Richard Bruton (Dublin North Central, Fine Gael) | Oireachtas source

As the members probably know, up to this year Ireland was not involved in these country-specific recommendations because we were within the troika programme and much of the commitments and assessment of our national policy was done by the troika overseen through those quarterly visits. With the new regime we are now back into the general system that applies across all member states where each year the Council makes a recommendation. This comes on foot of a growth survey. A number of documents have led up to this in terms of assessing the state of the European economy. This has been followed by country-specific recommendations. Clearly, these country-specific recommendations are acquiring increasing importance with changes in EU rules in the provisions and the expectations of convergence of countries, particularly within the eurozone. This is an important process and will continue to be an important part of Ireland's relationship with the European Union.

In that context, Ireland welcomes the Commission's package of country-specific recommendations. As members will note, seven recommendations in total are set out, among which there are no real surprises. During the past few years we have been involved in this process and we understand the view from Europe of where we need to improve.

We have been engaging fully in the Semester process, as it is described, which started with the growth survey and went through examination at European level at a previous Council meeting and now we have the country-specific recommendations. They took place earlier in the year and the national reform programme under the EU 2020 strategy and the stability programme were published at that stage. Ireland is involved in that.

Following the publication of these country-specific recommendations, various preparatory committees are looking across the range of all member states and the recommendations being made. These involve the Employment Committee, the Social Protection Committee and the Economic Policy Committee. That helps to give a broad perspective, not only with regard to a narrow financial money market view of the world but also in respect of a social, economic, employment and social protection view. It is important to strike that balance.

In terms of my responsibility and presenting here to the committee, two of the recommendations are in the sphere of employment. Recommendations Nos. 3 and 4 fall into the area of employment policy and social policy, and No. 5 deals with the SME sector and access to credit. There are also two others in which my Department is involved and they deal with banking, access to finance and cost competitiveness. The recommendations issued to Ireland by the Commission this year are consistent with the policy directions that were firmly established in the past. They are also consistent with the national approach being adopted in the medium-term economic strategy, the Action Plan for Jobs, the Pathways to Work and SOLAS in terms of the further education and training strategy that is being developed by the Minister for Education and Skills.

In the course of the coming weeks as we move towards the Council on 19 June, the country-specific recommendations will be finalised and agreed with the various configurations.

We will seek to clarify some of the supporting data with the Commission through those committees and also through COREPER, which is the committee of permanent representatives of member states. This process is ongoing and we do not expect significant adjustments in country specific recommendations Nos. 3, 4 or 5 and expect they will be adopted as they stand on 19 June. ECOFIN, the European Council of Finance Ministers, will meet on 20 June and it will finalise the country specific recommendations on economic and budgetary issues. The country specific recommendations will be sent as a package to be endorsed by Heads of State at the European Council on 26 and 27 June.

Committee members will have seen the country specific recommendations in the packs with which they have been provided. Recommendation No. 3 calls for improvements in active labour market policies with a particular focus on the long-term unemployed, low skilled workers and young people through the youth guarantee. It seeks to progress reform in the further education and training sector and ensure the implementation of the apprenticeship report and the provision of workplace training. It seeks to improve the level and quality of the support service at Intreo offices and the referral process between Intreo offices and the education and training boards. Essentially, recommendation No. 3 endorses the approach adopted under the Pathways to Work scheme and it encourages improvement in the execution and development of that policy. The next phase of work, which will take on these recommendations, will be reflected in the forthcoming Pathways to Work scheme that will be published soon.

On further education, SOLAS was established last October and a significant expansion of the training and work placement programme has taken place. SOLAS has published a strategy that indicates it seeks to become more relevant to employers and its client base. It is an ambitious strategy that sets out the various objectives it seeks to pursue and I understand it will be followed by operational programmes that will put flesh on the bones of those objectives.

These recommendations are aligned with the thrust of existing policy, which has shifted considerably in recent years. For many years in Ireland the system that prevailed saw payments made to people on condition they were idle. The system now seeks to support people to become engaged and active and this has been a feature of the active labour market policy that is being pursued by the Minister for Social Protection. It is evident too in the interlocking changes that are being made by the Minister for Education and Skills.

I will now address the matters of jobless households, child poverty and child care. This country specific recommendation has two aspects. It aims to tackle the low work intensity of households and to focus on the important issue of child care in supporting stronger labour market participation by women. Poverty and social inclusion issues have been highlighted for up to 11 member states. Up to 19 member states have been given country specific recommendations that focus on different aspects of labour market participation such as young people, women, older workers, migrants and so on. Low work intensity is the official EU indicator for households with little paid employment and an above average share of the Irish population, 24%, is in such households. The problem is particularly severe in Ireland in single parent households. Key policy responses include Intreo, reform of lone parent supports and the development of housing assistance payments. Social transfers in Ireland are very effective in alleviating poverty in households with low work intensity but increased labour market participation remains the best route out of poverty. I understand the National Economic and Social Council, NESC, is also working in this sphere and will soon publish research in the area that will shape the continuing policy debate.

It will be difficult to advance significant improvements in child care within the current fiscal constraints. The supports provided in Ireland include the universal provision of part-time care and education for children in the year before they commence primary school and targeted supports for low income parents through a number of schemes that support them in taking up employment, work experience, education and training opportunities. All of this combines to see public spending in these areas reach around €260 million. Responsibility for the implementation of the poverty element of this recommendation falls to the Minister for Social Protection and responsibility in the area of child care falls to the Minister for Children and Youth Affairs. This country specific recommendation is aligned with the Government's existing strategy and priorities, including early childhood care and education and subsidised after-school child care schemes. The issue of welfare benefit reform is also very topical as the report of the advisory group on tax and social welfare is anticipated shortly.

The next recommendation relates to support for small and medium enterprises, SMEs, and includes access to finance. It fully reflects the work on access to finance that is detailed in the Action Plan for Jobs 2014, which has been agreed by the Department of Finance and other parties in the State bodies group. This recommendation has a number of areas. It relates to the availability of bank and non-bank financing and debt restructuring issues. It addresses initiatives to improve the access of SMEs to bank credit and non-bank finance, including three SME funds co-funded by the National Pensions Reserve Fund, NPRF, Microfinance Ireland and the temporary loan guarantee scheme. The key focus is on supporting SMEs, particularly in accessing finance. Responsibility for implementing this falls to the Minister for Finance and I as Minister for Jobs, Enterprise and Innovation. Restoring normal lending conditions for SMEs is a crucial focus of Government policy and we will continue to work towards the repair of the banking sector. We seek to develop a range of non-bank sources of finance and this continues to expand with numerous measures under way. Government oversight of this process is via the SME State bodies group, which is chaired by the Department of Finance and includes senior officials from my Department, the Department of Jobs, Enterprise and Innovation. Senior officials from the Department of Jobs, Enterprise and Innovation are also on the SME funding consultation committee that seeks to strengthen the engagement of stakeholders with the various SME representative bodies.

On 22 May the establishment of the Strategic Bank Corporation was announced and it will help channel credit into SMEs and it envisages a mix of funding from sources including the European Investment Bank, EIB, KfW and the NPRF. It is anticipated that it will make €500 million available to SMEs as a first phase. We are trying to expand options, develop a stronger range of players in the market and develop options for the sector. At the moment I am finalising proposals to improve the operation of the credit guarantee scheme and the review of micro finance will begin soon. Net job creation will mostly come from fast-growing young firms and we have reissued support for the seed and venture capital operated by Enterprise Ireland. This will be pivotal in supporting high-potential start-ups. There is much happening in this area and we have seen general improvement but there is clearly a long way to go regarding access to finance for small and medium enterprises. We must continue to be innovative in this area and this has been underlined by the Commission's recommendations.

The fact that the content of the 2014 recommendations addressed to Ireland is consistent with the thrust of Government programmes reflects the close working relationship that developed during the support programme and was built upon in the three recent bilaterials. The close fit between the Commission's recommendations and Government policy in terms of the Action Plan for Jobs and Pathways to Work also reflects the progress made on the reform agenda. Once adopted, the country specific recommendations will be subject to ongoing multilateral surveillance by member states and the Commission and will involve continual monitoring, mutual learning and peer review.