As I was saying, a Chathaoirleach, on the last occasion we discussed this motion, on balance I am quite sure we took the right course in the Government, and the Irish people in the referendum, in deciding to join the EEC, whether we look at it from an economic point of view or from the point of view of the political implications. However, we are now at a new turning point in relation to EEC matters and the Minister for Foreign Affairs has spelled this out in his reference to the absence of a credible regional policy and the necessity for the avoidance of serious regional disparities. If we turn to page 88 of Developments in the European Communities: Tenth Report, July 1977, we find the heading:
"The Means of Regional Policy" and under it, the following:
Determining Priorities:
The first task is to establish an effective monitoring system which can regularly review the situation of all the Community's regions and define where Community action is required. Then, every two years beginning in 1979 the council, on a proposal from the Commission, will set priorities and guidelines to be followed by both the Community and the member States.
The next paragraph states:
—Regional Impact Assessment:
From now on, in preparing its proposals in all main fields of community policy the Commission will take account of the regional consequences of those policies. The Community will thus be able to take into consideration the interests of the regions concerned and where necessary adopt specific measures to correct any negative effects.
Then under "Coordination of National Regional Policies" we read:
Coordination will be based on the guidelines to be set by the Council and the regional development programme of the member States. The Commission is concerned in particular to bring about the coordinated use of disincentives to investment in the developed regions and the coordination of infrastructure projects, especially in internal frontier regions which, obviously would be of great interest to us and to ensure that Regional Fund and national resources are used in a complementary way.
This is all very well but we are, at this point in time, considering in the Community the admission of Portugal, Spain and Greece. In fact, we are quite close to the question of the admission of Greece. If the EEC is to be enlarged—and to a considerable extent we and the other member states are already politically committed— there are two key points which I consider should be not only emphasised but should be required before these other states are admitted: (1) that there is specific regional policy which is acceptable to this country and, as the Minister has pointed out, this does not yet exist; and (2) that there be agreement on EEC structures in particular, including agreement on majority voting. These are two matters which must be decided and agreed in a manner acceptable to this country before we, in turn, can agree to the admission of Greece or, later, Portugal and Spain. These are very essential requirements for Ireland if we are to continue to gain the economic benefits of the EEC on a really worth-while basis.
When we consider Portugal, Spain and Greece we find that they have three major features in common. First, they are all relatively underdeveloped; secondly, they all have large and relatively inefficient agricultural sectors to their economy; thirdly, their industries are industries which could compete with those already established in the EEC and they already have excess capacity in textiles, which is obviously very relevant to us with difficulties enough as it is with our textile industry, with excess capacity in shipbuilding, which is a major difficulty to the EEC as a whole in this moment in time, and with excess capacity in steel. We have already had our own difficulties vis-à-vis the EEC as regards the Irish steel industry. Yet, this year we are considering admitting Portugal, Spain and Greece which have an emphasis on these three industries. As regards agriculture they will clearly be directly in competition with the agriculture of southern France and of southern Italy. But, effectively this is going to have implications, and perhaps very serious implications, for our agricultural industry and I think we must look at this very, very closely indeed and watch the agreements that are made before we can possibly, in our turn, agree to the admission of these three countries which might have most serious consequences agriculturally and industrially on the Irish economy.
From the point of view of the government and running of the EEC, there are very considerable practical difficulties in the admission of those three countries. All three have languages which are at present not used within the EEC, Spanish, Greek and Portuguese. Already we are in a rather unwieldy situation in the EEC and the addition of three further languages will pose serious practical problems. Another factor we must consider is that all three countries have rejected a pre-membership period. I understand the EEC at one stage was considering a pre-membership period for Greece and, perhaps, now regrets that it did not insist on such a pre-membership period. But, having failed to do so as regards Greece, it will find it equally, or more, difficult to do so as regards Portugal and I am quite sure the Spanish would effectively and bitterly resent any attempt to impose a pre-membership period.
As regards the actual government of the EEC, if we move from nine member states up to 12 member states, and we still continue with the present method of unaminity in government, we are continuing a situation in which effectively the major states have by far the greater say in what happens. It is a simple fact of life that inevitably the major states will have a very considerable say in what happens and their say will become overwhelming if we have an enlargement without some form of control over voting procedures, presumably majority voting procedures. We should insist on some change before we agree to an enlargement of the Community because, if we do not, the larger powers will become even stronger. Such a development might be very welcome in the United Kingdom but it would make the EEC institutions as such very much weaker and I cannot see that a weakening of the EEC institutions will be of any benefit whatever to this country.
If we look at the applicant countries in detail, taking Greece first of all, there has recently been an election there in which the Premier Constantine Karamanlis and his National Democratic Party found themselves still with a majority of 173 seats out of 300 in the Greek Parliament. That still represents a substantial drop in the vote for Mr. Karamanlis' party, a drop from comfortably over 50 per cent down to less than 40 per cent. His main opponent, Mr. Andreas Papadreas, heads a Pan-Hellenic socialist party which, interestingly enough, gets large agricultural support. In the Greek general election that party doubled its number of seats and now has 92 seats in the Greek Parliament. The important point is that this particular party is totally opposed to Greek membership of the EEC and a situation of considerable conflict within the Greek Parliament is building up. We have to take cognisance of this when considering the admission of Greece. Greece is already an associate member of the EEC and as such it is due to receive over 300 million dollars in credits in the period up to 1981. If Greece becomes a full member of the EEC, even making due allowance for Greece's own contribution to the EEC budget, it is still reasonable to suppose it would be expecting that sum annually from the EEC budget— in other words, 300 million dollars annually. Greece and the other applicant countries then will not be substantial contributors to the budget. There will be a deficit and that 300 million dollars has to come out of whatever funds are already available unless one or other of the member states is willing to increase its contribution. There is no evidence whatsoever that the major financial supporter of the Community, the Federal German Republic, is willing to increase its financial support. The implication of this is that inevitably our share of the Community budget will probably fall. We have to take this factor into very serious account.
I have already mentioned the fact that shipbuilding is a major Greek industry—shipbuilings in yards which by and large are outdated and no longer able to compete with present day methods or with the yards which exist in Sweden, West Germany or, perhaps, more important nowadays, in South Korea or Japan. We will have a considerable problem there. Obviously it will only be to a slight extent a question of direct competition where we are concerned but it will be a very burdensome problem for EEC finances generally. The sums involved in shipbuilding are so vast this inevitably will cut into any Community budget available.
Greek agriculture is very much underdeveloped. There is, of course, also the question of relations with Turkey which is an associate member with the EEC. Turkey has already made it clear that, if Greece is admitted to the EEC, there must not be any political disadvantages to Turkey. In fact, Turkey has requested that she be included in political consultations if Greece is admitted to the EEC. There is this major conflict between Greece and Turkey which involves Greece at the moment in a defence expenditure of 1.5 million dollars. I cannot help thinking that that also has implications for us to consider before Greece is admitted.
Portugal is currently a member of EFTA and it is true that the Portuguese gross domestic product has increased by a figure of something like 7 per cent in the past year. Of all the countries of western Europe, Portugal's financial position is the most critical. In fact, the balance of payments deficit amounts to something like one billion dollars. Curiously enough, about the only thing keeping Portugal afloat financially is the very large gold reserves amassed under President Salazar between 1938 and 1968, something like 800 tons of gold. The financial position of Portugal could well be a substantial burden if she is admitted to the EEC. The internal situation is perhaps rather different in that all the parties in Portugal are in favour of joining the EEC, including even the Communist Party. The Communist Party has some slight reservations but these are related really more to the burden which joining the Community would in turn throw upon Portugal rather than to any specific objection as such.
One matter which could be of very considerable direct practical importance to us is the enormous petro-chemical complex and oil refinery which is being established at Sines, south of Lisbon. We have a personal interest here obviously, but one must say immediately we have already had in the EEC very serious discussions as to over-capacity in refineries within the EEC. If we, in due course, are going to set up our own oil refineries and hydro-carbon complexes then we may find ourselves in considerable difficulties particularly as the geographical location of the Sines refinery would be in almost direct competition with any possible Irish refinery or petro-chemical complex.
With regard to Spain, we are dealing here with a major country of 35.5 million people. You have a situation in which the Spanish are pressing ahead very vigorously and seriously with their application for EEC admission. Perhaps, to a large extent, it is an emotional rather than a specifically economic desire to join the EEC. For many years, when General Franco was in control in Spain, there was an absolute veto on Spanish membership of the EEC and it seems to be thought generally in Spain that, just as democracy has been restored, so also concomitant with this they should join the EEC and, to some extent, we on our side in the EEC have tended to regard ourselves as under some obligation to support the democratic institutions which have now returned to Spain by enabling Spain to join the EEC.
Spain has its own economic problems and difficulties. You have a situation in which you have this Monclao Pact between the Spanish Premier, Mr. Suarez Gonzalez, the Socialist leader, and Mr. Carrillo, the Communist leader in which you may well have a Larbinger of the future, in that the Communist, Socialist, Right Wing or semi-Right Wing parties are joined together in agreement on such matters as wage restraint, credit squeeze, substantial support for education and changes in social welfare. Nothing similar to this has happened, in recent years at any rate, in western Europe. Even the working arrangements between the Italian Communists and the Christian Democrats is very different from this specific pact. This may well be of very considerable interest in due course in regard to certain other EEC countries in which conceivably the Euro-Communists could come to power.
Spain has appointed Senor Leopoldo Calvo Sotelo as their negotiator with the EEC. He is a nephew of the Calvo Sotelo whose death was regarded as the starting point in the Spanish Civil War. He is an extremely able person and he will report directly to Premier Suarez. By April the Spanish Avis is due to be received at the EEC and the EEC plans to open offices in Madrid within two months. Negotiations with Spain are really proceeding quite rapidly. Yet, in Spain agriculture is extremely depressed, though very extensive, and so there will be immediate competition with Italian and French agriculture and, indirectly again, with any subsidies, supports or other financial incentives to Irish farmers. So there will be a direct and very serious effect on Ireland if Spain is admitted to the EEC. Equally, Spanish industry, although far more advanced than Portuguese or Greek industry, does contain shipyards, quite modern shipyards, but nonetheless not sufficiently competitive in a worldwide sense. In fact, I believe this year they have very few, if any, orders. Again, the sums of money involved are enormous.
The Spanish textile industry is a strong industry. It will be competitive with us. Most of all, perhaps—let us go back to where the Minister commented on his attitude about regional development funds—the regional demands of Spain will be enormous and where are the funds to meet those demands going to come from? There is only one substantial financial contributor at present, the Federal German Republic, and already within the present Nine nations of the EEC there is considerable resistance within Germany to additional financial support. We have to look at this very carefully, indeed, in terms of its implications for this country, implications which will affect every single one of us.
I welcome, nonetheless, the idea and general principle that the EEC should be enlarged. To me, it makes logic and sense that western Europe as a whole, Spain and Portugal, should join the EEC. I am not quite so sure about Greece. Greece is geographically very distant. Culturally it is in many ways very different from western Europe. Perhaps there is here a greater question mark, although curiously enough Greece is closer now to membership than either Spain or Portugal. But there are practical implications These must be sorted out to our satisfaction. We are not Britain, France, Germany or wealthy Holland. We have our own difficulties. Our difficulties, unfortunately, could well be seriously aggravated in the event of the accession to membership of the EEC of any or all of these countries. I repeat again, before they are admitted there should be agreement on the specific regional policy which is acceptable to this country and agreement also on the EEC structure including, in particular, the voting structure.
There are a great many other aspects of EEC foreign policy or external economic arrangements on some of the outstanding ones of which one should very briefly comment. First of all, with the developing world generally—we have had one or two debates already here on the developing world and aid for the developing world—perhaps one of the good features of the EEC has been the united policy which it has shown, for example, on the north-south talks. Perhaps the support which we have given in the EEC to the developing countries has not been up to the level which the developing countries quite naturally would hope and expect. Perhaps it has not been as great as many of us in this country would like to see. Nonetheless, there is a one billion dollar development programme —a special action programme—by the EEC. That is far better than anyone else is doing. I think we should bear this in mind and not always be so self-critical. In other aspects of policy there is the common Mediterranean policy which means that we in the EEC now have established working relationships with virtually all the Mediterranean countries. There has also been, I understand, the common policy on the General Agreement on Tariffs and Trade. Again, this is essential from the point of view of the economic wellbeing of this country as well as of the EEC.
We to some extent were responsible for another EEC foreign policy and economic initiative and that was in relation to the Euro-Arab negotiations and talks generally. There seems to have been little progress on these recently and this may be perhaps because the attitudes and outlook of the two sides have been motivated rather differently. I suppose the stimulus effectively to our contribution to the Euro-Arab dialogue was the oil crisis where the Arabs were, perhaps, looking at it more specifically from the point of view of Middle-Eastern problems.
One area in which the EEC, I think, has been a grave disappointment and has let down the democratic world has been in its relationships with Yugoslavia. Yugoslavia has witnessed a drop in trade from nearly 40 per cent down to 20 per cent odd during the last seven years in its trade with the EEC. Yugoslavia is, perhaps, the one country in the world in which you have a truly Communist regime. Whether we agree with Communism or disagree with it we would all, I hope like to feel that, if people wish to choose Communism, they should be, on the one hand, free to do so and, secondly, that it should have a human face. I think it would be tremendously important for world peace and progress generally that this should come about. Certainly, those of us who know Yugoslavia, read about it or visited it, know that, by and large, in Yugoslavia you have a fairly happy and contented society and one which is making considerable progress despite enormous difficulties both in the last war and since it broke away from the eastern Soviet influence. I think it is a great pity that there has not been more support for Yugoslavia from the EEC. I know there have been recent discussions—a Yugoslav trade delegation has been received—and that some sort of effort is now being made.
I hope that we would look at it as well. The last time I visited Yugoslavia—in September 12 months ago, I think it was—I was rather horrified to discover that I had to produce a visa. I would hope something has been done about this in the interval. From other countries in western Europe, apart from Spain, it was possible to visit Yugoslavia without a visa. It was very irritating to be held up at the frontier each time one went in and out and I do not know that we have any particular reason to withhold visas from the Yugoslavs, which is what I was told out there—we refused to give them admission without a visa. I do not see why we should not allow them to enter here and, in turn, be allowed enter Yugoslavia ourselves. There is, of course, the simple factual question that the leader of the Yugoslav Government is very elderly and inevitably there will be some degree of, shall we say, instability when he leaves. I would hope that the EEC would seize within its institution the opportunity of helping the Yugoslavs and reducing any instability as far as possible.
A major area of concern for the EEC has been negotiations with Japan. There, unfortunately, as we see announced today, the Japanese are being anything but helpful. I think the EEC must watch very carefully. We see already on our roads, the number of Japanese cars. Good luck to the Japanese. Their cars are excellent but the Japanese are not members of the EEC. They are not allowing our goods to go in freely into Japan. If the German car market or German shipbuilding is not doing well, that has implications directly, financially and economically, not only for Germany but for us. We cannot expect a weak German economy to be willing to come along and support regional developments in the west of Ireland. I would hope that a much stronger attitude vis-à-vis Japan would be taken by the EEC in future. Another area where I think the Minister of State here, Deputy Andrews, has been personally influential has been in relation to China. Any developments there, both in markets and in contacts generally, I am sure, should be very welcome. Congratulations to the Minister on his personal initiatives, quite apart from any departmental contacts.
I would not like any of this to be considered as specific criticism of the Soviet Union or of the other major trade area in Europe, COMECON. The Soviet Union is entitled to its policies as much as any other major power. It is a matter of regret that until recently it has apparently looked with disfavour on the EEC and that there has been so little trade contact between the two major economic areas of Europe. I am glad that recently a COMECON delegation came to Brussels and that some effort has been made to open serious negotiations and that effectively for the first time the eastern Europeans are recognising EEC as an entity.
In regard to trade and relations generally with the US, here again the EEC has played a very useful part in mitigating, at least to some extent, the tendencies towards protectionism, which seem to be on the sidelines at any rate in the US. Here the EEC, I think, must use all the muscle it has to make sure that the American market remains open to EEC goods. Again, to this country with its export-orientated industries this is a matter of key concern. Any degree of protectionism in the United States would immediately have very serious consequences in this country for employment and for prosperity generally.
There is one specific group of countries in Europe which must be thought of in the context of the EEC and are little referred to in these reports. Those are the EFTA countries, Austria and Iceland, Norway—which had the opportunity to join the EEC but declined to do so— Portugal, which is an applicant country, Sweden, which for various reasons has not joined, and similarly Switzerland. It has, as an associate member, Finland. For political reasons there is no way that Finland can join as a full member of EFTA or, later, the EEC. Similarly, Austria is under political limitations.
Since 1 July last there has been free trade between EFTA and the EEC. Many people do not fully realise that the free trade area for industrial goods extends right through the population of 300 million people and not simply through the 250 odd million of the EEC. There is now a unified market in industrial goods across 16 European countries. The EEC takes somewhere in the region of 46 per cent or so of EFTA exports and accounts for over 50 per cent of EFTA imports. Yet, in terms of EEC's overall trade, EFTA is surprisingly minor, it took only 11.5 per cent of total EEC exports despite the very close relationship which obviously exists between the Federal German Republic and Austria. Despite that, 11½ per cent of EEC trade went to EFTA and from the point of view of EEC imports, only gave 8.3 per cent. Another curious feature is that growth in world trade between the EEC and the rest of the world has grown far more than growth between the EEC and EFTA, and a similar position exists as regards EFTA and its trade. I would hope that further contacts will be encouraged and increased there, and particularly perhaps with Austria and Finland in view of the problems which they face and with which we should. I think, very considerably sympathise.
There is another aspect. Sometimes it is more interesting to note what is specifically referred to in a report and sometimes more interesting to note what seems to be totally omitted from a report or from a speech. I quote from an article in The Irish Times of Monday 20 February 1978, headed “Not Joining NATO”:
Ireland would not be a member of NATO, the Minister for Foreign Affairs, Mr. O'Kennedy, said. However, if it ever did get to the point, some time in the future, that the European Economic Community was being attacked, then we, as members of that Community, could not negate the fact. As members of the EEC, we would have to play our role and carry out our obligations responsibly.
Mr. O'Kennedy added that there was absolutely no basis whatsoever that any request or any pressure was being brought to bear on us to join NATO. "The case does not arise and Ireland will not be a member of NATO", he said.
Quite rightly to. Nonetheless, there are these hard facts of life that we should consider very carefully. I referred to these very briefly in relation to the appropriations. Since I referred to them the situation I mentioned then has become much more evident because we have had, since then, the publication of the American Defense Estimates and of the corresponding United Kingdom White Paper.
We are not members of NATO and we are not joining NATO but the simple fact of the matter is that NATO is sitting effectively on either side of us—Britain and various other EEC members, with a question mark perhaps over France; on the other side, the Americans and Canadians. They are all members of NATO and whether or not we like it we are in a vital strategic position right in the centre of the NATO area. We are in a strategic position in what used be called the western approaches, now generally referred to as the Eastern Atlantic area. Unfortunately for us, this is a very exposed position in which we find ourselves, which is obviously and inevitably of considerable interest to our EEC colleagues who do not meet directly to discuss defence matters, as EEC, but who tend to meet I understand virtually at the same time, or within a matter of hours or days of their EEC meetings, wearing other hats to discuss defence priorities. Inevitably, and rightly from their point of vew, they must consider our strategic position and what we could do in the event of any degree of security problem.
It is a simple fact of the present-day world, unfortunately, that the Warsaw Pact States of Eastern Europe have vastly increased their offensive capability. Just as Federal Germany, in relation to the regional fund and so on is the main financial contributor, in the event of an attact on an EEC State, Federal Germany, unfortunately, is likely to be in the forefront.
I quote here the Department of Defense Annual Report, Fiscal Year 1979, Harold Brown, Secretary of Defense, February 2, 1978, page 3, paragraph 4:
Over the past 15 years, Soviet defense spending has been gradually increasing; we estimate the average rate of increase, in real terms, at between three and four per cent a year, roughly in line with growth in the Soviet GNP. For a substantial part of that same period (from FY 1964 to FY 1975), U.S. baseline budgets (with military retired pay and the incremental costs of the war in South-east Asia excluded) have been declining in real terms. Only since FY 1976, has our defense budget been increasing in real terms. As a consequence, the Soviet defense effort now appears to exceed ours. The margin is a matter of judgment, and depends on whether the two programs are compared in rubles or dollars. Estimates of 20 per cent to 40 per cent for this excess appear reasonable.
I now quote from the bottom of that page:
In particular, an increasingly precarious conventional balance between NATO and the Warsaw Pact in Europe is a matter of serious concern.
We have, on our Order Paper, a reference to disarmament. Without going into further detail on this I shall quote one further sentence of that report, on page 4, paragraph 4, first sentence:
A strategic nuclear attack is the least likely military contingency we face.
That is the opinion of the American Secretary of Defense given within the last few weeks. Unfortunately this has implications for us in relation to our membership of the EEC. Our sister island, which has a Labour Government at present—and Labour Governments are anything but committed to increasing defence expenditure or supporting defence budgets—have in creased their defence spending by 3 per cent. From 1978-79 the budget will be £6.919 billion. This is totally against the wishes and the desires of the British Government but nonetheless they feel it necessary to do so. I quote here from a Financial Times report of “Command Paper 7099, Statement on the Defence Estimates, 1978.” The original has not as yet arrived in the Library but is expected here shortly.
We have to take some congnisance of these matters. We have an excellent Army in Ireland which performs an internal security role, which is very important, extremely well. We must be very proud also of our contribution overseas. But it is a simple fact that our Defence Forces have not been such as to deal with any external threat. It would be a pity for us to find ourselves in a position where others found it necessary to step in for our protection.
This sort of matter is something which we in the Seanad have a duty to address our minds to if we are looking at long-term policies and matters which may not be of immediate importance in day-to-day constituency business. We in the Seanad should consider these matters very carefully and draw attention to them. It is no use suddenly, in a state of crisis, starting to take steps. I must compliment the Minister for Defence on his recent Estimates and for showing evidence that, for the first time in some years, some serious consideration is being given to the Army in the sense of having a defence posture. This must be very substantially increased in the present world situation. We want to be able to decide what our policy is to be rather than have it decided for us from outside. Unless we are capable of showing that we could make some contribution or some effort to defend our own territorial integrity, we cannot blame others for having contingency plans which might not perhaps meet our wishes.
In this particular relationship I am glad to see that, as a practical matter, our Naval Service is now increased and we are doing it in a practical matter with the EEC. There is a financial contribution to them but the ships will be under the Irish flag. Certainly this is an area in which we should pay particular attention to the development of the Naval Service with EEC support, if possible, and if not alone. It is necessary for the protection of the substantial global area which we now have, our large sea area. It is very reasonable for a maritime nation to develop its marine resources. A previous Taoiseach, Séan Lemass, set a very good example in this matter. I would hope that we would continue to develop it, and I am delighted to see it. It also gives employment of a nature which is useful, which can be used in civilian life and which contributes very much generally to our economy.
