Oireachtas Joint and Select Committees
Tuesday, 27 November 2012
Joint Oireachtas Committee on European Union Affairs
Presidency of the Council of the European Union: Discussion with Minister of State
The Minister of State spoke of economic stability and conditions for growth throughout Europe. The greatest destabilisation factor across Europe is the high rate of unemployment. The current position, in which many millions of people are without a job, is unsustainable. Many billions of euro are being spent, as is appropriate, on sustaining people who are unemployed when this money could be invested in job creation. Having examined statistics and factors across Europe, I note that unemployment, rather than stabilising, is becoming worse in some countries and has increased throughout the Continent in the five years since catastrophe struck. The problem has the potential to destabilise Europe.
The Minister of State referred to small and medium sized businesses. The large number of job losses from such enterprises is often understated. I estimate that we lost 1,800 small and medium enterprises in two years. Many of the former owners of businesses that closed will tell one that, having made staff redundant and cut their costs, they were forced to close their business because the banks would not lend. The absence of bank credit continues to be a major problem. One hears the same argument made in debates in Greece, Italy and Spain, namely, that the banking system in Europe is not lending to small businesses.
If a large industry closes with the loss of 300 or 400 jobs, we consider it a disaster while forgetting that small and medium enterprises with perhaps five, ten or 15 employees, are closing daily. The European Union has not taken any initiatives to address the problem, although individual governments have introduced minor initiatives to address it such as the business enterprise schemes here. In the coming weeks, statistics will be published showing the catastrophic effect on European economies of the large number of closures in the small and medium enterprise sector. Does the Government have any definitive proposals for the sector which would assist the economy and the economies of other EU member states?
My second point relates to the ongoing critical conflict in the Middle East, specifically Gaza.
The conflict which is under-estimated has the potential to destabilise economies across Europe and the world, particularly if other countries become involved and if the recent conflict had gone to an all-out war between Israel and Hamas. Even those who support Israel, I am not one of them, acknowledge that the way forward is the acceptance of a Palestinian independent state which is crucial to any solution in Israel. The people in Gaza are living in an open prison camp which has been acknowledged by the Minister for Foreign Affairs and Trade, when in opposition. He has a good deal of time for the Palestinians because of the way they are treated. We underestimate the conflict because it has the capacity to flare up. A conflict in the Middle East that would involve other countries over a period of even a short to medium time would set back the European economy. We should use all influence possible and perhaps step up to the plate on this occasion and advocate the argument put forward by some of the military groups in Gaza - to which I do not subscribe - which is based on the fact that there is no acceptance of a Palestinian state. Maybe that would be one gigantic step forward that we could propose.