Dominic Hannigan (Meath East, Labour)
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The joint committee is now in public session. I remind Deputies O'Reilly and others to please switch off their mobile phones. I include those in the Gallery. It is not good enough to put them to silent mode and they must be switched off.

I welcome Deputy Paschal Donohoe, the Minister of State with responsibility for European Affairs. The Minister of State will be attending the General Affairs Council meeting in Brussels next Tuesday. The Council is expected to prepare the ground for the European Council meeting on 19 and 20 December 2013. The General Affairs Council will also continue preparations for next year's European Semester. Ireland will fully participate in the European Semester next year following the successful completion of our EU-IMF programme next month, as announced by the Taoiseach and the Tánaiste earlier today in the Dáil.

I invite the Minister of State to make his opening remarks.

Paschal Donohoe (Dublin Central, Fine Gael)
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I thank the Chairman for the opportunity to address the joint committee. I am delighted to be here and I always value the opportunity to brief the committee ahead of any of my attendance at the General Affairs Council. I will give the committee a report on events since the last meeting. I will also refer to questions from colleagues at the previous meeting. I will give an update on the pertinent points raised with me.

One of the key roles of the General Affairs Council is to support the development of the European Council agenda. Along with the Taoiseach I was pleased to brief the Dáil last week on the outcome of the October Council meeting, the agenda of which was particularly lengthy, including a dedicated and productive debate on the digital economy innovation and services.

It also covered, youth unemployment, banking union and the broader work currently under way on Economic and Monetary Union, as well as migration and other issues. We took an active part in the work of the Council, not least in the context of the priority which the Government accords to many of the matters that were discussed. A range of opinions always emerges in these debates but it is in the final conclusions that agreement is reached. A further priority for Ireland at the European Council was to flag the potential contribution of the digital sector to the effort to tackle youth unemployment. We were pleased that, as a result, this issue was also addressed at the Paris summit on youth unemployment, which the Taoiseach and the Minister for Social Protection, Deputy Burton, attended earlier this week.

Since our previous meeting, I have been continuing to build up relationships with my counterparts in other member states. I visited Rome and Athens at the end of October and had very productive discussions with Ministers in both cities. Greece and Italy are, for course, to two states which will hold the Presidency in 2014. I gained valuable insights in both capitals, particularly in the context of youth unemployment and migration issues. Last week I visited London and Edinburgh and met the my counterpart, the Minister of State at the Foreign & Commonwealth Office, Mr. David Lidington, MP. I will be continuing to reach out to my colleagues in all member states. It is essential to take every opportunity to ensure that Irish positions are understood at political level and that we keep up to date on the developing priorities and challenges for our partners.

I will now deal with next week's General Affairs Council. The agenda includes a number of important presentations by both the Commission and the Presidency. These will cover: the European Commission work programme for 2014; the roadmap on the implementation of the 2014 European semester; the Commission's annual growth survey for 2014; and a Presidency report on the implementation of European Council conclusions. The draft agenda for the December European Council will also be presented. Under any other business, my colleagues and I will also be briefed on the EU strategy for the Baltic Sea region as well as on a subsidiarity review carried out in the Netherlands. I am aware, of course, that members will be particularly interested in the latter.

The presentation of the Commission work programme is the first agenda item. As members will be aware, the background to this is that each year an annual work programme outlining how the European Commission President's political guidelines for the 2009 to 2014 will be implemented is published. The 2014 programme was published on 22 October and this will be the first opportunity to review it at political level. I understand that members had a meeting with Barbara Nolan, Head of the Commission Representation, earlier this week and I would be interested to hear any of their feedback on that. In reviewing the programme we must recognise that the term of the current Commission ends next year. It is no surprise, therefore, that the focus is inevitably on delivery and implementation. I am pleased that, very much in line with Ireland’s priorities, the programme is geared towards completing work on measures aimed at consolidating financial and economic stability and promoting growth and jobs. In a break from the usual format, the 2014 programme sets out which legislative files the Commission believes should be prioritised by the Council and the European Parliament. The aim is to achieve agreement on these before the European elections next May. I welcome this as a sensible and realistic approach. I especially welcome the continued focus of the Commission’s work programme on growth and jobs, with a particular emphasis on combating youth unemployment.

In the economic and financial area, the Commission has committed to completing the banking union, the urgency of which was emphasised by the European Council last week. Ireland supports the Commission in its drive for quick agreement on the single resolution mechanism, the bank recovery and resolution Directive and the deposit guarantee schemes. When I was last before the committee, Deputy Eric Byrne made reference to the digital market, its value and the work that is being done in respect of it. In that context, I am happy to report that great strides have been made to finalise many of the outstanding files for completing the Single Market, with particular reference to the digital Single Market. I welcome the strong focus in the work programme in respect of this matter. Important files in this area include e-identification and signatures, public procurement and e-invoicing in public procurement. I am also pleased to note that the work programme continues the Commission's focus on bilateral trade agreements, including the Transatlantic Trade and Investment Partnership, TTIP, negotiations with the US, which are of particular interest to Ireland.

A limited number of new initiatives for 2014 are also set out in the work programme. These include a labour mobility package and an initiative on resource efficiency and waste. While the current Commission accepts that these new proposals will not come to fruition before the end of its term, they may well contribute to the agenda and immediate priorities of the new Commission. Deputy Durkan has on many occasions referred to the status of industrial policy and made the point that while the development of the digital economy is welcome, it is not something in which every existing or potential worker in our overall economy will be able to participate. I am pleased that the list of new initiatives includes an industrial policy package. We fully support the need for a strong industrial base which can deliver a robust and thriving real economy for business and society. It is important to fully exploit the potential of the inter-linkages and mutual dependency between manufacturing and services in particular. In its work programme the Commission also commits itself to a wide range of preparatory and exploratory work to help prepare the ground for some key decisions to be taken in future years.

At our previous meeting Deputy Dara Murphy referred to regulatory competitiveness and the need to ensure that the regulations in place - with particular references to those relating to small and medium-sized companies - will be fit for purpose. In this regard, the Commission is taking a fresh look at existing legislation in order to ensure that it is fit for purpose. The work programme lists a range of legislative acts which the Commission aims to recast and simplify as part of its regulatory fitness programme, otherwise known as REFIT. This has emerged as a key priority for President Barroso and is something we very much welcome. It is essential that we continue to see real and timely progress in the reduction of regulatory burden, especially for SMEs and micro-enterprises.

The work programme also includes a long list of legislative proposals which the Commission has decided to withdraw. This is mainly due to the fact that these proposals have been overtaken by new ones, have become obsolete or in respect of which, in a few instances, agreement within Council or between the Council and Parliament has become impossible. Departments are still studying the text but overall our initial assessment of the Commission work programme 2014 is positive. What remains to be seen is how much can be achieved in the final year of this Commission's mandate, particularly in view of the time constraints created by the European Parliament elections at the end of May. I am, however, looking forward to the Commission’s presentation and I will be feeding this into our national considerations.

I again welcome the fact that this committee has already engaged with the Commission on the work programme. This is very positive in the context of the recent initiative for the planned identification of priorities for detailed scrutiny by all sectoral committees. In the past, a matter of discussion for this committee and others has revolved around when they should pitch their interventions. In other words, when should they engage with the Commission or the Parliament. There is little point engaging with them when everything is cast and when things are already happening. I welcome the fact that the committee - through Barbara Nolan - has already engaged with the Commission. I understand it has also extended an invitation to the Secretary General of the European Commission, Catherine Day. Again, this is a very good idea and I wish the committee success with it.

From a national as well as a strategic EU perspective, it is crucial that committees focus on the proposals which are of most relevance. This year is, of course, different because of the approaching end of term for the Commission. Nevertheless, the annual work programmes are an invaluable tool for committees seeking to engage effectively with EU policy making.

I will now deal with the second agenda item, namely the European semester. At our previous meeting, Deputy Kyne referred to this matter and posed a number of questions on it. I wish to provide him and other colleagues an update on the position in this regard in the context of the General Affairs Council. As many members will be aware, the European semester lies at the heart of the EU's stronger, post-crisis economic governance arrangements.

It is fundamentally about developing and implementing the Union’s jointly agreed priorities to support growth and jobs, underpinned by the enhanced Stability and Growth Pact and the Europe 2020 strategy. The General Affairs Council, GAC, will continue preparations for next year's European semester process informed by two important inputs, a presentation by the Commission of the annual growth survey 2014 and a presentation by the Presidency and the incoming Presidency of the Roadmap for the European Semester 2014.

The Commission produced the annual growth survey yesterday setting out the broad EU economic priorities for the year to come. This marks the first key step in the annual cycle. The main message of annual growth survey 2014 is that biggest challenge now facing Europe’s economy is how to sustain the recovery that is now under way. It presses strongly for a continued emphasis on five main priorities over the coming year: pursuing differentiated, growth-friendly fiscal consolidation; restoring lending to the economy; promoting growth and competitiveness for today and tomorrow; tackling unemployment and the social consequences of the crisis; and modernising public administration. This is an issue Deputy Crowe raised on the last occasion I was here. He made the point to me that we need to have enhanced focused on growth and on from where this growth will come. This is a discussion that will be taking place at the General Affairs Council and at other European meetings across the coming months in the context of this annual growth survey. This survey will now be the subject of intensive consideration with the Council and that will, in due course, inform the guidance from the spring European Council to member states on preparation of their national reform programmes and stability programme updates for submission next April.

Along with the annual growth survey, the Commission produced yesterday the alert mechanism report, which serves as an early warning on macroeconomic imbalances; the joint employment report, which assesses the social and employment situation; and the report on Single Market integration, which highlights both implementation gaps and priorities with greatest growth potential. I look forward to the Commission’s initial presentation of these matters at next week's meeting.

In so far as the Roadmap for the European Semester 2014 is concerned, I expect that the Presidency and the incoming Presidency will set clear timelines for managing the various stages of next year’s process. This will be informed by the synthesis report from the Lithuanian Presidency on lessons learned in 2013, as noted at the last General Affairs Council in October. This committee will recall that effective management of the third European semester cycle was an important focus for the Irish Presidency earlier this year. The key goal was to ensure that all relevant Council formations worked in a co-ordinated and consistent manner towards a thorough preparation of the March and June European Councils. Our overall emphasis was on improving dialogue and strengthening national ownership of proposed reform measures. This is an emphasis that is reinforced strongly by yesterday’s annual growth survey.

The important work taken forward by both the finance committee and European Union Affairs Committee of the Oireachtas has also provided a strong basis for exploring further ways in which the involvement of national parliaments in the European semester processes might be reinforced in the period ahead. I commend the committee on its initiative in this regard and look forward to working closely with its members to ensure a successful return by Ireland to full participation in the European semester 2014, underpinning an economic recovery that will be smart, sustainable and inclusive.

The main preparatory work for the next European Council will be done at the December General Affairs Council. For the benefit of colleagues, it is worth noting that the European Council meeting will take after the General Affairs Council meeting following next week's General Affairs Council meeting. That is where much of the discussion will place in relation to it. I will meet the committee to outline my briefing for that General Affairs Council meeting. Nonetheless next week’s meeting will consider the draft annotated agenda. This will include the Common Security and Defence Policy; economic and monetary union, including banking union; economic and social policy, including SME financing and taxation; enlargement; migration; and energy. It is immediately obvious that this is a heavy agenda which focuses on many important issues for Ireland. I am looking forward to next week’s discussion as an opportunity to get a sense of how preparations for the Council are proceeding and what colleagues' current views are. Detailed work is also being taken forward in the relevant Council formations, including ECOFIN, the Foreign Affairs Council and the Justice and Home Affairs Council.

The General Affairs Council will also receive a Presidency report on the implementation of European Council conclusions. We appreciate and support the Presidency’s work. Ireland’s position here is clear. We strongly believe – the Taoiseach has repeatedly made this point – the European Council has to be seen to deliver on its commitments if it is to be effective. We must all work to ensure the full implementation of European Council conclusions.

On a positive note, I am also very pleased to note that agreement has been reached on a new EU budget for 2014. It is currently expected that the agreement on budget 2014 and draft amending budget 9 will be approved at the General Affairs Council and then by the European Parliament on 20 November. This is the first annual budget agreed under the 2014-2020 multi-annual financial framework. It follows the Irish Presidency's earlier work in brokering a political agreement with the Parliament on the multi-annual financial framework. This budget implies an over 6% year-on-year reduction in the allocation for payments from the 2013 budget. The final package protects Irish interests, including Common Agricultural Payments payments and cohesion funding. It also frontloads youth unemployment and research and innovation moneys, from which Ireland will also be a beneficiary.

My colleague Minister of State, Deputy Brian Hayes, said after the ECOFIN Council that the agreement is a pragmatic one that responds to the needs of a Europe emerging from a painful period of contraction. Spending at EU level has to reflect this present reality while also meeting the future funding needs of the European Union.

I also want to let the committee know that, under any other business, the Dutch Government has requested an opportunity to brief the General Affairs Council on the outcome of its recently published subsidiarity and proportionality review, entitled Testing European Legislation for Subsidiarity and Proportionality – Dutch List of Points for Action. The review contains some food for thought, which is of interest to all member states, including Ireland. The October European Council conclusions also welcomed steps being taken by member states with the aim of better identifying excessively burdensome regulation and noted in this respect the subsidiarity and proportionality principles. I think this reflects some of the thinking we have seen from our colleagues in the Netherlands. Frans Timmermans, the Dutch Foreign Minister has written to me to draw attention to his country’s initiative. He is seeking to a promote a debate between member states and the institutions on how to achieve a sharper focus in EU initiative. In that context he is organising a seminar in the Hague in January on the theme, "Is subsidiarity relevant for better EU Governance?" I will listen with interest to Minister Timmermans’ outline of the Dutch review’s key findings at next week’s General Affairs Council. These are important issues which affect us all and it is important to take time to consider them.

I thank the Chairman for the opportunity to address the committee. I have made an effort to relate the work of next week's General Affairs Council and in the meetings to come to questions colleagues put to me at the last meeting and I will do my best to answer any new points or questions the members wish to put to me.

Dominic Hannigan (Meath East, Labour)
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I will start by asking a few questions and making a few comments. As the Minister of State will be aware, we attended the COSAC plenary session in Vilnius two weeks ago.

His absence was noted. He would have enjoyed the conversation, which was excellent. We spok a little about enlargement and the subject of Turkey came up again. There was a meeting last Monday week, 5 November, on accession. Could the Minister of State let us know how that went or what the outcome of it was? We talked about eastern partnerships, in particular in terms of Ukraine. We had a presentation from Pat Cox, who is one of the special rapporteurs for the European Parliament in the region. He explained the issues in terms of the current state of play and the hope that we will be able to enter an agreement in the near future, depending of course on what happens with Tymoshenko. Could the Minister of State give us an update on the position in that regard as well?

Reference was made to the annual growth survey which was published yesterday. Does the Government have a view on how we deal with the European semester? The annual growth survey will be covered by the committee and we have asked Catherine Day in to discuss the issue with us. She has agree to come in early February. It will also fall to this committee to consider the draft national reform programme, but then the Joint Committee on Finance, Public Expenditure and Reform will examine the draft stability programme. I am not sure which of us, or whether it will be both, will examine the country-specific recommendations and it is also unclear which committee will attend the Article 13 conferences. Does the Minister of State or the Government have a view on how we should proceed at an Oireachtas level with the implementation of the European semester?

The Minister of State mentioned the visit of Barbara Nolan from the Commission. We had a very fruitful discussion with her early this week. One of the questions we asked her was about Barroso’s State of the Union Address, the progress he is making with the proposals on EMU and political union, and what we would expect to see prior to the European elections. Does the Minister of State have any thoughts in that regard?

As the Minister of State is aware, the Commission published a document on trying to include social indicators within the semester process. In the coming weeks the committee will debate the type of indicators that should be included. We have a number of meetings set up with organisations such as Social Justice Ireland, the Irish National Organisation of the Unemployed and various other groups to talk about the type of indicators we need to see. The proposal as it stands is that we would have such indicators as long-term rates of unemployment and disposable income in households. To what use does the Minister of State think we could put the social indicators and how could they be used in practice?

The other matter on which I wish to comment is subsidiarity and the work being done by the Dutch Parliament. We had visitors from the Netherlands yesterday to discuss preparation for the Presidency and lessons learned from the Irish Presidency but we also took the opportunity to discuss issues such as subsidiarity. We noted the fact that in recent weeks the number of reasoned opinions from the Oireachtas has gone from two to four. We spoke about green cards, their views on democratic legitimacy and how we can improve it across the Union through the involvement of national parliaments. It will be interesting to hear the Minister of State’s views on subsidiarity in the context of the paper produced by the Netherlands.

The only other point which I wish to briefly mention before anyone else comments relates to the European Council meeting in December. The Minister of State will be aware that we talked in the past about bringing in contractual arrangements and associated solidarity mechanisms within the new budgetary processes. What is the progress in that regard and what is the current state of play in terms of thinking on it? That is all I have to say.

Paschal Donohoe (Dublin Central, Fine Gael)
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Before you move on, Chairman, could I make sure that I have a full list of the questions you raised so that I can do justice to them? The list includes enlargement, the European semester, the role of committees within that context, social indicators, the application of subsidiarity and the December European Council with reference to contracts for competitiveness.

Dominic Hannigan (Meath East, Labour)
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I think that is it.

Joe O'Reilly (Cavan-Monaghan, Fine Gael)
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I thank the Minister of State for his very comprehensive and helpful presentation. He said at the December GAERC meeting the work for the next European Council will be set out and he listed the agenda items. Energy is the last item on the list. An issue came up in conversation with friends recently that is troubling. While we all support green energy, emission policies and the reduction in emissions it is disturbing that Europe will now be in a disadvantaged position compared to America which is continuing with a policy position that is not based on the same decisions. For example, shale fracking is taking place there. They are using traditional energy sources with great success and acquiring it cheaply. Will that not greatly disadvantage Europe in the future? If China and other major landmasses across the world are ignoring the dangers of emissions and the greenhouse gas effect, and Europe is the only area adhering to such a policy, while it is a morally sustainable position will it not put us at a huge disadvantage in terms of economic development? I am interested in a comment from the Minister of State on the matter and how we square that circle. The matter will require much consideration in the future.

The Minister of State referred to Deputy Durkan’s persistent raising of indigenous manufacturing. I presume he will wish to comment himself. I support his view that while it is very important to develop our IT sector, as there is much activity in that regard, that there is room for traditional manufacturing. We might have taken our eye off the ball in that regard. I was interested in the importance the Minister of State attached to the issue in his introductory remarks. Could he comment further? How does he envisage such development in this country and across Europe? What could we do to get ourselves more actively involved in manufacturing? We have a cohort of young people who are not able to get into the IT sector because they do not have the competencies, interest or aptitude. Many young people were displaced from construction and traditional manufacturing could appeal to them. I would be interested in hearing a comment from the Minister of State on the matter.

My constituency colleague, Senator Reilly, has done much personal work which I happily acknowledge, on the youth guarantee scheme. How is that proceeding? Is the Minister of State confident that we can get it implemented and that we will get enough money from Europe to introduce and sustain it? There is the greatest requirement and moral imperative on all of us to do something about youth unemployment.

The Minister of State referred to SME financing in the agenda items. Any of us who do constituency work know it is an enormous issue. Will he comment on how optimistic he is that we will get something practical in place or get a return so that by this time next year an SME could more readily access cash than is the case today? That is an important issue. I welcome the report of the Minister of State and the degree to which he is focused on the right issues.

Seán Kyne (Galway West, Fine Gael)
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I welcome the Minister of State and his officials to the meeting. He mentioned that he met with the Minister of State, Mr. Lidington, MP, in London and Edinburgh last week. Were there informal discussions on the referendum in the United Kingdom on EU membership?

In terms of the work programme, the financial transaction tax was mentioned. I ask for an update on where we are going on that, and if there is any opposition in Dublin or London to it.

An interesting aspect of the work programme is the establishment of a European public prosecutor's office, of which I have not heard previously. I presume that will be involved in trans-European issues, whether it be fraud or other criminality. What role would the Director of Public Prosecutions have in that regard? If the Minister of State does not have information on it he might follow up on it at a future date.

A project called the Fourth Railway Package was mentioned. The point I wish to make is not particularly about railways but the basis of policy on infrastructural projects. I refer in particular to what is called the TEN-T project regarding transport and the transnational measures therein. In terms of what that means, if a project encompasses a number of companies, presumably they have advantages in terms of funding compared to Ireland, which has one land border with the United Kingdom via Northern Ireland. I am aware that under the TEN-T project approximately €26 billion is available over a number of years. It might be a small percentage of funding vis-à-vismatching funding from national Government but the project highlighted in Ireland is almost like a line from Belfast to Dublin to Cork, with the western area left out. I am concerned that we do not have the options to access that funding that other European countries have by virtue of the land border.

Eric Byrne (Dublin South Central, Labour)
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I thank the Minister for attending. I am proud we are sitting here as a collective dealing with European affairs against the backdrop of the announcement by the Taoiseach and the Tánaiste that Ireland will see the troika leave on 15 December and that we will no longer be seeking extra financial supports. As this is the Irish European affairs committee, it is important to convey not only to the Irish public but to the European public, and particularly to those other countries facing financial constraints and difficulties, that Ireland is extremely proud of that, notwithstanding the obligations placed on the sovereign by the European Union vis-à-vis the Central Bank to carry the buck for the bankers. Although it was unfair, this country has done a remarkable job in two and a half years and I want the message to go out to our European partners that Ireland has succeeded in regaining its sovereignty, that it is proud it has regained its sovereignty, and that it is happy to work alongside other countries in distressed financial straits with a view to reunifying the European project around fiscal stability. I am extremely proud, after two and a half years of difficulties for this country, that in December we can raise the tricolour for the second time under the new Republic.

As I am a member of the foreign affairs committee, many of the issues I will touch on have an international context. The Chairman mentioned the discussions with Turkey. I strongly support the Turkish and the Ukrainian relationship with Europe and I ask the Minister to outline how matters progressed at the conference on 5 November. The 22nd chapter was being opened with Turkey and I would advocate strongly that we should continue to show Turkey this country's commitment to its efforts in involving itself in a greater way with Europe.

I ask the Minister of State to give me an update on Ukraine, and what we read in the newspapers is positive in that regard. The problem for Ukraine is that Tymoshenko - a name that rolls off everybody's lips - was reputed to have done an unsustainable deal on energy with the Russians that bankrupted Ukraine. The issues of energy and Ukraine go hand in glove. Given the pressures Russia is applying on the peripheral states, be it Moldova, Ukraine or Armenia - it twisted the arms of the Armenians so much that I understand Armenia has pulled out of its developments with Europe - can we take it the Ukrainian Government is attempting to progress matters but it is under phenomenal pressure from Russia, which has threatened them - these are the winter months in Ukraine - that if it developed the relationship and does not adhere to the customs union the Russians want, it will cut off supplies? I ask that the Minister be sympathetic to the conditions prevailing in Ukraine and the pressures it is under.

I welcome that Albania is about to engage in the accession process. Having been to Albania, I was most impressed by its rate of development, given its history and its isolation in the past. It also should be encouraged.

The key areas and the challenges the European Council will have to confront are very interesting. The migration flows issue is coming very much into focus, particularly in the Mediterranean regions. In terms of the different roles, which I do not fully understand, is Frontex the agency of the European Union that will control migration? Is the Minister happy that it is sufficiently resourced? Could he explain Frontex's different functions with the European External Action Service because in the future we will have the debate about military security? We saw that the French had to act alone in going into Mali to release prisoners. I know that piracy and kidnapping in Africa, involving captains of ships, is common. Is the Minister of State satisfied that we can play a sufficient role with our partners in identifying the threats made against European interests by these pirates?

The youth guarantee is the key issue. The Minister of State might have some information but I understand the Minister for Social Protection, Deputy Burton, was in Europe discussing the youth guarantee. I hear figures of €100 million or €200 million may be available here to target youth projects. Will the Minster confirm the approximate figure? I believe the ballpark figure for Europe is €6 billion. Has the Minister any idea of the type of funding Ireland might be able to claim of that €6 billion?

I refer to the Minister's contribution. One of the main priorities of the coming year is modernising public administration. I do not know whether that is in reference to European or Irish public administration. We have just gone through two and a half years of the bailout and we had to restructure our entire society. Will the Minister of State tell me, under the modernisation of public administration as a priority aspect, if there is a view that Irish public administration is in further need of modernisation? Can the Minister give us a hint as to the area of modernisation that is required? I thank the Minister of State.

Bernard Durkan (Kildare North, Fine Gael)
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I welcome the Minister of State and thank him for his attendance and for his comprehensive report of the previous meeting.

I wish to focus on a couple of points. To what extent has the EU studied the areas most likely to contribute to economic recovery throughout the Union, particularly in terms of extended and increased employment? We all remember being told eight or nine years ago that the future would be the digital economy. While that is the case, it has appeared for some time that the traditional areas of employment are those that have delivered the most in the response to the economic downturn, both here and abroad. For example, Germany has been relying heavily on exports. To what extent has the EU studied this issue with a view to maximising employment potential and, as used to be said, lifting all boats on a rising tide?

Is each EU country able to access sufficiently the digital economy in order to capitalise on it in terms of employment creation? Ireland is not able to fully access its most modern elements. Be it Europe or this jurisdiction, we do not do enough forward planning. The problems with accessing the digital economy should have been dealt with ten years ago when plenty of resources were available to do so.

There is a particular need to ensure that state-of-the-art technology is available in all EU countries. We are dependent on one another. If there are gaps in the system in Ireland or its adjoining economies, they will show up in the extent to which the EU and its Single Market are competitive, for example, the degree to which we have state-of-the-art broadband. Ireland does not have it. Many people in my and my colleagues' constituencies, including not far from where we are, must roam around their buildings to find the hottest spots for accessing broadband. This is disgraceful and should not be the case. The EU should have identified the need for an emphasis on these issues years ago, not now when the problem is there for everyone to see.

I have welcomed the semester concept for a long time. It gives the EU the ability to assess progress under various headings on an ongoing basis. This would identify deficiencies or inefficiencies and the potential to maximise the benefits of the Single Market. Unless all of these factors fall into place simultaneously and we move together in the Union, the concept of the Single Market will fall by the wayside.

The Chairman will be glad to know that I will make my last point. I would be interested to know what our colleagues in the Netherlands will say about subsidiarity and proportionality. I have had views on these issues for some time. Previously, something was applied to every country on the basis that it suited one country. However, this does not follow, nor should it. It must be recognised that not every economy is starting from the same base or is in the same position. To capitalise on the benefits likely to accrue from the semester and the examination, it is necessary that we emphasise this point.

I could discuss other issues, but the Chairman will be glad to know I will not continue.

Paschal Donohoe (Dublin Central, Fine Gael)
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I thank all members for their questions and the Chairman for the opportunity to answer them. I asked whether I had captured everyone's points because I wanted to ensure that, when I appear at these committee meetings, which I do at least once per month, I could refer to the questions asked at previous meetings without needing to re-invent the wheel. If colleagues put their energies into deliberating on points, I want to register them and be able to revert to them each time.

I will begin with the Chairman's good self and some of the points he put to me. A review takes place each year at European Council level regarding the enlargement process. This will occur at the December European Council. The Chairman referred to Turkey. The Irish Presidency worked hard on that matter. Chapter 22 was opened up via this month's intergovernmental conference, IGC. We are supportive of that process. I have met the Turkish ambassador and discussed the matter with him. This relates to one of Deputy Byrne's points. Turkey understands our support for progress by the IGC on this chapter. This issue was agreed without discussion at the last General Affairs Council, in large part due to the work done by the Irish Government. If the Chairman is interested, I can provide a detailed update on where the work stands at future committee meetings, but the first meeting on commencing the work happened only a week ago.

As to the other countries relevant to this discussion, consideration will be given to Albania's candidate status at the December meeting. Deputy Byrne asked me about this situation. There also will be discussion on the initiation of accession negotiations with Macedonia. Bosnia-Herzegovina will be discussed at next Monday's Foreign Affairs Council, where we believe the emphasis will be on the need for people within its communities to do everything they can to take responsibility for the process. In the coming months, the EU will take stock of our work with them and what else can be done. Negotiations have begun on Kosovo's stabilisation and association process.

At the December European Council meeting, an overview will be taken of the total enlargement process, which leads on to the points made by the Chairman and Deputy Byrne about Ukraine. I will attend the partnership summit in Vilnius in two weeks' time. It will address this and a number of other issues. Ireland is disposed towards signing and supports the association agreement, but we want to see progress made on the issue of selective justice. We will examine closely what happens in that country during the coming weeks, but we are also conscious of the pressure on Ukraine and other countries and the work being undertaken by their leaders. The coming two weeks will be important, in that they will confirm what our position, and that of other members states, will be.

Regarding the European semester, I am supportive of the role of social indicators in gaining a more holistic assessment of where economies and societies stand within the European project.

For example, the Chairman referenced some potential indicators of unemployment. If we had given as much focus to the indicators of unemployment as have to those on debt sustainability or deficit levels, the progress that this country and other countries are beginning to make could have been accelerated. I strongly believe that the role of social indicators is to be valued in understanding and assessing where member states are within their economy and in terms of the social pressures they face.

Where I do have a concern and where I question their role would be when they gain the same level of equivalence as many of our economic indicators in terms of the macroeconomic imbalances process. I have used a huge amount of jargon in explaining all of that and I want to explain it to myself as much as to all of the members. As colleagues will be aware, the macroeconomic imbalances procedure is a process within the architecture of the European Union that asks countries to take recognition of how particular indicators are going, for example, deficit levels in their own national economies. If action is not taken or if those indicators go completely in the wrong directions, it is open to the European Union to use sanctions in order to ensure countries focus on these in the way they should. I will go back to the points Deputy Durkan made in that regard. My rationale for why it is important for measures such as that to be included within that process is because of the strong spill-over effect of many such matters where one country's deficit level can have a strong effect on the ability of another country to fund its deficit. I believe we should proceed carefully in extending the number of indicators that we use for that process because that will raise severe issues of what are referred to as pro-cyclical difficulties, in other words, where economies are already in difficulty one makes matters more difficult for them by potentially sanctioning them. That gets us into big questions also regarding the role of national parliaments and the role of national sovereignty in how they manage social issues. We need to move deliberately and carefully within this area to ensure that we come up with a process that reflects the concerns of many member states about issues such as national sovereignty, the role of parliaments and understanding that some matters need to be looked at in a different way because of their spill-over effect elsewhere.

I link that point directly into the Deputy's question on the contracts for competitiveness. While this is an issue that many countries have raised and have discussed, we are not yet at the point of the real substance of how all of this would work, for example, issues such as whether this would have an intergovernmental provenance, would it come out of arrangements between member states, what role would the Commission play in it, etc. In that regard, our view would be that we have agreed a large amount of measures, such as the Two Pack and the Six Pack, which are all about looking at the performance of national economies and their interaction with the European institutions, and we have also voted in and implemented the fiscal governance treaty. In the past 24 to 36 months, there is a degree of architecture on EMU that is sophisticated and nuanced. Our view at this stage is we should focus on making all of that work, particularly given that Ireland is about to move into the European Semester for the first time.

There were a couple of points Deputy Joe O'Reilly asked me about and I will go through each of them. On cash access for small and medium-sized companies, I agree entirely with the point Deputy Joe O'Reilly made. That is why we are focused on completing the banking union and making that a robust process. If it is easier for banks themselves to raise money, it should be easier for that money to be passed on via credit to the companies of which the Deputy spoke. That is also why Ireland has been to the forefront in pressing for the European Investment Bank, EIB, to play a more prominent role. We would argue that the future sources of credit within national economies may not be all commercial bank orientated. There may be a role for other entities and we would see the EIB playing a role in that. That is why we welcome the role the EIB is playing in the Luas BXD line, Grangegorman DIT and other initiatives across the country.

On the Deputy's question on the youth guarantee, in this regard the Minister for Social Welfare, Deputy Burton, is engaging in extensive consultation with national stakeholders, and particularly with the OECD. Given the expertise of the OECD in this area, I welcome this. By the end of this year, which is to say, in the coming weeks, a detailed implementation plan for that will be published. That will run alongside the work that the Government is already doing in programmes such as JobBridge, internship programmes and in trying to ensure that there are opportunities for our young people while there is not the level of employment for them that we would wish.

I also agree with Deputy Joe O'Reilly's point on manufacturing competitiveness. A Europe Council in the first half of next year - this is a point Deputy Durkan raised on many occasions - will focus in on this. We must have a model for economic growth that has many engines within it and that is diversified so that when something goes wrong in one part of it, we still have other parts of an economy that are capable of growing it. To state it in a colloquial way, we have seen what happens when all one's eggs are in one basket and we need to have more baskets. Manufacturing plays an important part in that.

On the Deputy's point about the trade-off that could occur between environmental sustainability and the national competitiveness of countries at any point in time, the reason I say it "could occur" is that I believe there are many other sources of manufacturing activity and economic activity onto which we are moving that will be environmentally and economically sustainable. This is something in which nation states must play a role. The European Union can support it. It can support it through enabling the development of cross-continent infrastructure. It can also support it through supporting the universities and colleges in giving them the funding they need to have research in place in the correct areas. Fundamentally, however, national governments themselves must identify those areas and take a leadership role in that regard.

On the questions Deputy Kyne posed, I will begin by reference to his question on the referendum in the United Kingdom and whether I raised this with my colleague, the Minister of State at the Foreign and Commonwealth Office, the Rt. Hon. Lidington, MP. I did not raise it directly in my meeting with him, although I have touched on it in other discussions with him. However, I have raised it publicly on three occasions: in the North of Ireland, in London and here in Dublin. I raised it in an address to the Institute of International and European Affairs, I raised it in an address in the Northern Ireland Assembly and I raised it substantively in a contribution I made to the British-Irish Parliamentary Assembly. In addition, I raised it on Friday afternoon last in an address to the University in Edinburgh. Our approach to all of that can be framed in terms of two particular areas. First, we appreciate and recognise the right of any other member state to have a debate regarding its membership and terms of the European Union, given the number of times that we ourselves have done so. Second, the Government strongly believes that Ireland's future lies within the European Union and within the development of our membership of the European Union, and a full participation within it.

I am carefully emphasising that point to our neighbours and other stakeholders.

There have been more discussions on FTT in recent months but the Irish position remains unchanged. We believe that the implementation of something like this can only happen when all countries are participating within it, both in Europe and beyond. We will not be participating within such a framework because it would put Europe at a disadvantage vis-à-viswhat will happen elsewhere. We have many people employed in our own banks who are contributing to the economic recovery and we will be cognisant of that in any discussions that take place on this matter.

I was asked where the fourth railway package currently stands. We must ensure that we are competitive within any such environment, given our status. The Department of transport is playing the lead role in that regard to ensure that our infrastructural projects can be funded if other new activities are taking place across the continent of Europe.

I agree with Deputy Byrne's point. In the earlier discussion, I was struck by the number of people who said we would never get out of the bail-out programme and that we were condemned to participating in it for generations to come. Through the public's sacrifice, this Government has shown that that is not the case. We have shown that an exit is possible and even though we were the second eurozone country to enter such an arrangement, we will be the first one to leave it.

As regards the parties that are now criticising or questioning our actions, I need hardly tell the Deputy that if our country had decided to apply for a precautionary credit line, the same people would still be criticising us for doing so. We made a decision based on the economic interests of our country and where we are now, due to the huge changes society has made. Our deficit levels are coming down strongly. We have already implemented a deficit reduction programme of 18% of our national income during a period when the global economy was in recession. Since World War II, few countries in the developed world have done the same.

We had options but made this decision which we believe is in the best interests of our country. That is the sole reason the Taoiseach, Tánaiste, the Minister for Finance and the Minister for Public Expenditure and Reform made that decision. I hope this is another important stepping stone in delivering the appreciable economic growth we want everyone to see. In that way, the terrible pressure people are under will be lightened.

I have dealt with the question raised about the Ukraine and I was also asked about the difference between Frontex and the EEAS. Frontex is the organisation that assesses the work of various member states in protecting borders. The European External Action Service is a different body, although some of its work has similar consequences. It basically ensures that EU member states have a source of representation abroad in non-EU states. I have seen this at first hand in Africa where the work of the EEAS allows a better co-ordination of activities within the European institutions as well as supporting the work of national embassies.

Piracy and military security are issues that arise consistently at meetings I attend on maritime security and related legal areas that need to be resolved. We expect to see further proposals on these matters. Some Irish personnel are operating in a training capacity in Somalia and they will be focusing on these kinds of issues which will become more pressing.

I have already touched on the youth guarantee. As regards modernising public administration, a lot of that work will focus on the European institutions. Another aspect will examine how digital services can allow citizens to deal and engage better with national administrations. We need to make more progress in how our public services are organised and delivered in Ireland. It is work that we must undertake ourselves anyhow, regardless of the EU. I am sure the European institutions will be of help in allowing us to understand how to do such work.

I have covered Deputy Durkan's point on engines for economic recovery. I recall that on the last occasion he also referred to the digital economy when he spoke about market fragmentation. Due to their economies and scale, various countries do not have access to the same levels of digital infrastructure that other economies may have. The European Commission has published proposals concerning the idea of a connected continent. We wish to ensure that the status of operators and regulators in smaller member states is protected and that their work is recognised. In order for that kind of digital innovation to take place, we will initially have to improve the level of digital infrastructure. In many cases the responsibility for that sits with national governments.

Bernard Durkan (Kildare North, Fine Gael)
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Yes.

Paschal Donohoe (Dublin Central, Fine Gael)
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I am at pains to avoid blaming European institutions if things are not being done well by national governments. We must undertake such work ourselves with the help of the European institutions. Ideas such as the connected continent will assist us in that regard.

As regards the role of national parliaments in the Semester process, as a former member of this committee for six years I know there should be a delineation between recommendations by the Executive and by Parliament. I would be glad to hear the Deputy's views on where committees should sit in this process. I know he is engaging in this matter already. Arising from discussions with colleagues about the Semester process, I have learned that if engagement does not happen early between national governments and the European institutions - particularly the Commission - and if the quality of bilateral discussion is not there, we will not get what is required from that process. I support that process because of the difficulty that Ireland is in. If it was just our own difficulty, I think we would have had the measure of it. However, we dealt with our difficulties at the same time as everybody else and the spillover effects cascaded in on top of us.

I believe that while the semester process is new and different and will ask questions of parliaments and governments all over the EU, it is the best way of dealing with that. The basic point is that if we stay inside the framework of the commitments we have made as a Government and respect the role of bodies like the Irish Fiscal Advisory Council, which is a domestic institution, all of our participation within the semester process should be positive and supportive.

In respect of the subsidiarity work the Netherlands is doing, the Deputy is correct in saying that everybody starts from the same place. Not everybody ends up in the same place. This is an area where I would be very interested to hear the thinking of our colleagues in the Dutch Government. They have undertaken an interesting process. They have very clearly positioned this as a work that is taking place within the treaties and they want to look at the application of them. I believe we should be open and engaged and look at the work they are doing. When they have given us an update - I gather the committee has already informally begun to understand some of this work - I will formally have an opportunity to get an update on it next Tuesday. When we hear about that work and what they are thinking - they have also organised a seminar on this area - we should reflect on it carefully because we should always be open to thinking about the relationship between member states and the institutions of the EU. We should be open to ensuring that the relationship that is there is in line with the treaties and the commitments we have given to our people in many referenda over the past number of years.

Dominic Hannigan (Meath East, Labour)
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I thank the Minister of State. I appreciate the time he has given us today and wish him the best at the GAERC meeting in Brussels next Tuesday. I suggest that we continue in public session because we do not have that much business if that is agreed? We have two meetings next week. One is on Wednesday morning when we will meet the Director General of the European Commission's Directorate-General for Employment, Social Affairs and Inclusion, Mr. Koos Richelle, to discuss the Commission's communication on the social dimension of the EMU. We also have a meeting on Thursday afternoon with the social partners - ICTU, Social Justice Ireland and the Irish National Organisation of the Unemployed - to discuss their reaction to the Commission's proposals.