Mr. Brian Hayes:

I will begin by responding to the Chairman's remarks. There are 24 committees. As there are just 11 of us, we are not going to be on every committee. In that context, I return to my initial point that there could be more co-ordination between the 11 of us. That is something I would like to explore with all my colleagues, leaving party politics outside for a moment. There is more work we can do. Three or four members of our 11-strong delegation are on one committee, but we have no one on eight committees. There is an issue there. I am also on the Committee on Development as a substitute member. Obviously, there is a kind of ying-yang balance between economics and development. They are both connected, given what we need to see in terms of trade opportunities between the developing world and Europe, especially in light of the huge sums of money the European taxpayer is putting into humanitarian relief across the world.

I would like to set out the key issue with regard to investment. Of course we need investment, but someone has to pony up the money. Investment in Ireland decreased by 20%, or one fifth, from the top of the crisis in 2008 to the bottom of the crisis now. The question of whether this is the bottom of the crisis is an open one. That is private consumption. People talk about public sector money, but the real money that drives the economy is private sector money. Of course capital money here, there and everywhere makes some difference. Private sector money is the real money that encourages investment in small and medium-sized enterprises. Mario Draghi has made the point that we need to return to the investment agenda.

I came across a very interesting paper by Daniel Gros at a preliminary meeting of the European Parliament Committee on Economic and Monetary Affairs the other day. He made the point that such a wall of money has never before been put into the banks, or made optional to the banks, without the banks lending it. He says that when something similar happened in the 1930s, there was a deflationary period for a decade after. People psychologically remembered the crash in their own private lives and in their countries' lives. They deleveraged, they paid down their loans and they decided not to take on more debt. I think Europe is in a similar spiral right now.

There is a simplistic top-of-the-head attitude that we need to get more money into the system, even though we have never had more money in the system. There is a psychological problem with drawing down that money. Some of the banks have said they are making money available, but it is not being drawn down. When a small businessman who has three or four people working for him is told there is money available, he has to decide whether to do it now or to wait. He might choose to pay down his existing debts, such as credit card debt. That is the psychological problem Europe is in right now, largely because it took us so long to get out of the crisis. We have had to retrofit the whole system of banking union. We have had to put a resolution system in place. We have finally got a sensible president of the ECB, following the departure of a rather single-minded and unsensible person.

The new President of the ECB has done many things. He has put the three-year money at 1%. He has promised countries which cannot get back to the markets that he will keep buying their bonds, if they are unable to do so, as long as they can get two ten-year papers away. He has announced that up to €400 billion in asset-backed securities will be made available to the banks of Europe. How much of that money will get into the real economy? That is the question. Something interesting happened when he came out with his proposal. Europe is virtually in a period of quantitative easing at present. I will explain the difference between what the Federal Reserve in the US is doing and what the ECB is doing in terms of monetary policy. When the Federal Reserve has $100 billion to put into the system, it says to the banks: "Here it is; take it." The difference between what Mario Draghi is doing now and what Mr. Wagner and others used to do is that they are expecting the banks to apply for this.

The big impediment to investment, whether that involves the off-balance sheet bond buying that the Germans are in favour of or the straight investment of ECB money, is the upcoming stress tests. I have been a public critic of the new supervisory mechanism. I think it is holding back growth. At a time when Europe needs investment of private sector money into the banks to get the lending and the multiplier effect going again, it is crazy that the stress tests have been put off on three separate occasions. They were supposed to be done at the start of this year and then they were supposed to take place in March. When I asked about the matter at last week's meeting of the European Parliament Committee on Economic and Monetary Affairs, I was told they will definitely be done by the end of October. If one gives a huge sum of money to the banks to recapitalise them and if they know this test is coming down the line, it should not be a surprise if they hold on to the money. We have created a monster through these stress tests, because it is taking the real economy a significant length of time to get this money.

This is not going to be an easy nut to crack. There are no simplistic solutions to this. The reputation of our country has improved dramatically. If one believes the GDP figures, our country has the potential to hit 5% growth this year. Every 1% of GDP growth leads to €1.6 billion in additional money coming in. The big prize for Ireland goes back to the point made by Deputy Durkan. It is not just about Ireland getting something from Europe. There are many things we need to get. It is also about telling Europe how we have managed to come through this awful period in our economic history. Average earnings in Ireland are €33,000. Average earnings in Portugal are €16,000. Average earnings in Greece are approximately €10,000. They cannot be compared.

The point I am making is there are things we can do now on foot of some extraordinary experiences. For example, the public sector unions have accepted the kind of dramatic reduction led by the Minister, Deputy Howlin. We have transformed the public sector unions. This country has a much more efficient public sector than the great majority of EU countries. I know that because I see a lot of Belgium these days. We have a much more efficient public sector. Our public sector led us through this crisis. It was prepared to take one third of all the adjustments. We have learning on procurement to explain to similarly sized EU countries.

I think the way out of this for Ireland is to benchmark ourselves against similarly sized countries in Europe like Denmark and Belgium. We should examine how they are doing by comparison with us. That is how we can negotiate. There is a great deal to be learning about the Irish experience. When our colleagues speak of Ireland now, and this is not a kind of German-centric view, they do so in a very different way from how they did four or five years ago because of what we have come through. Many people in Europe have a great deal to learn from us. It is not just about us taking something; it is about us giving something back. That is a very strong experience.

The investment issue is very significant. It is going to be led by the private sector. It is not going to be done by the public sector alone. As we are in a monetary union and therefore cannot change our interest rates, we need to foster a productive and competitive environment. We have gone up in the competitiveness stakes in recent years. Wage price inflation is a real issue now. The unit labour price has come down in Ireland. It is a much more competitive place in which to locate jobs. The foreign direct investment sector is doing very well now. We have a very good selling point in our country. Ireland is a highly skilled, deleveraged and privatised country. Ireland is much more northern European than southern European in its feel and its composure.

We have to use what we have come through to our advantage. I think there is a great deal of learning on all sides. I am not going to discuss what happened today at the hearings when Phil Hogan faced questioning. It is there for everybody to see. I think Commission Hogan will be really good. It is an example of the standing we now have that President Juncker asked an Irishman to take on this crucially important task. The hearings speak for themselves.
Deputy Kyne asked a really important question on the issue of the UK referendum. I have taken a great interest in this, and members may have seen the articles that were published in the newspapers. I recently spoke at the British-Irish Association in Oxford on this issue. I think we can be a bridge of interpretation between now and 2017, should there be a referendum. In a recent speech I said the genie is out of the bottle, whether the Conservative Party or the Labour Party win the next election there will be a referendum at some point in the United Kingdom. I think that is good. My personal view is that the sooner it happens the better. That is not the view of the Government, but my personal view. It will force the British to renegotiate a list of things that they believe is important. We are an English-speaking country and we understand where the British are coming from, we have an opportunity of being a bridge of interpretation because there is goodwill in Europe to making sure that the British remain in Europe. That is in Ireland's interest.
It is in Europe's interest that Britain is at the heart of the European Union and I think they need to resolve their issues. It will be a once in a generation referendum. The British Labour Party tells us that it would only have a referendum based on future treaty change. At some point there will be a treaty change, but I cannot say when it will be, hopefully not soon. It is inevitable that there will be a referendum and it is better that it is done with their support and that we do it together. As I said in my recent speech, we can be a bridge of interpretation to try to help the British to resolve that issue and equally that the continental Europeans can do likewise.
Senator Reilly raised the issue of fracking. I agree with her position and I think it is right and prudent that the Government would take its time and that we do not go in helter skelter in our response. I fundamentally agree with an impact assessment. The Senator is absolutely right on that. We have a problem. The problem is that the cost of energy in the United States is a third lower than across Europe. One of the reasons that their manufacturing base is powering ahead in the past number of years is because they have found this alternative form of energy called fracking. It is not all to do with that. We have to weigh up all the issues but I think the Government is correct in taking its time on this issue and putting forward the arguments from an environmental perspective. We have too much to lose. I am very proud that the tourism product, be it in Dublin or elsewhere, is something we should be very proud of, North and South. We should do it on that basis.
I have said publicly that the response of the Israelis to Gaza has been totally disproportionate to what came from the other side. We have a ceasefire now and it is very important that the ceasefire holds and that the international community works hard and persuades all of the parties to resolve this issue and that the European taxpayer is not left in hock again. Some €700 million has been spent by the European taxpayer in the past decade rebuilding Gaza. It is a dreadful and appalling waste. In these circumstances children are not in school today. The European Union needs to speak with one voice. That is difficult as the Chairman knows because of the realities of foreign policy in the Union.
Ireland has an unique role to play and I commend the role of the Minister for Foreign Affairs and Trade, Deputy Flanagan, and others who have taken a fair approach to the issue. Ultimately the two-state solution is the solution that we all need to back and support. We know from our own conflict that it is only when the bombs stop and people are not being murdered that space is created for politicians to resolve the issue in a meaningful and impartial way. I would like to see this happen.
Deputy Crowe asked about Iraq. I am soon to become the vice president of the EU Iraqi delegation. It is a part of the world the EU will invest in very strongly. I recently met the representatives of the Kurdish community and heard about what they have gone through under the terrible terrorist Isis threat. We now have a new unity Government in Iraq. I said recently in Parliament, and I stand over that speech, that we have an opportunity of involving Iran in a way to help resolve this issue in the region. I think the Iranians can be a force for good. I passionately believe that the threat that Isis poses is not just a threat to Iraq and especially to northern Iraq but right across the region. We need to encourage the Iranian position and use it as a way of a new détente, as I described it in Parliament so that the Americans and Europeans can resolve their difficulties with Iran. This is something that I have worked towards as a member of the committee.
I apologise that I have not answered all the questions but I think I have given a flavour of my work.