When members of the new Government advert to the challenges they face on European policy, attention not unnaturally focuses on Economic and Monetary Union and the difficult policy choices it presents. After several years in which Irish policy makers appeared to be sleepwalking their way into EMU this kind of focus is welcome, but it does not obviate the need to address other European issues of critical national interest.
The most important of these are the renegotiation of the structural funds package, the implications of the planned enlargement of the Union and the further reform of the Common Agricultural Policy. All three issues will be the subject of a major policy statement by the Commission President, Mr Jacques Santer, in the coming month, but the Government must now begin framing a strategy for perhaps the most challenging period in Ireland's EU membership.
Certainly, there are several potential difficulties to circumvent. There is the danger that the boom in Irish living standards, which is rapidly approaching the EU average, could dramatically reduce our share of structural funding now running at £2 billion per year; there is the danger that further CAP reform could work to Ireland's disadvantage and there will be concern among farmers that the entry of some poorer Eastern countries will flood EU food markets and place further strains on the CAP.
In his statement on July 16th next, Mr Santer will outline the Commission's financial perspectives for the 1999-2004 budget and he will also give the Commission's opinion on the level of preparedness of each of the ten countries seeking entry to the Union. The concerns of some in the farm sector about the accession of the Eastern countries is probably over stated; agriculture in most of these countries is seriously underdeveloped. In the short term, at least, their take up of CAP funds is unlikely to have any serious impact while they begin the process of modernisation.
A more serious threat is the continued pressure for liberalisation of EU agriculture markets (i.e., improved access to the EU market and further restrictions on export subsidies), which will intensify with negotiations on the next world trade deal likely to begin in 1999. There is also the continuing internal pressure to reduce the overall cost of the CAP by bringing heavily subsided EU farm prices closer to the world market level.
A great deal of strategic thinking will be required to manage this period of dramatic change. The Government will be anxious to secure any concessions it can to help cushion the blows. But it will also need a clear vision of the likely shape of Irish agriculture five or ten years from now.
On funding, the Commission has already moved to assuage Irish fears that structural support will disappear entirely in 2000, although others suggest that Ireland is poised to become a victim of its own economic success.
It would be a pity if this mood of resignation was allowed to permeate Government thinking. Ireland still has a very strong case for structural funds. This State has only now reached the living standards which much of the Union has enjoyed for a generation. Although vastly improved, Ireland's transport and social infrastructure is still underdeveloped and this community still endures one of the highest levels of unemployment and social exclusion in the Union.
The Government's task is to convince Brussels that the economic statistics tell only part of the story and that the criteria for funding must be changed to take account of the wider realities.