Oireachtas Joint and Select Committees

Wednesday, 13 March 2019

Committee on Budgetary Oversight

Scrutiny of European Commission Country Report Ireland 2019 and European Semester

Photo of Tommy BroughanTommy Broughan (Dublin Bay North, Independent)
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I welcome the Deputy director general and his colleagues. Is the full report not, to some extent, a total cop-out in the context of our country having to deal with Brexit? We are following what is happening in the British Parliament on an hourly basis and we cannot believe that we are in the situation in which we find ourselves. We will have a debate on Brexit later this evening in which a number of us will speak. The report's projections are based on the status quo but surely that is a total cop-out. This is a cataclysmic event for our country because our economy is so intertwined with the British economy. The publication this morning of the suggested no-deal British tariffs has caused grave anxiety and anguish in our farming and business communities.

Mr. Martínez Mongay mentioned growth. In recent years we have the amazing growth figure of 7%, which is a lot higher than all of our EU partners but we have projections from the Central Bank, the Irish Fiscal Advisory Council and other bodies that brief us that it could collapse to zero by 2020. We are faced with an existential threat to our economy but this is not apparent in the report as far as I can see. It is as if this is not going to happen.

This morning, our Sinn Féin colleagues asked about a redress fund to support businesses and farmers. People have asked for the rainy day fund to be utilised in this regard. We almost certainly will have a second budget if there is a no-deal Brexit in the coming weeks.

Is it not the case, therefore, that this report does not address the challenge we face? That challenge is absolutely profound. A part of the other economy to which I refer is located on our island. We are so intertwined in every conceivable way with the UK and its destiny. This connection is literally within our families. This is the probably the biggest challenge in the 100 years since Independence and certainly since the Second World War. I do not see that reflected in the report.

The overall assessment at the end of the report draws attention to public and private debt. These levels remain elevated. We have our concerns about the levels of household debt, private sector debt and the national debt, which, of course, resulted from the imposition of certain polices on our country by the EU in the period after 2011. We are still facing that. In addition, we have to address the situation relating to Brexit. That seems to be the report's fundamental final assessment. We are very aware of the high levels of private debt. Much of it seems to relate to housing. Why is the Commission not prepared to state the case much more strongly and say that the housing market in this economy is dysfunctional? Many of us regard it as a completely dysfunctional market that is not delivering a fundamental, basic economic product at affordable prices for the public. Throughout our history, we have gone from boom to bust to boom and so on. It is the people we represent who suffer. Why has the Commission not been much more strong on that? Why does it not state that Ireland needs to sort out its dysfunctional housing market?

The report indicates that 79% of recommendations have been delivered on to some extent in different budgets and through the actions of various Governments since 2011. What stands out in the other 21% of recommendations that the Government has blithely ignored? On a brief final point, wealth inequality is addressed on page 9 of the report. Again, it is related to the property market. The Commission puts us among the most unequal countries in the 28 member states - 27 if Brexit happens. Is it not a very profound situation where we score so relatively badly in that area? Is this a situation the Commission should highlight more?

Those are some of my concerns about the report. I thank our guests for the report. It is very stimulating and interesting and echoes many of the briefings we get from our domestic agencies.