Brian Cowen (Laois-Offaly, Fianna Fail)

The context for this debate on the broad economic policy or direction of Europe is to do with making Europe, as a regional economy, far more competitive than it is today. The potential growth rates in Europe, as things currently stand, are less than will be anticipated in other regions of the world with which we are competing. The question of competitiveness and how we build the prospect for employment growth is based on economic growth.

It is true to say that in the aftermath of recession, particularly one as deep and as widespread as this, the question of achieving growth, in terms of the process of how growth is achieved, such as increasing demand which has been depleted and building up companies that are more competitive, has meant that people have had to look at their cost base, including their labour cost base. The question of how to increase productivity is a fundamental part of how economic growth is achieved. This involves investment in education and it also involves correction in the public finances and there is no way around that. We cannot create jobs in a vacuum and neither can we create jobs on the basis of continuing lagging of competitiveness in Europe vis-À-vis other regions of the world.

The Europe 2020 strategy is balanced in this respect, in my view. It speaks about social outcomes and social outputs as well as economic targets. The European model has been characteristic in that respect of not just looking at economic growth for its own sake, as would be the case in other countries such as China and India, for example, without any real effort being made to deal with social outcomes. The market economy we have in Europe provides for the prospect of social as well as economic improvements.

To answer the Deputy's question, with regard to member states, now that these strategies have been set out, we will set national targets as part of the process of preparing what are called national reform programmes to meet these set targets and these will be outlined in the coming months and years as we progress these targets. On the reason the headline targets are so few, one of the lessons to be learned from the Lisbon strategy has been that perhaps there were far too many targets and far too many boxes being ticked without the overall picture being considered. The headline targets with regard to employment, as has been referred to in an earlier question, aim to raise to 75% the employment rate for women, including through the greater participation of young people, older workers and low-skilled workers and the better integration of legal migrants.

The Deputy will be aware of the various other targets set in research and development, greenhouse gas emissions, renewables and education levels across Europe, etc. The targets also include the reduction of poverty in which it is aimed to lift at least 20 million people out of the risk of poverty and exclusion by the implementation of the strategy across the European Union.

The Deputy may disagree but, in my view, the Stability and Growth Pact is an absolute necessity, particularly in the context of the current volatility in the financial markets. It is questioned by others whether Europe has the political will to put public finances back in order. The consequences of not doing so have been very severe. We can look to other European countries where that has not happened and very serious adjustments have not only been contemplated but implemented.

With regard to the international development area, we seek to continue our serious commitment. Europe is the largest contributor of international aid in the world. In discussions leading up to the adoption of the strategy, I did not detect any lessening of the commitment. There was recognition that Europe can play a role in that area and that Governments must meet their commitments as best they can.

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