presidency has continued to try to link any deal on the UK rebate with farm subsidy concessions. The Common Agricultural Policy has undergone radical reform over the past 15 years. Spending on agriculture as a proportion of the EU budget has fallen over that time. Any further modifications must be a matter of negotiation, rather than unilateral attack from any single member state. By linking reform on one single issue to the wider question of agricultural subsidy, the UK Presidency has undermined European relationships and may pass this problem on to the next Presidency of the EU in 2006.

Today, many eyes are focused on the role of the EU at the World Trade Organisation. I am concerned, however, that the European Commission has made too many concessions, which would have a negative effect on farmers' livelihoods, the rural community and rural economy. The revised European Commission proposal put forward at the end of last month proposes a 70% cut in domestic supports, including funding for intervention, along with the complete phasing out of export refunds over a seven to ten year period. In addition, the Commission has also put forward proposals to reduce tariffs on food imports by between 30% and 60%. Specifically the Commission has tabled a 50% cut on imports of milk products and a 60% cut on imports of beef.

However, the return proposal from the United States is of little value. Its planned cuts in supports for agriculture, to be introduced in the 2007 US Farm Bill, are unlikely to take place. In reality, will the US Congress accept cuts in US farm subsidies on the eve of an election in the United States?

Ruairi Quinn (Dublin South East, Labour)
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What does the Deputy think?

Bernard Allen (Cork North Central, Fine Gael)
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I do not believe it will happen.

The EU Agriculture Commissioner should be a driving force in these talks. During the last round of WTO talks, the former Agriculture Commissioner, Franz Fischler, took a prominent role but current Commissioner Fischer Boel is not leading this debate. The Agriculture Commissioner must be given a more significant role in these negotiations in order to protect the viability of Irish family farms.

I wish to refer to concerns about the Iranian nuclear programme. The recent comments by the President of Iran relating to Israel were unacceptable, and I have deep concerns for the welfare of the former ambassador to Ireland from Iran, currently in custody in that country. The European Union may be ready to resume talks with Iran on this issue in early December, which were stalled in August when Iran commenced uranium conversion processes. I understand that Russia has proposed a deal which could see Iran entering into a joint venture with it which would allow Iran to use uranium for power generation but would ensure that uranium enrichment, the precursor to the production of weapons-grade material, would take place in Russia. The growth in nuclear sabre-rattling must be of concern to all of us within the European Union and in the wider world. The development of Iranian nuclear capabilities would do nothing for the stability of the Middle East, especially in light of the recent comments from the Iranian President.

I point out to the Minister, as I have at committee meetings, that allowing the UK, Britain and France to be the voice of Europe in negotiations with Iran needs to be reviewed because of the track record of one or two of those countries. The double standards involved in the approach to the non-proliferation of nuclear weapons treaty also needs to be addressed. I ask the Minister to give his view on the capability of the UK, France and Germany to reach an accommodation with Iran on what is currently one of the dominant issues on the international stage.

Ruairi Quinn (Dublin South East, Labour)
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I take it when this debate resumes after Question Time I will have the balance of time allocated which is approximately ten minutes.

Jerry Cowley (Mayo, Independent)
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Yes, there is a sos at 1.30 p.m.

Ruairi Quinn (Dublin South East, Labour)
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I suggest the defeat of the treaty in France and The Netherlands is a serious setback for the constitutional treaty but it is not the first setback the European project has endured or experienced. On all previous occasions if the idea had merit and the proposals had positive content, they were implemented and agreed on a new horizon and in a different timeframe when a sufficient number of people could be persuaded to endorse them. Therefore, the period of reflection should be combined in two contexts. The first is to examine what we can do between now and 1 November 2007 and to examine the probability that the French and the Dutch, if their current political leaderships are to be taken at face value, will not put forward the same question on the same treaty to their people in the foreseeable future.

I have a few suggestions to make to the two Ministers and the Minister of State present, and they follow from the comments of my colleague, Deputy Allen, which I warmly support. The leadership of the European Union must be restored to the Commission. The President of the Commission must receive the encouragement and the support of all member states. In the past, particularly when Jacques Delors was the President, that support tended to come from the large dominant member states in a European Union of 12 and subsequently a Union of 15. The numerical composition of a European Union of 25 does not provide for the same kind of relationship to exist for a host of reasons, but there is a possibility of achieving that, and Ireland has a unique capability of having a leadership role in this regard. I say that in all sincerity and admiration for the achievements of the current Administration in terms of the friends of the community method and the group of 27 that the Minister of State, Deputy Treacy's predecessor, the Minister, Deputy Roche, succeeded in using in the run-up to his outstandingly successful achievement during the Irish Presidency in securing agreement on ratification by the 25 member states. I have said it previously and I am happy to say again that we must find a new way of instilling in President Barroso and his colleagues a sense of self-confidence, in the first instance, and of encouragement to bring forward proposals that will enable us get to the far side of Laeken and Nice that was set out and declared when those decisions were taken.

I will give a few examples of that, and I am on record as having said this to President Barroso in the Mansion House when we met last June. There are elements in the draft constitutional treaty, and I am subject to correction on this, that could be implemented by common agreement of the 25 member states. They address the concern about lack of openness and transparency in the decision-making process of the Council of Ministers when it meets as a legislature. I am not aware, and perhaps the Minister and the Minister of State present and their Department of Foreign Affairs personnel could advise me to the contrary, of any legal impediment that would prevent the Council of Ministers, when meeting in Council on legislative matters, from so doing in public. If that step was to be taken by agreement, it would probably require unanimity of the current members. However, since we have got agreement from those members on the draft treaty, such a proposal — to do in public what they do in private — could hardly be against the interests of the citizens of member states.

I suggest, for example, that there is a need for a stronger connection between the national parliaments and the European Union, and I will go into that in some detail when we resume after the sos. In essence, the unique hybrid that is the construction of the European Union, which is a combination of intergovernmentalism on the one hand and federalism on the other, does not carry through into the decision-making process of the Union as it currently exists. The decision-making process of the Commission proposing and the Council and the Parliament, now with a more equal relationship between the two, together deciding on what will become draft European laws and subsequently European laws, is uniquely a federal construct. It has none of the intergovernmentalism associated with decision-making in justice and home affairs matters or in respect of common foreign and security policy. Part of the political difficulty is that it is very difficult for the ordinary European citizen at national level to see the operation of political decision-making at a European level. That is not the fault of the MEPs in all our parties in their political groups in the Parliament or the fault of the Ministers who participate in decision-making, but we have to find a new way to bring the national parliaments closer to the decision-making process of the European project and to bring the decision-making process of Europe closer to politicians in this House and in every other national assembly of the member states.

I have a detailed set of proposals which were unanimously agreed by all my party colleagues at the Joint Committee on European Affairs some weeks ago. The suggestion is that in each of the three plenary sessions in all the member states there will be a dedicated European week in the national parliament. When the debate resumes I will outline how that would function. Effectively, we would close down national business in this House and concentrate on all those issues of European concern and interest to our members and our electorates.