Dominic Hannigan (Meath East, Labour)
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I welcome members and guests to our meeting of the Oireachtas Joint Committee on European Union Affairs. I welcome the delegation from the European affairs committee of the Bavarian Parliament. The delegation is led by Professor Ursula Männle and I thank its members for attending. I also welcome our colleagues from the German Embassy.

The delegation is on a short visit to Ireland in the context of Ireland's EU Presidency. One of the priorities of the delegation is to have the opportunity to engage with parliamentarians across Europe. Bavaria is the second largest of the 16 German states. We always hear with great interest the results of different elections in the German Länder. We understand the importance of the Parliament within that system. Many of the issues we are all interested in are known to us in respect of the future of the eurozone, fiscal union, banking union and, most importantly, the challenge of high levels of unemployment, which many of us face, and what we can do to respond to it.

We will first hear from Professor Ursula Männle before hearing from members of the committee and then other members of the delegation.

Professor Ursula Männle:

I thank the Vice Chairman for his opening remarks and for the opportunity to meet the Joint Committee on European Union Affairs of the Irish Parliament. We are delegation from the Bavarian State Parliament and five parties are represented in the Parliament. All five parties are represented within to the delegation visiting today.

It is probably fair to say that there is broad consensus among the members of the delegation on European affairs. We might differ significantly on other policy issues but, when it comes to European affairs, there is shared consensus among members of the delegation.

I will briefly introduce the members of the delegation and refer to the parties they represent in order that when they make a contribution, committee members will have some idea of the position from which they are speaking. Mr. Linus Forster is a member of the Social Democratic Party and also a speaker on youth issues in the parliament. Mr. Alexander Radwan is a member of the majority party, the CSU, Christian Social Union, party, and has been a Member of the European Parliament for ten years. Mr. Konrad Kobler is also a member of the Christian Social Union party and has been a member of the federal state parliament for 30 years. He is the speaker on social affairs within the parliament. Mr. Joachim Hansich is a member of the Free Electors' Group, a group of independents, and represents that part of the political spectrum. He has worked for many years as lord mayor of a significant local community. Ms Anne Franke is a member of the Green Party and specifically interested in agricultural policies and consumer protection. Mr. Thomas Dechant is a member of the liberal Free Democratic Party. This is his first term in the parliament and he works on the agricultural committee. Ms Renate Dodell is not a member of our committee, but she is vice chair of the CSU parliamentary party in the federal state parliament. She has a keen interest in European affairs and we have invited her to join us and observe the discussion and exchanges. I am the chair of the European committee and also a member of the government party, the CSU. Mr. Dechant is vice chair of our committee.

The Vice Chairman has alluded to the fact that our visit to Ireland coincides with the Irish Presidency of the European Union. Members of our European committee traditionally visit countries that hold the EU Presidency to see what political priorities they are pursuing. Beyond this, we are also very interested in finding out what efforts are being made - we have seen that Ireland has made significant efforts in this regard - to emerge from the crisis that has been evident in this country and what efforts have been made to understand the political context for Ireland in emerging from the crisis.

Before entering the more substantive discussion on current political developments, I would like to ask about the role of the Irish Parliament in the context of European policy. Members of the joint committee will be aware that the Lisbon treaty has placed greater significance on the contribution of national parliaments in how decisions are taken and carried through within the European context. The committee might also be aware that in the Federal Republic of Germany there has been a court ruling by the country's highest court, the Constitutional Court, supporting a request of the parliament for sufficient information to make a contribution to political decisions. That court ruling found against the government of the day. The ruling, as well as the Lisbon treaty provisions, strengthen the role of national parliaments and, for that matter, federal state parliaments within the European policy context. To what extent is the Irish Parliament at the table when it comes to policy decisions taken in the European Union and political decisions taken in Ireland within a European context? Does it believe it is heard before such decisions are taken?

Paschal Donohoe (Dublin Central, Fine Gael)
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On behalf of the joint committee, I will respond to that question. I acknowledge the fact that all of my colleagues who are from different parties could have different answers to Professor Männle's question. I will, therefore, make three points that may be helpful to the visiting committee.

The first point, as Professor Männle said, is that under the Lisbon treaty, new powers were conferred on parliaments. The way it has worked within this parliament is that these powers sit with sectoral committees rather than the Joint Committee on European Affairs. If there is an issue about transport policy, for example, under the Lisbon treaty the Joint Committee on Transport and Communications has capacity rather than the Joint Committee on European Affairs.

It would be a concern of all members that the national parliament maintain a pre-eminent role in European affairs. Our Parliament and this committee, through COSAC, the Conference of Parliamentary Committees for Union Affairs of Parliaments of the European Union, have put forward suggestions regarding how that could be maintained in European affairs and economic policy.

Within this Parliament, this committee does not have a formal role in the setting of government policy before decisions are made. Our role is one of influence and opinion rather than of formal sanction. For example, the committee has pre- and post-Council meetings.

Professor Ursula Männle:

If I may just ask a second question, are decisions on subsidiarity made and dealt with by the sectorial committees or by this committee?

Paschal Donohoe (Dublin Central, Fine Gael)
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Decisions on subsidiarity are made at sectorial policy level.

Professor Ursula Männle:

The reason for my question is that even within the federal state parliament system, at a regional level we also have the opportunity to voice an opinion and take part in discussions on subsidiarity. So, in the State Diet of Bavaria, it is the committee for European and federal affairs which discusses affairs of subsidiarity and deals with them.

Paschal Donohoe (Dublin Central, Fine Gael)
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Does any other member wish to contribute?

Mr. Joachim Hansich:

This morning, I had an opportunity to listen to the Minister of State at the Department of Finance, Deputy Brian Hayes, describing how Ireland has made successful efforts to go beyond the economic crisis and emerge from it, which is quite impressive. Will the committee comment on how communities at local government level are supported by the State in their challenges with the financial crisis? Is there a mechanism whereby local authorities are supported in their efforts to deal with the crises in unemployment and with their own financial budgets?

Paschal Donohoe (Dublin Central, Fine Gael)
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I call on Deputy Durkan and Senator Healy Eames.

Bernard Durkan (Kildare North, Fine Gael)
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I welcome our visiting colleagues and am delighted to have them with us for this important exchange of views.

In respect of the effect of the economic crisis on our local authorities, each Department and public sector body, as well as the private sector in many ways, has had to take a proportionate cut down along the line. Wages and salaries have been cut, in some cases by up to 40%. Working time has been increased while holidays have been reduced. Effectively and essentially, a wide range of economic measures have been applied through each Department to their subsidiary sectors to achieve the targets laid down in the troika agreement. The Government’s policy has been to try to encourage employment and minimise tax on working to encourage the regeneration of employment while ensuring at the same time that budgetary targets are met. We are set to achieve all of our targets in the economic recovery plan arising from the troika agreement and will be on target to move out into the financial markets on time.

Unemployment, particularly youth unemployment, is a problem in respect of which specific policies are being pursued at the present time in line with European policy on the same issue. At the same time, selective capital projects are being considered as a means of alleviating some unemployment and generating economic growth. Our target is to achieve economic growth as a means of galvanising economic recovery such as an economic growth rate of about 2% in 18 months time or thereabouts. We expect that anything in excess of that will have a dramatic result. We need to achieve 2% growth in the not too distant future as quickly as possible.

We are proceeding cautiously with regard to trying to achieve our targets as we proceed. We are trying to review our position as we go along. We have moved away from the notion that previously applied for the 15 year period prior to this whereby economic targets were assumed. We have now adopted a policy of checking economic progress on a regular basis in line with European policy. I wish to emphasise that we have not found it easy. This has been difficult. We have had social unrest and unease on a constant basis. The two parties in government have had to adopt a very firm stance. It is a difficult situation to find ourselves in but the two parties in government are committed to those targets and will continue. With regard to the issues presented by the delegation at the beginning, each EU member state, without exception, needs to play its role at the present time. Nobody can opt out or presume that somebody else will carry them. We know that and are fully committed to our own recovery. I should mention that I am the old guy in this bunch.

Paschal Donohoe (Dublin Central, Fine Gael)
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That does not need translation but we would all obviously disagree with him.

Fidelma Healy Eames (Fine Gael)
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The delegation is very welcome. Mr. Beuster is my neighbour as well so it is not the first time we have been in this setting. I thank the committee for the opportunity to be here and have this exchange. I will add a few words to what Deputy Durkan said about local government and then put one or two questions to the person in charge of youth affairs and the agricultural speakers.

The delegation asked about local government. Traditionally, local government would be funded through business rates and a local government fund. That would pay for local services. For a Government under stress, continuing to put the same amount of money into local government presents a huge challenge. As part of our reform package, we are bringing in a new property tax, which is currently due. I guess it widens the tax base so that not all of our taxes are on income but it will be a critical tax to fund local government as 65% of that tax will remain within the local authority area. We have about 30 local authorities, 26 counties and four cities.

It is great to have the opportunity to meet the delegation so that we can learn more about how people in Germany live and what their priorities are. We know Germany plays a predominant role within the EU and it is not unusual to be told that we need to learn how to be good Germans, which does not always go down very well in Ireland. I am keen to learn more about some of the challenges Germany faces.

Our youth unemployment is very high. About one in three of our young people under 30 would be unemployed. Could the delegation talk about the German figures? It is a massive challenge because around 65% of our young people attend third level education.

For that body of young people to come into the market without opportunities can be soul destroying. Nevertheless, we believe it is the way we should be going. What is the rate of unemployment among those aged under 30 years in Germany and what are young people doing at third level? Where is the thrust in terms of Government policy? Is it towards information technology, maths and sciences, that is, the knowledge economy? Germany has a great tradition in the artisan area. I ask the witnesses to speak further about this. What is the starting income level for graduates of sciences and artisan areas? Our wages were traditionally high, which is the reason we lost competitiveness but growth could be promoted in the European Union if Germans were paid more and had more money to spend.

Paschal Donohoe (Dublin Central, Fine Gael)
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I would like to give other colleagues an opportunity to put their questions before asking our witnesses to respond.

Fidelma Healy Eames (Fine Gael)
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I have one more question for the agriculture people, if the Vice Chairman is agreeable.

Paschal Donohoe (Dublin Central, Fine Gael)
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Sure.

Fidelma Healy Eames (Fine Gael)
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We are in the midst of the CAP negotiations. Do the witnesses favour reforms in production or in land ownership? We would like to see more coupling whereby productive farmers are rewarded. What are the witnesses' preferences?

Joe O'Reilly (Cavan-Monaghan, Fine Gael)
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I join my colleagues in welcoming the witnesses. It is great to meet them in Ireland and I hope they have an enjoyable stay and a productive exchange of views in Dublin and elsewhere. We are anxious to maintain strong links with our German counterparts. We have strong links in culture, trade and tourism.

As Senator Healy Eames noted, we have recently introduced a property tax for local government. The tax was born out of our economic difficulties but one of its happy results will be a strengthening of local government, contrary to popular conception. For the first time, local politicians will set the level of the tax, control expenditure and be accountable to the people for the money. We never had proper local government previously. It is an ironic advantage arising from the recession.

Unemployment, specifically youth unemployment, is the great challenge facing all countries in Europe. For this reason I would be happy to hear that the witnesses support the continuation of stimulus measures, the youth guarantee and other direct supports for European economies to create employment. Governments need to be actively involved, apart from the private sector, in creating jobs. A stimulus package is needed in this respect and I hope for a positive response.

I am interested in what the witnesses have to say about energy policy in their state given that nuclear energy has been ruled out at government level. How are alternative energies being progressed, has there been much success in this regard and how are the economics working out?

Eric Byrne (Dublin South Central, Labour)
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I apologise for my late arrival. I am also a member of the Joint Committee on Foreign Affairs and Trade. I have had to deal with Tibet and China this morning and have just left a very fine meal, with some accompanying German wine, because of the presence of a delegation from South Korea. I think the wine was from the Mosel region. I have not had a chance to read my briefing notes so I will direct three questions to the delegation.

Our Taoiseach is in Greece conveying a very important message to the Greeks about what we in this country are doing about extracting ourselves from the bailout. As we were one of the first countries to receive a bailout, it was extremely difficult for us to absorb the banking debt as part of the sovereign responsibility. Do the delegates support the agreement at the July meeting of the Heads of State to separate banking debts from sovereign debts?

The delegates are aware of Ireland's absolute commitment to the European project, unlike our neighbours in England. Germany has a population of 82 million; we have a population of 4.5 million. Does the delegation appreciate that we are a coalition Government - analogous to that between Angela Merkel's Christian Democratic Union and the Social Democratic Party, which is similar to our Labour Party - and that our obligation to implement the programme of austerity, particularly as social democrats, has been extraordinarily difficult? Do they think Germany will recognise that while the previous Government made disastrous policy decisions, we are now carrying a very heavy political burden? Will Germany join with us in sharing the burden?

Paschal Donohoe (Dublin Central, Fine Gael)
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I thank all members of the committee for their questions and contributions and invite the delegates to respond. Maybe we will begin with the youth issue.

Mr. Linus Forster:

As the members have addressed me directly I would like to respond to their questions on youth affairs, but I will also draw on the experience and expertise of my colleagues because there were also some questions that were more in the sector of education policy. First, regarding the statistics the committee asked for, we are in the very fortunate situation in Germany that we have in the former Federal Republic of Germany a youth unemployment rate of 7% and in Bavaria a youth unemployment rate of less than 3%, which is a very fortunate and pleasant situation to be in. These numbers do not include young people who are either in training programmes for further education or specific support programmes for school leavers who might not yet be able to enter the labour market. We have introduced programmes such as a fit-for-job programme. Anybody who is involved and supported by such programmes is not part of this statistic.

The youth unemployment problems, such as they are, are probably more focused on people leaving school who are insufficiently qualified to enter the labour market. For people having left third-level education, luckily, there is not a significant unemployment issue.

There are some specific demands and shortages, which are governed by whatever branch of industry might be concerned. For instance, with regard to the IT sector, engineering and manufacturing, we have a shortage of qualified people. On the other hand, there are academic fields where people leaving third level education might find it a little more difficult to find something specific to their background and their education.

With regard to the question on entry wage levels for people leaving academic training or with other qualifications, the committee might find that the response I will give might differ somewhat from the response members of other parties might give. There is a breadth in the political spectrum and there was a debate about where this is. As members of the Social Democratic Party - and the Green Party might share this view - we are of the opinion that people entering the labour market are not always paid appropriately and there should, perhaps, be an increase in the levels of pay. I am particularly concerned about developments regarding internships or other precarious employment situations which should, given the current economic situation in Germany, be more secure and better rewarded than they are currently. I will invite colleagues to speak for other parties on this issue.

Ms Renate Dodell:

Germany has been repeatedly criticised, not least by the OECD, for the relatively low number of young people who go through third level education but this may be the reason for the fact that we have such low levels of youth unemployment. Within the federal republic, the political responsibility for education rests with each state. Within Bavaria, we have a schooling system which allows young people to go through a schooling programme of nine, ten or 12 years. When they leave the programme at whatever duration they have chosen, they then have the opportunity to progress and move up from the level at which they have left the schooling system. Those who do not choose to enter a third level university to study, typically start a vocational training programme. The latter is carried out in Germany under the dual system, which comprises training supplied by the company for which they work and schooling for which they typically attend a school two and a half days a week throughout the training period. This lasts from two and a half to three years. Those who emerge from the training programme are well respected and sought after by industry. As a result, this leads to a situation where many people who have completed the programme will find acceptable jobs and they are well respected within those jobs.

We have recently introduced a new initiative whereby those who have gone through the vocational training programme to the level of master in whatever trade they are trained in, automatically have a right to enter university and to continue their education at that level following this practical training. Most of those who then decide to study are inclined to study the human sciences rather than natural sciences. Perhaps a correction is needed more towards natural sciences and the IT sector rather than having people study languages, education and so on because this is where the jobs are and where we are looking for future careers. We have introduced programmes co-sponsored by schools and businesses where young people, particularly young women, are introduced to science in practice.

I refer to the entry wage levels for people completing third level education. I have three sons who have completed third level education and it is my experience that the entry wage levels for the jobs they might take are determined by the industry, the job profile and the demand for those specific jobs at any given time.

Perhaps I will hand over to my colleagues on the question on agricultural policy.

Ms Anne Franke:

I was asked about the position Germany - and perhaps more specifically Bavaria - holds with regard to the Common Agricultural Policy and the political decision on how supporting measures would be allocated. It has traditionally been the position in Germany to decouple production from these support payments which are made available through this European programme. So the traditional political position would clearly have been to have this land-ownership-based. However, there is now a discussion over whether this is really the best policy to pursue and there is a rethinking of that policy based on the understanding and also some scientific support for the position that if public moneys are spent, they should be spent on something that makes a contribution to society and it should not just be based on ownership of land. So currently the German position within the Common Agricultural Policy discussions and negotiations is still the decoupled position based on land ownership, but there is a shift in the political thinking on that issue that we observe. Bavaria, in particular, strongly supports holders of small farms and family farms.

Fidelma Healy Eames (Fine Gael)
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It is similar to us.

Mr. Thomas Dechant:

I wish to add to this. With regard to the structure of farm holdings within the Federal Republic of Germany, there are quite significant differences. For historical reasons, the structure of farm holdings in the former East German federal states is very different from that in Bavaria, where we tend to have very small family-farm holdings. So there is a political debate over how we can address the reality of a significant structural difference in the agricultural sector. Bavaria in particular pursues a policy of front-loading and of supporting in particular small holdings of between 20 ha and 30 ha.

There are a number of other policy measures in place to support small farm holdings and family businesses. In particular, we support people making additional income outside the farm on which they work. We support initiatives to make a contribution to local tourism, farm tourism and different aspects of the cultural landscape and fabric of society which are being supported. We also support initiatives for producers to market their own products. There is a range of policy strategies in place to support family businesses and small farms.

I was asked about renewable energy. Within the agricultural sector there is scope for renewable energy to be used very successfully, not least because of the roof areas on big farmhouses, which are being used for photovoltaic solar systems, which feed into the grid. Larger farms are also introducing biogas systems. This is creating extra income for small farms and it works at that level.

Mr. Alexander Radwan:

I thank the members for their questions. I wish to focus on the questions on the economic and monetary union. I will start with the question of youth unemployment. The figures quoted for youth employment are figures that have been achieved at the end of the implementation of a ten-year reform programme. For a significant period of time wealth creation in Germany has been modest, facilitated by acceptance by the unions of such modest growth of wealth. While these figures are very positive, they are on the basis of a ten-year reform programme.

With regard to the separation of banking and sovereign debt, there is certainly a need for greater unity at European level when it comes to the banking sector with regard to monitoring mechanisms, facilities to manage the banking sector, regulation and the issue of a financial transaction tax. We need to speak with one voice and come to a common position on these issues and others such as the highly speculative transactions which to date have not been regulated in Europe. It is necessary and important to realise that if guaranteeing banking debt comes into effect at European level, it will be as the final step rather than the first step of the process.

In the first instance it is the responsibility of each member state to secure its own banking sector, and if this and other steps fail then such banking debt can be guaranteed at EU level. In Germany we very clearly recognise that a number of member states must make big asks of their people. We make a great effort to promote the idea that the German taxpayer must make a contribution to the situation. For this reason we are in the process of sharing the burden, which was mentioned at the beginning. It is necessary for us to address the issues and the mistakes made over the past decade, and this concerns all member states; I do not want to single out any one member state of the European Union. We must draw conclusions, learn lessons and ensure such a situation does not arise again.

The Irish Presidency has concrete experience of how difficult it is to go beyond fixing on paper something such as the six pack or two pack and new regulations, and implement them and ensure such regulations are observed and respected. For this very reason we are heartened to see a combination of austerity measures and budget consolidation in Ireland. This process, which is so successful in Ireland, will be seen as a model for future developments with regard to how a country can emerge from such a situation. We must learn from the mistakes made in the past and not repeat them.

Mr. Konrad Kobler:

To answer Deputy Durkan's question, Germany experienced significant challenges with regard to unemployment, and not only youth unemployment, in the context of reunification. At present, we cannot fill positions and must seek people to do the work. We recruit from elsewhere, we have extended the length of working life and introduced new training models to allow people change career. A White Paper has been published on the duration of working life and pension policies in member states, and a number of member states fall below the retirement age threshold of 65 or 67 which is foreseen in the White Paper.

With regard to youth unemployment and the dual vocational training programme we mentioned, it is our view and experience that the benefit of this training programme is that highly-qualified people are trained specifically for the jobs in the market. They are trained in companies where the work takes place. It is not schooling which takes place outside of the real world; it is very specific and tailor made. Those who emerge from the programme are very well qualified and respected, and have no problem finding their place in the workforce. We hold great store by the fact this significantly contributes to our low youth unemployment rates.

Eric Byrne (Dublin South Central, Labour)
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Should the Chair explain why people are going?

Paschal Donohoe (Dublin Central, Fine Gael)
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I was just about to explain. The Dáil has resumed. As a result, colleagues must attend either the Dáil, the Seanad or other committee meetings. No one is leaving out of discourtesy to our guests.

Eric Byrne (Dublin South Central, Labour)
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Deputy Durkan is leaving to chair a Dáil session, but it does not have a quorum. We should be there to allow Parliament to resume.

Professor Ursula Männle:

It is not a problem. We are all parliamentarians and are acutely aware of the constraints of parliamentary life. I thank members for their great interest in our affairs and problems. The breadth of the questions that have been asked show not just an interest in our affairs, but also the need for a good exchange at political level to get an understanding of the structures that are in place, the problems that we face and the ways in which each state tries to address them.

Paschal Donohoe (Dublin Central, Fine Gael)
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On behalf of the committee, I thank our guests for attending. I assure them that Germany's respect for and friendship with Ireland is reciprocated. We hope that the rest of their trip goes well.

Before I conclude the meeting, I remind the two of my colleagues who are present that, if they can make it, we have been invited to an EU Presidency conference tomorrow at Farmleigh on the western Baltics.