Bertie Ahern (Dublin Central, Fianna Fail)

I welcome this opportunity to address the Seanad on European issues. The European Union is currently going through a period of uncertainty. The rejection of the draft EU constitution in the French and Dutch referenda marked a setback for the process of European integration. This was compounded by the failure in June of the European Council to agree on the future financial perspectives of the EU.

Neither is Europe doing well on the economic front. The core European economies are battling high unemployment, rising public sector deficits and social systems faced with funding the needs of ageing populations. In addition, across the EU there are difficult national debates about how best to integrate immigrants into society and about the geographical limits of Europe. Externally, the EU faces an ever increasing competitive challenge from the rising, low cost and highly productive economies of Asia, particularly China and India, and from the huge agricultural producers of Brazil, Argentina, Australia and the US. Against this background, it is easy to become pessimistic. Many commentators suggest that the EU's original vision has become obsolete and needs to be radically updated.

I reject this pessimism and this bleak view of Europe's prospects. Europe is a stunning success on a political level and is hugely underestimated on an economic level. Fashionable Europessimism is dangerous. It only serves the interests of those who want to weaken the EU. Such weakening carries the risk of returning Europe to an earlier age of competing, loosely linked nation states. That Europe was one where the mightiest pursued exclusively national agendas at the expense of the small and the weak in the short term and the entire Continent in the longer term.

Last year, the Union took in ten new member states which are being fully integrated into the EU family. They have accepted the values that underpin the EU and their relatively new democracies are anchored in the EU. They will prosper economically and will benefit from European solidarity through the Structural and Cohesion Funds. We have not fully appreciated what a monumental achievement this represents. The fall of the Iron Curtain ushered in massive change on the Continent, change that could have resulted in political instability and conflict. One need only consider the former Yugoslavia to see how easily territorial conflict and ethnic hatred can raise their heads in the absence of strong institutions and policies which support co-operation, solidarity and partnership.

Instead of economic disruption, political instability and social upheaval, the fall of the Iron Curtain has brought the spread of peace, democracy and human rights across the Continent. The EU has been the instrument of this transformation, just as it underpinned the new democracies in Spain, Portugal and Greece in earlier enlargements. The people of the western Balkans know and recognise the immense value of the EU and are now looking to us to help secure their future peace and development after the ravages of the Balkan wars. Turkey is looking to the EU as its home in a globalising world.

Europe faces daunting challenges on the economic front and there is much work to be done in facing up to the challenges of globalisation. On the other hand, Germany is the world's largest exporter with a corporate sector that is reaping the benefits of restructuring. The dynamic Nordic economies and Spain are growing strongly, while France is home to one of the most productive workforces in the world and to many of the EU's most successful global companies. The economies of our central and eastern European partners are set to grow strongly. The eurozone has generally strong external economic balances and enjoys a trade surplus with the rest of the world. The recently published UN human development index featured 12 EU member states in the top 20 in the world, with Ireland at number eight. These countries have the best quality of life in the world. Let us not, therefore, delude ourselves into thinking that the EU is in terminal economic decline.

The rejection of the draft EU constitution in the national referenda in France and the Netherlands was a major shock. Their Governments, without our experience of holding national referenda on EU issues, were taken aback to find that many voters did not see the EU as relevant to the concerns they faced in their daily lives. The fact that the EU has lost the confidence of many people across the Union is not a complete surprise to me. The result of the first referendum in Ireland on the Treaty of Nice was an early manifestation of a sense of disconnection with the European project which is now general throughout the EU and which was never specific to Ireland.

In June, the European Council initiated a process of reflection and debate on Europe in all member states. The European Commission will launch its own contribution to shaping the debate on Europe in Brussels today. The Government wants our national debate on Europe to be open, inclusive and informative. The Government and the Oireachtas will play leading roles in this debate and the National Forum on Europe will also play a key role.

Today, we are publishing the Government's White Paper on the European Constitution, which is an important contribution to our national debate on Europe. It explains in clear and accessible language what the EU constitution is about and why it is important for Ireland and Europe. The White Paper also stands, on its merits, as an important statement of the Government's policy on the EU, on how the enlarged EU can best work effectively in the interest of all and, most important, on the common values that all EU member states share. In publishing the White Paper, we are also affirming the Government's view that the EU constitution is a good document that we would like to see implemented. I accept the outcome of the votes in France and the Netherlands. However, I firmly believe that if we are to equip a Union of 25 or more member states to deal with the challenges facing it, we will inevitably return to the EU constitution. While the ratification process may be suspended and the future uncertain, I cannot see the EU constitution going away indefinitely.

The national debates on Europe should be used as fora for frank discussions on dealing with the challenges now facing the EU. I do not believe that Europe needs root and branch reform. I agree, however, that the EU needs to better use its institutions, common policies, Internal Market, development aid and external trade to face up to the challenge of globalisation.

Globalisation is a fact of life and has, on the whole, been a positive force for global development. We see the daily advances made by China and witness the progressive transformation of India into a major trading nation. These two countries, which between them constitute two fifths of the world's population, are using trade and investment as the way out of poverty. They, along with many developing countries, often quote Ireland as one of their models for economic development.

Globalisation is having a dramatic effect on the plight of the poorest people. In China for example, the number of people living on less than $1 a day fell from 490 million in 1981 to 88 million in 2002. At the end of this month, I will attend an informal meeting of EU Heads of State and Government in Great Britain. This meeting will allow all the EU's leaders to discuss the management of reform in Europe and how Europe can reconcile its strong commitment to social solidarity with the competitive pressures and challenges of globalisation. This is a timely meeting that will help restore momentum and confidence to Europe. It is important that the meeting is not sidetracked into a fruitless debate about the relative merits of different social systems. Instead, it will hopefully focus on how we can best co-operate through the EU in facing up to globalisation.

We need a clear and well thought out strategy for dealing with globalisation in the EU. This strategy must include social partnership and must have a strong focus on research and development. It must harness the benefits of our internal market, include a more effective use of our common policies and a more coherent approach to our political and economic relations with China and other new trading nations. It must also include a strong commitment to a successful and balanced outcome to the WTO Doha round negotiations. In the coming months, as the member states debate and reflect on Europe, the EU must provide strong and convincing evidence that when we in the EU act together, we make a real difference to people's lives.

I fully support the British Presidency's objective of securing agreement on the EU's future financial perspectives at the European Council in December. Agreement on this important issue would be a real boost for the European Union. For Ireland's part, we will continue to insist that the agreement reached by the European Council in October 2002 on the future funding of the Common Agricultural Policy, CAP, is fully respected. We will also work to ensure that the European Union has the resources it needs to meet the demands we place on it. We will strongly support the provision of generous structural and cohesion funding to the new member states.

Over the past weeks I have set out a clear and cogent argument in defence of the CAP. Simplistic and negative statements about the CAP, many of which are driven by self-interest, are continually being made. These statements are becoming lodged in the public consciousness. In my statements, I have stressed the following key points — the CAP is the only fully funded common EU policy; it plays a vital role in securing Europe's food supplies; average farm size in the EU is much smaller than in our main international competitors and the CAP has given Europe relative price stability when viewed against the huge price oscillations in international commodity markets.

Over the past 15 years, the CAP has been subjected to three major broad-based reforms, in 1992, 1999 and 2003. The 2003 reform was based on a unanimous agreement reached by the European Council on future CAP funding up to 2013. The 2003 CAP reform was also the most radical since the CAP was established because it decoupled subsidies from production. Farmers will now produce in response to market signals alone and not simply to receive a subsidy. Expenditure on the CAP is falling significantly. The ceiling agreed in October 2002 for the EU of 25 member states for 2013 is less in real terms than the ceiling agreed for the EU of 15 member states for 2006. In addition, charges that the CAP damages the ability of developing countries to trade are not correct. The EU is by far the largest importer of agricultural products from developing countries, and absorbs approximately 85% of Africa's agricultural exports and 45% of those from Latin America.

I welcome the opening of the enlargement negotiations with Turkey and with Croatia on 3 October. I also want to see Bulgaria and Romania take up their places as full member states. Last December, the European Council agreed that enlargement negotiations should be opened with Turkey and Croatia in 2005. It was important that the EU lived up to the commitments it had given, particularly because the two candidate States involved had made extremely strong national efforts to comply with the conditions set down by the EU.

Widespread public unease and concern clearly exist across Europe with regard to the further enlargement of the EU, particularly the possible accession of Turkey, a country of 70 million people where economic development is considerably behind even the poorest EU member states. In the coming years, as the accession negotiations progress, much work must to be done to convince people that Turkey can meet the requirements for EU membership, that the EU has the capacity to absorb Turkey and that full membership is very much in the long-term interests of both the EU and Turkey.

I do not doubt that the accession negotiations with Turkey will be tough and difficult for both sides. While the negotiations are not preordained to succeed, and accession should only be on the basis of full compliance with the requirements of membership, we must make every effort to ensure they do succeed. The enlargement of the EU essentially involves enlarging the community of countries that subscribe to the European Union's values. These values are explicitly set out in the constitution for Europe, namely respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights. Obviously a demonstrated commitment to these values will be central to the future success of any accession negotiations.

Other issues on the EU's agenda which need to be pursued in the coming months are the fights against terrorism, organised crime and drugs. In areas such as these, the added value of collective action by the member states is self-evident. Finally, the EU must implement a legislative programme that is relevant and aimed at strengthening it to face up to the challenges of globalisation. I welcome the EU Commission's recent decision to review and withdraw more than a third of the proposed laws pending at the European Parliament and Council. This does not mean the EU is abandoning regulation. It means that Europe is now focused on better regulation which is an approach we have been advocating for the past two years.

In the coming months, the Government and the National Forum for Europe will promote the national debate on Europe. As part of this process, we will schedule a full debate on Europe in the Houses of the Oireachtas. I look forward to receiving the contribution of the Seanad to this national debate. The Government coincided the publication of its White Paper with this debate, and that White Paper is part of the process. I welcome the continuing engagement of the Seanad on the European issue during the months ahead, particularly as we approach the Austrian Presidency next June, when decisions on whether to move on the constitution will be taken. I thank the House.