'The 50th anniversary of the signing of the Treaty of Rome - Reflections and Perspectives'
by Pat Cox, former President of the European Parliament and current President of the International European Movement
On behalf of the International European Movement I am very pleased to join you in University College Cork this afternoon to celebrate Europe Day and to mark the 50th anniversary of the signing of the Treaty of Rome. I thank the Department of Government for the invitation to give this lecture and the European Parliament for their patronage of the event.
This day in 1945 marked the end of the Second World War in Europe. It was named by the winning allies as VE day, Victory in Europe day. It was an event more marked in Western Europe than in Central and Eastern Europe where the long shadow of post war Soviet dominance beckoned. The continent of Europe was shattered physically in terms of its infrastructure and morally in terms of the nihilism revealed in the liberated concentration camps. Alone among the victorious Western allies the ascendancy of the United States of America was assured. To the East, Soviet hegemony prevailed. Churchill's later graphic image of the 'Iron Curtain' drawn across the face of the continent captured the state of a divided Europe. The stage was set for the emergence of an era of American/Soviet bipolarity in world affairs, for the nuclear arms race and for the Cold War. Each side concluded a mutual defence pact. Proxy wars were fought around the world but the prospect of mutually assured destruction by the conventional and nuclear capabilities with which NATO and the Warsaw Pact bristled secured for Europe an uneasy, occasionally tense but also durable peace. The Marshall Plan pumped US money into European reconstruction.
These were the conditions against which on May 9 1950 that Robert Schuman, the French Foreign Minister, made his now famous speech proposing a new vision for Europe. At its heart lay a process of creative reconciliation between former enemies, especially the Franco-German rapprochement. It was built around innovative supranational institutions for the peaceful management of Coal and Steel resources, which so recently before had been used to fashion the weapons of war. United States economic support and security guarantees were necessary preconditions for Western Europe's post War renaissance but to be complete it required European leaders themselves to assume the moral and political responsibility to act. This was the gift of Schuman's vision, the basis for Europe day which we celebrate here today.
The European Coal and Steel Community Treaty embodied this new vision and together with the Euratom Treaty for the peaceful civil exploitation of nuclear power constituted the foundation for what followed. 1954 saw the rejection by France of a proposed European Defence Community. Carrying some lessons for today, European leaders went back to the drawing board and what followed was the Treaty of Rome, the 50th anniversary of whose signing occurred on March 25th last. This anniversary provides the backdrop for my remarks this afternoon.
Adding prosperity to sustainable reconciliation was the focus of the Treaty of Rome. Its functional method was to promote and build a deep network of economic relationships and mutual dependence between its participating states through the establishment of the Common Market. Since then it has taken the form of successive steps - from Customs Union, to a series of Common Policies, to the Single Market and to Economic and Monetary Union - that have marked out the development and the deepening of the European Community.
From the outset the objective of Article 2 of the Treaty of Rome was to promote a harmonious and balanced development of economic activities and a high level of employment and social protection. It aimed also to foster human dignity in an area of peace and security through an ever closer union of the peoples of Europe in its visionary project. The European construction brought with it a vision of the future and altered the political, economic and psychological outlook of a generation in Western continental Europe, replacing anxiety and fear by a sense of common purpose and hope.
The constant striving of the peoples of Central and Eastern Europe to free themselves from Communist dictatorship, from the Hungarian Revolution in 1956, to the Prague Spring in 1968, to the emergence of Solidarnosc in Poland in 1981 was finally crowned with success with the collapse of the Berlin Wall and the wave of essentially peaceful revolutions in 1989. The values and added value of the European Union provided an available and attractive framework for their full return to pluralist democracy and open markets and societies. Enlargement has been the most powerful expression of the soft power capacity of the European Union to attract others to a shared set of goals. Its strength lies in its voluntary nature. This comes neither from the point of an imperial sword nor from the barrel of an ideological or ethnic gun, but from the free choice of free and sovereign peoples and governments. It places democratic institutions, the rule of law and respect for individual dignity and freedom at the heart of what it stands for.
Through the dynamic of enlargement and deepening resulting from successive Treaties the combined global weight of the EU 27 today is impressive.
The EU has a population base of 480 million which, though ageing, represents the third largest in the world after China and India. It is the world's richest single market. It has established the single currency, the Euro, the world's second most important reserve currency. Collectively it is the world's largest trader in terms of share of global trade and a broadly equivalent share of global GDP.
Reflecting common European values the EU practices a policy of internal and external solidarity. It constitutes the largest donor community of untied non military aid in the world accounting for 55% of Official Development Assistance and is the largest donor of humanitarian food aid globally. The commitment is to double this effort by 2010. Externally the EU is an active leader in the fight to address the challenges of global warming and climate change not least through the Kyoto Process and its anticipated follow up. The EU is a strong believer in effective multilateralism preferring the civil resolution of international crises but through rapid reaction forces increasingly is willing to play a role in peace keeping and peace enforcing. The EU was central to the establishment of the International Criminal Court as an extension of the concept of the rule of law internationally. The common sense of vulnerability in the face of contemporary forms of terrorism is strengthening the resolve to act together. The EU prefers to conduct its bilateral and multilateral relations through mutually binding pacts and agreements rather than a la carte.
Internally, policies increasingly focus on sustainability in all that is done in economic, environmental and social policy terms with variable degrees of success. More than two fifths of the annual budget is allocated to internal structural and cohesion funding.
We have banned the death penalty within our EU borders. Our Treaties provide for the suspension of any member state found to be in persistent breach of fundamental rights. The EU values cultural diversity and practices a form of integration which is more mosaic than melting pot in its respect for cultural diversity.
By any standards this is an impressive record of achievement and yet there is a paradox. We have found Europe but struggle to find its Europeans. Peace, for generations so elusive, is now taken for granted. What for earlier generations of Europeans was reality for today's generation is history. Our comfort zone has extended psychologically and geographically with the disappearance of the Iron Curtain and the common external threat of the Soviet Union. The passage of time and of older generations has dimmed collective memory of Europe's earlier dreadful alternatives. Yesterday's narratives no longer carry the same force.
The functional method of integration had its strengths but also its weaknesses. A significant part of the European Union's internal self expression has been regulatory in form and economic in content yielding prosperity but also leaving a segment of popular opinion seeking reassurance that the contemporary European project is an authentic political vision for a modern society and not only a platform for markets, economism and technocracy. Lulled by a long period of guaranteed security and of growing prosperity, Europe's leaders shared a vision of European integration that drifted increasingly towards technocratic expression yielding to a popular perception of Europe as Brussels and Brussels as bureaucracy. Many citizens see the European Union as a powerful bureaucratic machine which endlessly argues about obscure subjects, which is remote, cumbersome and costly and over which they have very little influence. Europe, which was a visionary project - uniting peoples and nations to ensure lasting peace -
increasingly came to be seen as a mechanistic process. This is the more so when national leaders too often have chosen to make Europe and Brussels the whipping boy for what goes wrong and conveniently decry both its policies and the way it works, even though they are the ones who make most of the strategic policies in the first place.
So perhaps it should not be too surprising that in the failed referenda in France and the Netherlands that to the extent that national factors alone were not in play that this European technocracy in part was held responsible for the ills felt by many people. Our European Union economic performance is very diverse with states exhibiting both best and worst practice. Yet, where there is economic stagnation, high unemployment, poor performance and management and, frankly, poor political leadership many ordinary Europeans have the blues.
They have the economic, globalisation and delocalisation blues. They have the demographic, immigration, integration and assimilation blues. They have the security, terrorism and fundamentalism blues. And to wrap it up many have the enlargement and Turkey blues. Not everyone in every place has the same blues or in the same degree but collectively these feelings explain much of today's European Union political zeitgeist.
We recognise that as Europeans we live in a shrinking and increasingly interdependent world, challenged by the pace and consequences of globalisation, by ageing demographics, by climate change, by resource scarcity and raw material competition and by new security risks from energy supply to international terrorism, crime and trafficking. Anxieties provoked by these challenges must be acknowledged honestly and addressed.
As Europeans in the second half of the 20th century we designed the most sophisticated institutions ever to foster intelligent interdependence between sovereign states. For tomorrow's world surely this has to be a cause for hope. In essence if the European project did not already exist it would make sense to invent it today. This is so in the context of what will be a relentless relative European and Western decline in the 21st century. This process of relative decline will challenge our collective EU capacities but certainly would dwarf us as Europeans if our only capacity to respond was predicated on 19th century concepts of national sovereignty. While this thought may offer some comfort we would be wrong to lapse into a self satisfied complacency. To survive and thrive ideas cannot stagnate. They must evolve. Adaptation is the key. This is no less true for the European Union itself and for its institutional and policy perspectives.
The challenge for the EU 27 is, through concrete actions and visible achievement together with the need to articulate and communicate a relevant contemporary vision, to convince public opinion inside the Union that the collective wisdom and political will to act is capable of creating an effective system of economic governance, sustainable social solidarity and security guarantees adapted to and fit for our times. This is so even as the EU acts as a beacon of hope for neighbours on the outside who aspire to eventual membership.
It is important to ensure that unresolved issues regarding the European Union's constitutional arrangements should not unsettle its future potential. Reflecting on this 50th anniversary of the signing of the Treaty of Rome, clearly we stand at a crossroads proud of our achievements but uncertain about our future direction.
The air of doubt and the mood of anxiety of 2005 and since the defeated referenda are beginning to yield to fresh perspectives and the potential impact of new leaders, not least of Chancellor Merkel and President elect Sarkozy. The International European Movement calls therefore on the member states together with the European Union institutions to settle their differences over the constitutional future of the Union by urgently rebuilding a consensus that conserves the innovative substance and progress represented by the new treaty. Another intergovernmental conference is likely to be convened on the future EU Treaty settlement whose formulation will permit parliamentary ratification in most states. This is unlikely to obviate the need for a referendum in Ireland. The short term advantage of a new momentum and direction may however store up longer term pent up frustrations for the future as public opinion through universal suffrage finds its voice excluded thus reinforcing a sense of European integration as a projects of elites.
IRELAND in EUROPEAN UNION
Since January 1 1973 the European integration process has been the freely chosen framework for the evolution Irish public policy. Ireland has come a long way in recent decades. We all have emigrated from the past, the many who left our shores and those who stayed. Our economy and our society have opened up. This is evident in every aspect of our lives and our work. We have left behind isolation and stagnation and have embraced openness and connection as the foundation of our prosperity. Economically we have moved from the insular through the international to the global at extraordinary speed. We have moved from a depressing dependency to a vibrant and intelligent interdependence.
It is so easy to forget that though politically independent since 1922 Ireland remained uniquely dependent on the United Kingdom for trade and commerce. As recently as 1960 almost four decades after the foundation of the State Great Britain took 75% of Ireland's total exports and almost 90% of agricultural exports. It was a classic post colonial relationship. By then our farmers were still producing cheap food along with much of the British Commonwealth for Britain's urban market. A 1927 Currency Commission had long since ensured an Irish currency issued at par with sterling. Our surplus labour escaped stagnation at home by emigrating to our common labour market with the U.K. Economically we were so totally dependent on Great Britain that in effect we were reduced to the status of a stagnant economic region of the wider British economy. Unlike Britain and in particular the continental western European economies the post war economic recovery bypassed Ireland totally. An ageing national leadership under Eamon DeValera persisted with outdated protectionism, a carry over both from 1930s depression-era economic policy and economic nationalism. This almost brought us to our knees but eventually also brought us to our senses. A first significant policy rupture with the past happened with the retirement from government of DeValera.
The status quo was not an option. When Harold Macmillan courted Europe in the early 1960s only to be rebuffed by General de Gaulle Ireland's early seeds of economic policy change were already beginning to take root. If and when Britain joined the Common Market, given the extent of our dependency, Ireland surely would wish and need to follow. Yet for Ireland such a move was not only inevitable but also desirable. The large, rich and growing continental markets offered the prospect both of economic growth and of increasing trade diversity. Irish agriculture could look forward to making considerable gains through the Common Agricultural Policy and in so doing escape from the oppressive weight of Britain's cheap food policy, the deficiency payments system. Additionally, as one of the poorest regions in Western Europe Ireland by the time of its accession could anticipate early flows of solidarity funding from the EEC.
Much has changed in the past 40 years. We invested more in the education of our young people. Television opened our eyes to a wider world. Foreign direct investment was encouraged not despised. An Anglo Irish Free Trade Area Agreement was negotiated as a prelude to our EEC membership application. A Committee on Industrial Organisation was established to manage the transition form autarky to free trade. A new consensus emerged among political, business and public service leaders that led us from isolation to connection, from the closed to the open and from a pervasive sense of failure to the prospect of success. Ireland's aspiration to be a member of the European Economic Community was at the heart and core of that momentous transformation. In my view, one of the most creative acts of Irish sovereign independence was the moment when through pooling some of our sovereignty we added real value to our small state's choices, capacity and influence in joining the EEC in January 1973.
Inside the EEC we quickly began to learn new ideas and new ways. Gender equality and equal opportunity entered our statute books for the first time. As recently as 1974 women working in the Irish public service were obliged after marriage to give up their employment. Consumer protection and the creation of a new office of Director of Consumer Affairs heralded the new era. It is Europe which introduced the concepts of environmental protection and sustainable development into Irish public policy. It is Europe's strict rules on state aids which has freed our politicians from stuffing good money after bad into White Elephants.
In competitive terms we are the healthier for it. It was Europe which liberalised air transport and telecommunications, both indispensable cogs in our modern commercial and social wheel. Ryanair, the low cost Irish airline, is the product of a world class management employing a highly successful business model but it would not have been possible without a liberalised European air transport market. We replaced old style combative industrial relations, not unlike Britain of the early 1970s, with a successful Irish version of a European style social partnership model.
Europe has helped in other ways too. Jean Monnet once remarked: "when you change the context, you change the problem". It has taken many years for peace to take root in Northern Ireland reaching the zenith of its expression and hope yesterday in Belfast. This is primarily due to the commitment and will of the public and their political leaders in Northern Ireland itself ably assisted and encouraged by the British and Irish governments, by the United States and the European Union. An important contextual change and, in my view, an indirect contributory factor has been the ease and sense of equivalence, notwithstanding differences in country size, with which Irish Taoisigh and British Prime Ministers have learned to work together in the corridors of power in Europe. Moreover, our shared European experience taught us something about the institutionalization and institutions appropriate to consolidating and sustaining a process of peace and reconciliation.
In Ireland when it was our time to choose we courted the European bride at the beginning of the 1970s and consummated the contract by referendum in 1972. It was carried by an overwhelming majority. Many may have been seduced more by her dowry than by herself. Politically we were mesmerized by the prospective flow of funds.
We were not to be disappointed. Our already astute public service, a positive colonial legacy, sharpened its skills in multi annual planning and finance in this new European context rich in opportunity. If there was a gold medal for converting European funding commitments into actual investment the Irish public service would have been the winner on numerous occasions.
In the years of our membership, 1973-2006, Ireland has been gifted net receipts of forty billion Euros. On average throughout this period this was the equivalent of 3.5% of GDP per annum, varying from a high of 6.2% of GDP in 1991 to a low of 0.4% of GDP this year. Reflecting the structure both of EU budget spending and the role of agriculture in the Irish economy total receipts for agriculture and rural development accounted for almost three quarters of the total flow of EU funds to Ireland. With our growing national income and falling EU receipts Ireland is set to become a net contributor to the EU in the coming years.
When we joined the EEC in 1973 Ireland was the poorest member state with our income per capita standing at 58% of the average. Today we are one of the richest states as measured in GDP per capita at over 130% of the EU average. Gross National Product is a truer measure of domestic Irish economic performance than Gross Domestic Product. This is so because of the impact of profit repatriations by multinational corporations based here. However, GNP too has shown explosive growth in nominal terms since 1973 and at constant prices has registered an increase per head in real terms of over two hundred and fifty percent over the period.
Undoubtedly funding transfers from the EU to Ireland have made a key contribution to modern Irish economic growth and development but objectively they have been of secondary
importance in understanding and explaining the phenomenal growth of recent years. A brief digression might serve to illustrate. Since 1991 the Economist Intelligence Unit estimates that German transfers to East Germany have been running at an annual rate of 4 to 5% of their national GDP. This is roughly the equivalent of the entire annual budget of the European Union and in the host region dwarfs the comparative flow of EU funds to Ireland. If transfers are the key to growth why is Eastern Germany not the shining light of regional growth in the EU today?
The muscular economic effect of European integration in Ireland can be found not in transfers but in our export-led market success. Today 90% of our GDP is traded. In 1973, Irish merchandise exports amounted to one point one billion Euros. Last year, 2006, that figure had risen to eighty eight point seven billion Euros, an almost twenty five fold volume increase. Subject to competitiveness, this is sustainable bread and butter economics. It does not need a handout to thrive or to survive. To this must be added, particularly in the past decade, an extraordinary growth in trade in services, with service sector exports such as financial services, information and communications and transport amounting to additional exports of forty six billion Euros in 2005. The extent of our escape from economic dependency on the UK also is revealed by our export statistics. In 1960, as remarked earlier, Great Britain took three quarters of Ireland's exports. That singular dependency has been transformed. In 2006 Great Britain accounted for just 17.0% of Irish exports illustrating the extraordinary extent of Ireland's radical shift in trade diversification. Other EU states accounted for two and a half times as much trade as the UK, while the USA slightly exceeded the UK trade share.
Most of the infant firms and industries nurtured under Ireland's protectionist policies such as Ford and Dunlop in Cork disappeared under free trade. The economic transformation has been almost total. The huge success in attracting foreign direct investment is shown today by the almost two thirds of our exports originating in multinational firms located in Ireland. There are now more than 1,000 overseas companies in Ireland. If Europe provided the markets and the funds to assist regional catch-up it was vigorous foreign direct investment especially US investment that delivered much of the thrust for take off. There are more than 600 US Corporations in Ireland. They account for seventy three billion dollars of accumulated investment. They spend seventeen billion Euros per annum in the Irish economy. They pay two point seven billion Euros in corporate taxation. They employ 90,000. Currently they account for fifty five billion Euros worth of Irish exports.
Perhaps the best summary of success is found in our demographic and labour force data. Where once and for a very long time we haemorrhaged people through emigration today and for the past decade we have the fastest rate of population growth in the EU25. Though small, at 4.23 million our 2006 census registers the highest population since the census of 1861. Our labour force has doubled in twenty years and grown by half in the last ten years. We are now a country of net immigration and still our unemployment rate at 4.2% is among the lowest in the EU.
External circumstances have been kind to Ireland in the past fifteen years accommodating our needs and preferences in the different phases of recent economic development. The short to medium term outlook remains positive in the absence of any significant economic shock.
We have a new appetite and capacity for success, especially among our creative class which is a real and growing resource. Our business sector is profitable and self confident. We have been and can continue to be agile at surfing the global wave, drawing both on its European and American currents. Our small size itself has contributed an especial agility in confronting and responding to change. We will soon become net contributors to the EU purse. We have witnessed a secular trend in declining popular support for Europe as measured in Irish referendum results, with the exception of the second Nice referendum. We are not immune to the wider European debates, both in tone and content. Nor are we immune from a sense of national hubris that our new national economic circumstances are down to our native genius alone and not the supporting external frameworks of which the EU has been an important factor. Perhaps the most interesting future test will be whether our longer term fidelity as a people will prove to have been to the European bride or to her dowry.