Conference told EMU could spell rural poverty

 

MONETARY union will widen the gap between rich and poor parts of Ireland unless economic policies are adjusted to counter this, a Belgian professor of economics has said.

Prof Freddy Heylen, who lectures in economics at the University of Ghent, told a conference in Galway he was "not optimistic" such a policy change would happen. Afterwards, Prof Heylen said that while it was true there was an increasing convergence between income levels in EU states, this did not reflect regional differences.

Because of the free movement of capital, investment in peripheral countries such as Ireland was becoming more and more concentrated in prosperous areas within those countries, because such areas enjoyed a better infrastructure, better technological support and a wider skills base.

This trend would accelerate with monetary union, he said. The ability of individual states to intervene on behalf of disadvantaged areas would be lost, as fiscal authority was yielded to Brussels. However, there were no centralised structures in place to replace such action.

The conference, "Creating employment in an expanding Union - the IGC debate", was organised by the European Commission and European Parliament offices in Dublin.

It was the first of a number of "citizen's hearings" which will be held in different regions in response to earlier criticisms about the lack of public involvement in such debates, according to a commission spokesman, Mr Paul Gormley. "We want to give people an opportunity to hear, discuss and give their views on the issues that are going to have an impact on them," he said.

The organisers were only partially successful in their aims. Much of the time at the conference was taken up with a repetition of already well ventilated positions from farming, trade union, employer and other organisations.

The European Social Commissioner, Mr Padraig Flynn, told the conference that unemployment continued to be "the most fundamental challenge" facing the EU as it prepared for expansion towards the east.

Europe must do better on employment, he said, which meant reforms in education, training, taxation, social security, labour law and collective bargaining. The planned introduction of employment goals in the next EU treaty would facilitate co operation on job creation. "However, let me be clear. I don't believe simply putting a reference to employment in the treaty will create jobs," he said.

The Fianna Fail MEP for Connacht Ulster, Mr Pat "The Cope" Gallagher, said CAP supports for farmers should continue, even after the Union enlarged to the east. "I agree the CAP as it stands cannot simply be offered to the countries of central and eastern Europe who join the EU," he said. "To do so would give all the wrong signals to their farmers and entrepreneurs.

"It would encourage farmers to take the easy option and it would encourage entrepreneurs to invest in farming for the sake of guaranteed prices, rather than in modernising their business structures. It would put up their land prices and distort their economies.

"But if we do succeed in enlarging the EU, the benefits for Ireland could be considerable. Enlargement will provide a bigger market for our high quality food and fish products. This market will also want our high technology products," Mr Gallagher said.

The Fine Gael MEP for Connacht Ulster, Mr Joe McCartin, said enlargement must go ahead. "We often tend to overlook the point that if we do not take in these countries, we will still have to take them into account in our economic planning," he said.

"The European Union and its individual states are already committed within the World Trade Organisation to global free trade. There is no possibility, even if we do not admit these countries to the EU, that a tariff barrier will be maintained between them and us.

"So whether they are in the Union or not, their economic development, or lack of it, will affect us. The same is true of their agriculture which in 20 years from now, perhaps even less, will be competing with us in our own and world markets, whether they join the Union or not," he said.

The Polish Ambassador, Mr Stanislaw Szymanski, said the cost of integration would be lower than previously thought.

"Politically unbiased studies prove that to integrate the agriculture of central and eastern European countries with that of the Union, the annual funds under the Common Agricultural Policy will have to grow only about ECU 10 billion (the current CAP budget amounts to ECU 41 billion), which, as you will agree, does not constitute any excessive expenditure in the light of potential benefits," he said.