Mr. John Murphy:

Deputy Calleary asked a number of questions. The budget for COSME is not yet agreed because it is subject to agreement of the multi-annual financial framework, which is the overall EU budget for the next seven years. Its purpose and main focus is to facilitate access to finance for small and medium-sized enterprises through loan facilities. In an Irish context it would be best to see it as something which complements the range of measures which the Government is taking to address access to finance for small and medium enterprises. It is a relatively small initiative in EU terms and a relatively small part of the multi-annual financial framework, but it is important for getting an understanding of the issues at European level and getting an EU response.

Deputy Calleary raised the wider issue that we are five years into the crisis and where is the EU plan. It is important to bear in mind the EU's budget. Its capacity to intervene directly to apply resources to a problem is extremely limited. Even if the Commission's proposals for the multi-annual financial framework were accepted by everybody around the table, the EU's budget would be approximately 1% or less of EU GNP.

In many areas of policy the direct responsibility lies with the member state. This is particularly true in the area of employment and social policy generally. However, the role of the European Union, apart from direct intervention through the European Social Fund, is very much to focus on policy and a sharing and understanding of various approaches which work or do not work. The semester process to which I referred is about examining how member states approach this and making recommendations, particularly where member states fail to take action to address issues in the labour market or rigidities in their business and regulatory environments which may impede the creation of jobs. This is very much where the focus of the EU has been, as distinct from massive job creation programmes as such. This is not something which falls within the ambit of the EU or within the resources provided in its budget.

Where the EU has a significant role in terms of facilitating employment is under the regulation agenda. Ireland's focus traditionally has been to try to ensure where proposals are made for regulation that they are proportionate and take account of the administrative and compliance burdens. Frequently we find ourselves in a minority of member states on some of these proposals because many countries have a tendency to legislate for a perceived problem. Our first questions tend to be whether the regulation is necessary, whether it will achieve what it sets out to achieve and what it will cost to implement it.

In the case of the Single Market Act we have been anxious to progress those changes so that the EU can sponsor and make the environment better for business. It is quite a slow process to get a consensus. Then one must take account of getting the approval of Parliament in a co-decision process. Frequently in Parliament, there is a conflict between people who want to see less regulation and people who see a particular problem and think the answer is more regulation. That is not always an easy problem to solve.