THE Government has referred the latest National Economic and Social Council (NESC) report on the future of Europe to the Select Committee on Finance and General Affairs.
The report, European Union: Integration and Enlargement, strongly restates the council's strong support for monetary union and for the opportunities that integration and enlargement present.
The report examines a wide range of issues from European integration to economic and social policy, as well as policies on competitiveness and employment and economic and monetary union.
As reported earlier in The Irish Times, the council argues that Ireland's strategic interest lies in full economic and monetary union. The move to the single currency is an "historic opportunity which promises significant benefits to both Ireland and the EU as a whole".
However, it warns that there is some doubt whether there is an adequate cushion to absorb economic shocks which affect some parts of the union more severely than others or to ensure the correct level of employment and demand across Europe. It states that attention may be given to the design of an appropriate regional stabilisation fund.
On EU enlargement to the east, the council agrees with the 1996 IBEC report that formal accession will only have a minor influence on trade flows.
However, it adds that enlargement should be accompanied without an absolute increase in the resources of the EU.
Manufacturing trade will be presented with both threats and opportunities. The expansion of the EU market by 110 million people will be an important opportunity for Irish exporters. On the other hand, a major threat is likely to arise from increased low-cost exports from these markets.
Nevertheless, the council believes that most of the foreign industries recently attracted to Ireland are unlikely to be diverted. Ireland's major competitors in these sectors are existing members of the EU, it states.
The report stresses that it is very much in Ireland's interest that the EU continues to have a commitment to cohesion policies.
On the CAP, however, it notes that changes in agricultural policy are driven as much by World Trade Organisation negotiations and internal pressures.
Overall, the council believes that a planned gradual integration of eastern European states, leading eventually to full membership is desirable and can be achieved.
The council also believes that the major determinants of competitiveness advantage continue to reside with members states. However, it also insists that community discussion and action are "relevant" and constitute more than rhetoric.
The EU's policy on employment and unemployment would also "be considerably strengthened by the introduction of a new title on employment in the treaty".
