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Statement on EU Council Meeting in Vienna

 

I attended the EU Council meeting in Vienna last weekend together with the Minister for Foreign Affairs, Mr. David Andrews, T.D., and the Minister for Finance, Mr. Charlie McCreevy, T.D. The Council, the second time the Heads of State or Government have met during the Austrian Presidency, the first having taken place at Pörtschach in October, presented a key challenge to the Presidency in terms of progressing the complex issues contained within the Agenda 2000 portfolio. For a variety of reasons which I will highlight throughout my statement, I believe that the meeting was a success and a tribute to the competence of the Austrian Presidency and, in particular, to Federal Chancellor Viktor Klima.

I should perhaps outline the format of the Council. It began last Friday morning with a meeting with the President of the European Parliament, Mr. Giles Robles, where there was a useful exchange of views on issues such as employment, the further potential of the Single Market and the key items to be considered by the Summit, including Agenda 2000, Enlargement, Common Foreign & Security Policy, Subsidiarity and the Common Statute. A detailed discussion of Economic Co-ordination formed the bulk of the first working session which followed, while issues such as Agenda 2000, Justice and Home Affairs, Common Foreign and Security Policy, Subsidiarity and the Internal Market were examined on Friday afternoon. Over dinner on Friday evening, Leaders discussed the Enlargement process and gave particular attention to the situation in Russia and how the Union should respond. I know this is a matter which Minister Andrews will address in greater detail in his concluding statement. On Saturday morning, as is usual, Leaders focused on the draft Council Conclusions and subsequently met with the Heads of the eleven applicant states.

Economic Co-ordination

Employment

The Council considered the Employment Guidelines for 1999 and the possibility that the Guidelines might be strengthened so as to ultimately evolve into a European Employment Pact within the framework of the Luxembourg process. The emphasis given to the discussion of employment underlines its status as the top priority for the Union., a situation being sought by Ireland. Accordingly, the issue of job creation underpinned the whole of our discussion on economic matters, concern being to promote greater economic growth and to maximise its employment intensity. The call for a greater synergy between the Guidelines and the Broad Economic Guidelines also reflects this approach.

In calling for the 1999 Guidelines, the Vienna Conclusions ask Member States to take into account important areas such as:

  • promoting equal opportunities between men and women, using benchmarking and mainstreaming approaches;
  • making lifelong learning a reality and setting targets in this regard;
  • exploiting the potential of the relatively employment intensive services sector, especially in information technology and environmental areas;
  • developing SME's;
  • reviewing tax and benefit systems;
  • supporting the re-entry of other workers to the labour force; and
  • promoting greater social inclusion.

In addition to these factors, I would add that in an Irish context, when forming our next National Employment Action plan, we must maintain a strong focus on supporting the re-entry of the long-term unemployed to the workplace.

EURO

Leaders also discussed the launch of the Euro from 1 January, 1999, and the related issues of the external representation of the Union in EMU matters and enhanced policy co-ordination. I believe that a practical arrangement has been found in relation to representation at the G7 Finance Ministers and Governors Group and at the International Monetary Fund; and in relation to the composition of ECOFIN delegations for missions to third countries. That agreement was based on the Report from ECOFIN on the state of preparation of Stage Three of EMU which, inter alia, stressed the need for the Union to speak with one voice in this area and that the Commission should be involved appropriately. I fully supported this approach.

I also welcomed the ECOFIN Report's conclusions, and fully share the view, that closer community surveillance and co-ordination of economic policies is essential, if the full benefits of the single currency are to be obtained. I believe also that the existing institutional arrangements and instruments must be given time to work before any additional measures are considered.

Taxation

Of course, the somewhat contentious issue of tax co-ordination or co-operation was also discussed. Clearly, there is a strong case for the elimination of harmful tax competition between Member States which I fully supported, but, equally, harmful tax competition between the Union and third countries must also be examined. I made it clear in my intervention that we welcome proposals for a fully comprehensive study of Corporation Tax Régimes within the Union - a study which would address not just Corporation Tax rates but also allowance and incentive arrangements together with the accounting standards and other practices which determine the tax base in individual Member States. Ireland's tax system is fully transparent, and I believe will compare favourably, in the forthcoming study by the Commission, with the régimes in place in other Member States, especially as regards the all important effective rates of tax which are applicable in each country.

I am pleased to be able to report that the conclusions on taxation specifically state that co-operation on tax policy does not mean the pursuit of uniform tax rates, and, instead is aimed at eliminating distortions in the single market and the development of tax structures which are more employment-friendly. I believe that now, after the Vienna Summit, there is a fuller understanding of what needs to be done in the area of Tax Co-operation and, more importantly from an Irish point of view, of the situation which pertains in Ireland. This situation represents a real improvement over the level of debate on this issue in the European media in recent times.

Finally, in relation to other areas of taxation, there was progress on proposals for new directives on the taxation of savings and on interest and royalties; and an endorsement also for a framework on energy taxation taking into account its implications for the environment; and, I would argue strongly, that its implications for competitiveness should also be borne in mind.

Duty Free

On the subject of Duty Free, I believe there was real progress. Ireland secured a valuable agreement that the Union will examine the 1991 decision on the abolition of tax free sales within the Union. This examination will focus on the employment impact of abolition and will, EU leaders concluded, consider also "a possible limited extension of transitional arrangements". The Commission and ECOFIN are to examine by March the employment problems which will arise from abolition and consider proposals for addressing them. Together with other EU leaders, I intend to pursue the matter directly with President Santer, to ensure that work on this item proceeds as rapidly as possible. We will be pressing for a full five year extension of the transitional arrangements.

Agenda 2000

In addition to addressing employment, the other major area which was considered by European Leaders at Vienna was that of Agenda 2000 - ensuring that the progress called for by the Cardiff Conclusions was made in advance of the German Presidency. I am happy to report that the Austrian Presidency has succeeded in a comprehensive examination of the proposals for the next financing period from 2000 to 2006, identifying both areas of potential agreement and, perhaps more importantly, those areas where further work and compromise is likely to be required. A key outcome was a strong endorsement of the end-March deadline for the conclusion of negotiations. I believe that the deadline should be adhered to, so as to avoid protracted negotiations as in previous rounds and to force all Member States to address issues which will ultimately have to be resolved in any event. I understand that the German Presidency are considering the need for a special Summit on Agenda 2000 to be held in Germany in late February in order to ensure that the end-March Summit in Brussels is not overburdened. The handling of the Agenda 2000 negotiations was a theme which I discussed in Bonn on Tuesday with Chancellor Schröder. I went through with him in some detail Ireland's position with regard to the phasing out of Objective 1 Status for the better off part of the country, its retention along the Border and in the West, and the reasons in terms of our underdeveloped infrastructure, why we need it for a few more years so as to remain recipients of the Cohesion Funds. We agreed that the Austrian Presidency have laid a sound foundation for the work of the German Presidency and are to be complimented in that regard. This will allow for the end-March deadline for political agreement to be met and more importantly for the final adoption of an agreement in advance of the European elections in June of next year.

The need for all Member States to adopt a flexible and pragmatic approach was discussed and the Chancellor outlined to me the need, as perceived in Germany, to address the level of Germany's contribution to the Union's Budget. We discussed the progress made to-date at a technical level in the consideration of the draft regulations on Structural and Cohesion Funds and the various proposals for reform in the Agriculture area. As well as recording our concerns on Structural and Cohesion Funding, I indicated Ireland's rejection of any proposal for co-financing of the Common Agricultural Policy (CAP) both because it breached the fundamental principles of the Policy and because of the disproportionately negative effect it would have on countries like Ireland. I also mentioned the value of the milk and beef sectors to the Irish economy and that, for instance, current Commission proposals on milk quotas and proposals favouring intensive rather than extensive beef systems, would impact very negatively on Ireland, especially when compared to the position of other Member States.

We must be realistic in our expectations, but so must other Partners; and an equitable outcome is what is required. We cannot resist all suggested avenues to reform. All Member States, be they net recipients or contributors, will be forced to compromise in the course of negotiations.

I believe that the German Presidency realise fully the challenge presented to them, but I am confident on foot of my discussions with the Chancellor that he is determined to conclude the negotiations during his Presidency. Having said that, I fully appreciate that until there is agreement on all aspects of Agenda 2000, including the issue of Own Resources, no single element can be finally signed off.

Enlargement

In Luxembourg last December, probably the most significant decision on Enlargement was taken - in terms of the admission of the so called "ten plus one" applicant countries. The Commission's Reports on the progress that has been made by each of the applicant States was welcomed by Leaders at Vienna and reinforced our belief that each country should be dealt with on its own individual merits. We must be realistic in our approach to Enlargement since meeting the eligibility criteria for joining the Union is a very substantial task for all applicant states; and, equally, we must be supportive in practical ways in helping them meet those criteria. The "five plus one" countries, the so called "ins" - Cyprus, Hungary, Poland, Estonia, the Czech Republic and Slovenia - have made substantial progress in their respective Accession Conferences, while the remaining countries, Romania, Slovakia, Latvia, Lithuania and Bulgaria have made good progress in their preparatory process, and will move to bilateral rather than multilateral negotiations with the Commission from the beginning of next year. In the course of our detailed considerations of the Enlargement issue, we noted also the reactivation of the Maltese application for membership and welcomed that the Commission would bring forward a Report, early next year, updating its opinion of 1993 which, of course, was favourable.

I took the opportunity of the meeting with the Leaders of the Applicant Countries to have a short bi-lateral meeting with the Bulgarian Prime Minister, Mr. Ivan Kostov, and assured him of Ireland's full co-operation throughout the accession process. Irish agencies and private sector companies have a small but growing presence in the Bulgarian market, and I expressed the hope that this growth would accelerate in tandem with the transformation of the Bulgarian economy, a process underway now since 1990.

The European Conference which was inaugurated in March of this year provides a useful forum for political consultation with participant countries and a further meeting, at Foreign Minister level, will take place during 1999. I believe it is a potentially useful forum for the improvement of EU/Turkish relations, and I hope that it proves so during the course of 1999. However, I think it is right that we should review the role and functions of the Conference in Helsinki next December, so as to ensure its effectiveness. Finally, in relation to the European Conference, I welcome the extension of an invitation to Switzerland to become a "member elect".

Preparing the implementation of the Amsterdam Treaty

I mentioned at the outset of my speech that the Vienna summit was the second of the Austrian Presidency. The first took place on the 24th and 25th October at Pörtschach and was convened to discuss the wide range of institutional, organisational and administrative issues facing the Union. At Vienna we were able to build on those discussions and agree key elements of the so called "Vienna Strategy for Europe" contained within the Conclusions.

I have covered the main employment aspects of the Strategy already and will address the Justice and Home Affairs issues shortly, but wish to focus briefly on those elements aimed at "Reforming the Union's policies and institutions".

I look forward to the final Ratification of the Amsterdam Treaty in the second quarter of next year and for the progressive implementation of its provisions. I welcome the decision at Vienna to agree to examine, at Cologne in June of next year, how and when to tackle the institutional issues which were not resolved by this Treaty. I accept that we must look at the size and composition of the Commission and the re-weighting of votes in the Council - in line with Article 1 of the Protocol to the Amsterdam Treaty. However, I believe that we should be careful about the timing of any changes. I would also be concerned lest we would re-open any wider discussion of institutional arrangements and the Treaties generally at too early a date given that we are still in the process of Ratification of the most recent Treaty. My belief is that there are wide ranging instruments and provisions contained in the Amsterdam Treaty and that these must be allowed to be implemented and developed before we turn our minds again to any fundamental reviews.

I believe that the measures put in place by the General Affairs Council (GAC), so at to separate the internal and external affairs of the Union within its agenda, will allow for the more efficient processing and co-ordination of the Union's internal issues, in particular; and I look forward to further consideration by the Council of how its work can be organised for greater effectiveness. In that regard also, I welcome the Conclusion from Vienna that the number of Council formations should be reduced and the initial recommendation that the Internal Market and Industry Councils be merged. I look forward to the Reports coming from the President of the Commission on the Internal Reform of the Commission itself and from the Secretary General of the Council on its functioning in the light of an Enlarged Union.

The Vienna Strategy usefully encapsulates the medium-term actions required across a variety of areas of concern, so as to maintain the organic development of the Union. In this way it prefigures, to some extent, the planned "Millennium Declaration", planned for agreement at Helsinki, which it is intended will outline the Union's priorities for future years.

Justice and Home Affairs

The area of Justice and Home Affairs is one of increasing importance since many of the issues faced by individual Member States are best dealt with collectively at European level given their trans-national nature. An Action Plan on Freedom, Security and Justice was considered by Leaders at Vienna. It sets out the priorities for action in this regard over the next two years, after the entry into force of the Amsterdam Treaty. Co-operation in this field will allow for a co-ordinated approach to tackle serious problems such as drug trafficking and organised crime. EU level co-operation also allows for the development of global solutions in relation to asylum and immigration; and, in order to progress work in this area, a High Level Working Group on Asylum and Migration has been established by the Justice and Home Affairs Council. The diverse strands dealt with in the broad Justice and Home Affairs area will be brought together for detailed consideration in the special meeting of the European Council to be held on 15/16 October, 1999 in Tampere, Finland.

Northern Ireland

I have often noted that the European Union has provided a useful framework within which progress in relation to Northern Ireland can be made and I welcome the reiteration of support from our European Partners provided in the Vienna Conclusions. They recall the Conclusions at Cardiff which mandate the Commission to bring forward proposals for the continued support of the Peace Process. I look forward to the Commission's proposals and wish to thank our European Partners, as well as the Commission and the European Parliament, for their ongoing and very genuine support.

As far as Common Foreign and Security Policy issues were concerned, the Vienna European Council discussions and Conclusions broadly covered three areas: Human Rights, the implementation of the Treaty of Amsterdam and a number of external policy issues.

Human Rights

The 50th anniversary of the Universal Declaration of Human Rights fell on 10 December and, to mark the occasion, the European Council reaffirmed its commitment to the rights and fundamental freedoms enshrined in that historic human rights document. I think it is appropriate to recall that the European Union is itself founded on the principles and values enshrined in the Universal Declaration - liberty, democracy, respect for human rights and fundamental freedoms and the rule of law.

External Policy Issues

In the perspective of the implementation of the Treaty of Amsterdam when it comes into force in May or June next, the European Council took some decisions of a procedural nature. These concerned the new instruments of Common Strategies, the appointment of a High Representative for the Common Foreign and Security Policy (Mr/Ms CFSP) as soon as possible, and the new impetus given to debate on security policy issues. While the Council stated that the CFSP must be backed by credible operational capabilities, which has an immediate application to the Petersburg Tasks, and welcomed the Franco-British San Malo Declaration, it also stated that the reinforcement of European solidarity must take into account the various positions of European States. These of course include the four neutral states.

The Heads of State or Government had a detailed discussion on Russia over dinner on the first day when concerns were expressed over the economic challenges facing the Russian people. The European Union stressed its solidarity with Russia and its people and reaffirmed the importance of Russia as a strategic partner. Foreign Ministers at their dinner discussion focused on the Western Balkans. Progress was noted, where such had been made, in respect of Albania, Macedonia and to a lesser extent in respect of the return of refugees in Croatia. With regard to Kosovo, the Council expressed concern at the lack of progress on political talks between the Serb and the Albanian sides, but reiterated its support for that process as well as the readiness of the EU to provide further humanitarian and reconstruction aid to Kosovo.

Middle East Peace Process

The European Council also considered the Middle East Peace Process, and in that context reviewed the important Wye River Memorandum Agreement. The Council welcomed the new dynamic for peace created by that Agreement. However, all Members of the European Council are conscious of the serious difficulties which have arisen in its implementation. We deplored the recent violence which has led to several deaths and the setting of new conditions which are impeding its implementation. We called on the parties most concerned to implement the Agreement fully in accordance with the agreed time table and in good faith.

Since the European Council, President Clinton has visited the Middle East. I would like to take this opportunity to pay tribute to his great personal efforts in support of peace between the Israelis and Palestinians - efforts which we in Ireland together with our Partners in the European Union fully support.

The European Council reaffirmed its determination to make its own political and economic contribution to the Peace Process. The Union andindividual Member States made pledges at the recent donor conferenceheld in Washington. On that occasion, Ireland pledged a minimum of$10 million during the five year period 1999 to 2003 for projects inthe West Bank and Gaza.

UN Security Council

To refer briefly to my meeting with Chancellor Schröder in Bonn, I raised Ireland's campaign for a non-permanent seat on the UN Security Council for the period 2001 to 2002 and asked for favourable consideration when the new German Government come to consider the issue, highlighting Ireland's commitment to the UN, multilateralism and peacekeeping over many decades.

In summary, may I say that three days after the Council, I had a very friendly and productive meeting with the German Chancellor in Bonn, in which we went fully over all the issues that have to be decided in March and clarified Ireland's position in regard to them. I believe the meeting represents a new start to a good working relationship, which will be very important when vital decisions have to be taken.

I believe that the Austrian Presidency managed to host a very successful Summit and that their Presidency saw advances on many of the key items on the Union's agenda. I believe that the Austrian contribution will be more evident in the medium-term as the many reports which were commissioned are produced and the deadlines they hope to set are met.

ENDS