Bernard Durkan (Kildare North, Fine Gael)
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I welcome our guests, with whom we have many common causes, particularly in the agricultural arena. Ireland exports 90% of its produce, unlike our next door neighbour, which imports the great majority of its food produce.

We are not federalists. We do not believe in federalism but in close economic, social and political co-operation within the EU. We are concerned about our next door neighbour's intention to hold a referendum on its membership of the EU, which could result in Britain leaving the union. Some of us believe that could have devastating consequences for the European concept.

The original founding fathers of the modern Europe had a vision and I strongly believe - we have discussed this at our meetings on many occasions - in the need for Europe to retain its original vision. Departure from that vision can only mean going back to where Europe came from, and that is not a place to which we would want to go.

My colleague quite correctly referred to tax harmonisation. We should look at the United States, in which there are variations in taxation depending on the individual states. The same must apply to Europe. There are different demands and requirements in different countries, but there should be a general thrust towards taking a common direction and making progress with an emphasis on economic and fiscal controls and growth. Without that, the unanimity and cohesiveness that is required for the European project will diminish.

There is a danger of a two-tier Europe developing. That is not in the interest of anybody in Europe. It is not in the interests of the new member states, and it certainly is not in the interests of the existing member states. People who profess their adherence to that concept are wrong. They will be proven to be wrong.

We do not have a particular problem with the financial transaction tax, provided everybody applies it. Were it to apply right across the globe from Tokyo to the United States and right across Europe, particularly in the United Kingdom, which is reticent in that area, we would have no problem with it. We recognise that sometimes those in the private sector can find ways and means of circumnavigating the system to their advantage.

I wish to refer to the recent discussions on tax fraud. We want to state emphatically that the tax laws applied by Ireland are exactly as they profess. Our corporation tax rate is 12.5% and this is strictly enforced. All profits generated, whether through manufacturing or services, by foreign direct investment in this country are taxed at that rate. The effective rate is deemed to be about 1.5% less. I know that other European countries that profess to have a much higher corporation tax rate have in effect a much lower one. This has generated discussion in the United Kingdom and the United States in recent weeks. The discussion does not take account of the true facts. The situation is within the control of the states themselves: should states wish to tax companies from their countries on the profits they generate in other countries, they can do that. It is within the control of the United States or the United Kingdom to do so. In this country we tax companies on the basis of the goods and services manufactured here. Anything else they want to do after that is of no relevance in the Irish system of taxation.

We fully agree with the deepening of the economic and monetary union. The establishment of a common currency has had devastating consequences for countries throughout Europe. We thought the introduction of the euro throughout Europe meant the application of controls by the ECB in respect of borrowing and spending right across the eurozone states. There was no proper control and no supervision, and as a result we incurred appalling debt. My colleague has referred to measures taken by the previous and the current Governments. These cruel measures were inflicted on our people. In the past few days Ministers have repeated that taking such measures is not something they enjoy; however, they are having the beneficial effect of bringing our deficit down more rapidly than we thought, as my colleague has just said. Initially, we were worried that the burden imposed on the people of this country would break their resolve to withstand the shock of what we must deal with. We have achieved a considerable degree of success. The trade figures announced this morning show that our level of success is much greater than we had anticipated.

The country was criticised heavily when the economic bubble burst originally. We got a lot of unfair criticism in many quarters, which we did not deserve. Of course we were wrong. We hold up our hands and accept responsibility for wrongdoing. We set about rectifying that, but it is important that everybody else across Europe recognises that they also have responsibilities. If the powerful countries and the smaller countries work together we can recover the lost ground in a much more meaningful way than we might have thought just a few short years ago.