Liam Twomey (Wexford, Fine Gael)
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Before we commence business, I remind members, officials and those in the Gallery that all mobile telephones must be switched off to avoid interference with the broadcasting of the meeting.

I welcome the Minister, Deputy Noonan, and his officials to the meeting. He will brief the committee on the January ECOFIN meeting and the upcoming one on 16 February. It is timely to discuss developments in Europe such as the introduction of the proposed strategic investment fund, the annual growth survey and alert mechanism, and the move towards fiscal co-ordination under the European Stability and Growth Pact.

I wish to advise witnesses that, by virtue of section 17(2)(l) of the Defamation Act 2009, they are protected by absolute privilege in respect of their evidence to this committee. However, if they are directed by the joint committee to cease giving evidence on a particular matter and they continue to do so, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.

I invite the Minister to make his opening statement.

Michael Noonan (Limerick City, Fine Gael)
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I thank the Chairman and committee members for inviting me to speak in advance of the next ECOFIN meeting on Tuesday, 17 February, in Brussels. Although it is little under a week away from the meeting, and the final agenda may change, it is a useful opportunity to discuss the issues before finance Ministers at the Council. This will be the second ECOFIN meeting under the Latvian EU Presidency, Latvia having taken over the Presidency for the first time from 1 January 2015. I understand the Latvian ambassador to Ireland already briefed the Joint Committee on European Union Affairs on 20 January on the Latvian priorities for its term.

I will also provide a brief overview of the proceedings of the January ECOFIN meeting which took place in Brussels on 27 January and at which I represented Ireland. The agenda was dominated by two main areas, investment and governance. As part of the formal agenda, several items were approved under the A list procedure - that is, without debate - including the final compromise text of the anti-money laundering directive and regulation. On the taxation side, the anti-abuse clause to the parents-subsidiary directive was adopted, along with a recommendation for a regulation amending Regulation (EC) No. 2532/98 concerning the powers of the European Central Bank to impose sanctions.

Ministers discussed the European Commission proposal for a regulation of the European Parliament and of the Council on the European Fund for Strategic Investment and amending Regulations (EU) No. 1291/2013 and (EU) No. 1316/2013, as detailed in the communication An Investment Plan for Europe: European Fund for Strategic Investments, which was published on 26 November 2014. It is an initiative mobilising €315 billion of additional investment from public and private sources over the period 2015 to 2017. The Presidency updated the Council on the establishment of the ad hocworking party on the regulation, which involves the establishment of a European fund for strategic investments. Ministers had a preliminary exchange of views. This is a key priority for the Latvian Presidency, the European Commission and all member states in delivering jobs and growth for the people of Europe.

ECOFIN noted a Presidency report, Current Legislative Proposals, on the state of play in negotiations on current financial services legislative proposals. This is a standard item at each Council and keeps Ministers appraised of the latest position on the individual financial services dossiers. Ministers were then given a presentation of the Latvian Presidency six-month work programme outlining priorities in the ECOFIN area. The European Commission also made a presentation on the communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on the Commission's 2015 work programme, entitled A New Start.

Minsters discussed two items under the heading of economic governance and commission communications. The first one related to the communication from the Commission on the review of the six-pack and two-pack, entitled Economic Governance Review: Report on the Application of Regulations (EU) Nos. 1173/201, 1174/2011, 175/2011, 1176/2011, 1177/2011, 472/2013 and 473/2013. The review found that, overall, the reformed governance framework introduced by this legislation proved effective, although it acknowledged that the period of the review was limited.

The second item is another communication from the Commission which clarifies the flexibility in the existing rules of the Stability and Growth Pact, entitled Making the Best Use of the Flexibility Within the Existing Rules of the Stability and Growth Pact.

The Commission presented both communications together. There was a broad-ranging discussion, and all parties agreed that progress had been made on these issues. The Council will come back to these in due course as the semester process unfolds. Finally, Ministers adopted the terms of reference under the agenda item Preparation of G20 Meeting of Finance Ministers and Central Bank Governors on 9-10 February 2015 in Istanbul.

That was a brief overview of last month's ECOFIN meeting. Now I will turn to the draft agenda for next week's ECOFIN meeting and provide an outline of the key issues that are likely to arise. Work is continuing at the level of officials, so there may still be changes between now and the meeting in terms of content and the order of the discussion. The draft agenda is divided into two parts. The first part of the agenda relates to legislative deliberations. These are items which are held in public. The A-list items are matters agreed without debate. At present there are no items under this heading. These will only become clear as the agenda is finalised.

The next item is Investment Plan for Europe: European Fund for Strategic Investments (First Reading). Ministers are scheduled to have a state of play discussion on this issue as a follow-up to that at the January ECOFIN. The Presidency will update the Council on the progress of the ad hocworking party on the regulation. Discussions are ongoing. The Presidency is aiming to have an agreed Council position on the regulation to establish the fund by the March ECOFIN meeting in order to meet the deadline of agreement on the issue with the European Parliament by the end of June.

The final item under this portion of the agenda is the item on current legislative proposals. This is the regular update from the Presidency on the financial services files. The second part of the agenda relates to the non-legislative activities. The first matter listed is the approval of the A-list items. This is without debate. We are not aware of any items under this heading at the moment. The next item listed is 2015 annual growth survey and the 2015 alert mechanism report. Ministers will have an exchange of views and adopt the draft Council conclusions on the 2015 annual growth survey and alert mechanism report. I understand that the chief economist of the Department briefed the committee on 21 January last on this matter. The publication of the annual growth survey kick-starts the annual cycle of the European semester. The annual growth survey identifies broad reform priorities for member states, to act as a foundation for the creation of growth and jobs. The 2015 survey has three pillars: a co-ordinated boost to investment, a renewed commitment to structural reforms, and fiscal responsibility. The reform priorities set out in the draft Council conclusions, once considered and agreed by ECOFIN, are expected to be endorsed by Heads of State and Government at the European Council in March.

The alert mechanism report identifies the member states for which further analysis in the form of an in-depth review is necessary in order to decide whether an imbalance in need of policy action exists. The draft conclusions note the Commission's intention to publish analytical work for the 16 member states whose readings suggest they are in need of further analysis. These are expected to be published later this month.

The next agenda item is a follow-up to the G20 meeting of finance Ministers and Central Bank Governors on 9-10 February 2015 in Istanbul. This is an information point. Terms of reference were adopted by the Council at the January ECOFIN and the item will provide an update on the discussion and outcome of the meeting.

Next on the agenda is a Council recommendation on the discharge procedure in respect of the implementation of the budget for 2013. The discharge procedure is the annual process whereby the Council makes a recommendation to the European Parliament on whether to grant discharge to the European Commission for the manner in which the annual budget has been spent. At ECOFIN, the Council will be asked to consider and endorse the outcome of Council working group and COREPER deliberations on the Council's discharge recommendation to the European Parliament on budget 2013. This is an annual item and requires a qualified majority vote.

Next up is the draft Council conclusions on the European budget guidelines for 2016. The budget guidelines are the Council's input to the Commission preparations for the 2016 budget proposal, reflecting the Council's priorities for the following year's budget. At ECOFIN, the Council is expected to endorse the draft guidelines.

Turning to the next item, first assessment report of the high level group on own resources, there will be a presentation by Mr. Mario Monti, chairman of the high level group on own resources, which was established with the aim of undertaking a general review of the EU own-resources system. That is the system by which the EU budget is financed. At ECOFIN, the group's chair will present the first assessment report, which was published last December. This initial assessment is a scene-setting document which, among other things, provides a background analysis of the current own-resources system, outlines the position of the various stakeholder institutions and highlights the issues to be considered in achieving reform in this area. It does not raise any issues of concern for Ireland.

The final item on the agenda is under the heading of any other business. No items are listed on the agenda under this heading at the moment.

I trust the Chairman found the summary of last month's ECOFIN meeting and the outline of this month's ECOFIN agenda informative. I believe they give a good insight into the current issues before the Council. I thank the committee for its attention and, at this point, I am happy to respond to any questions or observations members may have.

Michael McGrath (Cork South Central, Fianna Fail)
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I welcome the Minister and his officials and thank him for his opening statement on January's ECOFIN meeting and the ECOFIN plan for next week. Tomorrow's emergency Eurogroup meeting sounds much more exciting, but I guess we are not allowed to ask about that. We will start with ECOFIN, in any event.

On the investment plan for Europe, which was dealt with in January and is on the agenda again for next week's meeting, in an Irish context, the overall figure of €315 billion sounds very impressive. Much of this will come from the private sector and will be leveraged over a period of time. We have submitted a list of possible projects. Will the Minister give the committee an indication of when he would expect this fund to be up and running and investments to start flowing to Ireland from it?

Michael Noonan (Limerick City, Fine Gael)
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The authorities are anxious to proceed very quickly. It is known familiarly, as the Deputy knows, as the Juncker plan. Mr. Juncker, being the President, has a personal interest in advancing it quickly. The European Central Bank regards the investment programme as a very important parallel initiative to quantitative easing and believes that quantitative easing on its own would require an investment programme as well. I expect things to proceed very quickly after Tuesday's ECOFIN meeting. A national quota system is not applied to it. Initially, the timeframe was very short. We put in all the infrastructural projects which were available across different Departments and Government agencies. The next step for us is to prioritise and to select, from the very substantive list that was put in, the shovel-ready projects which would have most effect on growing our economy by providing essential infrastructure or by expanding on essential infrastructure. There is an indication that infrastructural projects with a trans-European relevance will be ones that continental Europe is interested in. However, it is possible to have analogous projects in a country such as Ireland which are compatible with the main thrust of the plan.

For example, if they proceed with the trans-European energy delivery project - that is not its correct name, but the Deputy understands what I mean - we could invest here in an energy project that would not necessarily be connected but would be geared to achieve similar objectives.

Michael McGrath (Cork South Central, Fianna Fail)
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What is the nature of the investments from the fund? Are they in the form of loans or equity? What form does the investment from this fund take?

Michael Noonan (Limerick City, Fine Gael)
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With the leveraging involved, some public private partnerships, PPPs, would be used, as well as loans and equity.

Michael McGrath (Cork South Central, Fianna Fail)
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Is there any detail yet on the terms attached to that package for investment?

Michael Noonan (Limerick City, Fine Gael)
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No, but with the interest rates being so low, the terms would have to be generous to make it worth our while.

Michael McGrath (Cork South Central, Fianna Fail)
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Is detail available on the level of matching funding required from a domestic point of view for individual projects?

Michael Noonan (Limerick City, Fine Gael)
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I cannot say yet. There is a double tap on the leveraging. Approximately €21 billion is being put in, and that is leveraged three times in the first instance by the EIB, which brings the amount to approximately €63 billion. Then that is leveraged five times to reach the figure of €315 billion. It is at the second stage of leveraging that the matching private sector funds would be involved. As this is Europe-wide, we would not necessarily be confined to Irish companies. If the projects are big enough, the matching funds could come from anywhere, except that they are private sector.

Michael McGrath (Cork South Central, Fianna Fail)
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Would the Minister hope to be a position to draw down some of the investment in 2015?

Michael Noonan (Limerick City, Fine Gael)
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Yes. The next step, activating it, is more a matter for the Minister for Public Expenditure and Reform, Deputy Howlin, and his Department, because it is something that would fit easily with an extension of a capital programme. Obviously, we will have an input. There will not be any secrets about it. I am sure the Minister, Deputy Howlin, will share information with the committee.

Michael McGrath (Cork South Central, Fianna Fail)
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Is there anything significant with regard to the draft Council conclusions on the European budget guidelines for 2016?

Michael Noonan (Limerick City, Fine Gael)
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No. There are two items there about budgets. It will review the 2014 budget. The way it normally works is that the creditor nations are critical and the expenditure nations are seeking expanded budgets. There is qualified majority voting; there will not be unanimity. Certain countries, which one can predict, will have a problem with overspending, while other countries, which one can predict as well, will have plans for additional expenditure.

Michael McGrath (Cork South Central, Fianna Fail)
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Are the draft guidelines for 2016 Europe-wide and not specific to individual countries at this stage?

Michael Noonan (Limerick City, Fine Gael)
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The Council recommendations for the 2016 budget guidelines are an important orientation of how member states would like to see next year's budget prepared. Ireland can support this Council recommendation, as it strikes the correct balance between investment in growth and job creation and recognising the requirement for fiscal prudence. This discussion takes place against the backdrop of severe economic challenges which still confront many member states. We welcome the fact that these guidelines, while acknowledging the current economic situation, also reflect the need to provide resources which would seek to boost growth, promote employment and enhance EU competitiveness. We concur with the view expressed by other member states that the provision of sufficient payment margin is prudent from a budgetary management perspective. Again, there are certain countries that wish to keep budgets very tight because they have the perspective of the people who pay for these things. Other countries want more expansion.

Michael McGrath (Cork South Central, Fianna Fail)
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The guidelines are EU-wide and not country-specific?

Michael Noonan (Limerick City, Fine Gael)
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Yes.

Michael McGrath (Cork South Central, Fianna Fail)
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The Minister said that the current financial services legislative proposals were mentioned in January and that he expected the matter to arise in February. To what does that relate?

Michael Noonan (Limerick City, Fine Gael)
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It relates to the various financial dossiers. They report progress on the progress they are making through Council or the European Parliament. It is just for information. Nothing has been brought to my attention that I need to alert the committee to at this meeting.

Michael McGrath (Cork South Central, Fianna Fail)
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We are at the eve of a very important Eurogroup meeting and I wish to take this opportunity to ask the Minister about it. It is an emergency meeting, given the serious situation facing the Greeks and the implications it could have for the wider eurozone. What is the Irish Government's position going to that meeting tomorrow in terms of the possible options?

Michael Noonan (Limerick City, Fine Gael)
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The Deputy is familiar with the sequence of events. There was an election in Greece, which Syriza, the main opposition party, won. It quickly formed a government, and a cabinet was put in place. Then the Prime Minister and the Minister for Finance embarked on a diplomatic initiative around Europe and visited the bigger countries, in particular, while representatives of the various European groups visited Athens. For example, Jeroen Dijsselbloem, the president of the Eurogroup, went to Athens. The Deputy will have seen newspaper reports of the various bilateral meetings that took place.

What is not clear at this stage is what the Greeks will ask. We know in general terms from the election campaign what they require, but they have not specifically put a request on the table. The Irish position is that we do not favour write-offs. Write-offs or write-downs will put a hole in the balance sheets of all 28 member states. There are other ways of meeting the objectives without writing off the capital amounts on the balance sheets. Beyond that, I will listen to the Greek proposals and treat them on their merits. The Irish Government has great sympathy for the Greek people and we hope that proposals will come forward that will help to bridge the gap that was clearly emerging between the larger European countries and the new Greek Government in the bilateral dialogues that took place last week, as reported in the business and political newspapers.

Michael McGrath (Cork South Central, Fianna Fail)
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There is a suggestion of a bridging agreement until June, extending the agreement which is due to end at the end of February by a number of months, to allow some time and breathing space for fuller negotiation of the Greek position. Would the Irish Government be open to that?

Michael Noonan (Limerick City, Fine Gael)
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I must wait to hear the proposal. One suggestion for a bridge is that the Greek authorities would be allowed to sell treasury bills up to the level of the bridge required. Originally they were talking about €15 billion, but it now appears the bridge would be more than that, because there has been fall-off in the collection of taxes. The European Central Bank has set a limit on the amount that can be raised on treasury bills. If that request is made, the first intervention in reply will be by the European Central Bank. It is a technical issue, so I am not quite sure. There are media reports that there will be a four-pillar approach, but I do not know whether that is correct. I do not wish to speculate on it. The Deputy is familiar with the suggestions that have been made in the newspapers, and that is one of them.

The German reports were that a programme is finishing in February, that the conditions of the programme have not been fulfilled by Greece and that Greece should fulfil those conditions. The negotiating space is to negotiate a new programme. That appears to be a rejection of the bridging proposal by one of the lead participants, but we must wait and see. There are various other suggestions around, but I do not know what weight the Greek Government would attach to them. However, they are attributed to the Greek Government. One of them is that it would be willing to comply with 70% of the reforms and it would like to replace the other 30% with structural reforms as designed by the OECD. The OECD would be generally recognised as the international authority that is best fitted to restructure economies and certain aspects of countries' economic approach. That is one of the pillars. There is also a suggestion that instead of having a primary surplus of 3%, as required at present, the Greeks will seek to have that reduced to 1.5%. Then there are proposals on debt reliefs and debt swaps of various types, including growth-linked bonds.

The European Central Bank is the first responder, but it seems there are technical difficulties immediately once one goes down that route. I do not know whether the newspaper and media reports are correct, but there is an indication that it is somewhere in that space. That might be for discussion tomorrow, but I have had no communication from the Greek authorities or any other group in Brussels that this is actually the space. There is one shot at it by what are usually informed people in the media.

Pearse Doherty (Donegal South West, Sinn Fein)
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Before I refer to the ECOFIN meeting, I would like to pick up on the last comment on the emergency Eurogroup meeting tomorrow. While none of us is aware of the Greeks' proposals, we are aware from what was said by the Greek Finance Minister that there will be firm proposals at the Eurogroup meeting tomorrow. We are also aware that the central demand is for a bridging programme and space to allow the new Greek Government to negotiate with its creditors.

In regard to the principle that a newly elected government be given space to negotiate and come up with proposals, is this something the Irish Government will support at the Eurogroup? I refer to the principle, not the specific recommendation because obviously its detail will inform the Minister. Does he support the concept and principle that space be given to the newly elected government to negotiate with its creditors?

Michael Noonan (Limerick City, Fine Gael)
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As I said, I have great sympathy for the Greek people and absolutely recognise, as anyone would, the mandate given to the new Greek Government by Greek voters and the Greek population, but I am holding my position until I hear the proposals because to speculate now might give absolutely the wrong steer, as the situation is very sensitive. I thought there would be more time, but things have moved very rapidly in a very short space of time. However, I do not think the discussions will conclude tomorrow. We will have the Eurogroup meeting, to be followed by the ECOFIN meeting on Monday and Tuesday next. It is more likely to come to a head at that stage, if it is to come to a head in the medium term.

As regards the Irish position on what space will be allowed to the Greek Government, it will depend on the nature of the mechanism to provide that space. If the position of many European colleagues is accepted that they will accept the conditionality of the existing programme and commit to complying with it, I am not too sure. In terms of bridging finance through Treasury bills, I can foresee getting into difficulty with the ECB, although I do not want to be categoric. The issue is sensitive and I do not want to reject any proposal before I see the detail, but, generally, as I said, I will have a sympathetic approach.

Pearse Doherty (Donegal South West, Sinn Fein)
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I appreciate the Minister's comments, in particular, on having a sympathetic approach. On positions he has articulated which possibly come from others on fulfilling the outstanding conditions under the programme, is it the Government's position that the programme, as constructed, is not capable of working? We are talking about a programme that has added €240 billion of debt to the Greek economy. Approximately 10% of this figure has found its way into Greek public services and so on, while the other 90% has gone towards servicing debt. Is it the Government's position that there needs to be change, but let us negotiate what that change should look like?

Michael Noonan (Limerick City, Fine Gael)
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A new government has been elected in Greece on a platform of change. As I said, I respect the mandate it has received. Obviously, what is at issue is the nature of that change. When we were elected in 2011, we were committed to making changes and we did so. We negotiated the changes and I put forward the proposition in Europe that, as far as I was concerned, it was one piece of the negotiations, that there would be rolling negotiations over the lifetime of the Government. As late as last September, we were still negotiating changes and got our colleagues to agree to refinancing the IMF loans, for example. The Deputy should see it, therefore, as one piece of the negotiations and as part of a process over a period of time. That is the space I think the Greek authorities should move into, but I do not know what is in their minds. They have said contradictory things and as such, I am not quite sure where they stand. There is a major humanitarian crisis emerging in Greece as it runs out of money, as poor people get poorer and revenue falls off. In talking about four pillars of negotiation there is a humanitarian crisis issue for Greece which I would like to see addressed.

Pearse Doherty (Donegal South West, Sinn Fein)
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We would all like to see it addressed. The Minister said he did not know what the Greek's proposals were. I am not sure I know what is the Government's position on the principles it will adopt. I put it to the Minister and without second-guessing-----

Michael Noonan (Limerick City, Fine Gael)
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I will outline for the Deputy two principles to help him. First, we will not favour any write-off of debt for the reasons I have given because if we write off debt, it will make a hole in everyone else's balance sheet. If we park debt - even if no interest is being paid on it - the debt is still owed on the balance sheet. Second, I want Greece to stay in the eurozone. I would not favour any strategy that would encourage, induce or drive Greece out of it.

Pearse Doherty (Donegal South West, Sinn Fein)
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Both positions are the same as those being articulated by the Greek Government, but I am not sure how far the Irish position is from the specifics-----

Michael Noonan (Limerick City, Fine Gael)
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We have had no contact with the Greek authorities at ministerial or ambassadorial level. I have had no contact.

Pearse Doherty (Donegal South West, Sinn Fein)
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They have made a public call for time, in the context of what was a genuine democratic revolution, to allow the new Greek Government to negotiate on behalf of its citizens. Without second-guessing the views of citizens across the State, I genuinely believe the vast majority of them would support allowing the Greek people time. The Minister is right to point out that there is a humanitarian crisis, but it did not emerge yesterday or after the election; it has been ongoing for quite a while. It is the result, although not primarily, of the extend and pretend nature of dealing with the crisis in Greece of loading more debt on debt. That is part of the problem and I hope a conclusion is reached at the Eurogroup, although I do not expect a final conclusion to be reached. I hope, however, that it will be the start of reaching a conclusion. The Irish Government should not be a bystander but a willing participant in trying to ensure Greek and Irish debts are brought to a sustainable level, or a more sustainable level in our case.

Michael Noonan (Limerick City, Fine Gael)
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it is also true that, as a sovereign nation, Greece is responsible for its own affairs and must take responsibility for the consequences of its actions.

Pearse Doherty (Donegal South West, Sinn Fein)
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As must other member states, including Ireland, which at ECOFIN decided time and again that this was the type of programme that would be foisted on Greece which was put in a corner and running out of money. It was about loading €240 billion of debt onto the economy. I do not think any economist believes - the Minister can ask the economist sitting beside him - Greece can pay back that debt. I have not heard one economist argue that point.

I would like to move on to discuss the ECOFIN meeting and the investment plan which will be co-funded from our own resources. Is that correct?

Michael Noonan (Limerick City, Fine Gael)
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Much of it will be private sector money as we leverage it. We will try to obtain sanction for priority projects and then fund them through loans and with equity from the figure of €310 billion.

Pearse Doherty (Donegal South West, Sinn Fein)
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In terms of our EUROSTAT accountancy statistics and so on, will it be counted as Government expenditure?

Michael Noonan (Limerick City, Fine Gael)
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Public private partnerships are off balance sheet. As the Italians began to negotiate flexibility in the expenditure ceilings under the new European fiscal rules, exemptions were made for essential infrastructure for countries the growth potential of which had not been realised.

Pearse Doherty (Donegal South West, Sinn Fein)
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That does not apply to Ireland.

Michael Noonan (Limerick City, Fine Gael)
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No, but we are looking for some flexibility in certain areas.

Pearse Doherty (Donegal South West, Sinn Fein)
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The position in Ireland is-----

Michael Noonan (Limerick City, Fine Gael)
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We will have to see how it works out because there are many moving parts.

Pearse Doherty (Donegal South West, Sinn Fein)
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Is the Minister suggesting negotiations on the expenditure ceilings are ongoing? Otherwise, the Government will not be able to invest using the Juncker moneys given the expenditure ceilings imposed on the State.

Michael Noonan (Limerick City, Fine Gael)
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There is no requirement for the use of own resources, but we could match with the Ireland Strategic Investment Fund, ISIF, and so on, with no impact on Government accounting.

Pearse Doherty (Donegal South West, Sinn Fein)
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How could that be done?

Michael Noonan (Limerick City, Fine Gael)
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Obviously, the full rules have not yet been developed. This is a new initiative, but we are hopeful we may have some leeway to invest without it being on the balance sheet.

Pearse Doherty (Donegal South West, Sinn Fein)
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There are negotiations taking place. I would like to clarify the issue which we discussed a couple of weeks ago. We cannot benefit from the investment clause at this time. Therefore, unless leeway is provided, we will be restricted in this investment by the expenditure ceilings.

Michael Noonan (Limerick City, Fine Gael)
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That is the space we are trying to widen. If it was to run through the capital programme, we would be confined. Since it is a new European initiative to generate growth and jobs, however, it would be unreasonable to deprive us of what was available in other countries.

Pearse Doherty (Donegal South West, Sinn Fein)
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Will there be white smoke tomorrow, or is this a long-term issue?

Michael Noonan (Limerick City, Fine Gael)
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It is a medium-term, not a long-term, issue.

Pearse Doherty (Donegal South West, Sinn Fein)
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I thank the Minister.

Kieran O'Donnell (Limerick City, Fine Gael)
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I wish to address the European fund for strategic investments. In his presentation the Minister spoke about meeting the deadline for agreement on the issue with the European Parliament by the end of June. When does he expect the fund to become operational and when will we see shovels turning in Ireland? The investments are not capped per country, but does the Minister have an estimate of the employment creation potential in Ireland?

Michael Noonan (Limerick City, Fine Gael)
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"No" is the answer to the Deputy's last question, but I hope that in the course of the year infrastructural projects will be under way.

Kieran O'Donnell (Limerick City, Fine Gael)
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When will the fund be operational? Is there a date on which Ireland will apply to the fund in respect of specific projects or have we already applied?

Michael Noonan (Limerick City, Fine Gael)
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It will happen mid-year, in July.

Kieran O'Donnell (Limerick City, Fine Gael)
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Must we formally apply at that time or have we already applied?

Michael Noonan (Limerick City, Fine Gael)
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We have submitted, as has every other European country, a list of appropriate infrastructural projects, from which we will list priorities in the next week or two. The priorities will be those projects that will contribute most to growth and job creation and those that are nearest to being shovel ready in order that they can be commenced quickly.

Kieran O'Donnell (Limerick City, Fine Gael)
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If I understand the Minister's comments, he foresees infrastructural projects getting under way in 2015. Is that a fair assessment?

Michael Noonan (Limerick City, Fine Gael)
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Yes. We hope to have projects under way in the course of 2015.

Kieran O'Donnell (Limerick City, Fine Gael)
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What types of project? Are we discussing road or school projects?

Michael Noonan (Limerick City, Fine Gael)
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We are discussing the usual list of projects. I can give the Deputy a summary of what has been included.

Kieran O'Donnell (Limerick City, Fine Gael)
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If the Minister has it.

Michael Noonan (Limerick City, Fine Gael)
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The list covers public and public-private projects, for example, energy union, with a total investment of €2.555 billion; knowledge and the digital economy; resources and the environment; transport; social infrastructure; and small to medium-sized enterprise, SME, lending. We believe we can have social housing included before final decisions are made.

Kieran O'Donnell (Limerick City, Fine Gael)
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I presume broadband provision is included in the knowledge and digital economy mix.

Michael Noonan (Limerick City, Fine Gael)
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Obviously.

Kieran O'Donnell (Limerick City, Fine Gael)
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I will revert to the situation in Greece, but what is the Minister's overview of how the issue will be progressed in the European set-up? The Minister will attend the Eurogroup meeting tomorrow and there is to be an ECOFIN meeting on Wednesday, 17 February. When decisions in Europe are made, how does he anticipate that they will deal with the issue? Where will the forks in the road be and when will decisions be made?

Michael Noonan (Limerick City, Fine Gael)
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The officials will meet tomorrow before the Eurogroup meeting. Their meeting will be chaired by Mr. Thomas Wieser, a significant person. We will be represented by Dr. Nicholas O'Brien, whom the committee has met. They also met last week and will have the first indication of what proposals may be put on the table. My current understanding is that everyone is waiting for a Greek initiative and proposal.

Kieran O'Donnell (Limerick City, Fine Gael)
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There will be a preliminary meeting before the Finance Ministers meet.

Michael Noonan (Limerick City, Fine Gael)
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It will inform the Eurogroup meeting which we expect to last for five hours, starting at 5 p.m. and finishing at 10 p.m. or 11 p.m.

Kieran O'Donnell (Limerick City, Fine Gael)
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Does the Minister anticipate the Greek Finance Minister tabling a formal proposal to the group?

Michael Noonan (Limerick City, Fine Gael)
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That is my understanding, although I do not know how formal it will be. He will be welcomed to the meeting and, early in its course, asked to state his case. It will be up to him to make a proposal.

There will be a Heads of State and Government meeting on Thursday at which the Taoiseach will represent us. On the following Monday there will be the normal monthly Eurogroup meeting. On Tuesday there will be an ECOFIN meeting. It seems that tomorrow's discussions will scope the problem, with a view to scoping possible solutions. The process will become more focused as the meetings proceed.

Kieran O'Donnell (Limerick City, Fine Gael)
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Is there a consensus in Europe? The Minister probably touched on this issue. Where will a consensus crystallise on the situation in Greece? Are there issues on which all of the member states involved will have a common viewpoint?

Michael Noonan (Limerick City, Fine Gael)
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I do not believe the diplomatic démarcheby the Greek Government was successful. People are waiting on Greece to make a proposal to determine whether there can be a development of consensus for negotiating purposes. Different statements have been made in different capitals by the Greek Prime Minister and Finance Minister. The Prime Minister returned home and addressed Parliament on Sunday in a full speech, but everything that was stated on Sunday did not match the detail of the dialogue in European capitals. I do not want to be definitive about anything because I am not sure what the Greek position is, but I hope it will be clarified tomorrow.

Kieran O'Donnell (Limerick City, Fine Gael)
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Does the Minister believe it might have been for the home as distinct from the European audience?

Michael Noonan (Limerick City, Fine Gael)
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I do not know; that is a matter for the Greek Government to decide.

Kieran O'Donnell (Limerick City, Fine Gael)
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Is the Minister optimistic a solution will be found?

Michael Noonan (Limerick City, Fine Gael)
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Today I am pessimistic.

Kieran O'Donnell (Limerick City, Fine Gael)
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What is the basis of the growing pessimism?

Michael Noonan (Limerick City, Fine Gael)
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From the various reports I am reading in the media and the briefing notes I receive, I do not see a basis for a solution emerging. Many of the proposals emanating are, on the face of it, technically impossible.

Kieran O'Donnell (Limerick City, Fine Gael)
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Must a solution be found in the face of the Greek crisis? The Minister spoke about wishing for Greece to remain within the eurozone. Where will the platform be found?

Michael Noonan (Limerick City, Fine Gael)
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It comes, in the first instance, from the Greek authorities stating what they want. The ECB and the Commission can then respond to this, followed by the views of member states.

Kieran O'Donnell (Limerick City, Fine Gael)
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Does the Minister anticipate that some outcome will have been reached by next Tuesday, after four meetings between Eurogroup Finance Ministers and Heads of State?

Michael Noonan (Limerick City, Fine Gael)
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We will know by next Tuesday evening whether it will get worse or better, but I am not in the business of predicting which way it will go.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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In some ways, I share the Minister's concern about the seriousness of the situation we are facing. I do not want to overdramatise it, but I cannot understand why the Minister and the Government are stabbing the Greek people in the back. In the process we are stabbing in the back all of the victims of failed austerity policies, including in this country, by refusing their initial proposal, which is very clear, that there be a debt conference along the lines of the post-war debt conference, from which Germany benefited, with a 50% write-down of debt and an extension of the rest of the debt for such a period that it effectively wrote it off. This allowed for the reconstruction of Germany and, essentially, the rebuilding of Europe. It was a very good proposal and I do not understand why the Minister did not support it.

Does the Minister accept that the election result in Greece stems from the fact that the policies pursued by the troika have been a disastrous failure in Greece? Is it not absolutely obvious that the policies have been a disastrous failure? We have seen the verdict of the Greek people against the background of a humanitarian crisis caused directly by austerity. It did not produce the growth the troika stated it would, led to a collapse of the economy and produced a humanitarian crisis, which is appalling. It turfed thousands of workers out of their jobs and slashed incomes, leaving 40% of young people in poverty and 26% unemployed. The Greek people have rightly said this policy is not working and that we need a radically different approach, saying the debt is unsustainable and needs to be written down and that we need an end to austerity policies. Does the Minister agree that they are right to say austerity has not worked? We should support them in saying, after six years, that it is clear it has not worked, that we need a different approach and that the proposal was a fair and reasonable one in order to start looking in different directions?

Michael Noonan (Limerick City, Fine Gael)
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There have been problems in a number of European countries. The programme was designed for Ireland and Ireland implemented it, including the vast bulk of the structural reforms in it. Portugal implemented the structural reforms in its programme; Spain implemented the structural reforms in its programme and Cyprus is implementing the structural reforms in its programme. Greece, however, did not implement the structural reforms in its programme and, as a result, its economy is not growing fast enough to get out of difficulty. It is fashionable to load all of the blame on the countries that were supplying money and credit to Greece, but there is a problem with the way the programme was implemented in Greece.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Is the Minister seriously suggesting the reason for the humanitarian crisis we are witnessing in Greece is it did not impose vigourously enough the troika programme?

Michael Noonan (Limerick City, Fine Gael)
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I am saying sovereign countries are responsible for running their own affairs and the welfare of their peoples. The Greek authorities, for a number of years, did not take the same actions as the Irish, Portuguese and Spanish authorities. Structural reform was necessary. Greece implemented quite a number of measures and the economy began to grow, but it is faltering. This is the fourth programme for it. Various adjustments were made to the previous three programmes. We are not starting at the beginning.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Is it not a fact that even the IMF has acknowledged that the adverse and disastrous impact of the programmes was far worse than that predicted? They had a devastating effect. The initial prediction was that imposing this level of austerity on Greece would lead to a return to growth much quicker and that the adverse effects would not be as severe as they turned out to be. The troika was wrong - it has had a devastating effect in Greece.

Michael Noonan (Limerick City, Fine Gael)
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Very often the IMF produces commentaries on programme countries, but it has never written off debt anywhere. The IMF programme in Greece runs until May 2016 and, if it wants to help Greece, it can reconstruct its programme for it. Let us talk straight. European countries have supported Greece. Ireland has supported it in a small way because this is also a programme country. There were faults in the programme which were identified. Over three programmes, attempts were made to correct them. However, it is a fallacy to say all the of fault lies with the creditor nations and that no fault lies with Greece. The Deputy probably knows what the situation is in Greece. If the Greek people had paid their taxes, they would not be faced with the same humanitarian crisis.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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If the rich had paid their taxes-----

Michael Noonan (Limerick City, Fine Gael)
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It is not just the rich, it is a lot wider than that.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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-----just like if the rich had paid their taxes in Ireland-----

Michael Noonan (Limerick City, Fine Gael)
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The theory of taxing the rich never lifted a country. There is a tranche of people who do not pay taxes in Greece and they avoid them if they want, but it is not helpful to get into this blame game. I would like to go to the meeting tomorrow disposed to help Greece if I can. However, there are difficulties.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Angela Merkel is saying there will be no deal without conditionality, while the Greek Government has stated it cannot continue the programme and that it has no mandate to continue it because of the election result. It is stating it cannot do it anymore because the public will not stand for it, while Angela Merkel is saying there will be no deal unless Greece continues the programme with conditionality.

Michael Noonan (Limerick City, Fine Gael)
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I do not know if that is Ms Merkel's position. That is what the Deputy is saying, but we will know tomorrow.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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The Minister himself said it, saying there would be no bridging finance deal without conditionality.

Michael Noonan (Limerick City, Fine Gael)
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We will know tomorrow what position different countries will take on this issue. What the Deputy is doing is unhelpful. He made a very emotive intervention at the start, talking about stabbing people in the back. If he thinks that will help anyone in Greece, it will not.

That does not help anyone in Greece. This is a sensitive issue, and the Deputy should hold his cool while we see how it works out.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I share the Minister's concern, as I noted earlier. We are at a very serious point. The Greek Finance Minister rightly stated that we could be facing a house of cards if Greece is forced out because the ECB, Angela Merkel and other Governments are insisting on this hard-line refusal of a write down and making any deal conditional on keeping with a programme that the Greek people simply can no longer take. I ask the Minister why we appear to be siding with Angela Merkel and the ECB rather than acknowledging that the Greeks have a point.

Michael Noonan (Limerick City, Fine Gael)
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I never said we were siding with anybody. I said that we are pursuing our own interests and that our two red lines are no write-downs and that we want to keep Greece in the eurozone.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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On the one hand, the Minister is saying "no write-downs", which is what the Greeks want, but on the other, the Minister for Agriculture, Food and the Marine said that if the Greeks did get a write-down we would want one too. We are not going to help them to get a write-down but we want to benefit from any write-down they achieve. Is that not a shameful position to take?

Michael Noonan (Limerick City, Fine Gael)
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That is the opinion of the Minister, Deputy Coveney; it is not the Government's position.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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If Greece proposes a debt conference and a deal similar to that agreed for Germany at the end of the Second World War, will the Minister say "No way"?

Michael Noonan (Limerick City, Fine Gael)
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I will tell the Deputy my position, which I outlined to his colleagues earlier. I am going to a meeting tomorrow. I outlined to him our red lines, which are very limited, but I want to hear the Greek proposal. Since I read the election manifesto of the party that is now in power in Greece, there has been no mention by the Greek Prime Minister or Finance Minister, or anybody else in the Administration, of a debt conference. The only place I saw it mentioned was in the party's election manifesto. They have not mentioned a debt conference in any of their bilaterals as reported in the international press or in my briefing notes. Like other programme countries, they are quite prepared to use the Eurogroup and ECOFIN as the forum for their negotiations. I am not going to put a debt conference on the table when the Greeks have not done so.

Sean Barrett (Independent)
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The Minister is welcome, as always. I wonder whether the fault is the lack of an exit mechanism in the euro. He made a comment several years ago about feta cheese which was taken as humour, whereas I think his point was that Greece needs to export more. It is stuck at a fixed exchange rate compared to the drachma. I predict that this problem will recur despite efforts to make up for it via massive transfers. The lack of an exit mechanism may be a design fault in the euro. Apparently a state can leave the EU but it cannot leave the currency. Greece's problem is that it is locked into a relationship in which it cannot survive.

Last Friday I attended a meeting in TCD which Deputy Boyd Barrett addressed. I was only in the congregation, but it was interesting. One of the speakers was from Syriza and some of her comments were relevant to the Irish case. Syriza recognises that the Greek State has also failed and the speaker contended that the left has to confront the State when it fails. The Minister may hear some interesting insights at tomorrow's meeting in regard to how this issue is viewed. This is related to some of his comments about tax collection and the volume of directives with regard to enterprise. The speaker hinted that Greece is a bad country in which to do business.

The Minister referred to 16 member states which may be in need of further analysis. Was he referring to difficulties in economic policies for those states?

Michael Noonan (Limerick City, Fine Gael)
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Some of these are legacy issues. We had six last year and four this year. They are quite predictable. The indicators are the size of the national debt, the amount of personal debt, the level of unemployment and the net balance of payments or international investment position.

Sean Barrett (Independent)
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It is worrying to hear that 16 countries are in trouble of some kind.

Michael Noonan (Limerick City, Fine Gael)
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They are in trouble of some kind when one considers the low growth rates and high unemployment levels across Europe. In many of the Mediterranean countries the problem is high levels of unemployment, including in particular youth unemployment. There is no doubt they are real problems.

Sean Barrett (Independent)
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Could there be a more open cost-benefit analysis of the strategic investment plans? When they do not work they leave the debt mountain in place and we do not get the increase in GDP. There is a "free money from Brussels" syndrome in spending that money. I hope there is a high standard of project appraisal to prevent a recurrence.

The anti-money-laundering directive and the anti-abuse clauses for parent and subsidiary companies are pertinent in light of the reports on HSBC's involvement in tax avoidance and evasion. It is important that, at a time when public morale is low in regard to taxation, banks and accountancy firms are not allowed to shunt the burden onto average people. Margaret Hodge, MP, the chair of the Public Accounts Committee in the UK, pointed out that some of the financial institutions which not long ago were knocking on the UK Treasury's door to ask for a bailout are now facilitating tax avoidance in a number of countries, at great cost to the rest of society but substantial profits for the banks.

Michael Noonan (Limerick City, Fine Gael)
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I fully share the Senator's views on tax evasion and tax avoidance. We are doing a fairly good job in Ireland on eliminating tax evasion. Whenever I get a request from the Revenue Commissioners to plug holes that are being exploited by tax advisers, I legislate to plug those holes. Europe is also making progress on the issue, with automatic exchange of information on deposits in banks. Countries such as Switzerland are also being drawn in. A range of initiatives is being taken, but tax avoidance is a big industry, whether for corporate tax or other forms of taxation.

We will be carrying out a cost benefit analysis on the projects we submit for funding, but the European Investment Bank will also be assessing projects from a risk point of view and their capacity to pay a commercial return. It will be the organiser and deliverer of the investment fund. The fund is envisaged as a companion initiative to quantitative easing. Europe needs investment if it is to create jobs and cut into high unemployment levels, particularly youth unemployment, and to build the modern infrastructure required for a continent that is competing with the United States, China and many of the emerging nations. While €350 billion seems a massive sum, it is small by global comparisons. I hope the various initiatives will work together because we have gone through a very fallow period in Europe and we need things to start working. Almost everything has been tried at this stage.

Liam Twomey (Wexford, Fine Gael)
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Are we expected to submit under headings? For example, I consider the major infrastructure projects in County Wexford to include the Enniscorthy and New Ross bypasses.

They are both on a Euroroute - E01 and E02 - with full planning permission and ready for funding.

Michael Noonan (Limerick City, Fine Gael)
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Are these specific projects?

Liam Twomey (Wexford, Fine Gael)
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Yes, they could be specific projects.

Michael Noonan (Limerick City, Fine Gael)
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Is there a list of specific projects? The demand came quickly to submit projects; there were only a couple of weeks. We took everything across Departments and in agencies.

Liam Twomey (Wexford, Fine Gael)
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Anything that was ready to go?

Michael Noonan (Limerick City, Fine Gael)
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Some projects were not ready to go, but at least there were proposals that were formulated and costed, to a degree.

Liam Twomey (Wexford, Fine Gael)
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Regarding the digital economy, the broadband issue is the most obvious one. It is early days yet in our plan for that.

Michael Noonan (Limerick City, Fine Gael)
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We must prioritise now what we really want from that list for consideration. It will only be a fraction of what was put in.

Liam Twomey (Wexford, Fine Gael)
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I was in the European Parliament last week. Many people from all countries - not just Germany - feel that Greece was let down by its elected representatives, including the present government, in the promises made to the Greek people. We could have a more open debate about what happened there rather than just scoring political points.

Michael Noonan (Limerick City, Fine Gael)
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One does not wish to typecast an entire population. There are many people trying extraordinarily hard to sort things out. It is a very difficult model. We must remember there was civil war in Greece until 1949. When our Civil War was over there was conflict between the combatants, but in Greece there were a lot of consequences for the losing side. People in the public service were forced out, and a lot of people emigrated. Nearly half a million Greek communists settled in Bulgaria. There was huge emigration to the United States, Canada and Australia. As a result of what happened in the 1950s, Melbourne is the second biggest Greek city in the world after Athens. When the first left-wing government formed in 1980 under Mr. Papandreou senior, its policies also had consequences because he attempted to right the wrongs of what had happened after the civil war. The civil service and the public sector were increased dramatically so he could have his own supporters in there. Our Civil War was not as extensive, but by 1924 the sons of opposing combatants were playing on the same Gaelic football teams, and people were doing business together and were intermarrying. That is not the way it happened in Greece. The Greeks had a difficult past, interrupted by the colonels taking over. There is a long tradition and we should not be judgmental. We should do our best to be of assistance, but we have our own priorities also. That is the point I am making. It is not lack of sympathy for Greece, but we are only barely out of the woods.

Liam Twomey (Wexford, Fine Gael)
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Are there any supplementary questions?

Pearse Doherty (Donegal South West, Sinn Fein)
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I wish to make a point. When you have an issue of insolvency, what must be done is to restructure or write down the debt. The Minister has just taken one of the solutions off the table. I think the Minister should go into the meeting tomorrow with an open mind.

Michael Noonan (Limerick City, Fine Gael)
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The Greek authorities have made it clear they do not want write-downs. That is clear from the exchanges across Europe.

Pearse Doherty (Donegal South West, Sinn Fein)
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I understand, but the Minister has made a write-down a red-line issue. I think that is a mistake in an insolvency situation, because the second red-line issue is whether Greece stays in the eurozone. There is a real danger that other partners in Europe could force a situation in which it is impossible for Greece to stay in the eurozone despite the commitment of its Government to stay. If the Minister is going in with an open mind, he should not have a red-line issue. The projects submitted for the investment programme, which will be leveraged about 15 times to come to that level, were done haphazardly.

Michael Noonan (Limerick City, Fine Gael)
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It was done in a hurry.

Pearse Doherty (Donegal South West, Sinn Fein)
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Ireland was the only member state in Europe that did not provide costs for each proposal. They were not assessed centrally; they were just lists coming from Departments. We acknowledge and understand this, but has there been any central assessment of the proposals?

Michael Noonan (Limerick City, Fine Gael)
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The projects are publicly available on the Commission and the European Investment Bank websites. We have costings but did not publish them because of commercial sensitivity. We will be looking for tenders.

Pearse Doherty (Donegal South West, Sinn Fein)
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Are we the only country in Europe not to publish the costings? Is there no commercial sensitivity across the rest of the European Union?

Michael Noonan (Limerick City, Fine Gael)
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I do not know what costings they put up. They could have been indicative figures.

Michael McGrath (Cork South Central, Fianna Fail)
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The Minister referred to significant comments made by the Minister for Agriculture, Food and the Marine, Deputy Coveney, on national radio yesterday, to the effect that if Greece got a new, better deal, Ireland would be looking for similar terms. Is that not the position of the Government?

Michael Noonan (Limerick City, Fine Gael)
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The Government has not made a decision to that effect. There are circumstances in which measures may be conceded to Greece or designed for Greece which would run to our disadvantage. For example, any indication that our debt is not sustainable could run against our best interests. This morning we were getting ten-year money on the secondary market at 1.20%, while the rate on Greek ten-year debt was 10.67%. We are not in the same space.

Liam Twomey (Wexford, Fine Gael)
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I thank the Minister for giving us his time. The Minister has a prior engagement and must leave us now.