The decision to have a referendum is based on the clear legal advice that ratification of the Treaty by the State requires Constitutional change. What is involved is the up-dating and consolidation of the rules governing enhanced cooperation, the introduction on a limited basis of enhanced cooperation in the area of the Common Foreign and Security Policy and the extension of the scope of qualified majority voting. It is important to avoid any risk of legal uncertainty on matters of such importance to the State as the Treaties establishing the Community and the European Union.

The Treaty will only come into effect if ratified by all fifteen Member States. When ratified the measures adopted will equip the Union to function effectively with a significant increase in membership and at the same time provide the required protection for this country's essential interests. It is intended to prepare the way for a significant enlargement of the Union.

The European Union is continuing to seek ways of playing a greater role for peace, stability and security in Europe and Ireland has a strong interest in maintaining a stable, inclusive security environment. It is essential for Ireland to be centrally involved in shaping future changes in the direction that we would wish to see them take. Ireland pursues this objective not only through the common foreign policy of the EU but also through the primary role of the United Nations and other international organisations.

The development of the common foreign and security policy, under the provisions of the Amsterdam Treaty, has led to an enhancement of the capacity of the EU to carry out humanitarian and crisis management tasks -- known as the Petersberg tasks. Existing security arrangements and procedures have been adapted to carry out these tasks and Ireland is actively and constructively participating in improving European responses to challenges which can arise. Important steps have been taken in developing an EU capability to undertake crisis management tasks.

Participation by Ireland in any Petersberg task will be a sovereign decision by the Government and approached on a case by case basis. Also, in line with the Government's policy of military neutrality, the Government has made clear that Ireland would only participate in operations authorised by the United Nations in accordance with the appropriate legislation and subject to Dáil approval.

The existing Treaty provisions were intended to make the common foreign and security policy of the EU more coherent, more visible and more effective. The Treaty of Nice has made only limited changes in this area. References to the Western European Union have been deleted. At the time of the Amsterdam Treaty it was envisaged that the Western European Union would play a key role, acting on behalf of the EU, in the area of crisis management and conflict prevention. However given the development of the Union's capabilities in this area, the role of the WEU has diminished. The deletion of the clauses concerning the WEU can therefore be seen in the light of the evolution of the European Security and Defence Policy and of a desire to update the Treaty.

The Treaty of Nice also provides for the replacement of the existing Political Committee, which comprised representatives from capitals, by a Political and Security Committee, based in Brussels, operating on instructions from the respective Governments. The new Committee will assume functions relating to the conduct of the common foreign and security policy. As part of its responsibilities, the Political and Security Committee may exercise, under the authority of the Council of Foreign Ministers, the political control and strategic direction of crisis management operations.

I would now like to respond to points raised by Deputy Gormley in relation to security and defence issues.

In his comments the Deputy raised a number of points which I would particularly like to address. He said that NATO refers to four countries - Austria, Finland, Ireland and Sweden as "former neutrals". I am not aware of this description being used to describe the four members of the European Union which are not members of the Alliance. If used, however, it would be completely misleading. None of these countries are members of a military Alliance and, as such, they are not party to any mutual defence guarantee. Like Ireland, what they are doing is making a positive contribution to European Security and Defence Policy. They, like Ireland, want Europe to be in a better position to carry out humanitarian and crisis management tasks. They, like Ireland, are not neutral when it comes to playing a role in peacekeeping and reconstruction after the terrible events in the Balkans over the past decade. They, like us, do not want an impotent Europe that has no capacity to provide humanitarian assistance for a crisis on the EU's doorstep.

I see no contradiction between neutrality and Ireland's involvement in Europe's work to promote peace and stability. To say, as Deputy Gormley said, that Ireland has "sold out big time on neutrality" is just irresponsible scaremongering.

Having questioned our neutrality, I was even more surprised to hear Deputy Gormley raise questions about the deletion of clauses about the Western European Union in the Treaty of Nice. Given the concerns he has expressed in the past on Ireland's Observer status with WEU, I would have thought that the deletion of these clauses might represent a positive development for him.

What the limited changes in the Treaty of Nice amount to is an updating of the Treaty to take account of the evolution of European Security and Defence Policy. It was the Amsterdam Treaty which defined a role for the EU in relation to peacekeeping and crisis management tasks. In short, the basis for this work is the Amsterdam Treaty. What the changes at Nice do is to reflect the reality that the European Union, and not the WEU, that will implement the decisions it may take in this area.

Turning to the Political and Security Committee, I would point out to Deputy Gormley that the creation of this Committee is intended to provide a direct political control over the military dimension of any crisis management operation. Moreover, the EU can only decide on any operation on the basis of unanimity among its 15 members - it is absurd that to suggest that the responsibilities of the Political and Security Committee include waging war. Once again, the Deputy is simply scaremongering.

Moreover, Deputy Gormley seems to have a fixation on the military aspects of European Security and Defence Policy. It is of course much wider in scope than the development of military capabilities. In evolving its policy in this area, the EU is working on developing a range of instruments, including conflict prevention and the work on the civilian aspects of crisis management. We are currently devoting a lot of time and effort, for instance, in regard to policing and in the definition of concrete targets in the civilian crisis management area.

What's more, he implies that Ireland might take part in an EU operation without a UN mandate. First of all, if Deputy Gormley reads the conclusions of recent European Council meetings, he will see that the centrality of the UN is explicitly recognised by the EU.

As regards any potential EU Petersberg operation, in keeping with the Government's stated position in this area, I would reiterate that Ireland will approach each mission on a case by case basis and only participate in operations authorised by the UN as comprehended by the appropriate legislation, that is, the Defence Act (1954), the Defence (Amendment) No 2 Act (1960) and the Defence (Amendment) Act 1993. This principle is at the core of our approach to any such participation.

Another area where Deputy Gormley appears confused is in relation to Ireland's commitment to the Headline Goal, or Rapid Reaction Force as he calls it.

Last November a number of meetings were held in Brussels which centred on the Capabilities Commitment Conference. The Conference chiefly provided the opportunity for EU Member States, including Ireland, to indicate formally the resources they can make available for potential humanitarian or crisis management operations. These contributions were made in the context of the voluntary Headline Goal agreed at the European Council at Helsinki in 1999.

A Declaration by EU Member States was issued after the Conference which outlined progress to date on the elaboration of the voluntary goal in the lead-up to the Nice European Council. It clearly stated that the Union's contribution to international security would be made in keeping with the principles of the United Nations Charter. Moreover, it reiterated that these steps did not imply the creation of a European Army.

It is emphatically not a standing army. Rather it is a catalogue of capabilities available to provide the means to carry out humanitarian and crisis management tasks. The question of a UN mandate for identifying, developing and organising these capabilities does not arise. What the EU is doing in this area is similar to what the UN already does with the UN Standby Arrangements System.

In summary, Ireland's contribution of up to 850 members of our Defence Forces does not in any way affect our long-standing policy of military neutrality to which the Government remains firmly committed. Nor is any mutual defence arrangement involved.

Let me be absolutely clear that the national elements, including Ireland's contribution, can only be deployed on foot of decisions by each potential contributor and emphasise that Ireland will approach each mission on a case by case basis and only participate in operations authorised by the UN as comprehended by the appropriate legislation, that is, the Defence Act (1954), the Defence (Amendment) No 2 Act (1960) and the Defence (Amendment) Act 1993.

I hope that these explanations will put Deputy Gormley's mind at rest. Let me assure him that neutrality is not in danger and Ireland will continue to play a positive role in keeping with our long-standing tradition in peacekeeping.

Irish people are generous and outward-looking. They want the countries of Central and Eastern Europe to have the same opportunities we have had in a safe secure environment. This makes sense for Europe. It is also good sense for Ireland.

An objective assessment of the relatively limited changes proposed by the Treaty of Nice must be that Ireland has nothing to fear, and much to gain, from equipping the Union to face the challenges ahead.

As I have already stated the purpose of the Treaty of Nice is to make the changes necessary to prepare the Union for enlargement. It does so by ensuring that a Union of 27 members will be in a position to operate effectively, while at the same time making sure that the essential safeguards for smaller countries remain in place.

As a country which has benefited and which continues to benefit greatly from Community membership it is in our interests that the Union can operate and take decisions, even with a larger membership.

Ireland is well placed to take advantage of the benefits offered by an enlarged Union. The single market will expand to over 500 million people.

We in Ireland have demonstrated over the past three decades that we are fully capable of adapting and taking advantage of the benefits and opportunities which full participation in the Union has offered us. Change holds no fear for us.

Ireland has benefited enormously from being at the forefront of the European Union, economically, politically and socially. The Irish people have consistently rejected those who have argued for an inward, introvert vision, based on a lack of confidence in the capacity of the Irish people to advance their interests successfully in the European environment.

Ireland indeed is a model for many newly acceding countries, as a country where membership of the Union has been invaluable in promoting economic growth, employment and social development.

Enlargement will extend benefits to a new group of Members, while offering opportunities to the current membership. I am confident that the Irish people want to help these new countries succeed in the transition from authoritarianism to democracy.

Our record as a nation is one of generosity, not mean-spiritedness. I know that we will not turn our backs on the candidate countries.