HL Deb 24 October 1972 vol 335 cc2051-62

2.52 p.m.

LORD MOWBRAY AND STOURTON

My Lords, yesterday in another place my right honourable friend the Prime Minister made a Statement on the European Summit Meeting. It has been agreed through the usual channels that this Statement need not be repeated to-day in your Lordships' House but, with leave, I will arrange for it to be circulated in the OFFICIAL REPORT.

The Statement was as follows [OFFICIAL REPORT, Commons, 23/10/72; cols. 791–4]:

"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 wellbeing 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 put 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 monetary 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.

"Mr. HEFTER: What mandate was there?

"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 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 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.]

Following is the Communiqué referred to in the Statement:

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:

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 deter- mination within the framework of a worldwide policy towards the developing countries, 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 regimé, affirm their determination to pursue their policy of detenté 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.

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:

The competent bodies of the Community shall submit reports:

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:

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 31st 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 in the different countries the conclusion of collective agreements at European level in appropriate fields and at strengthening and coordinating measures of consumer protection.

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 sicence 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 succeeded 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 mare 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 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:

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:

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:

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 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 consructive 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 Ministers 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 alia, 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 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.