Pádraig Mac Lochlainn (Donegal North East, Sinn Fein)

When the Taoiseach spoke to us last before the informal Council meeting he warned that at this Council meeting, "The intention is that we will not at this stage take decisions or draw conclusions." Why would the Council take decisions, given the current situation where unemployment is sky high across Europe and when there are queues for soup kitchens in many places, not just in Greece? I would suggest that the inconvenience of a referendum in this State may have had something to do with the reluctance of EU leaders to put their plans down on paper before the austerity treaty was passed here because we were told the treaty was the bad cop that we had to see before we could see the good cop of investment and a growth plan.

The treaty has been passed and the clear differences in attitude among the less well-off section of our people towards it has been brought to light. Post the informal Council, is it time to ask the Government to show its hand and state clearly what it is looking for in terms of a growth plan?

According to a report published this year by the International Monetary Fund, less government spending during periods of economic contraction lowers incomes in the short term and raises unemployment, particularly long-term unemployment. The report's authors reached this conclusion after examining 173 episodes of government-imposed fiscal austerity over the past 30 years, with the average deficit reduction equal to 1% of GDP.

They found that a 1% deficit cut had the effect of reducing real incomes by about 0.6% and raised unemployment by nearly 0.5%, and it gets worse. The IMF report also found that in cases where governments chose to pursue austerity programmes instead of deficit spending, income and employment levels frequently did not return to pre-recession levels even after five years. Recovery was even more painful when multiple countries tried to impose austerity measures simultaneously, as is currently happening in the eurozone, since not every country can devalue its currency to boost exports at the same time.

With that in mind, I suppose we need to get to the crux of the issue. What is the Government's negotiating position? What does it regard as an adequate stimulus package to get the Irish economy moving?

I asked the Taoiseach the following questions on the previous occasion. Is the Government promoting or supporting an increase in the investment capacity of the European Investment Bank and if so, to what level? Chancellor Merkel and her Government's submission for the next Council meeting at the end of June amounts to approximately €10 billion for all of Europe. As the Taoiseach will be aware, the Irish Congress of Trade Unions has talked about a package of €10 billion for Ireland alone, which has a population of less than 1% of the European Union. If that is the sort of ball park Chancellor Merkel is in, the Taoiseach would need seriously to challenge that.

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