Speech by Minister McGuinness at the Business Alliance for Europe Road Show

Thursday 22 May 2008

It is now just three weeks before we vote on the Lisbon Reform Treaty. I am grateful for the opportunity you’ve given me here today to restate the case for a YES vote. There will be no complacency in this campaign. We know what we have to do. Opponents of the Treaty on both the extreme left and right have repeatedly made misleading statements, often even contradicting each other, in an attempt to create confusion. They can’t really expect a large NO vote, but can only hope to create enough apathy and antagonism in the hope of a low turnout.

I welcome the continued support of a large majority of Ireland’s business community for the Lisbon Reform Treaty. Both indigenous and foreign multinationals here have consistently supported the European Union, in large part because of their first-hand experiences of the benefits of a Single Market.

I particularly appreciate the efforts of the Business Alliance for Europe with its own website (www.yestolisbon.ie) while IBEC too have created their own dedicated website (www.ibeclisbon.ie) promoting the Lisbon Reform Treaty. The business community in Ireland has a history of strong support for European integration. In 2002, IBEC, alone, collected a half-a-million euro in donations for the Nice 2 Referendum and ran an excellent campaign.

Since 1973 Ireland has received some €60 billion from the EU budget and contributed €19.5. Since we joined the EU, Ireland has benefited from major funding, including more than €41 billion from the Common Agricultural Policy. Ireland has also received more than €17bn in Structural and Cohesion Funding. This financial support contributed to our exceptional economic development through investment in roads, environmental services, public transport, education and training In the period from 2007-2013, Ireland can expect to receive a further €12 billion.

One of the EU’s primary achievements, the Single Market, has been important for growing and diversifying Irish trade while enhancing the attractiveness of Ireland for foreign direct investment. The completion of the Single Market, which has provided us with access to larger open markets in the EU, is a significant magnet for investors to Ireland. Remarkably, FDI stock in Ireland increased by over 400% between 1992 and 2003.

Closer European integration has allowed us to have a strategic focus on attracting and developing international mobile investment in traded goods and services. Ireland has been in an excellent position to exploit these opportunities and is now the 11^th largest exporter of services in the world, with total services exports for 2007 of €64.8 billion.

EU membership has enabled us to shift Irish patterns of trade and investment from a traditionally high UK dependence to become more diversified and integrated with our EU trading partners and the global economy. In 1977 around 30 percent of Irish goods exports were destined for EU markets (not including the UK), a figure which had risen to 45 percent by 2006.

Last year, the European Commission launched the Seventh EU Framework Programme (FP7 2007-2013) with a budget of €50 billion. FP7 is the most ambitious of the Framework Programmes to date and will be a key element of the Irish research landscape that will help our researchers and enterprises to achieve the targets set out in the Strategy for Science, Technology and Innovation. In funding terms alone, it is expected that FP7 will inject some €600 million of additional research funding into the national research and development system.

EU employment, social and equality policies have had major impacts on equal pay legislation, social protection and inclusion and equality of opportunity in Ireland. More recently, the common European labour market has given Ireland access to a high number of well-qualified, highly skilled Europeans who wish to work in Ireland. At the same time, the uniform application of labour standards and health & safety provisions across the EU, including the new Member States, have helped level the playing field and ensured that Irish businesses are not put at any disadvantage.

The Lisbon Reform Treaty is a complicated document. Any negotiated text between 27 countries that changes institutional rules in an international organisation is inevitably going to be complicated. This is not a new difficulty. In the run-up to the 1972 referendum on joining the EEC, the Bishop of Kerry famously held up the 295-page Irish Accession Treaty and asked, “Who the hell is going to read all of this?” The onus is on us to explain the Treaty.

Explaining the Lisbon Reform Treaty is complicated by the fact that it has no single dominant theme such as the Single market or a Single Currency. However, as the title suggests, this Treaty is about reform and how the European Union can increase its effectiveness with a membership of 27 countries.

The Government has published a White Paper on the Reform Treaty and a website (www.reformtreaty.ie) explaining the Treaty’s reform agenda. I’d like to commend the Referendum Commission, who offer an ‘independent, neutral and clear’ analysis of the Treaty. They have already debunked some of the more extraordinary myths from the various anti-Treaty groups on issues like taxation and neutrality.

The Lisbon Treaty will provide us with a new basis on which to operate institutionally so that we can tackle efficiently and effectively the great challenges that lie ahead - globalisation, climate change, the need for sustainable energy sources and new security threats. The Treaty is a further stage of development, an incremental and rational step to update and modernise the Union’s rules and focus, which is essential for the effective operation and functioning of the enlarged Union and the Single Market.

The Treaty changes nothing in relation to taxation. Unanimity will continue to be required for all taxation decisions. This means that no changes can be made in this area without the approval of all Member States, including Ireland.

Ireland’s traditional policy of military neutrality is not affected by the Reform Treaty. There are several safeguards in place for us. First, the Reform Treaty maintains the general requirement for unanimity in relation to decisions in the security and defence sphere. Ireland, therefore, maintains a veto over any proposal with which it disagrees. This applies, for example, to the launch of any EU crisis management mission. Ireland retains the sovereign right to decide on participation in any such mission, in accordance with our national “triple lock” arrangements, which require a UN mandate to be in place, as well as Government decision and Dáil approval.

New voting arrangements have been agreed in the Reform Treaty that require double majority voting to be used in the Council of Ministers. A qualified majority (QMV) will now require 55% of the Member States and 65% of the Union’s population. In contrast to what some have said, this provision will actually give a greater voice to the smaller countries in the European Union.

The Reform Treaty provides for a strengthened role for national parliaments with greater advanced notice of legislative proposals from the Commission and a ‘Yellow Card’ system for flagging issues of concern to the Oireachtas and the other 26 national parliaments. Each national parliament is given two votes (the Dáil and the Seanad will each have a vote). National parliaments can vote to issue a ‘reasoned opinion’ on whether or not a Commission proposal respects the principle of subsidiarity (i.e. is the policy area concerned a suitable subject for EU legislation?) If there are 18 such votes, the Commission’s draft must be reviewed (for internal security proposals, the threshold is 13). This ‘Yellow Card’ system is a major new innovation in involving national parliaments in EU activities.

The Charter of Fundamental Rights does not radically alter the protection of fundamental rights within the Union. It does not replace the Constitutions of the Member States, as it applies only to the EU institutions and to the Member States when they are implementing Union law. The Charter will not extend the capacity of EU citizens to bring cases before the ECJ to force Member States to reverse their positions in areas that fall within their competence (e.g. the right to life of the unborn, on which we also have a Protocol protecting our constitutional position).

The impact of the Lisbon Reform Treaty on foreign direct investment has clearly been misrepresented in some quarters. In recent years we have witness the emergence of significant outward direct investment by Irish firms in overseas markets. The removal of third countries' barriers to FDI, coupled with a predictable, transparent, and nondiscriminatory business climate, plays a key role in this respect. The inclusion of FDI in the Common Commercial Policy section of the Lisbon Reform Treaty enhances the ability of the EU to act quickly as a single trading block in trade negotiations with third countries, with Korea and India, for example.

Membership of the European Union has supported Ireland’s social and economic development in many ways. Our place in Europe means that we participate in the most unique and successful experiment in international co-operation. This experiment, still evolving and adapting after over 50 years, has brought benefits to all its members and given us a stronger voice in global issues from trade and the environment to development co-operation and peace and security. The institutional reforms introduced through the Lisbon Reform Treaty will help to prepare the Union of twenty-seven Member States for the new challenges ahead.

ENDS/TC323