Brian Cowen (Laois-Offaly, Fianna Fail)

On the first matter raised by the Deputy regarding the question of employment, it is true that unemployment has risen within the European Union to a rate of 10%. Unfortunately, we expect to see unemployment peak, hopefully, during the course of the coming year as we seek to emerge from recession. We are seeing a fragile recovery at present and the stimulus packages remain in place, both at European and national level, until such time as recovery has been assured.

On the question of our stimulus package, I refer to my speech on the budget last week which outlined the considerable stimulus which is being provided by the Government in the current circumstances, rightly so given the impact the recession has had on the construction sector and other areas of the economy. If one considers that we have a current deficit of 11.75% for next year, some 5% of GNP or almost half the deficit is made up of the capital investment programme, which is the largest capital investment programme of any European government, including Belgium.

On the current side, expenditure includes investment in education and research and development. The State is spending some €600 million on science, technology and innovation which is leveraging a further €15 hundred million or €16 hundred million in private sector investment in research and development. This is reflected in the fact that 40% of IDA Ireland investment last year was in the area of research and development, which is an indication that Ireland is promoting itself and obtaining projects which will develop the knowledge economy and the new economy which we are all trying to achieve.

Across a range of domestic policies there is a stimulatory effect in what we are doing, in terms of capital investment or investment in education or research. Our commitment to enterprise support is evident in the fact that over €900 million was allocated to IDA Ireland and Enterprise Ireland. There will be an increase of up to 180,000 places in training, education and activation. All of these measures constitute major investments by the Government at a difficult time for the economy. The stimulus effect of the domestic policy framework which the Government is implementing is commensurate with and, in many cases, well advanced beyond what other countries have been able to provide.

The Deputy also referred to unemployment. The strategic issues which face the European Union, in terms of trying to promote employment, investment and recovery, refer back to the fact it has an ageing population and its productive base is less than other parts of the world. If one looks at the expected growth rates in the world economy, which aggregate at some 20%, it is estimated only 6% will be in the European Union. The need to evaluate the success or failures of the Lisbon strategy thus far, in terms of growth in jobs during the 1999 to 2009, will inform the wider economic strategic debate which will take place in Europe in 2010 as we prepare for the budgetary discussions which will start in 2011 in respect of 2013, when the next financial perspectives are to be agreed.

There are serious challenges and there is no sense of complacency amongst any heads of state of governments regarding the impact the current financial and economic crisis has had on employment. Before the recession, prior to 2008, there was a very record of job creation in the European Union. Much of the debate on the future budget allocations from Europe will involve deciding on the strategic areas in which Europe needs to invest. I am glad to say we have nominated, subject to parliamentary approval, Ms Maire Geoghegan-Quinn to the Commission. She will play an important role in the new Commission in a top priority area which has already been identified by President Barroso as one in which he will have a personal interest.

On the question of Gaza, the issue did not arise at the Council meeting to which the Deputy referred. It is a matter of constant discussion at the General Affairs Council of foreign ministers. The Minister, Deputy Martin, will take parliamentary questions later today and will address the issue in more detail.

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