Mr. David Kitching:

Thank you, Deputy. There have undoubtedly been major achievements. The point I was making, however, is that one can see a certain ossification of the project in the sense that there is a level of complacency within what might be called the Brussels bubble. People there are far removed from the realities of everyday life in their member states. Their discussions are all with people who broadly agree with them, even across political divisions. It is a cosy consensus way of living. It is also very dangerous because it creates a huge chasm between the people who work within the system and those who are subject to it, namely, citizens across the European Union. Unless we address these fundamental issues of elitism and the counter-reaction of populism, the entire project is in grave danger.

It is in this context, that I am focusing on the social and economic elements. When we consider the problems of inflation that occurred in the past we can see that there was a significant change in policy direction from the 1970s onwards. The policy priorities moved away from employment and social initiatives towards the maintenance of stability. Some commentators have linked the shift to the problems which followed the Maastricht treaty, when there was a huge speculative attack on the British pound and the lira, in particular, which led to the reliance on the Deutsche mark as the basis of the euro. As a result, the German preference for the social market economy came to dominate and, with that, German fears of inflation, which are more severe than in most other countries. As a result, we have seen slower growth, less job security and higher levels of unemployment, particularly among young people and the less skilled. These are issues which endanger the overall achievements of the European project. If we have that level of dissatisfaction, there is eventually going to be a backlash.

The issue was raised of the relative strength of the European Parliament compared with national parliaments and how that might play out in the coming years. The ideal situation would be for each national parliament to have a certain degree of oversight in terms of how the legislative process is conducted. There is a trade-off, however, if we want to ensure legislation is efficient and effective in a Union of 28 member states. The principle of subsidiarity within the European legislative process has been broadly successful in that every point of legislation is decided at its most appropriate level within the overall system.

This is a matter for the European Parliament and national parliaments to decide between them. The problem of late has been the dominance of the Council, which brings with it the dominance of larger member states. I see this as a greater problem than, for example, the distribution of parliamentary seats. The loss of these seats is detrimental to small member states but the tendency among larger member states towards big power plays has been more pronounced at Council level than in the European Parliament. Part of the objective of the Parliament is to politicise the European public sphere and, ultimately, to have elected representatives as members of European political groups.

Ms Emer Costello, MEP, referred to the social pillar being linked into economic and monetary union. Some of the research the Foundation for European Progressive Studies, FEPS, has had carried out would concur with what she said, namely, that any investment by the European Investment Bank, EIB, should not be offset against austerity measures within individual member states. Such investment is meant to have a specific outcome. One of the proposals put forward was for project bonds to be issued. An example in this regard would be directing such bonds towards graduate start-up schemes. In areas of the workplace where there is high gender disparity, there are specific measures which might ameliorate matters. The youth guarantee might also be usefully linked to project bonds.

In the context of Deputy Kyne's points, a difficulty arises in the context of the overall discussion on democratic legitimacy and accountability. As a small country, Ireland faces a conundrum. It is not entirely democratically legitimate to exclude someone from the role of Commission president because he or she comes from France or another large member state. I understand the point the Deputy is making, however, particularly in the sense that the US Senate provides an extra layer of representations for smaller states in that jurisdiction. There would be a necessity to have some kind of mechanism in place to ensure that representation would not be lost and that the voices of small member states would not become lost in all the noise.

The Chairman inquired about next year's European elections. I am quite concerned with regard to the issues on which those elections will be fought. The European parties will have platforms on which they will wish to campaign. In addition, they will want to bring forward certain policy proposals in order to show how they would improve the position during the lifetime of the next European Parliament. I do not know if people will vote on those issues. Ireland is not the only country with a huge level of disaffection. There has been a major rise in the number of populist and extremist parties in countries such as Hungary and Greece. There are indications that it is also happening in France and many other countries. While many of our problems are systemic and will not be remedied overnight, it is extremely difficult to predict the outcome of the elections. I would envisage a rather fragmented European Parliament following next year's elections.