Bernard Durkan (Kildare North, Fine Gael)
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I welcome Deputy Paschal Donohoe who is present for the first time in his capacity as Minister of State with responsibility for European affairs. I wish him well in his role as Minister of State and congratulate him on his assessment of circumstances Europe-wide. I have a couple of questions that I believe need to be addressed.

At the June Council meeting the Heads of State agreed on the issue of youth unemployment and identified certain procedures in that regard. Will the Minister of State comment on the progress made because it affects us all in each member state? If possible, I would like to receive an update.

The investment plan for Europe reflects SMEs and the mobilisation of European Investment Bank resources. It has come to my attention recently that citizens are affected in this and other European countries by the fact that many SMEs have had their credit ratings seriously damaged. As we know, the damage to the credit rating of the country can seriously debilitate its ability to assert itself economically and make progress. The principal of a company or small business, for example, might have found the company’s credit rating damaged and might have had the business referred to the credit bureau, with the consequence that it could not make progress, borrow money or receive any consideration for five years. For five years the company must remain stagnant. This should be dealt with at national and European level. The Minister of State might consider this.

I particularly welcome the Minister of State’s appraisal of the enlargement process and the necessity to keep it on track. He might indicate the extent of progress on banking union because it was mentioned at the June Council meeting.

Ireland has made huge sacrifices in recent years, as the Chairman and every member knows. There has been considerable progress and improvement in recent years as a result of these sacrifices. I hope our European colleagues are fully conversant with the sacrifices made and the progress made to date. An example of progress is the net rate of job creation in the country in the past 12 months or so. It has been spectacular.

The Minister of State has commented on the possible withdrawal of the United Kingdom from the European Union in the aftermath of a referendum. What would be the consequences of such an outcome for the European Union in general, the special Ireland-UK relationship and the common travel area, etc.? What is the potential for damage to the very concept of the European Union in the event that one country is seen to withdraw from it?

In any such situation negotiations have to take place. As the Minister of State has said, each member state has the right to determine its own future in this regard. However, we are in a Union and there are consequences in the event of any fallout. If one country breaks from that Union the concept of the Union is gone and may be irreparably damaged. In my opinion it will have disastrous consequences for the UK. It will certainly have disastrous consequences for this country and for Northern Ireland, as well as for the European Union itself. The withdrawal of a major power from the Union will be hugely negative in terms of the perception of that Union worldwide.

I am sure the Minister of State and others have noticed that there is currently a growth in fervent nationalism within the EU, which is not conducive to a Union. As the Minister of State said, the EU's institutions constantly strive to make themselves more relevant to the electorate. However, it is equally essential that that nationalism be recognised and addressed in some way. If we do have the development of ultra-nationalism in the future there will be no Union because the two cannot co-exist. There could be further disastrous consequences. There are many issues that the EU and its institutions have to address in the near future rather than in the long term.