§ The Prime Minister (Mr. Edward Heath)
with your permission, Mr. Speaker, and that of the House, I should like to make a statement about the conference of Heads of State or Government of the member and acceding States of the European Communities which was held in Paris on 19th–20th October at the invitation of President Pompidou.
This conference marked the enlargement of the Community, and the new dimension which it has come to have in consequence. It recognised the opportunities which this new dimension offers for the prosperity and well-being of our own peoples and for what we can do together for the peace of the world. Its achievements were made possible by a great deal of careful preparatory work, in a series of meetings of Foreign Ministers starting in February this year, and in a number of discussions which I myself had with other Heads of State or Government over the preceding months.
The purpose of the meeting was to set the course for the development of the enlarged Community. We thought it right to establish the broad principles on which this development should be based. In each field of activity we considered, the Community showed that it could agree not just on broad principles but also upon practical decisions and a programme of work for the institutions of the Community, to nut the principles into effect. The principles and the decisions are recorded in a communiqué issued at the end of the meeting, copies of which have been made available in the library of the House, and which I am arranging to circulate in the OFFICIAL REPORT.
The main decision of the summit conference was that the member States of the Community affirmed their intention to transform the whole complex of their relations into a European Union by the end of the decade. The institutions of the Community are to report on the subject by the end of 1975. The enlarged Community reaffirmed its determination to progress towards economic and mone- 792 tary union; and it was fully accepted that progress in economic co-operation must move in parallel with progress in monetary co-operation.
On the monetary side, the meeting agreed on the need for Community mechanisms to defend the fixed but adjustable parities between member countries' currencies which will be an essential basis for economic and monetary union. The meeting agreed that the Community should move to the second stage of economic and monetary union on 1st January, 1974, with a view to its completion by the end of this decade. A number of detailed steps to this end were decided, including the establishment of a European Monetary Co-operation Fund before 1st April, 1973.
§ The Prime Minister
The nine Governments agreed to adopt a common attitude in working for international monetary reform based on principles which were agreed. The meeting also agreed upon the need to co-ordinate economic policies more closely, and instructed Economic and Finance Ministers urgently to work out measures for fighting inflation.
Structural and regional imbalances which could affect the realisation of economic and monetary union will be tackled on a Community basis. A Regional Development Fund will be set up before the end of 1973 to be financed from the Community's own resources. The problems of industrial change and structural under-employment have thus been recognised as increasingly a Community responsibility.
A programme of action is to be decided by the end of next year for achieving the establishment of a single industrial base by the removal of fiscal, legal and technical barriers to internal trade and industrial co-operation within the Community. This should permit our manufacturers to realise the potential of a single market of 250 million people. Community institutions have been commissioned to formulate a policy for ensuring the Community's energy supplies.
The Community will draw up between now and 1st January, 1974 a broad programme of action in the social field, aimed at improving working conditions 793 and conditions of life generally. More attention will also be given to the problems of the environment and a programme of action is to be established before 31st July, 1973.
So far I have been concerned with the Community's internal development. But all those attending the meeting were conscious that the enlargement of the Community would bring it increased power and influence, and so increased responsibility, outside its own borders. We considered the development of the Community's external relations in a number of fields.
First, we discussed at length the problems of the developing countries, and agreed that decisions should be taken in the course of next year—the first year of enlargement—both to improve generalised preferences and to increase the volume of official aid.
Secondly, we made clear the Community's determination to play its part in ensuring the success of multilateral trade negotiations in the GATT. The Community is to prepare its own position by 1st July, 1973, and the conference called for the completion of the negotiations in 1975. We recognised that the United States, Japan and the European Community are the three centres of industrial and economic power in the democratic world, and that we must establish a just and stable relationship between them.
Thirdly, we reaffirmed the Community's readiness for co-operation with the countries of Eastern Europe, including the Soviet Union.
As the Community moves forward it becomes increasingly important to consider the international political implications of Community policies. Decisions were taken to ensure that this is done. A second report on methods of improving political co-operation is to be produced by Foreign Ministers by 30th June, 1973. Foreign Ministers will meet more frequently, and will work for common medium and long-term positions in foreign policy.
We also considered the implications of enlargement for the functioning of the Community and its institutions. Some improvements were decided upon, including a strengthening of the powers of control of the European Parliamentary Assembly. Others will be the subject of 794 further study. In all this it will be the pace and direction of the Community's development which will show what institutional improvements are necessary.
It augurs well for the enlarged Community and for this country as a member of it that the meeting was able to reach positive and specific decisions over such a wide range of matters, on the basis of principles on which we were all agreed. It was clear that the achievement of enlargement had given a new impetus to the Community's development.
The European Union for which we have agreed to aim is a reaffirmation of the best in our continent since the war. This time Britain was there as a member. And as I said to the House when I returned from Paris in May last year,I believe that this opens the prospect of a degree of unity, and thus of peace and prosperity, in Western Europe which our continent has never seen before …I added then that this would be—now I can say that it will be—of profound significance for Britain, for Europe and for the whole world."—[OFFICIAL REPORT, 24th May, 1971; Vol. 818, c. 35.]
§ Mr. Harold Wilson
While welcoming the right hon. Gentleman back to these shores, and before putting certain questions. I should like to make two comments about procedure. I do not make too much of the first, because it has happened under successive Governments. As a courtesy, a copy of the statement is normally in the hands of the Opposition some 15 minutes before it is to be made, but on this occasion it was only two minutes. At least when that happened we used to apologise for it, and I am sure that the right hon. Gentleman would wish to do so. [HON. MEMBERS: "Oh."] It was just a nice, old-fashioned gentlemanly procedure that we used to follow.
Secondly, one would have thought that between Friday and today the communiqué could have been made available as a White Paper. I did not hear the right hon. Gentleman say that it would be and I presume that for the sake of the records of the House in any case he will lay the communiqué before the House.
I have these questions for the right hon. Gentleman on his statement. First, on regional policy, which has been so markedly publicised; would he state what 795 assurance he has received from his European colleagues that the amount of money coming across the Channel, across the exchanges, for British regional development, when this is all worked out, will match what he has already conceded will go from Britain across the Channel, across the exchanges, to the Community for the European agriculture welfare state?
Secondly, having committed himself to full-scale European union by 1980, a concept which has not been defined in the communiqué or in the discussions, would he say exactly what he on behalf of this country understands by the concept of full-scale European union by 1980?
Thirdly, having committed himself to European economic and monetary union by 1st January, 1974, with a co-operation fund some nine months earlier, and remembering the warnings that he was given in last week's debate as to the implications of such a union, would he say what he understands will be the implications of this union and what obligations for Britain will be entailed by it?
Fourthly—again one has to rely on Press reports, which may not be fully accurate—would he say what general discussions there were in relation to the Third World and particularly overseas aid? Is it in fact the case that the British Government were not prepared to accept the obligations asked for in relation to the Lester Pearson Plan and the provision of official aid—and I repeat "official aid"—which he pressed very much on the then Labour Government several years ago, saying that we should have accepted them?
Fifthly, as he is concerned to gain what manifestly he does not command—the full-hearted consent of the country—as well as a kind of mini-consent by Parliament, would he now make a Ministerial broadcast to the country on the achievements of the summit and his role in it? In the course of it, would he explain to the country that he entered into these commitments without what he had pledged—the full-hearted consent of the British people?
§ The Prime Minister
I regret that the Leader of the Opposition did not receive the statement at the normal time of a quarter past three.
796 As for publication of the communiqué, I said in my statement that I would circulate it in the OFFICIAL REPORT. The roneoed version was placed in the Library first thing this morning, and it seemed to us that the quickest way would be to publish it in the OFFICIAL REPORT, and it will appear there tomorrow.
It is firmly and clearly said in the communiqué that regional policy is now to be the responsibility of the Community and the fund will be established by the end of next year. The criteria for the operation of the fund and the amount that goes into the fund from the budget will be decided in the perfectly normal way, by the Council of Ministers, on which we have our full powers.
Our concept of a European union is the same that this country has always had, which is that in developing institutions one develops them to meet the needs of the organisation concerned. In this respect I mention not only the importance that the Heads of Government attached to regional policy, industrial policy, and social policy, as well as foreign policy—they already attach importance to the economic and financial policy—but also the way in which the institutions will be developing over the next eight years to meet these requirements. What we have arranged is that before the end of 1975 the Council of Ministers will examine the progress made in each of these respects and will decide where institutional developments have to take place before 1980.
As for monetary union, it is the second stage on which we are to enter by 1st January, 1974, not the final stage. The requirements for that have been laid down by the Finance Ministers.
As for the Third World, although the point was not embodied in the communiqué, we accepted that there could be an increase to 15 per cent. in the goods coming into this country from the developing world. The communiqué accepts that there could be a substantial increase.
We do not accept the 0.7 per cent. for official aid. We have never done so and I never urged the Opposition to do so when they were in government. Our view has always been that we should accept the target of 1 per cent. of the GNP as a combination of official and private aid.
797 Our percentage is 1.43 of the gross national product which is very substantial indeed. We have moved up from 0.37 per cent. to 0.41 per cent. in official aid and, with the volume increasing, that percentage will also increase. But we are not prepared almost to double the amount of official aid with the consequences of that in a very much increased burden of total overseas aid, or restricting unofficial aid, for the simple reason that we believe that private aid, which carries know-how as well, as I have often told the House, is in many ways more valuable to developing countries than is official aid.
I was not proposing a Ministerial broadcast on TV, which would give the right hon. Gentleman the Leader of the Opposition the right to reply, because I have my own audience and he can find his.
§ Mr. Harold Wilson
I thank the right hon. Gentleman for what he said about a copy of the statement and also about the publication of the communiqué. I ask him to think again about a White Paper, because it is sometimes useful to have these things in a regular series and not just in HANSARD.
It was a decision of his predecessor that the Leader of the Opposition should have an automatic right of reply to a Ministerial broadcast. It was not conceded to some Labour Leaders of the Opposition. I am surprised that he has not taken advantage of that, because he seems very pleased with himself about the summit and the country would like to know why he is so pleased with himself and to hear the reply, as the right hon. Gentleman fairly said.
May I ask him now to answer the questions that I put to him? I thank him for what he said about overseas aid, but would he say whether he got an assurance, and what assurance he got, that the amount of money coming to Britain for regional development will equal what we are paying to France and other countries for agricultural development? Did he not satisfy himself about that before he entered his state of euphoria on Saturday morning? [An HON MEMBER: "That was the brandy."] I do not think it was the brandy. Would he answer the question? How does he define in his mind what he put on behalf of Britain in the talks as full-scale European union by 1980 and what does lie intend a European economic 798 and monetary union to mean? It is not unreasonable to ask the right hon. Gentleman to answer those questions.
§ The Prime Minister
I understand that I said that total aid was 1.43 per cent. I should have said that it was 1.14 per cent.
As for the amount of money on regional development, I said quite clearly that the amount of the budget of the Community and how that budget was to be allocated was not a matter for the Heads of Governments to decide. What we have—and the right hon. Gentleman cannot deny this—is full acceptance by the Community of responsibility for providing the resources for the regional policy. That is the position. We shall be a member of the Council of Ministers with our full powers in deciding the amount.
Monetary policy is set out clearly in the communiqué, leaving aside the establishment of the fund by next Spring and the obligations by the end of the next year—this we fully accept—again we have full powers in the Council of Ministers over future progress. This applies also to the movement towards European union. We shall be there as a full member with full control.
§ Sir D. Walker-Smith
Will my right hon. Friend help a little further with the concept of European union which gives rise to some doubt and concern because of its federal implications? We understand from paragraph 16 of the communiqué that the institutions of the Community, presumably including the Commission, will be producing a report by the end of 1975 on the structural framework. Therefore, will my right hon. Friend tell us what Her Majesty's Government will do in the next two years by way of communicating to them a British point of view on this concept and whether Parliament will be taken into counsel on this matter which so vitally affects the future of our Parliamentary institutions?
§ The Prime Minister
Yes, Sir. The British point of view will be communicated constantly through our member of the Council of Ministers, who is the British Foreign Secretary. When the report is published at the end of 1975 the matter will come to the Council of Ministers for decision. Indeed, it is foreseen in the communiqué that there will be a summit meeting of Heads of 799 Government to consider the report and to decide how further progress should be made. So in all these respects the British voice will be clearly heard, and these matters will be constantly discussed in Parliament.
§ Mr. Grimond
Will the Prime Minister reconsider his refusal to give a Ministerial broadcast? It is important that he should do so in order that the Opposition can reply. We are very anxious to hear their considered views on this matter. However, I must add a word of caution, because the last time we had a Ministerial broadcast, on the Ugandan Asians, the Opposition did not exercise their right of reply.
On regional policies, which I welcome, will the right hon. Gentleman assure us that the coming into being of a Community regional policy will not prevent the Government from continuing their present regional policies? The right hon. Gentleman said that the amount of the fund is still to be decided. Will he indicate that it will be large enough to enable the regions to have all the aid which they are now receiving?
§ The Prime Minister
I have not given any indication as to what the total amount will be, because this is a matter to be decided in the Community budget. It is important to note that it is coming from Community funds, and these decisions can be taken by the Council of Ministers. On general regional policy, all Heads of Government felt that there was no sense in each member country trying to outbid the others for mobile industry in those central regions where further industrial development is not required. I should think this is absolutely sensible, because it is only by having limits on the existing prosperous regions that we can guide industry into the other regions. This is what we do in our own regional policy, and it is absolutely right for Europe as a whole.
The right hon. Gentleman the Leader of the Opposition seems sceptical. He may recall that on the question of credit for international trade we have always made considerable attempts to prevent individual countries from outbidding each other to no purpose. [Interruption.] I am glad to hear the right hon. Gentle- 800 man agrees. His colleagues did not appear to do so. It is therefore sensible that for those areas which are prosperous, individual members of the Community should not be outbidding each other by inducements to regional development. This was foremost in the minds of Heads of Governments.
§ Mr. Knox
Whilst congratulating my right hon. Friend on his part in a very highly successful summit conference, may I ask whether he is aware that some of us, who are very strong pro-Marketeers, are a little disappointed about the lack of progress concerning democratic election to the European Parliament? Must we await another summit conference before progress is made on this score?
§ The Prime Minister
Perhaps I may explain the position on this matter, because I think there has been a genuine misunderstanding. There is a difference between the European Parliament having more powers of democratic control and being directly elected. The question of the European Parliament having more democratic control was fully accepted by the Heads of Government and embodied in the communiqué—and the date fixed for this was arranged. The responsibility for putting forward a proposal for direct election is deliberately placed, under Article 138 of the Treaty of Rome, on the European Parliament itself. Therefore, my view was that it was not up to the Heads of Government to tell the European Parliament whether it should ask for direct elections. What is more, I believe that any proposal which came from the European Parliament should come only after British Members of Parliament are members of it. I therefore took the view that I would strongly support the European Parliament having more powers of democratic control, but would not at this summit support Heads of Government telling the European Parliament what it ought to do before British Members of Parliament were members of it. It is therefore up to the European Parliament now to consider whether it wishes to make recommendations about direct elections to the European Parliament. In doing so, I hope that it will take fully into account the relationships which will have to be established between any directly elected European Parliament and the national parliaments.
§ The Prime Minister
The right hon. Gentleman knows that his last figure is his customary gross exaggeration. I have already told the House that no figures were discussed for the regional fund.
§ Mr. Gardner
Is my right hon. Friend aware that his success in persuading his European colleagues to give the highest priority to regional policies has earned the gratitude of people living in areas such as South Fylde and other parts of Lancashire where regional policies are of paramount importance to their future?
§ The Prime Minister
Yes. I think the regions of this country realise full well the importance of a Community regional policy. If right hon. and hon. Gentlemen opposite knew the contempt in which they were held by their Socialist colleagues in Europe they, too, might think again.
§ Mr. Elystan Morgan
Whilst accepting that the Prime Minister obviously did not negotiate a figure for regional intervention, surely some scale of intervention must have been discussed? Otherwise those talks would not have been meaningful. Is he now prepared to tell us whether that scale was in any way commensurate with the needs of the regions, with the £300 million-odd paid to those regions by the Labour Administration in the summer of 1970, and whether it bears any relationship to the princely ransom that is paid to French peasants?
§ The Prime Minister
I have already told the House that there was no discussion of amounts or of the Budget by the Heads of Government, because it is not the responsibility of the Heads of Government to settle the budget of the Community. The Community is not taking over the whole of regional policy. The Labour Party has always asked that a British Government should be free to continue their policies on regional aid.
§ Mr. Marten
Concerning European union, does the Prime Minister's statement of 24th May last year still remain 802 —that democratic control would remain with the Council of Ministers and that there would be no federal set-up?
On regional policy, it would help the House if my right hon. Friend could give the minimum figure which would be acceptable to the British Government.
On energy policy, did my right hon. Friend make it absolutely clear that British North Sea oil remains British and does not disappear into the Community pool?
§ The Prime Minister
I have always refused to enter into the arguments about federalism and confederalism because I believe them to be a sterile exercise. I was therefore glad that the Heads of Government agreed with the British approach in all these fields, in developing these institutions as they are required.
On the question of regional policy. I repeat again that no amounts were discussed because it is not the responsibility of Heads of Government to settle the Community budget.
As far as energy resources are concerned, what we have agreed is that proposals should be put forward in order to ensure the supplies of energy which Europe will need for the rest of this century. This was a major decision. Of course, as far as individual supplies are concerned, they are under the control of national Governments—coal is here, and oil is offshore, and so on.
§ Mr. Harold Wilson
I take with appropriate contempt the recent statement by the right hon. Gentleman when he referred to the leaders of social parties in Europe, by whom he must have meant Social Democratic leaders or leaders of Democratic Socialist parties. He has made this jibe before, and they have repudiated him. Can he give names, and give chapter and verse in this case? They have publicly repudiated that statement.
But, hoping that the right hon. Gentleman has now got his composure back, may I ask him whether he will deal with the question, which he was, possibly, answering, that by his hon. and learned Friend the Member for South Fylde (Mr. Gardner)? He began by referring to the priorities given to regional policies. Was any priority given to regional policies, or was this not just one more thing listed—to please the right hon. Gentleman, 803 since each one of the Nine got something listed last week? Will the right hon. Gentleman now tell us, is he satisfied, first, that we shall got as much back on our regional policies as the French and other agricultural countries get back on theirs? He has not answered that. Second, since he has referred to our desire that there shall be no European control of our freedom to develop our own regional policies, will he now say, in answer to what I put to him last week, whether he is satisfied that the regional policies and powers of the Government, who are dealing with regional development, are free, including the Steel Board, and the nationalised industries, and that they will not be interferred with by European developments?
§ The Prime Minister
What I would tell the right hon. Gentleman is that the whole question of regional policy is that we have our powers in the Council of Ministers, which enable us to ensure that the decisions reached have our agreement. That is the basis on which the Community works. I tell the right hon. Gentleman frankly, if he does not yet understand it, that there is no single arrangement in the Community which says that each country financially is to have back exactly what it puts in. He must realise what he accepted at the time he was negotiating—that the advantages for industry and trade in this country in an enlarged Community are much greater than other countries are going to get. This is the reason why there cannot be any arguments on the grounds which he put forward. The amounts under the regional policy will he negotiated during the coming year. It is because the right hon. Gentleman is so sour at any sort of success that he displays his contemptible attitude today.
§ Mr. Norman Lamont
Is the Prime Minister aware that his announcement on European co-operation in dealing with inflation is very much welcomed on this side of the House? Will he say whether, as part of that co-operation, he intends to support the plan of M. Barre on the need for external tariffs and a freeze on agricultural prices?
§ The Prime Minister
These matters will be discussed by the Finance Ministers on 30th and 31st October—in a week's time. Therefore I should prefer not to indicate at this moment the course which 804 those talks will take. Suffice it to say that the date fixed shows the urgency being attached to this matter.
§ Mr. John Mendelson
With further reference to the statement devoted to regional economic aid, surely the Prime Minister must be aware that in the official briefing given to the West German Press, a delegation of the Federal German Republic pointed out that they had resisted in the discussions at the summit conference any commitment to large-scale funds being devoted for these purposes. Surely the House is entitled to tell the right hon. Gentleman that what is meaningful is the amount and not only the general statement. In view of the fact that these commitments to European economic and monetary union are central to his Administration, will he not now agree that the strongest possible case exists for going to the country before 1st January, or early next year, to see whether he has a mandate for these far-reaching policies?
§ The Prime Minister
No. The only thing which interests the country is whether the hon. Gentleman and his colleagues have ceased to be irrelevant and are moving into the modern world.
§ Sir H. Legge-Bourke
If there is any magnanimity left, would my right hon. Friend bear in mind that there are many of us and, I believe, a very great number of people in the country as a whole, who would wish to take this opportunity of congratulating him on the culmination of many years of dedicated work in this cause which he advocated in his maiden speech in this House—and which I very well remember because I took the opposite view in that debate? May I ask him to believe that the time will come—and the sooner the better—when the Opposition will realise that they are getting absolutely nowhere by these cribbing, cabining and destructive criticisms which they are levelling against one of the greatest achievements this country has ever known?
§ The Prime Minister
I thank my hon. and gallant Friend for what he said. On the latter part of his question, I so much agree with him.
§ Mr. William Hamilton
Would the Prime Minister be a bit more specific about energy policy? Is that policy going to be decided within the Coal and 805 Steel Community? Is that one of the prime reasons why our own National Union of Mineworkers has already decided to participate in the Steel and Coal Community? On another matter, will he say what progress is being made in establishing in this Parliament the machinery for ensuring that we send to Strasbourg some of the most bloody minded Members from this House to put some democratic content into the European Parliament and for ensuring that our Members are elected by the three respective parties and are not the subject of patronage within the Whips Office?
§ The Prime Minister
On the last part of the qustion, so far as this side is concerned, we have made our own plans and we find no difficulties in this matter whatever. So far as hon. Gentlemen opposite are concerned, perhaps they would discuss that with their leader.
On the question of energy policy, this will be a matter for the Council of Ministers and not only the Coal and Steel Community, because it involves supplies of nuclear energy and also supplies of oil. I think what was brought home very vividly to the Heads of Government, in view of the shortage of energy which will become apparent in the United States in a very few years' time, was the competition which there will be in the Western world for the existing supplies of energy. Forward planning ought therefore to be undertaken, as this is now a matter of the utmost urgency. This was accepted.
§ Mr. Shore
I hope that the Prime Minister will try to treat a little more seriously the serious questions being put to him. This is still the House of Commons and he would do well to realise it. The first question which I should like to put to him is this: can he tell us, if this European union is to be achieved by 1980, a union which goes far beyond what we already understood to be economic and monetary union, how this can be achieved without the loss of essential national sovereignty which, we were told in the White Paper, and earlier, would not be at stake? Secondly, will he tell us in what particular the agreement on regions he has brought back with such pride from Brussels differs 806 from the agreement already reached by the Six on 26th March, 1972, to set up a common regional policy and which it then pledged to bring into force by 1st October this year? What he appears to have done is to get reagreement to an agreement 15 months late.
Lastly, may I ask him this? Does this communiqué amount to a treaty, as the last communiqué issued from the Hague amounted to a treaty, and, if so, did the right hon. Gentleman make it clear to the people with whom he was dealing in Paris that he was speaking for himself and not the Opposition and the country in entering into this obligation?
§ The Prime Minister
I have never pretended to speak for the Opposition, and the other Heads of Government knew perfectly well that I was not doing so. They know the sort of thing that the Opposition are saying about the treaty. The communique is not a treaty and it does not have to be ratified by Parliament. It is a communiqué, which is a declaration agreed by the Heads of Government meeting in conference. Regional policy is on a firm basis affecting the Nine and not merely the Six. It is not a social fund but a separate regional fund. It is now accepted as a full regional policy for the whole of the Nine. That is a major step forward. That is what we achieved at the summit. Other Heads of Government and other countries are interested in the Community having a full regional policy, and the matter was discussed more than ever before. That includes the Italians, the Germans and the Dutch. All member countries have an interest in it but some particularly so—for example, the Italians and ourselves.
In all these areas in which we have laid down policy in the communiqué, including economic union, the institutions of the Community will be adapted and will grow to meet the requirements. In 1975 the Council of Ministers will meet and then, if necessary, a summit conference will be held to consider the progress which has been made and to decide what further should be done by 1980. I should have thought that the right hon. Gentleman would approve of a programme which moves step by step and which Parliament can debate at every stage. Surely that is the typical approach of a British Parliament.
Following is the Communiqué:
The Heads of State or of Government of the countries of the enlarged Community, meeting for the first time on the 19th and the 20th of October in Paris, at the invitation of the President of the French Republic, solemnly declare:
—at the moment when enlargement, decided in accordance with the rules in the Treaties and with respect for what the six original member states have already achieved, is to become a reality and to give a new dimension to the Community;
—at a time when world events are profoundly changing the international situation;
—now that there is a general desire for detente and co-operation in response to the interest and the wishes of all peoples;
—now that serious monetary and trade problems require a search for lasting solutions that will favour growth with stability;
—now that many developing countries see the gap widening between themselves and the industrial nations and claim with justification an increase in aid and a fairer use of wealth;
—now that the tasks of the Community are growing, and fresh responsibilities are being laid upon it, the time has come for Europe to recognise clearly the unity of its interests, the extent of its capacities and the magnitude of its duties; Europe must be able to make its voice heard in world affairs, and to make an original contribution commensurate with its human, intellectual and material resources. It must affirm its own views in international relations, as befits its mission to be open to the world and for progress, peace and co-operation.
§ To this end:
- (i) The member states reaffirm their determination to base the development of their Community on democracy, freedom of opinion, the free movement of people and of Ideas and participation by their peoples through their freely elected representatives.
- (ii) The member states are determined to strengthen the Community by establishing an economic and monetary union, the guarantee of stability and growth, the foundation of their solidarity and the indispensable basis for social progress, and by ending disparities between the regions;
- (iii) Economic expansion is not an end in itself. Its first aim should be to enable disparities in living conditions to be reduced. It must take place with the participation of all the social partners. It should result in an improvement in the quality of life as well as standards of living. As befits the genius of Europe, particular attention will be given to intangible values and to protecting the environment, so that progress may really be put at the service of mankind;
- (iv) The Community is well aware of the problem presented by continuing underdevelopment in the world. It affirms its determination within the framework of a worldwide policy towards the developing countries,
808 to increase its effort in aid and technical assistance to the least favoured people. It will take particular account of the concerns of those countries towards which, through geography, history and the commitments entered into by the Community, it has specific responsibilities;
- (v) The Community reaffirms its determination to encourage the development of international trade. This determination applies to all countries without exception.
§ The Community is ready to participate as soon as possible, in the open-minded spirit that it has already shown, and according to the procedures laid down by the IMF and the GATT in negotiations based on the principle of reciprocity. These should make it possible to establish, in the monetary and commercial fields, stable and balanced economic relations, in which the interests of the developing countries must be taken fully into account.
- (vi) The member States of the Community, in the interests of good neighbourly relations which should exist among all European countries whatever their régime, affirm their determination to pursue their policy of detente and of peace with the countries of Eastern Europe, notably on the occasion of the Conference on Security and Co-operation in Europe, and the establishment on a sound basis of a wider economic and human cooperation;
- (vii) The construction of Europe will allow it, in conformity with its ultimate political objectives, to affirm its personality while remaining faithful to its traditional friendships and to the alliances of the member States, and to establish its position in world affairs as a distinct entity determined to promote a better international equilibrium, respecting the principles of the Charter of the United Nations. The member States of the Community, the driving force of European construction, affirm their intention to transform before the end of the present decade the whole complex of their relations into a European Union.
§ Economic and monetary questions
§ 1. The Heads of State or of Government reaffirm the determination of the Member States of the enlarged European Communities irreversibly to achieve the economic and monetary Union, confirming all the elements of the instruments adopted by the Council and by the representatives of Member States on 22nd March, 1971, and 21st March, 1972.
§ The necessary decisions should be taken in the course of 1973 so as to allow the transition to the second stage of the economic and monetary Union on 1st January, 1974, and with a view to its completion not later than 31st December, 1980.
§ The Heads of State or Government reaffirmed the principle of parallel progress in the different fields of the economic and monetary Union.
§ 2. They declared that fixed but adjustable parities between their currencies constitute an essential basis for the achievement of the Union and expressed their determination to set up within the Community mechanisms for defence and mutual support which would enable Member States to ensure that they are respected.809
They decided to institute before 1st April, 1973, by solemn instrument, based on the EEC Treaty, a European Monetary Co-operation Fund which will be administered by the Committee of Governors of Central Banks within the context of general guidelines on economic policy laid down by the Council of Ministers. In an initial phase the Fund will operate on the following bases:
—concerted action among the Central Banks for the purposes of narrowing the margins of fluctuation between their currencies;
—the multilateralisation of positions resulting from interventions in Community currencies and the multilateralisation of intra-Community settlements;
—the use for this purpose of a European monetary unit of account;
—the administration of short term monetary support among the Central Banks;
—the very short term financing of the agreement on the narrowing of margins and short term monetary support will be regrouped in the Fund under renovated mechanism; to this end, short term support will be adjusted on the technical plane without modifying its essential characteristics and in particular without modifying the consultation procedures they involve.
The competent bodies of the Community shall submit reports;
—not later than 30th September, 1973, on the adjustment of short term support;
—not later than 31st December, 1973, on the conditions for the progressive pooling of reserves.
§ 3. The Heads of State or of Government stressed the need to co-ordinate more closely the economic policies of the Community and for this purpose to introduce more effective Community procedures.
§ Under existing economic conditions they consider that priority should be given to the fight against inflation and to Ministers to adopt, on the occasion of the enlarged Council of 30th and 31st October, 1972, precise measures in the various fields which lend themselves to effective and realistic short term action towards these objectives and which take account of the respective situations of the countries of the enlarged Community.
§ 4. The Heads of State or of Government express their determination that the Member States of the enlarged Community should contribute by a common attitude to directing the reform of the international monetary system towards the introduction of an equitable and durable order.
They consider that this system should be based on the following principles:
—fixed but adjustable parities
—the general convertibility of currencies
—effective international regulation of the world supply of liquidities
—a reduction in the rôle of national currencies as reserve instruments
—the effective and equitable functioning of the adjustment process
—equal rights and duties for all participants in the system
—the need to lessen the unstabilising effects of short term capital movements
—the taking into account of the interests of the developing countries.
§ Such a system would be fully compatible with the achievement of the Economic and Monetary Union.
§ Regional Policy
§ 5. The Heads of State or of Government agreed that a high priority should be given to the aim of correcting, in the Community, the structural and regional imbalances which might affect the realisation of Economic and Monetary Union.
§ The Heads of State or of Government invite the Commission to prepare without delay, a report analysing the regional problems which arise in the enlarged Community and to put forward appropriate proposals.
§ From now on they undertake to co-ordinate their regional policies. Desirous of directing that effort towards finding a Community solution to regional problems, they invite the Community Institutions to create a Regional Development Fund. This will be set up before 31 December 1973, and will be financed, from the beginning of the second phase of Economic and Monetary Union, from the Community's own resources. Intervention by the fund in co-ordination with national aids should permit, progressively with the realisation of Economic and Monetary Union, the correction of the main regional imbalances in the enlarged Community and particularly those resulting from the preponderance of agriculture and from industrial change and structural underemployment.
§ Social Policy
§ 6. The Heads of State or Heads of Government emphasised that they attached as much importance to vigorous action in the social field as to the achievement of the Economic and Monetary Union. They thought it essential to ensure the increasing involvement of labour and management in the economic and social decisions of the Community. They invited the Institutions, after consulting labour and management, to draw up, between now and 1st January, 1974, a programme of action providing for concrete measures and the corresponding resources particularly in the framework of the Social Fund, based on the suggestions made in the course of the Conference by Heads of State and Heads of Government and by the Commission.
§ This programme should aim, in particular, at carrying out a co-ordinated policy for employment and vocational training, at improving working conditions and conditions of life, at closely involving workers in the progress of firms, at facilitating on the basis of the situation n the different countries the conclusion of collective agreements at European level in appropriate fields and at strengthening and coordinating measures of consumer protection.811
§ industrial, Scientific and Technological Policy
§ 7. The Heads of State or of Government consider it necessary to seek to establish a single industrial base for the Community as a whole.
§ This involves the elimination of technical barriers to trade as well as the elimination, particularly in the fiscal and legal fields, of barriers which hinder closer relations and mergers between firms, the rapid adoption of a European company statute, the progressive and effective opening up of public sector purchases, the promotion on a European scale of competitive firms in the field of high technology, the transformation and conversion of declining industries, under acceptable social conditions, the formulation of measures to ensure that mergers affecting firms established in the Community are in harmony with the economic and social aims of the Community, and the maintenance of fair competition as much within the Common Market as in external markets in conformity with the rules laid down by the treaties.
§ Objectives will need to be defined and the development of a common policy in the field of science and technology ensured. This policy will require the co-ordination, within the Institutions of the Community, of national policies and joint implementation of projects of interest to the Community.
§ To this end, a programme of action together with a precise time-table and appropriate measures should be decided by the Community's Institutions, before 1st January, 1974.
§ Environmental Policy
§ 8. The Heads of State or of Government emphasised the importance of a Community environmental policy. To this end they invited the Community Institutions to establish, before 31st July, 1973, a programme of action accompanied by a precise time-table.
§ Energy Policy
§ 9. The Heads of State and Heads of Government deem it necessary to invite the Community Institutions to formulate as soon as possible an energy policy guaranteeing certain and lasting supplies under satisfactory economic conditions.
§ External relations
§ 10. The Heads of State or of Government affirm that their efforts to construct their Community attain their full meaning only in so far as Member States succeed in acting together to cope with the growing world responsibilities incumbered on Europe.
§ 11. The Heads of State or of Government are convinced that the Community must, without detracting from the advantages enjoyed by countries with which it has special relations, respond even more than in the past to the expectations of all the developing countries;
§ With this view, it attaches essential importance to the policy of association as confirmed in the Treaty of Accession and to the fulfilment of its commitments to the countries of the Mediterranean Basin with which agreements have been or will be concluded, agreements 812 which should be the subject of an overall and balanced approach.
In the same perspective, in the light of the results of the UNCTAD Conference and in the context of the Development Strategy adopted by the United Nations, the Institutions of the Community and Member States are invited progressively to adopt an overall policy of development co-operation on a worldwide scale, comprising, in particular, the following elements:
—the promotion in appropriate cases of agreements concerning the primary products of the developing countries with a view to arriving at market stabilisation and an increase in their exports;
—the improvement of generalised preferences with the aim of achieving a steady increase in imports of manufactures from the developing countries;
In this connection the Community Institutions will study from the beginning of 1973 the conditions which will permit the achievement of a substantial growth target:
—An increase in the volume of official financial aid.
—An improvement in the financial conditions of this aid, particularly in favour of the least developed countries, bearing in mind the recommendations of the OECD Development Assistance Committee.
§ These questions will be the subject of studies and decisions in good time during 1973.
12. With regard to the industrial countries, the Community is determined, in order to ensure the harmonious development of world trade:
—to contribute, while respecting what has been achieved by the Community, to a progressive liberalisation of international trade by measures based on reciprocity and relating to both tariffs and non-tariff barriers;
—to maintain a constructive dialogue with the United States, Japan, Canada and its other industrialised trade partners in a forthcoming spirit, using the most appropriate methods.
§ In this context the Community attaches major importance to the multilateral negotiations in the context of GATT which it will participate in accordance with its earlier statement.
§ To this end, the Community Institutions are invited to decide not later than 1st July, 1973 on a global approach covering all aspects affecting trade.
§ The Community hopes that an effort on the part of all partners will allow these negotiations to be completed in 1975.
§ It confirms its desire for the full participation of the developing countries in the preparation and progress of these negotiations which should take due account of the interests of those countries.
§ Furthermore, having regard to the agreements concluded with the EFTA countries which are not members, the Community declares its readiness to seek with Norway a speedy solution to the trade problems facing 813 that country in its relations with the enlarged Community.
§ 13. In order to promote détente in Europe, the Conference reaffirmed its determination to follow a common commercial policy towards the countries of Eastern Europe with effect from 1st January, 1973; Member States declared their determination to promote a policy of co-operation, founded on reciprocity with these countries.
§ This policy of co-operation is, at the present stage, closely linked with the preparation and progress of the Conference on Security and Co-operation in Europe to which the enlarged Community and its Member States are called upon to make a concerted and constructive contribution.
§ 14. The Heads of State or of Government agreed that political co-operation between the Member States of the Community on foreign policy matters had begun well and should be still further improved. They agreed that consultations should be intensified at all levels and that the Foreign Minister should in future meet four times a year instead of twice for this purpose. They considered that the aim of their co-operation was to deal with problems of current interest and, where possible, to formulate common medium and long term positions, keeping in mind, inter alio, the international political implications for and effects of Community policies under construction. On matters which have a direct bearing on Community activities, close contact will be maintained with the Institutions of the Community. They agreed that the Foreign Ministers should produce, not later than 30th June, 1973, a second report on methods of improving political co-operation in accordance with the Luxembourg report.
§ Reinforcement of Institutions
§ 15. The Heads of State or Government recognised that the structures of the Community had proved themselves, though they felt that the decision-making procedures and the functioning of the Institutions should be improved, in order to make them more effective.
§ The Community Institutions and, where appropriate, the Representatives of the Governments of Member States are invited to decide before the end of the first stage in the achievement of the economic and monetary Union, on the basis of the report which the Commission, pursuant to the resolution of 22nd March, 1971, is to submit before 1st May, 1973, on the measures relating to the distribution of competences and responsibilities among the Community Institutions and Member States which are necessary to the proper functioning of an economic and monetary Union.
§ They felt it desirable that the date on which meetings of national Cabinets were normally held should be the same so that the Council of the Communities could organise itself with a more regular timetable.
§ Desiring to strengthen the powers of control of the European Parliamentary Assembly, independently of the date on which it will be elected by universal suffrage under Article 814 138 of the Treaty of Rome, and to make their contribution towards improving its working conditions, the Heads of State or Government, while confirming the decision of 22nd April, 1970 of the Council of the Communities, invited the Council and the Commission to put into effect without delay the practical measures designed to achieve this reinforcement and to improve the relations both of the Council and of the Commission with the Assembly.
§ The Council will, before 30th June. 1973, take practical steps to improve its decision-making procedures and the cohesion of Community action.
§ They invited the Community Institutions to recognise the right of the Economic and Social Committee in future to advise on its own initiative on all questions affecting the Community.
§ They were agreed in thinking that, for the purpose in particular of carrying out the tasks laid down in the different programmes of action, it was desirable to make the widest possible use of all the dispositions of the Treaties, including Article 235 of the EEC Treaty.
§ European Union
§ 16. The Heads of State or Government, having set themselves the major objective of transforming, before the end of the present decade and with the fullest respect for the Treaties already signed, the whole complex of the relations of Member States into a European Union, request the Institutions of the Community to draw up a report on this subject before the end of 1975 for submission to a Summit Conference.