Remarks by Minister Cowen at the IBEC Lunch, Part 2
Overall, in my view, there is a danger of too much talk about the Lisbon process and not enough action. We have already indicated to our EU partners that Ireland's EU Presidency in 2004 will give priority to a small number of key issues. These will include fostering competitiveness and eliminating the remaining barriers to the development of a supportive environment for business. We will in particular champion the interests of small and medium-sized enterprises, highlighting the need to complete the internal market for services, and the importance of moving ahead with regulatory reform.
The Government welcomed in particular the recent establishment by the European Council of a European Employment Taskforce which will look at practical measures to increase employment levels in member states. We, for our part, will do everything possible to contribute to its work over the coming months. And the development of this work is likely to be an important aspect of our Presidency.
If Ireland is to continue to compete with other international economies, we have to maximise the added value that can be wrought from investment in infrastructure, education, training, research and development. The Government is using EU funding and Exchequer resources in the National Development Plan to invest strongly in building our human capital. We are resourcing training and employment supports so that the participation rate of women and older people can increase in line with our employment targets.
Furthermore, we are all going to have to work together, both Government and business, to meet the 3% of GDP investment target in R&D by 2010. Technological innovation will be critical to our success as a knowledge-based economy. If we find ourselves competing with other European locations for inward investment on the basis exclusively of cost, we will know that we have a difficulty. It is for this reason that Science Foundation Ireland was established in 2000 with the aim of developing a world class network of researchers and research-oriented institutions. We want to create an environment where the leading corporations of the world in targeted sectors such as ICT and biotechnology will not only want to locate in Ireland, but will feel the need to do so.
Social dialogue also has an important role in achieving the goal set at Lisbon. I know that IBEC, as a member of the umbrella employer body UNICE, is committed to social partnership at the European level. The annual tripartite social summit with the European social partners will provide an opportunity to deepen their engagement with the Lisbon process. Next year's summit will be taking place under the Irish Presidency, and we plan to hold preparatory discussions with the social partners over the coming months to consider the themes and priorities for our agenda.
The European Union, as I said, is also in the process of serious change. Through the Convention on the Future of Europe, it is aiming to agree a new Constitutional Treaty which will, we hope, stand for years to come. IBEC is in regular contact with the Government's representative at the Convention, my colleague Minister of State Dick Roche, and with my Department. On a great many issues, we share a common analysis and common objectives, and I very much welcome your on-going input into our work.
The essential challenge facing the Convention, and the Intergovernmental Conference which will follow, is twofold. Can the Union be modernised and made more effective without losing the unique characteristics, the balances between its institutions and its member States, which have made it so successful? And is it possible to prepare a simplified and consolidated Treaty without jeopardising the careful legal language which reflects the balances and compromises made over fifty years?
I believe that the answer to both questions is Yes. The Union has changed dramatically in the thirty years since we joined. It has added new members, and developed new policies. All along the way, Ireland has benefited from such change. Fundamental to the Nice referendum was a recognition that we have benefited substantially from previous change, and that the Union has been vital to our development as an economy and as a people. Indeed, the Taoiseach has described the fact that we have maintained our social partnership as demonstrating our country's deep commitment to change. The issue, as always, is how to negotiate change in such a way as to maximise the positives, and to be fully prepared to take full advantage of the new opportunities that become available.
At the same time, the Government recognises that, among the Irish people, there is little enthusiasm for a radical transformation of the Union. Indeed, we believe that this is the predominant view across the Union. Standing back from the detail of the Convention, what is striking is that, overall, there is little pressure to change the existing mix of policy areas, or to transfer major new powers to Brussels. The focus is on doing better, and on making clearer, what the Union already does. One likely and welcome outcome of the process will be a sharper definition of exactly where responsibility lies for different issues. Another will be a strengthening of the principle of subsidiarity – the principle that things are best done at the lowest appropriate level, and that the Union should only eventually act where there is clear added value in its doing so. Common sense you might think but, unfortunately, common sense is not always that common!
The Government strongly supports the concept of a Constitution for the Europe of the future. In a way the existing Treaties already represent such a Constitution – but for most people they are almost impenetrable. A shorter, clearer text, setting out fundamental principles, will help to make the Union more understandable. It will also, in my view, be a significant step towards enhancing a sense of public ownership of the Union. And I want to emphasise that such a Constitution will apply simply in areas of European Union activity – it will not supplant or impinge upon any Member State's own national constitution.
One important question being considered at the Convention is the future status of the Charter of Fundamental Rights which was agreed as a political declaration in 2000. A strong majority favours its incorporation into a new Treaty in a legally binding form. The Government has always supported the Charter as a clear and comprehensive statement of basic rights. But, like some other Governments, we have not felt able to make a final decision on its future pending greater clarity about its precise legal impact.
However, valuable progress has been made, with two essential principles being clearly set down and reinforced: - firstly, that the Charter applies only to the Union's institutions and to the Member States when implementing EU law; and, secondly, that it cannot be used to create new competences for the Union. The substantive Articles of the Charter have to be interpreted and applied within the framework of these governing principles. It looks increasingly likely, therefore, that it will be possible to incorporate the Charter in a way which does not affect national arrangements, including in the social and economic areas, and which does not inadvertently lead to the development of new powers for the Union.
Another issue of particular concern is, of course, taxation policy. There are those who would wish to extend the Union's scope in taxation, in particular through a change in decision-making arrangements in this area. The Government firmly believes that, on a matter so fundamental to the relationship of the citizen and the State, it would simply not be acceptable for a Member State to be obliged to implement taxation measures to which both its Government and its people were firmly opposed. The Union rightly already has the capacity, acting unanimously, to harmonise indirect taxes affecting the functioning of the internal market. But we will not support any movement to qualified majority voting in this area, or in any other area of taxation.
Nor do we believe that any convincing case has been made that the harmonisation of direct taxes is economically necessary, or that it would address a real problem. Indeed, in an era of globalisation, an element of tax competition within the Union is important in making it more competitive in the international market place. We should not make the mistake of thinking that we have the luxury of engaging in some kind of zero-sum game played out entirely within the boundaries of the Union. This would be detrimental to the entire Union. The Government is continuing to make its opposition to any change in this area crystal clear, at the highest levels. I hope all those involved have got the message but, if not, we will keep repeating it for as long as we have to. We believe that our position is right not just for Ireland but for Europe as a whole. Nor are we isolated on this - a number of other current and future member States share our strong views and are actively networking with us on the issue.
The European Union brings together citizens, but it also remains a union of independent member states. The diversity of the Union is both a strength and a reality. While we want to see its institutions become more effective, and we strongly support reform for this purpose, the core, basic equality of the member states must be respected. The Union is unique because it is neither an international organisation of the classic kind, nor is it some sort of embryonic superstate. Its task is to promote a common European interest while recognising, at the same time, that this is made up of many and varied individual national interests.
The Union, in short, should be one in which sovereignty is shared where that makes sense, but also in which there must be full respect for, and recognition of, diversity. The economic integration of the European economy will continue to bring great benefits to Ireland's economy and our people. The on-going work at the Convention and the Intergovernmental Conference which will follow it is about providing the constitutional and institutional framework through which the Union can best achieve its objectives, recognising that the EU is a unique union of citizens and States.
The ultimate test of the Union as an institutional system of governance – or indeed any system of governance - is whether it can deliver a better way of life for its people. The careful language of the Treaties means nothing if it does not support and deliver that objective. The Union has succeeded in significant part to date - but it must now position and structure itself to address and take on the new challenges of the future. It must drive forward the agenda in a disciplined, prioritised and caring way – but it must be an agenda that resonates with and is relevant to the people. Both in parallel and in partnership with Europe, all of us in Ireland who share responsibility for national development and well-being, will likewise have to address and overcome a similar set of challenges. I believe, both in Europe and Ireland, we have the political, social and partnership commitment to succeed.