Eamon Gilmore (Dún Laoghaire, Labour) | Oireachtas source

The Chairman asked about enlargement. This week there was an informal meeting of European affairs Ministers which was attended by the candidate countries. The prospective candidate countries, Albania, Bosnia and Herzegovina, and Kosovo, had a meeting with the Presidency and the Commission. That clearly demonstrates the role Ireland intends to play in engaging with not just candidate countries, but also with the other countries. Bosnia and Herzegovina needs to do some work in order to meet the conditions that would enable it to apply for membership, including the alignment of its constitutional provisions with the rulings of the European Court of Human Rights. I am hopeful that there will be progress in these areas.

The Chairman asked specifically about Montenegro. We must recognise that negotiations are at an early stage and therefore it is important for us to be modest in our ambitions. We hope to open one or two negotiation chapters with Montenegro. I commend the Cypriot Presidency on opening the first negotiation chapter in December. The country has some work to do on rule of law and anti-corruption issues. Consideration of Montenegro's progress on these issues will take place during our Presidency.

The Chairman asked about the state of negotiations on the MFF and the development budget. Yesterday I met Mr. Bill Gates of the Bill & Melinda Gates Foundation. We co-operate with that foundation in respect of our development work. It does tremendous work in many dimensions. The European Union is, of course, the biggest contributor to development aid with more than 55% in total so understandably he was interested in the state of negotiations on the MFF and was obviously conscious of Ireland's Presidency role in those negotiations. I gave him an assessment of that. As members of the committee know, agreement was not concluded in November. President Van Rompuy has had negotiations with Heads of State and Government in the intervening time. He hopes to be in a position to present new proposals to the European Council meeting in February. The original proposals on development on heading 4 from the Commission provided for a very substantial increase in the budget. The proposals from President Van Rompuy still represent an increase in the budget of approximately 8%. There will also be a separate European development fund and a separate budget for emergency humanitarian aid. Clearly we will need to await further proposals because the pressure from some member states has been downward on the budget proposals. Ireland has a very strong and proud record in development aid and strongly supports the role of the European Union in aid programmes in countries that need them.

Senator Reilly asked about the unified patent court. We will sign the agreement probably in February along with other member states. It is likely to require a referendum. We have not yet made any decision on when this might take place. We will address that matter once the agreement has been signed.

The Senator asked specifically about youth unemployment. We have made the theme of our Presidency stability, jobs and growth, which is clearly aligned with our national priority. The level of youth unemployment in Europe is unacceptably high. In this country approximately one out of four young people between the ages of 16 and 25 who are in the labour market are unable to get a job. The figure is more than 30% across the European Union and higher than 50% in some member states. It is urgent that the European Union and member states address the issue of youth unemployment and provide employment opportunities. Some of those employment opportunities may not be standard and may be new. Individual states and the European Union as a whole will need to think outside the box about how we address the issue of youth unemployment in the short term.

We need to come at it in a number of ways. There are the measures we are taking to generate economic growth and employment in Europe generally. That means, for example, completion of the Single Market measures - we have a long list of legislative measures we need to put through the European Parliament. There is the issue of the digital Single Market, which has a direct relevance particularly to young people and the potential for the creation of employment. We want to see the trade discussions advanced. There is potential for the GDP of the European economy to grow by approximately 2% if we were able to conclude those trade agreements.

That said, other specific measures need to be introduced to address youth unemployment. The European Commission produced the youth employment package in December. That included proposals for a Council recommendation on a youth guarantee. The aim there is to ensure that young people who are not working or studying receive an offer of employment, continued education, or an apprenticeship or traineeship which will equip them for employment. Our Presidency intends to make significant progress on this proposal with a view to adopting a Council recommendation at the February EPSCO Council meeting. Youth unemployment will also be the main focus of the informal meeting of employment and social affairs Ministers which will take place in Dublin in February.

With regard to the issue of banking union and the bank debt, which was raised by Senator Reilly and Deputy Dooley, there are a number of dimensions. First there is the decision made in June, which was a game changer and involved the critical decision about the separation of bank debt and sovereign debt and the road map established to do that. At the time, some thought this would not be followed through but it has been followed through and was reaffirmed at the October Council meeting. Firm decisions were made in December about the timetable for putting in place the single supervisory mechanism which is the instrument required for the ESM to be in a position to recapitalise banks directly. Work is proceeding with the European Parliament on the legislation for the single supervisory mechanism. There are two separate elements of it - guaranteeing deposits and bank resolution. Again, work is progressing in bringing forward proposals in respect of those issues. The objective is that the single supervisory mechanism will be in place by early 2014 and we are on target to do that.

There are two separate issues. They include the agreement concluded this week on the lengthening of the maturities of the money available to us under the EFSF and the EFSM mechanisms, which is very good news for Ireland. Again, that has a very positive benefit for Ireland. The technical work on that will proceed at official level. The objective is to have that concluded by the end of March. Separate to all of that are the discussions we are having with the ECB in respect of the promissory note. Again, we must remember where the promissory note came from. It is a consequence of the decision to provide a blanket guarantee for the banks back in 2008, the subsequent nationalisation of Anglo Irish Bank, the establishment of the IBRC and the agreement by the last Government to commit paying €3.1 billion of taxpayers' money each year to what is in effect a dead bank. We did not make that payment that last year but found a way of exchanging it for a long-term bond. We committed to having negotiations with the ECB to find a resolution and conclusion to the promissory note issue by the end of March 2013. Those discussions are at a critical stage. The end of March is not too far away and we are very conscious of the time limitations on us for a conclusion of those discussions. I am optimistic we will have a satisfactory outcome to them.

In respect of entry to the bond markets, members will have seen that we have had a very good re-entry into these markets. Members will have seen the successful sale of Irish paper in the first week of January at an interest rate below that of the bailout funding. Last week saw the sale of about €0.5 billion short-term bonds at a very low interest rate. When one contrasts that with where we were two years ago and even a year ago when many people argued that we would not be able to get back into the markets again and would need a second bailout, one can see we have made significant progress. In order for that progress and momentum to continue, we need the issue of the promissory note to be dealt with very soon.

Deputy Dooley also asked about the reform of the Common Agricultural Policy. Those negotiations are progressing. Given our Presidency, we have a firm ambition to conclude them by the end of June 2013. Of course, they cannot be finalised as far as figures are concerned until there is an multi-annual financial framework, MFF, agreed. The Minister for Agriculture, Food and the Marine has been making great progress on that work.