Oireachtas Joint and Select Committees

Thursday, 9 May 2013

Joint Oireachtas Committee on European Union Affairs

General Affairs Councils: Discussion with Minister for Foreign Affairs and Trade

12:15 pm

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
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I welcome the Tánaiste here today. Today is Europe Day and the Minister for Foreign Affairs and Trade, Deputy Eamon Gilmore, has to be somewhere else directly after this meeting so we have approximately one hour for our meeting. The Minister will attend the General Affairs Council meeting in Brussels later this month, I think on 21 May. Today we would like to talk to him about what he expects to be discussed there. Of importance will be the multi-annual financial framework. I hope too that he will take the opportunity to update the committee today on the progress of our EU Presidency.

Photo of Eamon GilmoreEamon Gilmore (Dún Laoghaire, Labour)
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I thank the Chairman. The event that I need to get to by 4 p.m. is in my own constituency. It is a very important event organised by the local authority, the Dún Laoghaire-Rathdown County Council, to celebrate Europe Day. The parks department of the Council has put together a fabulous arrangement of plants in Cabinteely Park in the form of the European flag and has asked me to do the honours there. I am sure that the committee would like to oblige me in releasing me-----

Photo of Timmy DooleyTimmy Dooley (Clare, Fianna Fail)
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It is Thursday and we would all like to get back to our constituencies.

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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I thought the Minister was about to invite us.

Photo of Timmy DooleyTimmy Dooley (Clare, Fianna Fail)
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The Minister will have our full co-operation in that regard.

Photo of Eamon GilmoreEamon Gilmore (Dún Laoghaire, Labour)
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I thank the embassies of the member states which helped and provided information for the various panels and so on which will adorn the exhibition.

I am pleased to be here to discuss the progress made to date during Ireland's Presidency of the Council of the EU and to outline developments at the General Affairs Council. As members are aware, managing a Presidency places considerable demands on any Administration, particularly for a smaller member state such as Ireland. From first entering office the Government has paid close attention to planning for the Presidency. We knew from the outset that Europe’s citizens rightly expect strong and decisive action to put the EU economy back on the road to recovery. We knew that a well-managed and effective Presidency would be good for Europe and good for Ireland. We were also conscious of the strategic importance of strong and long-term engagement by Ireland in the EU. Managing an effective Presidency is a critical element of this re-engagement.

For these reasons, and reflecting our national political priorities, we made supporting and promoting stability, job creation and growth across the EU the main objectives of the Irish EU Presidency. The Irish Presidency programme was drafted to ensure that work in every Council formation is aimed squarely at contributing to building a stronger and more robust European economy and to promoting employment and social cohesion. The Government has worked intensively to deliver on these programme objectives over the past four months, and I would like to acknowledge the work of all those involved, including in this committee, who continue to contribute to the Presidency and to ensuring that it is a success for Ireland. So far, we have made steady progress on fulfilling the objectives set out in our Presidency policy programme, but we have a lot still to do, and we are looking forward to making further advances during the remaining seven weeks of the Presidency before handing the baton on to Lithuania at the end of June.

It is also important to stress to members of this committee in particular that the intensive engagement by this Government in EU affairs will not cease after 1 July. The Taoiseach and I are committed to continuing engagement with our partners in Europe to ensure that Ireland remains where it belongs within the Union - firmly at the core of the EU decision-making process.

Tackling the unemployment crisis, and particularly the appalling levels of youth joblessness across the EU, has been one of the Presidency’s main priorities from day one. Unemployment is a scourge that damages not only those affected but their families, communities and societies. Governments and the EU must address the causes of joblessness with vigour. Our citizens demand and indeed deserve nothing less.

At the end of February we secured agreement on the youth guarantee programme. We welcomed the decision by Heads of State and Government on a €6 billion fund for a new youth employment initiative to invest in fighting joblessness among young people in the worst-affected employment black spots in the Union. During our Presidency, Ireland is also working to ensure that citizens, and particularly our young people, possess the skills, training and education to find employment in a rapidly evolving jobs market. I am pleased to note the good progress that the Presidency is making on the on the Erasmus for All programme and the professional qualifications proposals with the European Parliament. We are also working to foster growth in sectors of the economy we believe will generate smart and sustainable employment in the future. The Presidency has placed a strong emphasis on supporting research and innovation, and we are intensifying our efforts to ensure agreement on proposals such as the Horizon 2020 programme and the European Research Area.

The Single Market, which was established 20 years ago, has transformed Europe’s economy. It has delivered strong benefits for exporters, including in Ireland, and delivered competitiveness benefits for consumers. In fuelling growth in businesses across Europe, particularly small and medium enterprises, SMEs, it has also created jobs and reinvigorated economies. That is why the Irish Presidency has prioritised measures aimed at strengthening the Single Market. We secured agreement on the accounting directive last month. This will help reduce the administrative load on SMEs so that they can concentrate on developing their business and creating employment. We are continuing to make progress with the European Parliament on other proposals aimed at supporting our growth and job creation agenda, including the COSME programme and Smart Regulation.

The digital agenda is another area which can deliver opportunities for future growth and job creation, and we are working to advance measures such as the e-identification regulation and the data protection package. The agreement we brokered last month on the Unified Patent Court will make it easier to protect and promote intellectual property rights, which are at the core of the rapidly growing digital economy. We look forward to hosting the Digital Agenda Assembly in Dublin next month, which will contribute to developing this important sector of the economy in Europe. The re-use of public sector information agreement that we reached last month also offers strong potential to generate growth and jobs in Europe.

In addition to advancing measures aimed at developing and stimulating the Internal Market, the Presidency is also attaching strong importance to new and growing markets in third countries for Europe’s exporters. Official negotiations for a free trade agreement between the EU and Japan have been launched during the Presidency and other trade-focused negotiations are ongoing with a number of Asian states. The Presidency has made EU-US trade a major priority, and we are doing all we can to ensure we secure a mandate for the start of negotiations on a trade and investment partnership with the United States, given the enormous untapped potential of enhanced trade relations.

The jobs and growth agenda is one side of the Presidency’s plans to contribute to recovery in the EU, but this recovery has to be built on stable foundations. Ireland continues to regard the recognition at the June 2012 European Council of the need to separate banking and sovereign debt as one of the key episodes in Europe’s handling of the crisis. The decision resulted in an immediate improvement in market sentiment, but we cannot afford to be complacent. We must deliver on our commitments, including the ambitious decisions agreed at the Europe 2012 European Council, and this is what Ireland has been doing during its Presidency. We have worked since January to make progress on the banking union package. The aim of these measures is to restore health to the European banking system so that banks can provide the credit necessary to fuel recovery and growth, to ensure the mistakes made in the past are not repeated, and to protect taxpayers.

The Irish Presidency has secured agreement on the Capital Requirements Directive IV and the single supervisory mechanism, and our focus now is on other elements of the banking union, particularly the banking resolution and recovery proposal. We have also managed to secure the Parliament’s agreement on the mortgage credit directive. The Presidency has worked to implement and to develop new economic governance measures. Last February, we reached agreement with the European Parliament on the two-pack legislation, which strengthens budgetary surveillance and co-ordination in the euro area. All of these measures are designed to promote stability and confidence and provide a secure basis for future economic growth and job creation.

Another major focus of our Presidency has been to secure agreement on the budgetary framework of the European Union for the next seven years. At the General Affairs Council in Luxembourg on 22 April, I provided Ministers with an update on negotiations on the multi-annual financial framework, MFF, and obtained general agreement to our efforts to find a compromise with the European Parliament. Our goal remains to reach agreement by the end of June and to translate the overall MFF agreement into legal texts. We are also seeking agreement on legislation underpinning the EU’s funding programmes to ensure the new programmes such as the youth guarantee can start on time in January. Intensive discussions towards this end are continuing and, as the committee will be aware, the Taoiseach and I met with Presidents Barroso and Schulz in Brussels on Monday. We agreed that formal negotiations with the Parliament would now begin, in parallel with negotiations on the draft amending budget for 2013. The first trilogue meeting will take place next Monday. We are working towards the Parliament's giving consent to the MFF regulation at its June plenary meeting. Early agreement on the budget would give a significant boost to confidence, demonstrating that the Union’s institutions are capable of working constructively together to deliver results. I expect to update the General Affairs Council on progress when it meets later this month. At the GAC, Ministers also held an initial discussion on the agenda items for the European Council on 22 May. Those topics will be more fully explored at the May General Affairs Council, which I will turn to shortly.

Germany, Denmark, Finland and the Netherlands also presented to the General Affairs Council their proposal for a new and more effective mechanism to safeguard fundamental values in member states, on which they have written to the Commission. In the subsequent discussion, Vice President Viviane Reding gave an overview of the existing measures in this area and highlighted the Commission’s report on the Charter of Fundamental Rights, which was published yesterday. I expect this is an issue to which we will return in the future.

The April General Affairs Council considered enlargement. It heard about reports by the Commission and the High Representative of the Union for Foreign Affairs and Security Policy, Catherine Ashton, on Kosovo and Serbia as well as a Commission report on the Former Yugoslav Republic of Macedonia. Ministers noted progress made by all three countries and warmly welcomed the agreement reached the preceding Friday between Kosovo and Serbia. Ministers acknowledged this historic progress toward normalising relations and congratulated those involved in brokering a deal.

The agenda for this month’s General Affairs Council, which will take place in Brussels on 21 May, is still being finalised. The main item for discussion will be preparation for the meeting of the European Council that will take place on 22 May, which will discuss energy, including completion of the internal energy market, prices, and investment in infrastructure; tax policy, with a focus on collection and tackling tax evasion and fraud; and deepening of the Economic and Monetary Union, with an update by President Van Rompuy.

I also will update the Council on progress with the multi-annual financial framework, MFF. The General Affairs Council also will take a first look ahead to the June European Council meeting, at which President Van Rompuy's report on the economic and monetary union, EMU, is expected to be a main item for discussion. It will also mark the first anniversary of the adoption of the compact for growth and jobs and of the decision to separate banking and sovereign debt, and I expect the Council will take stock of progress made. Enlargement, the European semester and justice and home affairs issues may also feature.

Before concluding my remarks, I thank the joint committee for the work it has undertaken during the Presidency and wish it well for the COSAC plenary meeting that will take place in Dublin late next month. I have only touched briefly on the main issues on the Presidency agenda but will be pleased to answer any questions members may have. I assure the joint committee that over the next seven weeks, the Presidency will do all it can to advance Europe's economic recovery and to deliver tangible results for a better future for the European Union.

12:30 pm

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
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I thank the Tánaiste. It is hard to believe that only seven weeks remain before the end of the Presidency. While it appears to have gone so fast, it has been a busy time, and as the Tánaiste indicated, significant progress has been seen in many areas Ireland prioritised, including the MFF, banking union, trade agreements with the Far East, the United States and Canada and of course the youth guarantee scheme. The joint committee is putting together the final details of the COSAC plenary agenda in June and we will cover many of the economic issues the Tánaiste outlined. However, I wish to ask a couple of questions regarding two particular sessions we will hold. The first is on enlargement and the other pertains to development aid. A meeting has been scheduled at the COSAC plenary meeting in which we will hear from experts such as the philanthropist Mo Ibrahim. We also will hear from Barry Andrews of GOAL and others about the European Union's aid policy. Can the Tánaiste provide members with an update on how matters are progressing on the budgetary issues surrounding the specific development aid budget?

My second question pertains to enlargement. There has been progress with regard to many countries and the Tánaiste referred to the recent agreement between Kosovo and Serbia, brokered by the European Union, which is good news. I have two questions, one on Turkey and the other in respect of Macedonia. As for Turkey, we were hopeful about opening up a chapter and the Tánaiste recently spent some time in Turkey on a trade mission. How does he expect progress to be made in the remaining seven weeks? Does he expect to see a chapter opened? Finally, Macedonia seeks a date for the commencement of talks on accession, but the issue of the naming of that country remains outstanding. Is there progress to report on the finding of a common way through that issue?

Photo of Timmy DooleyTimmy Dooley (Clare, Fianna Fail)
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I welcome the Tánaiste and his officials, thank him for his comprehensive outline of the agenda for the forthcoming General Affairs Council meeting and wish him well during the seven weeks that remain of the Presidency. As the Chairman, Deputy Hannigan, noted, it seems as though the time has flown. I am sure that from the Tánaiste's perspective, given the workload he has undertaken during that period, the end probably cannot come soon enough.

The Tánaiste rightly identified the potential in respect of a trade partnership between the United States and the European Union, which is a high priority, and the efforts Ireland is making to secure the mandate to begin these negotiations. How hopeful is the Tánaiste that Ireland will be successful in this particular endeavour? Turning to the Tánaiste's comments on the banking and sovereign debt issue and the banking union package that has been worked on, he will be aware that Professor Honohan appeared before the joint committee last week. While he did not rule it out, he cast a cold shadow on the notion that Ireland would benefit from the aforementioned statement from June 2012 and indicated it had a long way to go. That statement gave everyone some hope that Ireland's significant pile of debt would be affected, particularly in respect of the legacy investment it has made in its pillar banks. Obviously, were it possible to do a deal in this regard, it would have a significant impact on Ireland's debt pile and benefits would flow therefrom. The Tánaiste should provide members with an update on his views in this regard.

I also invite the Tánaiste to comment on the expected increase in banking regulation and the impact this may have on Ireland's International Financial Services Centre, IFSC. I was pleased that the comments made by Dr. Michael Somers at the weekend received the level of attention they deserved. From my contacts within the International Financial Services Centre arising from my membership of the Joint Committee on Finance, Public Expenditure and Reform, it has been apparent to me for some time that there does not appear to be a uniformity of application of European-wide regulation and to that extent, as Dr. Somers identified, banks such as Goldman Sachs have handed back banking licences. Funnily enough, they are establishing the very same businesses they have failed to maintain in the IFSC in other European financial districts. The various companies operating in the IFSC indicate that it is easier to operate in some of the other jurisdictions. I wonder whether there is a problem in this regard that must be addressed. While I accept, as does everyone, that we need better banking regulation, as the Tánaiste is aware, these are internationally traded services. This does not pertain to domestic institutions or to the excessive lending related to the property bubble. Although no one wishes to return to that, neither do we wish to put ourselves in a position in which Ireland is no longer attractive to such large multinationals that employ so many people. This question requires a response from the Government. I accept that the Tánaiste may not be in a position to respond to this point today, but it certainly is a matter that must be addressed by the Government pretty quickly. While everyone likes to be sure the regulation is in place and is solid, is Ireland applying it to a greater extent than other countries? It appears that this is the case if such institutions find it easier to operate in Frankfurt, London or wherever.

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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I thank the Tánaiste for his briefing. I have one question, which relates to an issue I have raised with him in the past, namely, that of Syria, the stance of the European Union thereon and whether there are developments in this regard. I am conscious that the United States and Russia appear to be seeking to convene a conference on Syria and I acknowledge that in previous meetings such as this, the Tánaiste has been clear in condemning the bloodshed taking place there and in speaking on what the European Union can do in that regard. While the issue was not covered directly in the Tánaiste's statement to the joint committee, I would be grateful were he to provide an update to members.

Photo of Eric ByrneEric Byrne (Dublin South Central, Labour)
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The Chairman will be pleasantly surprised to learn I have only one question. The joint committee had a meeting at 11:15 this morning with the United Kingdom's Minister for Europe, David Lidington, MP. Members had a fairly detailed discussion with him and needless to say, I was not terribly happy with the Conservative Party's position on what will happen and where it will lead the British people. However, I refer to an issue has been touched on a number of times and which the joint committee has discussed with the Tánaiste's colleague, the Minister of State at the Department of Foreign Affairs and Trade, Deputy Creighton. It is a very important issue that appears to affect most countries in Europe, namely, the alienation process, or citizens' withdrawal of participation in or support for the European Union programme. The European Union has suggested that all the relevant committees, presumably including this joint committee and the Joint Committee on Foreign Affairs and Trade, of which I am a member, should engage in a process of oversight of the European programme of legislation and discussion. It appears as though a democratic deficit exists and I am not satisfied that members have been able to engage in filling that gap. On this obligation of national parliaments - which claim they are out of the loop - to be more involved in the European process, and given the composition of democratically elected parliaments, with people running around telling their electorates they have secured schools for their own areas, among other things, and the clientelist base that exists in many countries, people have argued that national parliaments are not really in a position to engage in the serious process of overseeing the activities of the European Union. Does the Tánaiste have a policy in this regard? Does Europe have ideas as to how best to accommodate the national parliaments' representatives in engaging more in the issues of oversight of European policy?

Photo of Eamon GilmoreEamon Gilmore (Dún Laoghaire, Labour)
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I will start with the questions raised by the Chairman. First, on the issue of development aid, I refer to the provision in the MFF that was agreed at the Heads of State and Government meeting last February.

On heading 4, Global Europe, which includes development aid, the provision in the previous MFF was €56.815 billion and the provision in the new MFF, from 2014 to 2020, is €58.704 billion, which is an increase of €1.9 billion or 3.3%. In the previous MFF, from 2007 to 2013, the provision for the European Development Fund, EDF, was €26.826 billion. The provision for it in the new MFF is €26.984 billion, an increase of €0.2 billion or 0.6%. Therefore, the provision for development is increased in the MFF. In the original proposals, the Commission had proposed a significantly higher increase in that heading but what was agreed by the Heads of State and Government still represents an increase in the new MFF compared to the old one. Bearing in mind that the European Union and its member states contribute over 50% of all development aid in the world, that is very significant.

As I stated earlier, we must now secure the consent of the Parliament to the MFF. We will have a first formal trilogue on Monday next. There has been much informal discussion with both the President of the European Parliament and Mr. Alain Lamassoure, MEP, who is leading for the European Parliament on this issue. We will have a first formal meeting on Monday and then, hopefully, we will be able to progress matters after that.

I was asked about the issue of enlargement, with particular reference to the Former Yugoslav Republic of Macedonia. With a view to a possible decision on opening accession negotiations with the Former Yugoslav Republic of Macedonia, the Council invited the Commission to report on progress on EU-related reforms in the context of the high-level accession dialogue, steps to be taken to promote good neighbourly relations, notably with Bulgaria, and steps taken to resolve the name issue with Greece under the auspices of the United Nations. The Commission's report was published on 16 April. It was relatively positive, noting progress on almost all areas. The report noted progress on its recommendation that the Council should open accession negotiations with the Former Yugoslav Republic of Macedonia. However, it remains to be seen whether enough has been achieved to satisfy member states. The report will be considered at working group level with a view to further discussion at the June General Affairs Council and a possible decision at the June European Council. Decisions on enlargement are made by unanimity, requiring the agreement of all 27 member states. Ireland, in its Presidency, will facilitate discussion of the report and we will seek to have the issue progressed.

Ireland has supported the Commission's recommendation to open accession negotiations with Macedonia. However, we have maintained the position that it would not be appropriate to intervene in a bilateral matter between Greece and Macedonia. Third-party influence on this process would be counterproductive as it could entrench negotiating positions and force either side to act defensively. Greece and Macedonia must resolve this issue through bilateral talks and with the assistance of the UN special envoy.

As the Chairman stated, I visited Turkey last month. I had constructive discussions with the Turkish foreign Minister and the Minister for EU affairs on Turkey's accession process. We hope to be in a position to open a negotiating chapter with Turkey during the Irish Presidency. However, whether this proves possible will depend on the willingness of all parties - EU member states and Turkey - to facilitate progress. The chapter that we hope to open is Chapter 22 on regional policy and co-ordination of structural instruments. It has passed through the preliminary stages and Turkey has been asked to submit its negotiating position. On receipt of this, the Commission will draft an EU common position, which will be considered by member states, and once this is agreed the Presidency can then proceed to open the chapter.

Deputy Dooley asked about trade issues and banking union. On EU-US trade issues, at a political level much progress has been made. As the committee will be aware, the US President, Mr. Obama, in his state of the union address, committed to negotiating a trade and investment partnership between the European Union and the United States. We had a successful informal trade council here in Dublin some weeks ago at which much progress was made. There are issues. This is very big. It has considerable potential but, as with any major trade agreement, there are significant issues of sensitivity to some member states. Our objective has been to try to have the mandate for the opening of negotiations agreed by June, and this remains our objective.

On the issue of banking union, as I stated earlier, speedy progress on banking union is a high priority for the Irish Presidency. As the committee will be aware, political agreement on the single supervisory mechanism was reached at the informal ECOFIN in Dublin last month and COREPER ambassadors formally signed off on the two single supervisory mechanism texts at their meeting on 18 April. We are pleased to have made such progress on the single supervisory mechanism, which is a key element for an effective banking union. Having the single supervisory mechanism in place would allow the ECB to take over supervision by 1 March next and direct recapitalisation of banks by ESM would then be possible. As the committee will be aware, this is particularly important for Ireland and to give effect to the commitment that was made last June to separate bank and sovereign debt. We are continuing to work on how that will apply in practice, including on legacy issues. Since the agreement was reached in June we have made progress, for example, on the promissory note issue. I think everybody now agrees there was a very successful outcome to that.

I hear what Deputy Dooley is saying about the issue of the application of regulations. He correctly identified that financial services businesses are mobile. That is why we have been careful in the approach we have taken to issues such as the financial transaction tax and anything that would cause a movement of investment in that area. Ireland continues to be an attractive location for the financial services sector. IDA Ireland has been successful in attracting financial services to Ireland. I believe that will continue to be the case, but we are mindful of the fact that such businesses are mobile, and not only within Europe, as it is a global industry.

On Syria, in response to Deputy Donohoe, I have been following the discussions that have taken place between US Secretary of State, Mr. Kerry, and Russian foreign Minister, Mr. Lavrov. A more proactive role by Russia, working with the United States and the European Union, would be helpful. What has been missing in Syria is the ability of the international community to act effectively through the United Nations. I hope the discussions that have taken place this week will move us in that direction.

Of course, the other dimension to what is happening in Syria is the humanitarian situation - the significant numbers of refugees in Turkey, Lebanon and Jordan - and the significant issue of getting humanitarian aid into the country. The Chairman mentioned that former Minister of State, Mr. Barry Andrews, in his capacity as chief executive of GOAL, will be present at the event the committee is holding. I am in contact with Mr. Andrews about the GOAL's work in delivering humanitarian aid to Syria.

Deputy Eric Byrne spoke of the meeting the committee had this morning with the United Kingdom's Minister for Europe, Mr. David Lidington, MP. I had the opportunity of speaking with Mr. Lidington by phone late last week to discuss some of the issues that are before the General Affairs Council.

It is fair to say the Lisbon treaty gave national parliaments a greatly enhanced role in the preparation of EU legislation. There is, however, more that could be done. This committee has been doing great work on the role of Ireland's Parliament. National parliaments need to link with the semester process. Better co-ordination and consultation between the Commission and national parliaments is needed when legislative proposals first appear. Better co-ordination is also required with the European Parliament, in which regard the Chairman has been very active.

12:50 pm

Photo of Seán CroweSeán Crowe (Dublin South West, Sinn Fein)
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One of the Government's Presidency objectives is to reach agreement with the European Parliament on the multi-annual financial framework. The Tánaiste hopes this objective will be met by the end of the Presidency in June. How realistic is that timescale?

The Tánaiste referred to the meeting on 22 April which resulted in an update on negotiations on the multi-annual financial framework. There was general agreement on making efforts to find a compromise with the European Parliament. Where specifically can compromises be made? Will the German elections cause difficulty in coming to an agreement on the budget?

The Tánaiste referred to seeking agreement on legislation underpinning the funding programmes in order to ensure new programmes such as the youth guarantee programme could start on time in January. How important is it that we secure the budget? Is it possible to separate the programme from the budget? What is the timescale for the rolling out of the programme in January?

The Tánaiste talked about the enlargement process and the positive developments in some countries such as Kosovo and Serbia. Yesterday, I raised with the Minister of State at the Department of Foreign Affairs, Deputy Lucinda Creighton, the problem of slow progress in Bosnia-Herzegovina. Most people's main worry is that if a party is left out of the process or is perceived as being left behind, it creates instability or greater instability in the region.

The Tánaiste mentioned Syria. There are some 500,000 Palestinian refugees already in Lebanon, to which people went during the conflict in Iraq. The latest figure for Syrian refugees is huge. What exactly is the European Union doing to support the Lebanese authorities in this regard? Historically, there has been instability in the region. Yesterday, I alluded to the impact that the arrival of 500,000 refugees in Ireland in a two year period would have. Something similar is happening in Lebanon. The Tánaiste was in Jordan and Turkey, but one does not hear what the European Union is doing to support Lebanon.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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I welcome the Tánaiste and congratulate him and his colleagues on their work during the Irish Presidency, particularly on the level of activity generated among his colleagues in the European Union in focusing on the issues affecting us all directly. Will he elaborate on the issue of youth unemployment and the extent to which satisfactory targets have been agreed to, are attainable and being attained? When can it be expected that we will see a manifestation of the success of the programme?

The Tánaiste referred to technology, the digital agenda and the EU-US and EU-Japan trade agreements which are of considerable importance to the markets in Europe, the United States and Japan. We discussed this issue with Mr. Lidington this morning. To what extent is the European Union prepared to capitalise on its significant consumer market of 450 million people? Specifically, to what extent can we expect to benefit from the agreements?

The Tánaiste made a passing reference to the banks' mistakes. Can we assume that it might be no harm if the banking system, here and throughout Europe, recognised that one does not repair the mistakes of the past by going in the opposite direction to such an extent as to potentially cause future damage? To what extent are the ECB, the Tánaiste and his colleagues in the European Union cognisant of the damage that has been done? In the past an economic downturn tended to affect individual countries, regions and sectors of industry. In current circumstances the problem features right across the board. It affects each country, to a greater or lesser extent, as well as the community at large. It is not a case of correcting particular mistakes overnight; consequently, there is a need for a more co-ordinated approach.

Deputy Eric Byrne raised two issues this morning with Mr. Lidington. One concerns an invasive and insidious problem that is damaging the concept of the European Union and the European project. This has been happening for a long time. Euroscepticism is developing and growing to a significant extent in some member states, some within the eurozone and some without. It is not fair to say it is entirely a eurozone problem because it extends beyond it.

Social unrest and upheaval were referred to this morning, as were the development of the hard right and hard left in unison and the consequences for all those who were likely to be affected. This is not a new trend either, as the Tánaiste, as a good historian, knows well. It was prevalent in Europe in the 1930s during a very similar set of economic circumstances. Unfortunately, Europe did not respond well at the time. It turned on itself and attempted to devour itself, with catastrophic consequences. The United States which had the same social and economic problems at the time dealt with the matter in a different fashion. It was led by a leader who spoke for the people, brought them together and coerced and cajoled them into recognising that there was strength in unity and cohesiveness. He led them, in very difficult times, away from the path that Europe took. To what extent do our current European leaders, both within the eurozone and without, recognise the similarity between the two sets of circumstances and the need to respond, not in the manner Europe responded in the past but in the way the United States responded?

Photo of Joe O'ReillyJoe O'Reilly (Cavan-Monaghan, Fine Gael)
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I welcome the Tánaiste and his team. He merits our complete congratulations because of the extraordinary success of the Irish Presidency. The flagship developments are having the multi-annual financial framework agreed to and the very recent success in breaking the deadlock with the European Parliament in making progress on that issue.

I know the matter has not yet been resolved, but the Tánaiste has broken the deadlock and work is progressing. That is to be highly commended and we should be collectively proud of that achievement.

Our EU Presidency was correct in identifying unemployment as the key issue in Europe. As the Tánaiste knows only too painfully, it is a problem right across Europe. Spain, for example, has 50% youth unemployment, while the overall figure is 30%. Our own unemployment rate is unacceptable, as it is in Northern Ireland and throughout the EU. It is a major issue, so it was correct to identify it as such. The EU Presidency's view is ad idemwith the wishes of this committee, given all our contributions. There is nothing more compelling to deal with than unemployment.

I am impressed with the concept of the youth guarantee programme. If people can attend a job scheme after four months it can break the deadlock. I gather from the experiment in Finland that many of those people successfully found jobs later. While it may not be comparable, our own internship scheme was an unqualified success. It is great to get people going sooner rather than later.

When does the Tánaiste think that programme can be put into action? People want to know when it will be activated here and across Europe. Without the €6 billion devoted to it as part of the multi-annual financial framework it could not succeed. I congratulate the Tánaiste on that.

I also want to ask the Tánaiste about European funding sources and whether we can match the necessary financial retrenchment and reforms. I do not propose to reiterate those, but could we obtain a stimulus package that would have a productive dimension? While a lot of good work has already been done in this regard by the Minister for Education and Skills, the construction of new school extensions would be labour-intensive locally. In addition, the removal of pre-fabs would be efficacious both in creating jobs and removing one area of expenditure. Could we therefore get such a stimulus package from Europe to deal with the jobs crisis, in addition to what the Tánaiste has already cited?

I am delighted the Tánaiste referred to SMEs. Shopkeepers and other small business people are constantly telling us that they are inundated with bureaucracy and cannot cope. In this context, what will the EU accounting directive mean in practice? We should be able to explain what it means and promulgate it for those who need it.

We are all in favour of an EU-US trade agreement from which tremendous benefits and opportunities could accrue, specifically to this country. Is the Tánaiste confident that he can preserve agriculture, which is the vital Irish national interest, in the context of such an international trade agreement? People might reasonably fear that an EU-US trade agreement might mean automatic access to European markets for cheap US produce, including food. Could that prejudice Irish agriculture? Is the Tánaiste confident that he can protect Irish agriculture and the objectives of Food Harvest 2020?

The Tánaiste answered questions about the banking union and progress has been cited in that respect. It is an Irish priority, so I am pleased about that. Can he comment on the north-south divide in Europe, including areas of inequality, and the availability of eurobonds?

1:00 pm

Photo of Kathryn ReillyKathryn Reilly (Sinn Fein)
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I would like to apologise for missing the Tánaiste's remarks and those of some other speakers. I might be going over old ground but I wish to follow up on Deputy O'Reilly's comments concerning youth unemployment and the youth guarantee scheme. This committee, through myself, is putting together a report on the youth guarantee scheme, including an examination of other models across Europe.

One of the issues that came up in our meetings with interested groups on youth unemployment and the youth guarantee, was the level of funding. There is concern about the low level of investment that has been committed by the European Council. The sum of €6 billion - even when it is directed at member states with youth unemployment levels of over 25% - is a very small amount of money. Can the Tánaiste indicate whether the Government intends to match that funding under the youth employment initiative and, if so, by how much?

The European Council recommendation calls for youth guarantee schemes to be implemented swiftly and as soon as possible, but we seem to be opting for their gradual implementation. The recommendation says that in member states with high levels of youth unemployment and severe budgetary difficulties, gradual implementation of the guarantee "could be considered". However, departmental briefings on the issue have changed the language and are arguing that the Council recommendation recognises that the implementation "will need to be more gradual". This represents a shift in emphasis. Many of us would argue that, given the high levels of youth unemployment, with young people emigrating and disengaging from local employment services, the Government should be adopting a more urgent approach to measures like the youth guarantee. The Tánaiste said that EU governments need to address the causes of joblessness. Can he provide the committee with a timescale for implementing the youth guarantee? When can we expect to see it? Will it be gradual and, if so, how gradual?

Earlier today, the National Youth Council of Ireland launched its report entitled Time to Go, which examined emigration statistics. According to the CSO's figures youth unemployment is falling, but the number of young people in jobs is also falling. That is obviously being taken up by emigration. If he can do so, the Tánaiste should indicate when the youth guarantee will be rolled out. As we come to the end of Ireland's EU Presidency, it is important to get some meat on the bones, given that youth unemployment is such a priority.

Photo of Eamon GilmoreEamon Gilmore (Dún Laoghaire, Labour)
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I will start with what Deputy Durkan, Deputy O'Reilly and Senator Reilly said about the social consequences of high unemployment levels. Deputy Durkan drew parallels between current high levels of unemployment in Europe and what occurred in the 1930s. This is Europe Day and it is useful to recall that the European Community's founding fathers saw the development of the European project as a way of preventing a recurrence of what happened in the 1930s and 1940s when Europe ripped itself apart. Millions of lives were lost and appalling atrocities were committed then. The post-war idea was that we would agree a method of doing our business in Europe which was more civilised, democratic and grounded in the rule of law, democratic principles and human rights. In addition, economic difficulties would be resolved in that way.

We hear a great deal of understandable talk about the bureaucracy of Europe. While it is a pretty complicated way of reaching decisions through many layers, Europe tried the alternative and it was not pleasant. What we are doing now is trying to address the economic difficulties Europe faces. There are some parallels with the 1930s, in particular with regard to unemployment. We are addressing the problems we have in banking in a co-ordinated, co-operative way. There are a number of issues we must address, including what happened in banking. The big lesson we have had to learn over the last number of years is that what happens in banking in one country is not confined to one country - it is interconnected. For that reason, the Government has argued successfully that there had to be a banking union within the European banking architecture. That was agreed last June and we have been progressing it. Progress has been made during our Presidency on the single supervisory mechanism and we are making progress on the other two pillars. It comes back to the point raised earlier by Deputy Dooley as to why it is necessary to have a co-ordinated European approach to the regulation of the banking and financial sector. I hear many people asking if we are going too far with regulation. We must be careful not to get back to the kind of discussion, which has got us into trouble and which was so prevalent ten to 15 years ago, arguing for the advantages of decreased and light-touch regulation. That is what contributed to the mess. We are talking about appropriate regulation of banking and we are talking about it across the European Union. That is why we reached the CRD IV agreement to provide for a European-wide approach to bankers' pay, which has been an important issue in financial and popular debate.

Dealing with the unemployment situation in Europe is our priority. We have said that it is the major issue we must crack in the course of our Presidency. There is a particular problem in relation to youth unemployment, which is why we have promoted the idea of a youth guarantee. We were very pleased that provision was made in the multi-annual financial framework, or MFF, for €6 billion to give effect to that guarantee. To address Senator Reilly's remarks, the youth guarantee reflects what we have been trying to do in our national policy in Ireland anyway. The reforms to social protection and education are about that. The idea is that one's first day out of work will be one's first day on the way back into employment and involve a transition from social protection programmes to JobBridge to education and training programmes. The intention is that the youth guarantee will, when it has evolved, dovetail with what we are doing nationally.

Of course, all of these initiatives depend on us getting agreement on the MFF. Deputy Crowe raised that issue and asked how realistic it was to expect agreement during Ireland's Presidency. He talked about elections in one member state and how they might impact on agreement. My concern is not elections in a particular member state. Elections are always taking place which affect how a government might look at issues at a particular time. My great concern is that if we do not get agreement on the MFF before the summer, the European Parliament elections will be upon us and they are much more likely to have an impact. Following the summer, the attention of Members of the European Parliament will understandably turn towards the fact that they are standing for re-election next May. Due to the co-ordinated budgeting approach across Europe which is now taking place, the attention of national parliaments and governments will turn after the summer to their own national budgets and away from the European budget.

The difficulties that have arisen in relation to the MFF are twofold. First, the European Parliament has identified four areas in the MFF in which it wants to see improvements as to what is on the table. These include flexibility, a review of the MFF during its life, own resources and the unity of the budget. The Council is prepared to discuss these with the European Parliament and will hopefully reach agreement. Second, the European Parliament has indicated that it wants a draft amending budget for 2013. The Commission has said there is an amending budget of €11.2 billion, which it feels is required. That view is not subscribed to by all member states. The European Parliament has made it clear that agreement on the MFF is tied to agreement on the draft amending budget for 2013. We have put forward a two-stage process for the draft amending budget. We have said that there should be an initial, up-front financial commitment for 2013 and then a commitment based on what is documented and supported at a later stage in the year. We agreed last Monday that we will progress discussions in parallel on the amendments the EU Parliament wants to see to the MFF and on the draft amending budget. We are anxious to conclude both agreements during our Presidency. The two go together. The Parliament says agreement on the MFF is conditional on agreement on the draft amending budget. It works the other way as well. If there is no agreement on the MFF and the Parliament is not in a position to conclude an agreement, it is clear that there will not be an agreement on the draft amending budget either.

When one thinks about it, the MFF is €960 billion. We have talked about stimulus, which that budget represents. The sum of €960 billion includes provision for Cohesion fund spending and all of the infrastructure projects around Europe which generate employment. It includes provision for the Common Agricultural Policy, the importance of which we know in Ireland. It includes commitments on research, innovation, Horizon 2020, the education and training and the youth guarantee. If there is no agreement on the MFF, Europe will revert to annualised budgeting. The problem with annualised budgeting is that one cannot plan multi-annual programmes on an annualised basis. Research programmes are, by their very nature, multi-annual as are major infrastructure projects and many of the projects which attract Cohesion Fund funding. It is not possible to plan these other than on a multi-annual basis. This is not just a matter of agreeing figures - it is about jobs, investment and projects in individual member states, including Ireland. Jobs are riding on the MFF, which is why it is very important that we get agreement.

We can try to persuade, which we are working night and day to do. Meetings are taking place at official level in Brussels this week. I will be back in Brussels on Monday to lead the negotiations on the MFF. It is very important that we conclude the agreement. There are investment programmes to consider. I have been asked by Senator Reilly, among others, for a timetable on the youth guarantee but we must get the MFF settled first. It is part and parcel of that. There are many people who will argue that to be effective, the €6 billion provision for the youth guarantee must be front-loaded. One cannot front-load it unless there is a multi-annual agreement.

I was asked what the accounting directive is.

Political agreement has been reached on the accounting directive. The directive’s purpose is to ensure reporting requirements are proportionate and reduce the amount of red tape with which small and medium-sized companies, SMEs, have to cope. It is basically about getting agreement at European level which would exempt SMEs from some of the onerous types of reporting required.

On the issue of Lebanon, we have had a discussion at the Foreign Affairs Council about the impact of the crisis in Syria on neighbouring countries, including Lebanon. I contributed to the discussion and drew attention to the fact Ireland has a particular interest in Lebanon due to the presence of Irish troops in peacekeeping missions there. Deputy Crowe described it accurately about the additional 500,000 refugees in Lebanon which has a potentially destabilising effect there. The European External Action Service is working to support Lebanon. This is very much part of Europe’s response to the crisis in Syria. If anything in the discussions around Syria, there has been a much increased concentration of the impact of the crisis on neighbouring countries and the associated humanitarian issues such as more refugees.

1:20 pm

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
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I thank the Tánaiste and Minister for Foreign Affairs and Trade for his briefing in advance of the forthcoming General Affairs Council meeting. On behalf of the committee, it is very much appreciated that he and the Minister of State, Deputy Creighton, have been exemplary in their attendance at this committee in advance of General Affairs Council meetings. The European Movement has just published an accountability report which points out that Irish ministerial attendance at Council meetings is now at 97%, which must be applauded. However, ministerial attendance at this committee in 2012 is down by 7% compared to 2011 at 64% or two out of every three meetings. Excluding the Tánaiste and Minister for Foreign Affairs and Trade, we need to spread the word that more Ministers need to attend this committee.

The joint committee went into private session at 3.25 p.m. and adjourned at 3.30 p.m. until 2 p.m. on Thursday, 16 May 2013.