"The State of the Union": Speech by Minister Cowen at the Institute of European Affairs (Part 1)

I am delighted to be with you today, to look back over the year now ending and forward to 2002.

Before I move on, I want to congratulate the Institute on another highly successful year. A highlight for me was Joschka Fischer's presentation here in April. I want to say how much the Government, and I personally, value what you do and I want to thank Brendan Halligan, Joe Brosnan and everyone else involved.

As we come to the end of 2001, there is certainly no shortage of things to reflect on. I don't think too many of you will disagree when I say - in the most diplomatically correct way possible - that it has been an interesting year. 2002 promises to be no less eventful - starting in thirteen days with the introduction of Euro notes and coins.

The arrival of the Euro will have an impact not just on the European economy, but on the development of the popular consciousness of a European identity. I would take this opportunity to congratulate the Euro Changeover Board of Ireland, and the other agencies involved, for their superb work in preparing for this momentous change.

When I spoke to you this time last year about the Treaty of Nice, which had just been negotiated, I doubt if many present would have predicted how the story would unfold - I would ask those who did to talk to me later about the prospects for Leopardstown on St. Stephen's Day.

The rejection of the Treaty in June's referendum was, to be blunt, a surprise and indeed a shock - for the Government, for the rest of the Union, and for the applicant states. The outcome of the referendum, and the pitifully poor turnout, both pose very real challenges. Those challenges are, most directly, for the Government to address. But they should also concern everybody who appreciates how indispensable it is for our national interest that Ireland should play an active and committed role in Europe.

The most positive result of the referendum is that we are now, at long last, having, or beginning to have, the kind of broad national debate on Europe that has been needed in Ireland for a long time. It is a happy coincidence that, just as this is happening, the wider Future of Europe debate is itself being launched at EU level. Indeed, and I will return to this point later on, many of the questions posed in the Laeken Declaration echo those we in Ireland are asking ourselves.

The practical difficulty we face is that the Treaty of Nice has, through becoming entangled in the wider debate, come to assume a standing and a significance which its drafters did not envisage and which by itself it does not merit. In itself, it is a fairly modest text - as Pierre Moscovici said last week at the National Forum on Europe, it is a "technical and functional" treaty. But at the same time it is crucially important, providing the legal framework within which the Union can approach the institutional aspects of enlargement.

Enlargement is squarely in Ireland's economic and political interests, as it is in Europe's interests. It is very encouraging, therefore, that, during 2001, the accession negotiations have made such substantial headway. At the weekend, the European Council confirmed the Commission's assessment that, if the current rate of progress is maintained, ten new Member States, which it names, could be ready to join the Union in 2004.

A major enlargement to the East, which has been a political priority of the Union for almost a decade, could become a reality in a little over two years. All along there has been an acceptance that the Union must itself make, at the very least, the minimum changes necessary to accommodate new Members while continuing to be able to function effectively. The Treaty of Nice represents a consensus as to what those minimum changes are. It was negotiated with great difficulty over an extended period, and for absolutely obvious reasons, our partners are not prepared to re-open a carefully-balanced compromise text.

Nice is necessary for enlargement: and a failure to ratify Nice, therefore, would leave a fundamental dimension of the enlargement process in limbo. It would without question impede the accession of States with which we have much in common and which see us as a model of how a small state should operate within the Union. Already, the outcome of our referendum has caused them serious concern.

The Taoiseach and I have been at pains to assure our opposite numbers in the applicant countries that the outcome of the referendum did not reflect Irish opposition to enlargement. I strongly believe that to be the case - though at the same time it remains important that we continue to spell out to the Irish people just why enlargement is important and in our interests, and to offer reassurances on aspects of possible concern, such as agriculture and inward investment. A uniformly pro-enlargement message has come through at the Forum, as noted by Senator Maurice Hayes in his end-of-term summing up last week, and in the Oireachtas, including in a debate last week.

There is, therefore, a strong national consensus in favour of enlargement. But it would be inconsistent and illogical to support the end and to prevent the means - and the ratification of the Treaty of Nice is the means by which the European Union and the applicant countries envisage enlargement proceeding.

I have not yet heard from any of the opponents of Nice any coherent explanation of how they propose to reconcile their opposition to it with their support for enlargement. Some say that they want, as Sinn Féin proposed last week, a new Treaty. Let us leave aside for a moment the kind of Union they might want, and whether or not it would truly be in Ireland's interests. Does anyone seriously think that a new Treaty could be negotiated and ratified in time for enlargement to proceed on schedule? And does anyone seriously think that the elements of such a Treaty would differ substantially if at all from Nice? To claim to support enlargement while opposing Nice is, to put it mildly, self-indulgent.

While it will be for the people alone to decide what course of action should ultimately be taken, the Government is determined to take during 2002 whatever steps it can to achieve the ratification of the Treaty of Nice and to ensure that enlargement can go ahead on schedule.

Part of our response to the referendum has been a recognition that the No vote was in large part motivated by concerns and uncertainties which go well beyond the Treaty of Nice. The way to address those concerns and uncertainties is through vigorous debate. The Government decided to establish the National Forum on Europe for that purpose, and in my view the Forum has made an excellent start. I commend its Chair and all of those participating in it, including the IEA as a member of the Special Observer Pillar. There is, however, a need to do much more, and I hope that the debate will become more searching and will reach a wider public during 2002.

It is becoming steadily clearer that what is needed is to make afresh the case not just for Nice, but for our continued involvement at the heart of the Union, and for the Union itself. There is a need to reassert fundamentals. It is encouraging that, according to the most recent Eurobarometer poll, the Irish people continue to place a high value on membership. On the face of it, we remain enthusiastic Europeans. But there may be a danger that the roots of this support may not be nearly as deep as we would like to believe.

I believe that there is a need to demonstrate just how wide-ranging and essential the benefits of membership are, and how closely they are linked to the Union's unique character.

Too often the focus can fall on direct and measurable financial benefits, particularly from the Structural Funds and the CAP. These have been, and they remain, hugely important. But there is a danger that concentrating too heavily on these reinforces the perception that Europe is some sort of giant cash dispenser - and might lead people to conclude that, as transfers diminish in relative scale, so too does the importance of the Union.

However, and as the economist Rory O'Donnell - an active IEA member - and others have made clear, in recent times our participation in the Single Market and in Economic and Monetary Union have been particularly decisive. In the decade since the completion of the Single Market, the total numbers in employment here have risen by about three-quarters of a million. Many of the 140,000 who are directly employed by overseas investors, and the tens of thousands more who are indirectly employed in consequence, are among the beneficiaries of the Single Market. Without EMU, our interest rates would not be at an historic low, and our indigenous companies would not be operating without any exchange risk in a hugely important and competitive market. The Single Market and EMU are both vital to Ireland, as a small open economy, in giving us a stable platform for future economic development and growth. No serious economic commentator would deny that our nation's interests are best served by our being part of an integrated European Union economy.

As other small countries outside the Union have found, the choice is not between participation in it on the one hand and total freedom of action on the other. On the contrary, those non-members wishing to avail of the Union's markets are obliged to adhere to its rules and disciplines, while having no role whatever in framing them - while as full participants we have a significant capacity to shape the system to our own advantage, and to work to improve any defects. The choice is between the illusion of autonomy and the reality of influence.

Opponents of the EU have, from the very beginning, made much of Ireland's alleged loss of sovereignty. The same instinct underlay the summer's "You will lose money, power and influence" slogan. I do not see sovereignty as some sort of treasure to be hoarded, or as something which, once shared, is lost irretrievably. On the contrary, the true measure of sovereignty is surely its capacity to be used effectively to benefit and protect the people. During last week's Dáil debate on EU enlargement, a number of speakers, including Deputy John Bruton, argued that Ireland had become truly independent only with our entry to the EEC in 1973. I personally would not go so far as that - but it is certainly true that for pragmatic patriots such as Seán Lemass, entry to Europe was seen as a means of enhancing the State's genuine capacity to promote the welfare of its people. In a formal sense, our sovereignty was perhaps least trammeled in the period after the war through to the mid 1950s - but who, now, would want to return to those grey, isolated days?

During his recent speech at Birmingham, Tony Blair argued that, for Britain, participation in the Union is a means of developing its capacity to bring influence to bear on issues such as world trade, climate change, the fight against organised crime and terrorism - and therefore of enhancing its sovereignty. I agree and believe that that approach is true for Ireland also.

The reality is that, on very many questions, countries and peoples throughout the world are now more than ever interdependent. Solutions to many problems simply cannot be found at the local or national level. It makes sense to work together, including on international issues.

Our participation in developing and implementing the EU's common foreign and security policy gives us a voice and weight in international affairs far in excess of what we would enjoy otherwise. When the EU can agree on a policy or course of action - and let's be honest, this is not the case on all issues or all the time - it can have a major impact. Not just through the moral weight of a group of countries acting together, but also through the considerable resources that the EU and its member states can collectively command to address international problems and crises.

So, for example, when the EU commits itself, as it did at Laeken, to helping the Afghan people and its new leaders rebuild the country; to encouraging as swift a return to democracy as possible; to giving particular attention to the situation of women; the Union is acting in full accord with Ireland's national position. The difference is that by acting additionally at the EU level we can become involved on a scale that will make a significant impact.

Our national efforts to highlight the urgent humanitarian situation in Afghanistan have been amplified greatly by getting the agreement of our EU partners to maintain this as an EU priority - indeed an "absolute priority" as the Laeken conclusions state. Our national humanitarian aid contribution to this end is in the order of 5 million - the EU as a whole has already pledged 352 million.

The Laeken Summit also made a significant statement on the Israeli-Palestinian conflict. It renewed the EU call on the Palestinian Authority to eradicate terrorism and to dismantle the terrorist networks run by Hamas and Islamic Jihad, and to arrest and prosecute all those suspected of terrorist offences, as well as to appeal for an end to the armed intifada. The statement also renewed its call on the Israeli Government to withdraw its military forces from Palestinian territories and to stop extrajudicial executions, as well as to lift closures of Palestinian towns and to freeze settlement- building. In addition to this, and on foot of a specific Irish proposal, the European Council added a call on the Israeli Government to end its military operations directed against the infrastructure of the Palestinian Authority. Many, like me, regret that the Union is not able to have a more decisive impact over events in the Middle East, but this does not mean that the influence it brings to bear does not substantially exceed that which Ireland can exert in our purely national capacity. Top