Proceedings of the Standing Senate Committee on
Issue 24 - Evidence
OTTAWA, Tuesday, September 29, 1998
The Standing Senate Committee on Foreign Affairs met this day at 5:21 p.m. at
the 23rd European Parliament/Canada interparliamentary meeting.
Senator John Stewart (Chairman) in the Chair.
The Chairman: This evening, on behalf of the members of our committee, I would
extend a warm welcome to the delegation from the European Parliament.
The members in attendance this evening are Senator Whelan from Western Ontario,
a former Minister of Agriculture; Senator Andreychuk from Saskatchewan; Senator
Di Nino from Ontario; Senator Corbin from New Brunswick; and I am from Nova
Scotia. I would also introduce our clerk, Mr. Serge Pelletier, and our research
coordinator, Mr. Peter Berg.
Over the last 10 years, this committee has been involved in extensive studies of
international trade and commerce issues. In that regard we have completed an
analysis of the FTA, the NAFTA, and the World Trade Organization.
Currently, our committee has a reference from the Senate to study the importance
of the Asia-Pacific region for Canada and, in that regard we released an
interim report in July of 1997. The final report should be released some time
In July of 1996, the committee also released a report entitled: "European
Integration: The Implications for Canada". The committee is continuing to
study the consequences for Canada of the emerging European Monetary Union and
other related trade and investment matters.
With those introductions and that background, I would invite you to proceed with
Mr. Luigi Moretti, Non-Aligned Group, Italy: Mr. Chairman, this is the second
day of our visit here to Canada and we have surpassed even our most optimistic
expectations in terms of the number of meetings and issues we have dealt with.
I would, however, point out that perhaps it has been too long since our two
delegations last met. Explanations about certain events were in order. Some
clarification was also needed. We found that we had arrived at the same
solutions. We have exchanged information, sometimes information about Europe.
The media is not always omniscient and their analyses can differ. The press does
not always accurately report events as it should. Clearly, this delegation, the
association and your committee have a joint responsibility to see to the
welfare of the people. You are concerned about Canada, while we are concerned
about Europe. A new nation will emerge from the 15 countries that make up
Europe today. Indeed, Europe is undergoing some remarkable, historical changes.
The process of change has not been easy. However, I am enthusiastic about the
significance of the momentous events taking place. Not only has the Euro gone
into circulation, but on the political front, we are witnessing the expansion
of the European Community and the creation of a new European nation, one that
will be outward-looking and part of a geographic region destined to expand,
with all this entails for production and consumption, if we consider matters
from an economic and trade standpoint.
Furthermore, we are taking on responsibilities vis-à-vis an extremely
dangerous region, given the ideologies and ideas that are being promoted in
certain countries. All of these very unstable regions are located in close
proximity to Europe. Their foreign policy cannot be ignored.
Our institution has the impression that our partners have not been adequately
informed about the rapid pace of these changes. Perhaps we are at fault for
failing to convey this information. Perhaps what we need is a more direct
organization to follow up on these momentous changes because information needs
to be imparted. The consequences of these important events are far-reaching.
Clearly, from this moment forward, the world will have a third currency that
cannot be discounted in trade relations. This new currency will increase trade
stability. You have to realize that 15 different currencies will become one, an
event of major significance.
Much criticism has been levelled at the old Europe, so dear to us and, I am
certain, to Canada as well given its European origins. In passing, we very much
looked forward to visiting Canada. Just meeting people with Italian names and
sunny Italian dispositions brightens my day. Everyone can trace his or her
roots back to Europe. Clearly there is a direct link between our two regions.
The euro is more than just a fictitious trade concept. The euro policy is an
affirmation of a principle. In view of the criticism that has been directed
toward us, we have come to realize how difficult it is for others to imagine a
single economic unit, given that our countries have such different cultures,
histories and peoples and that some have yet to achieve full democracy. Some
countries are experiencing problems in terms of domestic and foreign policy.
The new European model is a testimony to the will of 15 countries and to their
desire to forge a new reality.
Now then, I do not wish to appear overly enthusiastic or convey the impression
that the new European Union will succeed regardless of what may happen. Of
course we will encounter some problems and we have to take into account the
time factor. However, we must weigh the positives. At the outset, we enjoy
stability, sound trade relations, secure new borders and the hope that we are
offering to all of these countries in Europe that are exerting some pressures
and experiencing some problems.
Europe will, of course, need to develop a foreign policy. It cannot do that
alone. It needs the cooperation of its partners, of those countries which
traditionally and historically have been its allies. Some issues remain
outstanding and the outcome of events in the Soviet Union remains uncertain.
Europe cannot ignore events taking place in Albania either. This very urgent
situation will have to be resolved as soon as possible. From a geographic
standpoint, the Soviet Union Is considered part of Europe. You are a committee
of wise senators and therefore you can surely grasp the complexity of this
situation and the broad responsibilities that we must assume.
All of our delegates prepared themselves enthusiastically for this visit. My
colleagues informed me that they had reviewed the agenda and identified issues
they felt were important. Officials made some comments, noting that the agenda
appeared rather gruelling. I feel, however, that the issues we are discussing
are extremely important. We should therefore be prepared to make some sacrifices
and to assume our responsibilities and I think that everyone is proud of being
part of the process.
Mr. Anthony Wilson, PSE, United Kingdom, European Parliament: We have a question
for your committee but, before I pose it, I will relay a short anecdote. Not
long ago, it gave me great pleasure to meet with the president of Cadbury's
Chocolate. While we were discussing cocoa, the composition of chocolate, cocoa
imports and oil imports into Europe, I put to him that famous speech by Nkrumah
at Ghana's independence. He said, "On our independence day, the leaders of
the world came to wish us well. On the following Thursday, we were bankrupt
because the world cocoa wholesaler dropped the price of our staple product."
He looked very embarrassed, and said it would never happen again.
We talk a lot about our aid. We do not have a foreign department, as such,
within the European Union, but we do have a parliamentary committee. We are now
probably the biggest giver of aid to the world. We talk about helping
self-sustaining economies rather than investing in cash crops. We still talk in
these terms. Does your committee have a responsibility in this area and, if so,
what position and policy do you adopt, and what are you developing?
The Chairman: Before we proceed further, I would mention that two senators have
recently entered the room: Senator Pat Carney from British Columbia, a former
Minister of International Trade; and Senator Stollery from Ontario.
I invite my colleagues to participate in the topic you mention. My impression is
that, over the years, the committee has not dealt directly with the matter you
raise. We have been involved in the Free Trade Agreement with the United
States, with the NAFTA, with the World Trade Organization, and then in studies
of the kind I mentioned such as the study of the implications for Canada of
There is no doubt the topic you raise is important, but our current studies have
pre-empted our time. Perhaps other members of the committee can supplement what
I have said or correct it. When I said "correct it", I noticed
Senator Andreychuk brighten up.
Senator Andreychuk: I would not presume to correct you, Mr. Chairman.
One of the difficulties we have encountered in committee has been that certain
senators have certain perspectives on foreign policy that are of greater
interest to them. However, in the last couple of years, trade has raised
different issues and new concepts. The World Trade Organization and European
integration expansion has been a concern. I would certainly not sell our
committee short because the issues of aid and development are related directly
to trade. Therefore, we do deal with it.
Some of us are very preoccupied with human rights and the impact of that. We
deal with human rights and aid as an ancillary issue to some of the broader
topics. For example, our Asia-Pacific report will have a chapter on human
rights. We have pursued, from every perspective, the subjects of trade and
development and aid with various speakers.
The Chairman: Senator Andreychuk's comments have been most helpful.
Senator Di Nino: Mr. Wilson, perhaps you can assist us with some of the issues
we are dealing with as a Senate committee and in this country. You have stated
that the European Community is the largest aid giver of any body. That includes
the U.S. How do you arrive at a budget for aid? How do you determine which
causes are deserving? How do you determine the amount of money to be given? Do
you use a certain formula? Do you have a committee which deals with that?
Mr. Wilson: We have various policies. We regularly meet with representatives of
organizations of the African, Caribbean and Asian countries, and we have signed
agreements with them. Much of the aid we give is covered by those agreements.
We deal mainly with non-governmental organizations within the government's
acceptance. Our parliamentary committees vote the budget according to the
forecast of expenditure within those agreements. Within the growing powers of
the European Parliament, the budget is the area where we do have power.
Expenditures cannot be made unless we agree to them. Our area of interest is
development aid. We are not involved in other foreign policy aspects, such as
defence, security, et cetera. Our involvement is in aid and trade. We
constantly debate how trade and aid can be married.
Senator Di Nino: Is aid tied in some way to trade?
Mr. Wilson: Not yet, though the concept is beginning to be argued.
Mr. Pietro Antonio Di Prima, PPE, Italy, Chairman: There are very different
legal systems within the framework of the community budget. The legal bases are
the mandatory expenses and the voluntary expenses.
There are different categories of voluntary expenses, for example, aid. We will
hear from delegations who apply for aid for a specific geographical area. Those
requests are assessed, and they move on to the budget control commission.
Certain categories of spending are authorized. The expenses of Parliament are
decided on by the commission and Parliament authorizes these expenses. The
budget is discussed in Parliament and approved by Parliament.
If Parliament does not approve the budget, the executive order comes into play.
As our colleague Mr. Wilson said, there are certain aspects in the budget. For
example, aid is a separate category.
You must understand that, if emergency assistance is required, you must provide
immediate aid. I have tried to explain in a few words the budgets of the
The budget is one-twentieth of the resources of the European Community. It is
one-twentieth of the GDP of every country of the EC.
Senator Whelan: Mr. Chairman and fellow parliamentarians, I come from an
ethnically diverse area of Canada. The constituency that I represented in
Parliament for 22 years had 72 different ethnic groups. My wife is German; I
have a Finnish sister-in-law; a Romanian brother-in-law; a Hungarian
sister-in-law; two German brothers-in-law; and I live in an Italian community
where they call me "Gino".
I was also president of the World Food Council which was a group of 36 ministers
of agriculture from around the world. Canada at that time was the largest donor
in the world of food to Ethiopia. Canada gave more to Ethiopia than any other
nation in the world at that time.
I disagree with some of the things that we are doing with regard to food aid
now. We have such tough economic measures in place that, it is said, people
will die for lack of aid before we get our economic house in order. That
comment applies not only to Canada but to many of the nations in the world.
That, to me, is not a humanitarian approach to take.
Aid in the form of providing funds for education is also very important, and
that is lacking in many parts of the world. In some areas, marketing systems
are non-existent. We teach people about how to produce, but we teach them
nothing about marketing.
Some of the changes in the World Trade Organization only aggravate the
situation. For instance, Mr. Katz, the man who has been telling the United
States of America and the rest of the world how to trade in agriculture
products, says their farmers are producing a surplus and that we must have more
free trade in the world. This would lead to flooding the world with their
product, products that they do not know what to do with because they have no
controls on production.
In Germany and France you are paying the farmers $5 a bushel for their wheat.
There is a subsidy of $171 an acre. We pay our farmers no subsidy. They are
going on the world price for the wheat. If our farmers received $5 a bushel for
wheat, we would have wheat coming out of our ears.
Wheat production has increased tremendously in Europe, as has barley production.
I used to attend many meetings in Europe. The OECD was going to create a better
world. In the World Trade Organization has hired a big bureaucracy and pays
them four or five times as much as the Prime Minister of Canada or probably the
Chancellor of Germany receive. We, as parliamentarians, have increasingly less
to say about what goes on in the world.
We produce wine in Canada, which may amaze some people. Most of the wine
producers here are immigrants who came from Europe: from Germany, Italy,
Portugal, from the Balkans. We produce good wine. We have an extremely
difficult time selling that wine in Europe because you have rules that we do
not think are completely fair.
When I fly on an Air Canada airplane, I inquire as to what kind of wine is
available. The reply is: We have French; we have German; we have Italian. When
I fly Alitalia or Air France or any other European airline, they say: We have
German wine. Air France serves French wine. I find such practices unacceptable.
Over 50 per cent of the wine consumed in Canada is imported.
I believe that some of the rules about our use of names are trade
Mr. Chairman, in our overview of Canada's current trade irritants with the
European Union, I do not think one of them is our aid to the rest of the world.
The trade irritants are related to what our farmers are telling us is bad.
When I was young, I studied to be a tool and dye maker. I also worked in
Mercedes-Benz is buying Chrysler in Canada. It is now a big, joint operation. It
will be the world's fourth largest auto producer. It has recently bought a
large truck manufacturing plant in Southwestern Ontario. We have some
reservations about this.
Our major trade with the United States is not related to the Free Trade
Agreement. It is trade that is guaranteed under an auto pact that we signed
back in the 1960s when it was agreed that so much of the North American market
belonged to us, and so much belonged to the United States. Many of our
economists call that "free trade".
When talking about free trade in agriculture products, we are guided by section
11 of the GATT. That section allows us to have supply management for our
poultry and dairy products. These producers are not affected by APEC because
the cost-price formula that they use is very fair. If their input costs go
down, the price to the consumer and to the processor goes down. However, this
was taken away from our farmers. We are using high tariffs now.
That was taken away from our farmers by the World Trade Organization, this new
global organization. I do not call it global. I call it "gobble". We
gobble up one another.
I realize, Mr. Chairman, I have rambled all over the agriculture trade world.
We have a long history of trading with Britain and with Europe. We have a very
strong relationship with them. I believe our chairman has suggest that we
should have more of these kinds of meetings. I can remember a minister from
what was then West Germany at an OECD meeting in Paris saying that, if we had
held these kinds of meetings before, we probably never would have had a war
because we would have had that kind of understanding from working together
towards solving our problems.
This is the same room where the G-7 leaders met. This is the same room where we
created Confederation, when we put English and French Canada together. The
Europeans said that it would not last 10 years but here we are, 131 years
later, the envy of the world. We built a nation of people from all over the
Our agriculture industry is one of the best and strongest in the world. We
produce 55 per cent of our food further north than any other country in the
world, utilizing science and research, and programs that provide incentive for
our farmers to be productive, and we want to have a level playing field.
Senator Carney: You do not get a speech from Senator Whelan, you get a seminar.
I do not intend to cover those issues.
I want to apologize for being late. This meeting corresponded with the
appointment of the first Chinese-Canadian senator to the Senate in 131 years of
Confederation. We have never had a Chinese Canadian in the Senate. Since, in
the region that I represent, one-third of the population in the largest city is
Asian, from all parts of Asia, I know that you will excuse me for my attention
to that event before coming here.
Senator Whelan: You were not too late because the Bloc held up the meeting for a
Senator Carney: To be candid, my question is one seeking information. We have
all been very interested in the change of leadership in Germany, which we have
not had a chance to digest. We have not had a chance to really learn too much
about this change. May I ask you, simply for information purposes for us, how
is the change in leadership going to affect the European Union and,
particularly, the Europe Monetary Union? We have some interest in that in
Canada. I do not expect you to be able to give us a detailed report, but I ask
this of you because you are the first group we have had a chance to talk to
about it. I know you have talked to those in the Department of Foreign Affairs
and this matter must have been raised. What can you tell us about this very
Mr. Di Prima: First I want to respond to Senator "Gino's" question. I
followed what you said attentively. It was, in fact, a piece of history. The
relationship of our states makes it possible to talk about this. Your age makes
it possible to talk about this.
The globalization of markets carries a great danger, which is selfishness on one
hand, and a lack of solidarity on the other. The European Community very often
runs the risk of having this interpretation put on its actions because, every
time there is the accusation that we are helping farmers with their
agricultural products, perhaps we do not manage to make the outside world
understand that we have an obligation of solidarity within Europe.
We have an important function, and that relates to the distribution of our
structural project funds. Our main objective is to help certain regions by the
allocation of funds from the quota that I mentioned.
There is no doubt that southern Europe must absorb different cost factors. I am
sure Mr. Wilson will support me in that statement. Regions of the former Soviet
Union, those covered by the Warsaw Pact make greater demands on the structural
program funds. Projects cost much more there than in southern Europe. We
realize that a kind of cross-solidarity should take place and, in that regard I
am referring to geography. As such, to counter-balance this, we have created a
fund to which we devote greater resources. This is a fund for a program that
will be directed to countries along the Mediterranean basin in order to
balan(null)ce the geographic area that has specific needs.
As for the request from Senator Carney, you are fortunate to have as a member of
this delegation a colleague who is German and who can give an immediate
response to your question. He was part of this election in his nation.
There is no doubt that Germany with its 99 members in the European Parliament,
with its level of contribution, with its leadership represented by its leader,
had and still has great importance for Europe. However, for modern day Europe
and for the Europe of the future, it will not be the change of a government, a
change within a single state, that will change the vocation of Europe. We are
deeply convinced of that.
As to the image of Europe with this new result, I can say that I feel sorry for
Mr. Kohl who was part of my political group. We have been aware of certain
internal difficulties in Germany for a long time. Our problem was that election
campaigns and results are not based on what has gone on before. Historical data
gives you no guidance when it comes to winning an election campaign. An election
campaign is won on the basis of prospects. Since Europe represents the prospect
of a continent and an agenda for that continent, the loss of an election
campaign or of an election round will not halt the process of integration of
Europe. Thank you.
Senator Carney: When we visited Germany during our study on the European
Monetary Union, we recognized how deeply committed Mr. Kohl was to the concept
and how important it was. It is within that parameter that I am asking if there
is likely to be a change. We would very much like to hear from Mr.
Mr. Schnellhardt, Second Vice-Chairman, PPE, Germany: As a German, may I say a
few words about the elections in Germany? Obviously, I give the chairman the
prerogative of answering.
I smiled to a certain degree when listening to the chairman because his country
has known many, many changes that have not necessarily had an impact on
development. Sometimes governments change more rapidly than one changes one's
shirt in Italy.
Let us return to the point at hand. Admittedly, we cannot reject the fact that a
momentous change has taken place. However, I must try to be unpolitical
inasmuch as I belong to the losing side. It is not altogether easy to answer
The fact is that Helmut Kohl has played a fundamental role in the European
unification process. I believe that certain developments -- and I am thinking
of the development towards the monetary union, and the Maastricht agreement --
would not have developed without Chancellor Kohl. Let us say things would have
I do admit that our chairman is right. The axis, France-Germany, has played a
role, but one country alone has never given priority to this. There is a group
that is working along these lines, with certain ideas. I have taken note that
President Chirac has invited Schroeder to a meeting tomorrow. Therefore, there
has been a recognition in the countries that one cannot take a defensive
position, although naturally we would have preferred Chancellor Kohl. These are
the basic feelings, but in the interest of European unification, we have to
admit that we need to advance, and advance with Schroeder.
As to Schroeder's goals at the European level, I can say very little because we
have been living through a sort of American style campaign for the very first
time, with show effects, with laser, with music, and with a whole tra-la-la
which probably impressed people more than the actual subjects we were
For first time since 1986 we heard "enough is enough" and "we
need new faces". There was no discussion of needing to make changes
because Europe, including Germany, would collapse. That was not at all the
discussion, despite the high unemployment rate. Admittedly that does exist but,
nevertheless, we have noted an improvement over the last few months.
I think it depends an awful lot on how the coalition is established and how the
agreement looks. At the present moment, it looks as if the Reds and the Greens
will be working together, the Social Democrats and the Greens. Obviously, the
Greens are already playing a role, for example, in terms of the degree to which
they will be able to implement their eco-tax at the transport level. Will they
be able to implement this?
I do not see any reason why one would panic. I have to be apolitical here.
European integration is so developed that I believe that one person alone - and
I would agree with our chairman here - is not going to have any real impact.
The fact is that one individual country cannot adopt a completely different
I think that Herr Schroeder has understood this. In fact, he made a declaration
along these lines a few years ago, where he in fact said that, although he was
in favour of unification, he did not necessarily agree with monetary union. He
did not agree 100 per cent with the Maastricht agreement. Obviously, you can be
a little sceptical, but over the last few months he did seem to change his tune,
and I believe him.
He was in the European Parliament where he made a declaration. Absolutely no
negative comments came out of that declaration on European unification. He
obviously talked about social democratic Europe. One would not necessarily
agree with him, but I think that one has to contend with reality because,
otherwise, he would not be chancellor for very long.
I have a few comments about Senator Whelan's remarks. To a large degree, I enjoy
Canadian wine. I thought about how I could take a few bottles back home. I am
not surprised to learn that it is Germans, Italians and Spaniards who are
producing these wines.
Joking aside, I think that we are well set and, in fact, we have already
discussed the fact that free trade should be fair trade. We have mentioned this
already. We cannot afford total domination. The fact is that we have
established structures. We have established industries. If they are to be
dismantled because developments in the world require it, obviously, that will
take time. I believe that certain developments have already taken place.
The WTO negotiations which will be reconducted as of the year 2000 will lead to
further freeing of trade, not necessarily as free as you would like it to be,
Senator Whelan, but I do not believe that will be possible. I believe we will
be making progress little by little in the Uruguay Round, for example. A number
of things were considered to be exceptions: We cannot do this but we can do
Trade, after all, requires competition. Competition leads to wealth. At the same
time, one must realize that progress will be slow. Admittedly, we have a number
of problems in the European Union, the situation respecting wine being one of
them. The price of wheat and other agricultural products are a separate
problem. In our proposals and the proposals on the table under the title, "Agenda
2000", there are, as I said, proposals that aim at dismantling barriers
and advocating freer trade.
We are hoping for agreements next year and that these will have a positive
outcome within the WTO. I am relatively optimistic that we will make progress.
Senator Stollery: Mr. Chairman, I have a question that really comes out of the
financial disorder that we have seen around the world in the last few months
and to which I have seen reference recently. It concerns the European Central
Bank. Can you give me some guidance as to how this is going to work.
Many people, including the chairman of the federal reserve, say that one of the
ways of dealing with financial disorder is to lower interest rates in the
United States. However, some people have pointed out that we have changed the
financial architecture. After January 1, it will be difficult for the federal
reserve to do much with interest rates without the agreement of the European
Central Bank because of the other currency bloc that has been established.
As I understand it, and I am reasonably certain of this, by law, the Governor of
the Bank of England is obliged to consider only inflation as his term of
reference when setting interest rates for the Bank of England.
As our committee discovered and as those of us who follow this business are
quite aware, the European Central Bank has taken its terms of reference from
the Bundesbank, and it is that they must maintain a strong currency. That is
what we were told in Frankfurt. The Financial Times and other magazines that
follow this have stated that the European Central Bank will have difficulty
because of the terms of reference of the bank in setting interest rates to
increase development, however you want to define that. The federal reserve will
have more difficulty in, for example, lowering the interest rates because they
will not be able to get an arrangement with the European Central Bank after
January 1. What do you think about that?
Mr. Di Prima: I will try to provide an answer even if it is very technical. In
any case, it is part of my responsibility. I do not understand the dependency
of the European Bank on the Bundesbank. They are two completely different
structures and they are completely independent. There is no doubt that,
presently, the management takes a very technical approach. It benefits from the
best representatives that every country has sent there to be on the board of
However, human weakness has left its mark. One appointment resulted in a fairly
distorted image of an autonomous organization which has its own structure.
Currently, England is not part of the euro system, but we hope it will decide to
join soon. Therefore, England's internal mechanism will activate its own rates
and delineate its own categories.
As for the United States, rates will be set on the basis of a balance between
supply and demand. Presently the markets are experiencing the reversal of a
situation with which we were quite familiar, that is, a stock market that had
taken on excessive value respecting the performance of certain companies. Some
of the expectations of these companies were beyond what was realistic, and that
led to international speculation. However that, for the first time, has not
affected the single European currencies.
In this crisis, the European currencies have not undergone a backlash. It was a
test of the stability of the euro as opposed to the single European currencies.
Perhaps we have been assisted by a strong economy such as that of Germany, but
I am convinced, beyond everything else, that the true structure is that through
the euro many accounts have been restored at the level of individual states.
Through the effort that was made for the euro, many internal budgets, with some
necessary sacrifices, have improved, and so the economy of Europe has been
We still have to settle matters such as the public debt. However, interest rates
are something that are an international matter that will be based on the
volatility of the global market of today. Presently, certain European nations
have interest rates of 25 per cent. You must acknowledge that the system should
be fixed as soon as possible. Of course, there are experts who are more
knowledgeable than myself on this, but there is no doubt that the entire system
must be improved.
The Chairman: I understand that our guests have a commitment.
Senator Stollery: I have one further observation, Mr. Chairman. I will not
pursue it at length.
A few weeks ago the credit rating of the Deutschbank was reduced for the first
time ever because of the world financial crisis. It is said that the losses in
Germany alone are half a trillion U.S. dollars. It is in that context that I
posed my question about the European Central Bank's ability to deal with
interest rates in concert with this.
Mr. Schnellhardt: Perhaps I could briefly respond to that comment. Obviously, we
have put the question ourselves. It is clear that the authorities have got to
be moved to the central bank, and this is made up of different interest rates
of the different countries. We must find out the right level. If it is too
high, it will be detrimental to the people who have lower levels, and vice
However, I think that the rapprochement of the economies of the various
countries has developed so far that the problem will not necessarily be a major
one. The European Central Bank will be far more independent than the
Bundesbank, and it cannot be influenced politically, although we should not
hide the fact that France would like to have this influence and is trying
through political influences to set up a club, if you like, to bring influence
to bear on the central bank. I do not think that will succeed. I think they
will take the responsibility and be independent.
They have quite clearly stated that they want to practice a price ability
policy, a true value policy. That will set interest rates but it will not
necessarily be an easy transition. It will take a number of weeks. Obviously,
many factors must enter into the calculations. Attempts being made to find the
correct level. To my mind, there is no danger of them not achieving this.
The Chairman: I am sorry we do not have more time to exchange questions and
answers, views, but we must cope with the world as it is. We have appreciated
your visit and the candor with which you have asked your questions and given
your answers. It has been a great pleasure.
Please note that fish was not mentioned at all. It is a "four letter word",
as we say. However, I see that you will be meeting with the Department of
Fisheries tomorrow to discuss this very important topic. It is important, not
only as it applies to relations between Canada and the European Union, but
because it is a global problem. If we, in North American, and you, in Europe,
cannot get together on this problem, we will have a major global concern.
Senator Carney: I should point out that the chairman comes from Nova Scotia,
which is a part of the Atlantic fishery.
The Chairman: Yes. Senator Carney comes from British Columbia, which happens to
be an important part of the Pacific fishery, so she shares my view, I hope.
Thank you very much. Please come again.
The committee continued in camera.