Eamon Gilmore (Dún Laoghaire, Labour) | Oireachtas source

I agree with Deputy O'Reilly that the priority and the focus in Europe now needs to be on jobs and growth. As he said, there has been, quite rightly, a strong emphasis on budgetary discipline over recent times. Obviously, that will remain. We all have to recognise that if the European economy is to recover, there has to be economic growth. In particular, there has to be employment. The challenge of youth unemployment, especially, needs to be addressed. That is clear across Europe and in this country. That is why a compact for jobs and growth was agreed at the June Council meeting. That is why the European Council meeting in October will resume the discussion on how the compact for jobs and growth is to be implemented and driven forward. I expect and hope that the European Council will give some specific directions in that regard. The agreement that was reached in June represents an important reinforcement of political commitment in this area. The approach in the compact is threefold. First, its sets out the actions to be taken at member state level. Second, it sets out the contribution of European policies to growth. Third, it sets out the approach with regard to EMU related growth factors.

Deputy O'Reilly also asked about the issue of flexibility with regard to Common Agricultural Policy payments.

Again, this does not pose any particular difficulty for Ireland. We are in favour of allowing member states the flexibility to transfer funds between the two pillars according to their needs and priorities. We also support the suggestion to exempt from co-funding funds that are transferred from pillar 1 to pillar 2.

Deputies Joe O'Reilly, Bernard Durkan and Seán Kyne referred to the Common Agricultural Policy in the context of the multi-annual financial framework. We need to consider the current position as regards the multi-annual financial framework because a number of issues remain to be resolved. There is the question of what will be the ultimate size of the European budget up to 2020. As everyone is aware, there are differing views among member states as to what should be the size of this budget because this will have a major influence on the ultimate size of the Common Agricultural Policy budget. Ireland's position is that we support the proposals that were brought forward by the European Commission. The European budget must be fit for purpose and, in particular, capable of delivering the measures needed to promote growth and jobs. In that context, the Common Agricultural Policy is important for this country in respect of food security and the major contribution the agrifood sector makes to employment. We are very pleased with the extent to which the sector has grown and is contributing to economic growth and recovery.

When member states are considering the European budget, it is important that they do not approach the issue with a view to identifying how much can be pared from this or that area but in terms of what the European budget can contribute to stimulating economic recovery in the member states, whether in the area of cohesion, research and innovation, education and training or the Common Agricultural Policy. The continuation of a dynamic, consumer-focused agricultural production base in Europe is one of the areas where the European Union can add value.

Senator Reilly raised a number of issues. It is important that we first recognise that this is a process which is following on from key decisions made in June. In that context, I refer to Deputy Kyne's comment regarding a pattern of decisions being made at European level which brings confidence for a few days before such confidence slips back again. That is a fair description of the action taken in response to the crisis in the 12 to 18 months prior to the June meeting. The June meeting was different, however, because we have seen a retention of confidence in the markets since that meeting, as reflected in bond yields. Everyone knows the figures in respect of the yields. This retention of confidence is dependent in turn on the implementation of the measures that were agreed in June. There cannot be any backsliding. A critical element of the decision taken in June related to the compact on jobs and growth. The compact must be driven forward and it is one of the issues I expect we will discuss on Monday and subsequently at the European Council meeting in October.

To respond directly to Senator Reilly's question on the bank deal, it was agreed in June that bank debt would be separated from sovereign debt. The conclusions of the June meeting made specific reference to addressing the Irish position and the Government has been following through on that matter. There is not a day that engagement does not take place either at official or ministerial level, whether this involves the Minister for Finance, the Taoiseach, me or the Minister of State, Deputy Lucinda Creighton, engaging with our counterparts in other member states and the European institutions about working the deal through at a practical level. We did this also in respect of the interest rate issue and leading up to the June summit when we secured agreement on the issue. We will conduct discussions with our partners in private and confidentially. We are confident of securing an outcome that will be to the best benefit of Irish people and taxpayers.

We need to be careful when listening to or reading comments made by other Heads of State, whether Chancellor Merkel or anybody else, that we do not parse them too literally. I interpret Chancellor Merkel's statement that there has been no change in respect of the bank deal for Ireland as meaning there has been no change from the decision that was made in June. What we have to do is to work through that decision and seek agreement on it.

On the issue of own resources raised by Senator Reilly, the Commission has proposed new ways of funding the European Union, including through an EU VAT measure and a financial transactions tax. The view of the Government has been that direct payments from member states as opposed to new lines of tax are the fairest and most effective way to proceed. As the Senator is aware, concern has been expressed about the effect of a financial transactions tax on our financial sector if it were not applied globally or at least across all 27 member states.

On the Future of Europe group, this is a very informal group of foreign ministers who, in the course of frequent meetings, are placing in the public domain some collective thoughts for consideration. These ideas do not constitute a formal proposal. The political cycle across the member states is such that when I counted those around the table at the most recent meeting of the Foreign Affairs Council, I discovered I was in the top half of those present in terms of longevity. Given that I have only been attending Council meetings for 18 months, members will have some idea of the cyclical nature of these matters.