Dominic Hannigan (Meath East, Labour)
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On behalf of the committee I welcome the Tánaiste and Minister for Foreign Affairs and Trade, Deputy Eamon Gilmore. The Tánaiste will attend the General Affairs Council meeting next week in Brussels. This afternoon he will outline to the committee the issues to be addressed at the General Affairs Council. The Tánaiste will chair the meeting, which will focus on the preparation of the European Council of 14-15 March and which is expected to be dominated by European issues and, in particular, the European semester. We are looking forward to his contribution today and to discussing the semester, an issue the committee has held several meetings about. I call on the Tánaiste to outline his views.

Eamon Gilmore (Dún Laoghaire, Labour)
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I am pleased to have the opportunity to brief the joint committee ahead of the next General Affairs Council, which will take place in Brussels on Monday, 11 March. This is the second General Affairs Council of Ireland's EU Presidency and I will again have the honour of chairing the meeting. The Minister of State at the Department of Foreign Affairs and Trade, Deputy Creighton, will represent Ireland. The agenda is still being finalised but discussion is expected to focus closely on preparations for the European Council on 14-15 March. The European Council is expected to discuss the conclusion of the first phase of the European semester, the implementation of the compact for growth and jobs, economic and monetary policy and strategic partners. President Van Rompuy will join Ministers for the final hour of the meeting.

We are now one third of the way through Ireland's EU Presidency and I believe we can justifiably take some pride in our achievements to date. The Presidency remains a whole-of-government effort and Ministers and Departments are pulling together. We are making a contribution to taking Europe beyond the crisis. Only last week, two landmark breakthroughs were brokered by the Irish Presidency. First, the agreement on capital requirements, responding to the concerns of citizens and government about the unbridled bonus arrangements which impacted on the risk profile of the banking system. Bonuses will now be regulated in a sensible way and this focus on reducing risk and preventing future crises is in line with the Irish Presidency priority on banking union. Second, the agreement on the youth guarantee which, when implemented, will assure young people under the age of 25 years of a good quality offer of employment, continued education and an apprenticeship or a traineeship within four months of becoming unemployed.

We have made important progress on the two pack on economic surveillance. Washington and Brussels have given the green light to working towards an EU-US trade agreement. There is agreement on the multiannual financial framework, MFF, for the period 2014-2020. We supported President Van Rompuy in his work to achieve agreement at the European Council in February and we will now take forward the vital task of securing agreement with the European Parliament. We have had productive meetings with the key players already. The Taoiseach and I, together with the Minister of State, Deputy Creighton, met Presidents Schultz and Barroso in Dublin last Thursday and we now have a clearer picture of where each of the players stand. The challenge ahead will not be easy but I am confident that with goodwill on all sides we can reach agreement. Timely implementation of the MFF is critical to underpin recovery throughout the EU and to facilitate implementation of vital programmes, including Horizon 2020, the programme for the competitiveness of enterprises and SMEs, COSME, and CAP, and the Cohesion Fund and regional funding.

I thank committee members for their engagement in the Presidency. In particular, I welcome the committee's launch of a national debate on the future of the European Union. I hope this initiative will spark broader debate about what it means to be part of the EU and how we want it to evolve in coming years. This ties in well with the European year of citizens, launched in Dublin in January. I look forward to hearing about the views submitted and ultimately to hearing the committee's assessment of the challenges and opportunities facing us in future.

The Taoiseach will co-chair the tripartite social summit immediately before the European Council. This will provide an opportunity to discuss with the social partners the importance of addressing challenges to recovery and the renewal of the EU social dimension.

Discussions at the General Affairs Council will focus on preparations for the March European Council, which is expected to be dominated by economic issues. Our Presidency is committed to the effective implementation of the European semester, the EU system of economic and budgetary co-ordination, which we see as a key tool in restoring economic stability and creating conditions for sustainable growth. The March council will conclude the first phase of European semester 2013. The key output is guidance to member states on the preparation of their stability programme updates under the Stability and Growth Pact and their national reform programmes under the Europe 2020 strategy. The semester is the basis for building a common understanding about the priorities for action at EU and national level as Europe seeks to return to sustainable growth and job creation. The key EU-level focus is on supporting the development and implementation of jointly agreed priorities. The key national-level focus is on bringing about a stronger alignment of budget priorities, employment policies and structural reforms.

The effective management of the semester is an important focus for our Presidency, as committee members will be aware. I will present to the General Affairs Council our Presidency synthesis report of discussions on the annual growth survey. This will see a strong reinforcement of the five priorities identified by the Commission: pursuing differentiated, growth-friendly fiscal consolidation; restoring normal lending to the economy; promoting growth and competitiveness for today and tomorrow; tackling unemployment and the social consequences of the crisis; and modernising public administration. It is crucial that we keep up the momentum behind national-level reforms in these areas as a basis for sustainable recovery. Such reforms include integrating the green economy and resource efficiency agenda into economic decision-making; exploiting synergies between the transport, energy and communications sectors; reinforcing the digital agenda; and obtaining better outcomes from research and development investments.

Discussion will also be informed by last week's agreement by Ministers at the Employment, Social Policy, Health and Consumer Affairs, EPSCO, Council on the youth guarantee. The success of the Minister for Social Protection, Deputy Burton, in obtaining consensus in this area has delivered an important Presidency goal. I acknowledge that the committee shares my concern on levels of youth unemployment throughout the EU. Currently there are 7.5 million young people in Europe not in employment, education or training. This amounts to 12.9% of those aged 15 to 24 years. As the Minister, Deputy Burton, said last week, the economic and social costs of this are simply devastating. Youth unemployment can have lifelong effects and the youth guarantee is a key vehicle for mobilising support. As I have stated, once implemented, it will ensure young people receive a good quality offer of employment, continued education and an apprenticeship or a traineeship within four months of becoming unemployed.

It will also contribute to three out of the five Europe 2020 targets, namely, increasing employment, reducing early school leaving and removing people from poverty and social exclusion. Although each member state faces different implementation issues, progress should be supported by the €6 billion youth employment initiative under the MFF agreement. It was clear from last year's lessons learned exercise that the European semester should be an open and inclusive process which supports meaningful engagement with parliaments and all relevant stakeholders at European and national levels. I therefore acknowledge the work done by this committee on enhancing parliamentary involvement in European semester processes and in particular the COSAC meetings of parliamentarians from across Europe. Stronger economic governance has to be accompanied by stronger democratic legitimacy and I commend members for their work in this area. It is a valued input to our Presidency programme and I expect it will provide a good basis for exploring others ways of involving national parliaments in the European semester.

The spring European Council will also take stock of progress in implementing the compact for growth and jobs. This means EU level action and, in particular, backing up the more country-specific aspects of the semester process. It is a close fit with our Presidency's emphasis on the Single Market and external trade agendas. As members will be aware, we are prioritising agreement on the key Single Market Act I files that remain open, while aiming for as much progress as possible on Single Market Act II files as they are published over coming months. For the first time the monitoring of Single Market governance will occur within the framework of the European semester.

We have also made a good start on the EU-US trade relationship and will be working hard to get a formal Council mandate for free trade negotiations in time for the June Foreign Affairs Council. The financing needs of the real economy are another crucial issue in terms of EU level actions supporting growth and jobs. This means restoring normal lending conditions and unlocking productive and growth enhancing investments. The EIB will continue to play a crucial role in this regard. The reality is that we will have recovered from the current crisis only when our economies are growing again and creating jobs. That remains our most important test.

The European Council will look again at the process of strengthening EMU, although the next major discussion on this is scheduled for the June meeting when President Van Rompuy will present his roadmap following consultation with experts, member states and social partners. A stronger and more robust EMU will help to underpin confidence and contribute to economic recovery. While we have seen greater stability in the markets in recent months, there is no room for complacency and we must make the most of the period of relative calm to do what is necessary to ensure that we do not return to crisis. While in the Presidency we are continuing to support President Van Rompuy's work, including facilitating discussion among Ministers in the relevant Council formations. Although the March meeting may reflect on aspects of this work, the main focus will be on a range of ongoing and pending structural reforms to strengthen economic governance.

On banking union, a number of key decisions have already been taken and further progress remains a Presidency priority. A significant volume of legislation is involved and we are working for successful discussions with the Parliament and Commission on the single supervisory mechanism. Progress in this area will send a positive signal on subsequent reforms of economic policy. The intention remains for the ECB to be in a position to take over supervision on 1 March 2014. Crucially for Ireland, direct recapitalisation of banks by the ESM would then become possible. The aim for the bank resolution framework is to secure agreement in the Council and the Parliament by June. We also hope to reach agreement on deposit guarantee schemes by then.

I highlighted the capital requirements package earlier. This landmark agreement was brokered last week by the Irish Presidency with the Parliament and Commission. These were difficult negotiations and the Minister for Finance, Deputy Noonan, has done well to balance many different and competing interests. The new rules should provide greater stability and ensure that European banks hold sufficient capital to withstand future shocks.

The March European Council is also expected to welcome the agreement on the two pack economic governance legislation, which was brokered by our Presidency with the Parliament and the Commission. This is designed to improve budgetary and economic co-ordination among euro area members and will contribute to greater stability and confidence. Taken together, these reforms should lead to a more stable, robust and resilient economic and monetary union. The European Council will also discuss its strategic relations with external partners. The main focus is expected to be on relations with Russia but written conclusions are not anticipated. I appreciate the attention of the committee and I look forward to hearing members' comments. I will, of course, be very happy to respond to their points or queries.

Dominic Hannigan (Meath East, Labour)
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The Tánaiste will be pleased to learn that the committee has taken a role in preparing a paper on how we can enhance the involvement of national parliaments in the European semester. We will be discussing the matter with our colleagues from 20 different states in Copenhagen next week. We hope the outcome will be a set of recommendations that we can offer to President Van Rompuy with the intention of having them implemented across the Union.

In regard to the compact for growth and jobs and the Tánaiste's final point about relations with Russia I have a question about the EU association agreement with Ukraine. I understand the former President of the European Parliament, Pat Cox, and the former President of Poland, Aleksander Kwasniewski, are currently in Ukraine dealing with the various outstanding issues in the agreement. Following from last month's EU-Ukraine summit, what efforts are we making in the Presidency to build consensus across member states on finalising the association agreement?

Terry Leyden (Fianna Fail)
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I welcome the Tánaiste, his team of officials and the representatives from the embassies. The Presidency is going well and I commend him on that. Agreement has been reached on the budget and progress is being made on other issues. I will not comment in detail on these matters other than to wish him well at the meeting. I commend our ambassador in Brussels, Rory Montgomery, and his team on the excellent job they are doing. I visited Brussels with the Chairman and other members. I found when representing Ireland in a past Presidency that ambassadors and their staff provide tremendous support for Ministers and officials. We are renowned for the ability of our people on the ground in Brussels.

The Tánaiste is in a unique position with the Presidency in respect of other matters not mentioned in his opening statement. He and I have been to Israel and Palestine. He was there in his previous life as a member of the Labour Party.

Eamon Gilmore (Dún Laoghaire, Labour)
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I do not think that was a previous life.

Terry Leyden (Fianna Fail)
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I will rephrase that. He was a member of the Labour Party but he was not Tánaiste. He is not denying the fact that we were in Israel.

Eamon Gilmore (Dún Laoghaire, Labour)
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I remember it.

Terry Leyden (Fianna Fail)
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I have the photographs to prove it. The point I mean to make is that he was not visiting in his current capacity as Minister for Foreign Affairs and Trade. He travelled as a Deputy and the leader of a party. I know that he is concerned about the expansion of illegal settlements in Gaza and the West Bank and he commented previously on the matter. There have also been developments regarding apartheid on buses. Israelis are now insisting on Palestinian-only and Israeli-only buses. The situation is tense and I ask him to raise the issue.

I also ask him to encourage dialogue between the United Kingdom and Argentina regarding the Malvinas Islands, which are known as the Falklands in Britain. It is a difficult issue and he may not wish to broach it but he has an opportunity to do so with the Presidency. I attended a conference in London between 5 and 7 February which issued a communique calling for dialogue, bearing in mind the United Nations directives and what happened in 1982.

We are all conscious of those things, but dialogue is the way to settle any dispute. The dispute goes back to 1833. The Tánaiste has an interest in the area and perhaps he can have discussions with his colleague from Britain rather than at the full meeting.

Joe O'Reilly (Cavan-Monaghan, Fine Gael)
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I join in the welcome to the Tánaiste and I congratulate him on a number of landmark successes at European level in recent weeks. I warmly commend the Tánaiste on the impact of these decisions on the lives of people here, which people may not fully recognise immediately. The impact will be palpable and real over the coming years.

I refer to some of the successes. Nothing has caused more angst and annoyance among ordinary people than banking bonuses. Nothing has been so irksome and it has alienated people from the Government and democracy. It is great that the Tánaiste achieved a breakthrough on banking bonuses and perhaps he can elaborate on how it translates to reality and the caps that apply. People outside the room would like to hear it loud and clear. Nothing has come up more often than that issue for the people I met over the past year. People have a sense of annoyance and frustration that those who played a pivotal role in destroying the country received bonuses for doing so. It is a real issue.

While that issue resonates with many people, I believe the youth guarantee is more important. Dealing with youth unemployment is a challenge for all of us. Is the Tánaiste optimistic that Ireland will secure an adequate amount of the roughly €6 billion available? Is the Tánaiste optimistic that we can implement the youth guarantee here? I know he is committed. I was heartened to read an opinion piece in one of the newspapers yesterday, written by the Minister for Social Protection, Deputy Burton, which mentioned that in Finland, where this was previously introduced, the output had been tremendous in terms of job creation. I ask the Tánaiste to comment on that. Is he optimistic that it can be implemented in Ireland and that it can create a permanent change in unemployment?

We are told there is considerable opposition in the European Parliament to the budget as proposed. The successful negotiation of the multi-annual financial framework agreement for the coming seven years is mega and the Common Agricultural Policy aspect of it is particularly important in my area. How optimistic is the Tánaiste that he will get it through the European Parliament in the face of considerable opposition?

Dominic Hannigan (Meath East, Labour)
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Someone's telephone is interfering with the equipment. If someone has a telephone switched on, can it be moved away from the microphones?

Paschal Donohoe (Dublin Central, Fine Gael)
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I apologise for missing the first page of the Minister's contribution. I congratulate him on his work so far. I have three questions on the Presidency. The first concerns the situation in Syria, which I raised with him before. The bloodshed and carnage in the country is apocalyptic. The Tánaiste has made strong statements on this and I would appreciate an update on what, if anything, the European Union and its agencies can do.

The Tánaiste touched on the overseas aid budget in the past and the budget he is taking over will include the development co-operation instrument as part of the multi-annual financial framework. I would appreciate the view of the Tánaiste on how it stands. Will we be able to protect it?

With regard to the statement on the possibility and ambition of the ECB to take over supervision of the banking system by 1 March and the question of direct recapitalisation of the banks, how does the Tánaiste see that negotiation standing in the European Union and with the countries whose support we need to make it happen?

Eamon Gilmore (Dún Laoghaire, Labour)
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I welcome the initiative of the Chairman and the committee in the production of a paper on the involvement of national parliaments in the European semester process. It is a very important that national parliaments, which have traditionally had the primary function in regard to national budgets, should take an active role at the co-ordination level in respect of the first semester process and economic co-ordination. I appreciate the initiative that has been taken.

The Chairman asked about Ukraine. I welcome the mission by Mr. Cox and Mr. Kwasniewski and I hope their efforts will be successful in creating the conditions to make progress possible. Ukraine is not up for discussion at the General Affairs Council but it is regularly discussed at the Foreign Affairs Council. In that case, the lead is taken by the High Representative, Catherine Ashton, and the European External Action Service. I attended a meeting in conjunction with a recent meeting of the Foreign Affairs Council with Friends of Ukraine, where we had a good dialogue with the Ukrainian foreign Minister. The EU summit with Ukraine was held last month. The joint statement issued from the summit reaffirmed the three conditions set in December for progress on Ukraine's relations with the EU. The three issues are the EU reform programme, the issue of selective justice and the implementation of the recommendations of the Office for Democratic Institutions and Human Rights, ODIHR, on the conduct of elections. It is a matter for Ukraine to make progress on these three areas in the coming months. A meeting of the EU-Ukraine Cooperation Council will take place in June and Ireland will chair it as part of the Presidency. That meeting will review the progress that has been made. The intention is that, if sufficient progress is made, the association agreement could be signed at the eastern partnership summit in Vilnius in November.

I thank Senator Leyden for his compliments in respect of H.E. Rory Montgomery and his team. I take the opportunity of these kind remarks to pay tribute to the team at the Permanent Representation in Brussels. In comparison with teams often in place for a Presidency, ours is relatively small. That team and the officials in my Department and the Department of the Taoiseach, who have been working on the Presidency, deserve great credit. The same applies to all Departments. During the course of the Presidency, we will chair 1,600 meetings. For obvious reasons, most are at official level. When we are talking about progress being made on issues, great credit is due to the Irish civil servants and diplomats involved in that work.

Senator Leyden mentioned the West Bank and Gaza, which is more a matter for the Foreign Affairs Council than the General Affairs Council. However, it is an issue to which the Foreign Affairs Council has been giving much attention.

There is also the danger of further illegal settlements being established which would make it physically impossible for the two-state solution to be put in place. There is a window of opportunity in the aftermath of the American and Israeli elections for some progress to be made on this matter. I met with the new US Secretary of State, John Kerry, in Rome last Wednesday, along with other European foreign affairs Ministers. One of the issues we discussed was the prospect of a renewed effort being made by both the European Union and the United States to get the sides together and discussions under way on this long-protracted issue. I know the US President, Mr. Obama, and the Secretary of State, Mr. Kerry, are due to visit Israel in the near future. This is an item that is high on the European agenda.

Regarding dialogue between the UK and Argentina, there is a good European Union-Latin America-Caribbean partnership. I attended the European Union-Latin America-Caribbean summit in Santiago, Chile, several weeks ago and I would see the issue being pursued in that context.

Deputy O'Reilly referred to the successes we have had and I thank him for his kind remarks. What was agreed at trialogue level between the Presidency, the European Council, the European Parliament and the European Commission is known as the capital requirements directives, CRD, IV package. This is an agreement that is about more than bankers' bonuses. It is largely to do with the need for improved regulation in banking in Europe and to ensure the banks' capital requirements are adequate. The issue of setting a ratio limit on the bonuses that can be paid as against salary was one of the issues included in this package. It is before the ECOFIN meeting today but I am not sure what progress has been made because I did not get an up-to-date brief on this coming into the meeting.

It has been agreed that €6 billion will be provided for the youth guarantee in the multi-annual financial framework, MFF. The principles of the guarantee were agreed at the Employment, Social Policy, Health and Consumer Affairs Council, EPSCO, chaired by the Minister for Social Protection, Deputy Burton, last week. The provision in the MFF is for those member states where the level of youth unemployment is higher than 25%. Ireland, unfortunately, is one of those. However, it means we will benefit from the moneys provided for in the MFF. The exact detail of how the guarantee will operate has still to be worked out and will be pursued by the Minister for Social Protection and the EPSCO.

The MFF was agreed at Council level by the 27 member states. It now needs to get the approval of the European Parliament. There is a process that is under way. The MFF will be considered by a plenary meeting of the European Parliament later this month. Following that, I expect there will be a period of negotiation with the European Parliament, which will be led by the Irish Presidency. I have already started these discussions, as I met with Alain Lamassoure, MEP, in Dublin last week when he was leading a contact group on behalf of the Parliament. The Taoiseach and I, along with the Minister of State, Deputy Creighton, also met with the President of the European Parliament, Martin Schulz, and the Commission President, José Manuel Barroso. Following that meeting, I met with the Council President, Herman Van Rompuy, in London. The process of engagement with the European Parliament is already under way. Our objective, obviously, is to have the matter concluded and agreed by the end of our Presidency. It will be a challenge because a majority of the Parliament, 378 Members, must be secured for the budget to be approved. As in any parliamentary situation, if one is trying to get an overall majority one has to factor in absences and those who will vote against the budget for one reason or another. This will be a significant challenge for us in the months ahead.

Deputy Donohoe raised the matter of the conflict in Syria. Again, it was the top issue at the last meeting of the Foreign Affairs Council. The bloodshed and carnage continues there. One encouraging development is the indication from the leader of the Syrian opposition coalition, Ahmed Moaz al-Khatib, that he will engage in dialogue at some level with the Assad regime, and there is potential for building on that. We have argued for the situation in Syria to be referenced to the International Criminal Court and for an investigation into it to be carried out by the court. Ireland is among several European countries which have argued for this. One of the issues agreed at the last Council was the extension of sanctions. A question that arises is to what extent the continuation of the sanctions regime should apply to the arms embargo. We have taken the view that the situation there should not be further militarised and increasing the amount of arms and military equipment is not the way to go. However, there are some member states which are of the view that the arms embargo should be lifted or relaxed in some way.

The agreement in the MFF provided for €87.648 billion in funding for external relations, an increase of €2.31 billion on current funding. At least 90% of EU spending on external relations must qualify as official development assistance. The agreement ensures the European Union and its member states will remain the largest provider of official development assistance for the remainder of the decade. Our aim in the negotiations was to ensure a fair proportion of the EU budget was allocated to development and humanitarian assistance.

The target date for the coming into effect of the single banking supervisory mechanism is 1 March 2014. We are working on the legislative measures that have to be introduced to ensure this happens. We are hopeful that a significant amount of progress will be made on that by the end of our Presidency.

Timmy Dooley (Clare, Fianna Fail)
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I welcome the Tánaiste and Minister for Foreign Affairs and Trade and his officials and concur with the sentiments expressed so far. Will he give us an update on his dealings with Bosnia? The committee visited the region last year and considerable concern was expressed to us about the lack of constitutional reform there. There is a significant level of inertia there and what looked like a country emerging now looks like a country regressing.

Regarding the impact of the single supervisory mechanism for banking and the direct recapitalisation of banks by the ESM, European Stability Mechanism, the Tánaiste stated it would be possible to deal with the legacy issue of Irish bank debt. Have there been any direct discussions with the ESM or other member states as to how this might materialise? Obviously, discussions to date have centred on the ESM investing in troubled banks from now on.

There has not been much discussion about legacy investment. Can the Tánaiste update us about that? I am not trying to back him into a corner. I accept that much of this will be done through the finance Ministers but could he give us a flavour of what the thinking around that area is?

Fidelma Healy Eames (Fine Gael)
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I welcome the Tánaiste and his officials. I have three questions. I obviously welcome the youth guarantee but am ever mindful that we cannot see it as a panacea for all our ills in respect of youth unemployment. The economist and Nobel Laureate Professor Christopher Pissarides was the person who made me think about this when he visited the Seanad some time ago. I am a bit nervous because he did not see it as good value for money. The Tánaiste might clarify whether every person is offered an internship or a training place after four months or for four months. If it is for four months, it is clear that it is not adequate. I know we are not relying completely on it. The compact for growth and jobs is bigger than that. However, we need to make sure that given the sum of €6 billion, we are getting good value for money and that it is not just something to appease people in the short term because it is too much money not to make good use of.

Dominic Hannigan (Meath East, Labour)
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Could the Senator move her telephone away from the microphone because I have been told it is interfering with the recording?

Fidelma Healy Eames (Fine Gael)
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My apologies. My second question concerns the European Investment Bank, which members of this committee recently visited. To say I was impressed would be an understatement. It is a really good social, not-for-profit bank. I know we recently secured €50 million towards school projects from that bank. Are we doing enough to maximise the potential projects we could pursue at this time by presenting those projects to the European Investment Bank to be proofed? It pursues very sound projects for economic and social good. We need very sound job creation stimuli. Other members of the committee who joined with me on that day would say that we need to pursue far more projects, including school projects and those relating to primary health care centres and transport infrastructure. We should aggressively use the benefits of that.

I was approached last evening by a group of Bangladeshi people living in Ireland seeking our support with respect to the recent riots that have occurred there. I believe there are reports of between 30 to 300 people being killed in recent days. Could the Tánaiste tell us what is happening there and what our position is? Are we supporting any action at international level to stop this?

Bernard Durkan (Kildare North, Fine Gael)
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Like other speakers, I congratulate the Tánaiste and the Ministers on the progress to date on the Irish Presidency. I have a few questions, in particular with regard to the breakthroughs on capital requirements and banking bonuses. To what degree are non-eurozone member states likely to be affected by the cap on bankers' bonuses and to what extent are they likely to concur, albeit reluctantly in some cases? Can the Tánaiste give us some indication as to whether the principle has been established and will be accepted?

In respect of the two-pack on economic surveillance and the EU-US trade agreement, are budgetary cutbacks in the US likely to impact on it and the potential for growth which we need to develop to a greater extent? To what extent is it becoming more accepted that debt management, along with fiscal policy, is likely to be co-ordinated throughout the EU inside and outside the eurozone?

Energy costs are fundamental to economic recovery. Brent crude is about the price it was four years ago yet oil prices for the consumer have relatively doubled. To what extent can the EU during the Irish Presidency and thereafter use its influence to ensure that any savings are made available for economic recovery throughout the EU as opposed to going for other purposes such as oil company profits?

Seán Crowe (Dublin South West, Sinn Fein)
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I listened to what the Tánaiste said about the situation in Syria. I hope his optimism is justified because most of the information we get indicates that the situation is getting worse. The fact that the opposition leaders are talking about potential dialogue is a positive development. The significant worry relates to the arms embargo and the possibility of some EU or other countries doing their own thing in respect of that. I am aware of the recent leaked EU heads of mission report on East Jerusalem. Again, that report had fairly negative conclusions. There is a window there and, hopefully, we will see some action soon because the possibility of a two-state solution is slowly ebbing away. If the US will not broker talks, the only other option is the EU. The difficulty there concerns consensus.

The Tánaiste spoke about youth employment. There will be a €6 billion investment in youth unemployment measures but the big question is when the youth unemployment initiative is likely to be finalised and operational. I know the Tánaiste spoke about the work of the Minister for Jobs, Enterprise and Innovation on the details but people want to know when it will be introduced. Will it be this year or the next? When will we see something positive resulting from this money? Is it the Government's intention to provide any matching funds in respect of the funds drawn from the €6 billion? How will that be allocated?

There was some positive news on the radio about the bank recapitalisation and extending the maturities for the EU portion of the bailout loans. Again, the real issue is the use of the ESM to retrospectively recapitalise the pillar banks and the fact that we will get €30 billion of Irish taxpayers' money back. Again, the Tánaiste spoke in terms of mood music coming from Germany, including from the Social Democrats. This mood music suggests that a deal on this legacy debt will not be forthcoming. I know it is difficult but can he give the committee his assessment of the likelihood of a deal on legacy debt and outline when he expects the separation of banking debt and sovereign debt to be realised?

Again, there is great optimism in this regard, but the mood music seems to be changing. People want to hear news of a positive nature about their own lives. I held an advice clinic on Friday last and spent the entire time dealing with people whose mortgages were in distress, young people who were seeking employment and, despite the fact that there is supposed to be a huge number of houses available, those who were in search of housing. The mood among people is down-beat, as is my own because I am trying to assist them in dealing with their problems. Announcements are being made in the media, but nothing is trickling down into ordinary people's lives. In the context of employment creation, citizens want it to happen sooner rather than later. When will the relevant funding become available and on whom will it be spent?

Eamon Gilmore (Dún Laoghaire, Labour)
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Deputy Timmy Dooley inquired about the situation in Bosnia-Herzegovina. That matter is not on the agenda for next week's meeting. It is true, however, that there has been a regrettable lack of momentum. However, the European Union has, through the External Action Service, been working hard to encourage progress. The most recent reports suggest there may be some positive movement, particularly in the area of constitutional reform. I would certainly encourage progress in this regard. As the Deputy is aware, the path to European Union membership is conditional. The Union cannot impose the relevant conditions, they must be addressed by the countries concerned. We will obviously continue to encourage those involved in this instance to make progress.

Deputies Timmy Dooley, Seán Crowe and Bernard J. Durkan referred to the single supervisory mechanism and the possibility of the ESM directly recapitalising banks. The former must be put in place in order for that to happen. That is the architecture which must be created. There are also two other elements involved in the banking union, namely, deposit guarantees and bank resolution. Matters in this regard are being progressed. The intention is that the single supervisory mechanism will be in place by the target date of March 2014. The issue of legacy or retrospective debt is being considered in the parallel discussions being pursued by the Minister for Finance and the hope is there will be some outcome from the process at the earliest possible date this year. However, the discussions will, as was the case with those which preceded them, take time to complete. All of the relevant issues must be worked through. The direct recapitalisation of banks cannot happen until the single supervisory mechanism goes live.

It is important to place this matter in context. Two years or 12 months ago, the idea of there being a European instrument to directly recapitalise banks or the principle of separating banking and sovereign debt were not even on the radar. There were many individuals who thought that neither would ever materialise. The fact is that agreement on the separation of banking and sovereign debt was secured last June. When that was done, there were those who sceptically stated it had just been agreed on paper and that, for various reasons, it would never become a reality. In October and December progress was made in this matter and now it is being worked through.

Senator Fidelma Healy Eames and Deputy Seán Crowe inquired about the youth guarantee. The position is that under the youth guarantee, young people who are not working or not involved in education will receive offers of employment, continued education, apprenticeship or traineeship within four months of becoming unemployed. There are a couple of matters which must be remembered in respect of the youth guarantee. In the first instance, it is essentially a contract between the European Union and young people. Obviously, it must be backed up with money. That is where the significant sum of €6 billion comes into play. Some matching funds will be required, but the exact details in this regard have yet to be agreed. As it happens, the youth guarantee fits with the reforms we are pursuing in respect of training, further education, Pathways to Work, etc.

The guarantee is not a panacea. Where there are very high levels of unemployment, what one needs to provide is real employment and career opportunities. This is why the emphasis is on achieving stability - which we have now done - in respect of Europe's banks, its finances and the public finances of individual member states. That is the platform on which one builds because it gives investors more confidence to put their money on the line and create jobs. In the work we are doing to complete the Single Market and grow the digital Single Market, there is enormous potential for the creation of employment. Again, I return to the advancement of the trade agreements.

Fidelma Healy Eames (Fine Gael)
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What is the expected duration of the traineeships, apprenticeships and employment opportunities to which the Tánaiste refers?

Eamon Gilmore (Dún Laoghaire, Labour)
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There is no specific duration. The duration will be both country and scheme specific. For example, people in this country can access JobBridge and avail of the various interventions relating to employment activation. There are also various forms of education and training arrangements. As the Senator is aware, the Departments of Social Protection and Education and Skills are expanding the range of education and training opportunities being provided. I refer to the training opportunities being provided through SOLAS, the VECs, the private sector, etc. The process in this regard will continue.

The European Investment Bank is very much in the picture with regard to the stimulus package negotiated by the Minister for Public Expenditure and Reform, Deputy Brendan Howlin. Senator Fidelma Healy Eames referred to the €50 million for school projects and also to the funding for primary health care centres. Again, these form part of the package of measures to which I refer. There is significant potential for involvement on the part of the European Investment Bank, particularly in the development of infrastructure which will generate employment.

I will obtain for the Senator a direct reply on the issue relating to the situation in Bangladesh. I do not have any information with me on that matter.

Fidelma Healy Eames (Fine Gael)
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I appreciate the Tánaiste's offer to forward a direct reply.

Eamon Gilmore (Dún Laoghaire, Labour)
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Deputy Bernard J. Durkan referred to an EU-US trade agreement. The state of play in this regard is that the high-level working group has made a positive report to the effect that negotiations should take place on such an agreement. In his State of the Union address President Obama committed to progressing a trade and investment partnership with Europe. This was one of the issues we discussed at the transatlantic meeting with the Secretary of State, Mr. John Kerry, in Rome last Wednesday. I expect to discuss the matter again with the Secretary of State when I meet him in the near future.

We have made progress in this regard a priority for the Irish Presidency. It is estimated that if we can conclude the various trade agreements with the United States, Canada, Japan and a number of other trade agreements, there is potential to add about 2% to the GDP of the European Union. It is estimated there is potential for creating about 2 million jobs on this side of the Atlantic, with a corresponding win on the other side of the Atlantic. It is a case of putting together a market with 500 million people on this side of the Atlantic with almost as many on the other side of the Atlantic, which will have huge purchasing power representing over half the GDP of the entire world. However, there will be difficulties in getting that agreement. The negotiation of a trade agreement inevitably must deal with sectoral interests on either side of the Atlantic that will have their points of view on the agreement. None the less, it is a very big prize which would contribute very significantly to economic growth and job creation on both sides of the Atlantic.

I dealt with Deputy Crowe's points about Syria and East Jerusalem in my response to Senator Leyden. I refer to the sense of despair, the downbeat mood and the worry which Deputy Crowe described. I agree that this has been felt and expressed by many people, particularly in times when we have come through a terrible storm in this country. The recession that befell this country has been truly horrific. However, we have to solve it. We cannot just bemoan it or wish it away. We have to face into it and resolve it. Our work in negotiating the bank deal, the promissory note, the reduction in the interest rate, the extension of the maturities, the separation of bank and sovereign debt, dealing with the issue of retrospective debt, is all to do with lifting and easing the debt burden on the Irish taxpayer.

Second, we also need to ensure the promotion of economic policies which will generate employment and promote trade and investment. The stabilising of our finances and the banking situation are critical in order to encourage investment in the country. Happily, we have seen much success in that area over the course of the past year. IDA Ireland has done very well in attracting inward investment. The employment figures published by the Central Statistics Office show the first increase since 2008 in the numbers of people at work. We must not exaggerate those successes but they are indicators that we are on the way to recovery.

While people have been bearing a very great burden and have been feeling the pressure of that burden, there is also hope, in particular, for young people. We said that one of the priorities for the Irish Presidency of the European Union would be to address the issue of youth unemployment. So many young people right across Europe have no work and cannot get the jobs that match their qualifications. The provision in the European Union budget for the funding for the youth guarantee is one of the initiatives. This must be a priority in order to engender a sense of hope that we will come through the crisis and the recession and that there is life after the recession.

Bernard Durkan (Kildare North, Fine Gael)
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I refer to the issue of European energy costs.

Eamon Gilmore (Dún Laoghaire, Labour)
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The issue is in the draft conclusions for the European Council meeting. One of the issues which will be before the General Affairs Council meeting on Monday is the preparation of the European Council meeting. The draft refers to the internal energy market and investment in infrastructure, both of which are aimed to address high energy prices.

Dominic Hannigan (Meath East, Labour)
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I thank the Minister for his attendance and for engaging in the debate. On behalf of the committee I wish him all the best for next week's meeting.

The committee will meet next Thursday. The meeting will be attended by Emer Costello, MEP, Gay Mitchell, MEP, and Paul Murphy MEP. The meeting will provide an opportunity to discuss not just the future of Europe which is the main purpose of the meeting but also to deal with questions from members. Deputy O'Reilly raised the matter of the MFF and he may wish to raise it with the MEPs who represent all parties. The Fianna Fáil MEP will be unable to attend the meeting on Thursday but Pat the Cope Gallagher, MEP, will attend on another occasion.