Joe Costello (Dublin Central, Labour)

I welcome the contribution made by the Taoiseach on the Council meeting of 19 and 20 March in Brussels. The spring summit built on the winter 2008 summit in addressing the financial and economic crisis. When we consider the package, including what was introduced on 19 and 20 March, it indicates the strong co-ordinated response from the EU to the crisis. It shows the level of commitment to solidarity that can be achieved and how valuable the EU is in the framework context for Ireland and other member states. Already a fiscal stimulus of €400 billion, 3.3% of the GDP, has been injected into the EU economy. In October €30 billion was provided from the European Investment Bank, from which small and medium-sized enterprises may borrow. At the summit, a further €75 billion was made available for borrowing by member states to meet a crisis situation where states were unable to meet the balance of payments. That is a bail out proposal of the last resort. Some €50 billion was announced for financial assistance for non-EU member states. The final package was a €5 billion package, including €110 million for the interconnector in Ireland. That is a sizeable combination of stimulus packages and infrastructure packages. I compliment the Irish Government and officials on presenting the interconnector plans at such an advanced stage that we are in a position to draw down this infrastructural funding when other countries may not be as prepared.

The interconnector is a valuable link. Bord Gáis is spending €4 billion on providing a transmission and distribution grid throughout the country. This is starting from and largely based around the Corrib gas field. At the same time, I am not sure Shell has made any contribution to that distribution and transmission link. This transmission grid link will cost the State €4 billion and the interconnector will allow transmission to the Continent if required. On that basis, does the Taoiseach not believe the support framework deserves some contribution from one of the major beneficiaries? This relates to the parties which discovered the Corrib gas and oil field, namely, Shell.

This compares very poorly to the amount of money invested in ocean energy. I understand there is approximately €26 million going into that. The grid itself costs €4 billion on the island of Ireland alone, with approximately €26 million going into the development of ocean energy, which could be a major sustainable energy supply in future for us.

The elephant in the room was still the Lisbon treaty. The loss of a confidence vote by Prime Minister's Topolanek's Czech Government has handed the initiative to the deeply Eurosceptic Czech President Vaclav Klaus and the Czech Senate as we move towards the final ratification process. That is not a very positive development.

The Taoiseach has stated this House has a major role to play on the Lisbon treaty but we would like to know when it will do so. The Government has already reneged on the commitment given to engage with the main Opposition parties in preparing the text of the legal guarantees and assurances that are directed to bolster the prospects of a successful second referendum. It is now three and a half months since the December summit and neither we nor the country is wiser about the Government's intentions. We do not know the date of the next referendum or the text of the referendum provisions and there is no sign of enabling legislation. There is no sign either of the Referendum Commission and there is no explanatory documentation in the public domain to inform the electorate.

It seems as though history is repeating itself, although the previous referendum was only in 2008. The Government's carelessness at that time was a major contributory factor in the loss of the first referendum and its lack of preparedness and carelessness could easily be the determining factor in the second referendum in 2009. In the growing current economic and political instability, it is crucial that every effort be made to keep Ireland at the heart of the European Union and I would like to see a more proactive response from the Government on the way forward at this time, with only a few short months left until the Irish electorate will be asked to vote again in a referendum.

With regard to the economic crisis, the Council commended the member states for their financial recapitalisation measures and it was agreed to continue to act in a co-ordinated fashion in accordance with European Commission guidelines. The Council also agreed that there was a need to reshape the macroeconomic global management and regulatory framework for financial markets and investment in financial institutions. Most importantly, it agreed that the high-level group on financial supervision, chaired by Jacques de Larosière, was the basis for regulatory and supervisory action.

It was also agreed that the first decision would be taken at the summer summit in June on a new supervisory and regulatory financial system. Under the report the member states must first put their own houses in order in accordance with strict guidelines. The EU will then establish three supervisory authorities to cover banking, investment and insurance institutions.

Although it is a detailed and complex document, the de Larosière report is a very valuable initiative as it marks the end of the neo-liberal light regulation policy which was pursued by the Commission and particularly by our own Commissioner McCreevy. This facilitated the destruction of many financial institutions and economies, with the loss of millions of jobs and the impoverishment of millions of people. This light regulatory mechanism permitted such events.

The availability of loans is a very important part of the approach by the European Union and I have previously raised this matter, to which the Taoiseach also referred. The European Council welcomed progress on the €30 billion fund made available to provide credit for small and medium-sized enterprises but there has not been much progress in Ireland in this regard. The fund was made available by the Commission on 3 October, approximately six months ago.

Ulster Bank, AIB and the Bank of Ireland have just got approval for €100 million each in loans that will be distributed over 18 months to small Irish businesses. That is a drop in the ocean and I cannot understand why it has taken so long to begin to draw down the funding. None of it has entered the economy yet. Bank of Scotland was able to draw down the money in December 2008 so why has it taken the Irish banks so long to draw down a cent of the money available for the hard-pressed small and medium-sized enterprises? One can consider that nearly two thirds of private sector employment and 50% of all jobs are in the small and medium-sized enterprise sector, which consists of over 800,000 workers, so it is unforgivable that Irish banks are neglecting it.

The recapitalisation of AIB and Bank of Ireland was completed yesterday with the transfer of €7 billion of taxpayers' money, following on from the €500 billion guarantee scheme. Surely the Government can now insist on the banks doing what they are supposed to. Instead of destroying the economy — which they have done in many ways — they should support it because of all the investment and support we have given them.

Small and medium-sized enterprises are unable to source a regular credit flow and the failure of banks to lend their own money or draw down some of the €30 billion waiting in the EIB is depriving small businesses of the lifeblood of their daily operation. It is a scandal and the private banking system has already brought the economy of this and many other countries to their knees through irresponsible lending and private greed.

This cannot be allowed to hold the country to ransom in this time of crisis. It is time to look at a new financial vehicle for protecting the interests of the economy and the citizen. It is time to reflect on the role played by the ACC and the ICC in ensuring the flow of credit to the agricultural and corporate sector in Ireland in the past. It is time to establish a State investment bank which would have a special role in lending to the small and medium-sized business sector and drawing down European Union funds when available. It seems the nationalised Anglo Irish Bank has the potential to be that vehicle. It must first be cleared of toxic debts and be reconfirmed as a State bank before being recapitalised and given the new role and, finally, a new name.

These were the main issues addressed at the meeting of the Council. The employment summit, which was briefly referred to, was meant to take place in May 2009 in Prague. It concerns the maintenance and creation of jobs and at the summit all the Heads of State would have participated. It now seems that the leaders will no longer attend the meeting and it will be downgraded to the Troika of countries attending and reporting back.

That is a major disappointment because we cannot speak of financial stimulus, recapitalisation and guarantees for banks unless we talk about protecting and creating jobs. That meeting is even more important than what was going on in the Council in March and which will continue with financial and regulatory measures in June. Will the Government seek to act as an honest broker or another major role in the issue? Given that the British and French Governments are the major players involved in downgrading this summit, Ireland should work with other small European states to ensure that it will be upgraded again and that the emphasis will once more be placed on employment, the creation and retention of jobs and the Lisbon Agenda.

An issue which exercised the House, the Joint Committee on European Affairs and the Joint Committee on Foreign Affairs was the siege of Gaza and the developments that have taken place in the interim. Was the situation in the Middle East discussed to any great extent by the European Council? None of the reports issued indicates whether it was discussed. If it was discussed, what determinations were reached in respect of it?

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