Brendan Howlin (Wexford, Labour)

The Taoiseach indicated four areas were covered at last week's European Council meeting, the most important of which, and the one which received most attention, was the report of the task force on economic governance. It was established by a decision of the Council in March this year when economic matters were not as bad as they are now. Mr. Van Rompuy, the Commission and the European Central Bank focused on important matters which were set out in the task force's report.

The task force aims to increase fiscal discipline, something which we know all about, and to broaden economic surveillance. While the word "surveillance" is a discordant one, we must ensure every member state is playing according to the rules and, specifically, data on returns to the Commission are actual and real. As we saw with the unfortunate experience of our Greek colleagues, their previous administration's returns could not be relied upon to be a fair and accurate assessment of Greek economic performance.

The task force also aims to deepen co-operation, which I welcome, and establish a robust framework for crisis management and stronger institutions. While no one will have a difficulty with these objectives, the difficulty is how they are to be implemented. As always, the devil is in the detail. We must wait until later when the specifics are brought forward to see exactly the reporting mechanisms in question and the degree of and timing for the oversight of each eurozone member state's budgetary requirements. We also must wait to see the specific nature and architecture of these institutions. It is interesting the European Union has used the term "crisis management" in all of this. It does not shy away from the fact we are living through an economic crisis.

In advance of the summit, there was much comment about some of the remarks made by the German Chancellor, Ms Merkel, many with which I agree. I agree with her that it should not only be the taxpayer who should bear the costs of any future banking crisis. The same logic applies to the current crisis too. Ms Merkel went on to say that there was a justified desire to see that not only taxpayers but private investors should be liable. In so far as she has that viewpoint, I agree with her.

However, it was unfortunate that a joint Franco-German statement was made at Deauville in advance of the European Council meeting. It gave the impression that there was a central core, particularly of the eurozone states, that was going to drive a specific agenda that suited their needs, rather than the collegiate approach that has underpinned the basis of the European Union from its inception. The mechanisms they are talking about include more extreme proposals that the Taoiseach says were discussed, but which did not enjoy very much support, although they are still on the table, such as denying voting rights. It is unfortunate that level of debate was put on the table.

I wish to mention our own domestic situation on two fronts. In terms of fiscal discipline we know what we have to do and we know how Herculean a task that will be for us. We also know that we need the support and help of the European institutions, most specifically the European Central Bank which has been extraordinarily helpful to us in recent times. It is bizarre that some of the comments being made - even by people appointed to important State boards, to the effect that it would be desirable for us to withdraw from the euro - could have any currency, if the House will pardon the use of that word, in the current debate. We need the euro and the support of the European Central Bank. It is unhelpful to us currently for talk of withdrawing from the euro to be made, particularly by people who have been given a new economic role in our State.

We had difficulty in terms of the Lisbon treaty being accepted by the people of this country. There was a plethora of reasons for that, which were extraneous to the contents of the treaty. However, we did have a pact with the people in the course of those deliberations to the effect that this was the last round of institutional change and we were not going back. We were actually going on to bread-and-butter issues such as jobs, the creation of stable growth, a better environment and better social institutions within the Union. That was our next phase of work and focus, so it is somewhat jarring that we are back to the suggestion that we need to tweak institutional matters again.

It is understandable that the Germans have a difficulty concerning their own courts. We are mindful of our courts and our Constitution, so Germany must be mindful also of its corresponding judicial and legal framework. I fully accept the German concern that the existence of a stabilisation mechanism and funding system needs to be legally underpinned to be in accordance with German law. While I do not want to overstate that point, because I am not a legal expert in either domestic and international law, I do understand the concerns the German authorities have expressed on that front. We must be mindful of those concerns.

Given the Taoiseach's comments in Brussels last week and his statement to the House today, I understand that it must be done in a way that does not give rise to concerns that, when Germany or France require it, we are unravelling the settled institutional mechanisms that we had such difficulty in framing and getting passed in the second Lisbon treaty vote here.

This morning, people have been watching the election results coming in from the United States. Some two years ago, we were all carried on a wave of euphoria when President Obama was elected. He spoke a poetic rhetoric of change and gave people heightened expectations in terms of what could be done, certainly in the short term. The disappointment of that is now evident with the outcome of the congressional elections in the United States. I do not believe the American people are all that different from the people of this jurisdiction, particularly as it is clear there is a clamour for a balanced budget in the United States, but not for its own sake. If we are to believe the commentariat in the United States, what is at the core of the conclusions is the need for jobs. There is also fear because US unemployment has increased by more than 2% in the last two years, despite the message of hope that was presented.

One of my fears concerning the published conclusions of last week's European Council meeting is that they are heavy on the fiscal focus, as virtually all our debates in this House have been over a long period. There is every good reason for that because if the fiscal parameters in which we work are so askew, then nothing else will work. We understand that and that is why my party has signed up to the 2014 target. We must go beyond that, however, if we are to learn the lessons of the United States, and talk about what it is for. It is not a balanced budget or a 3% deficit for its own sake, because it is neat or has some sort of synergy that we have clutched out of the sky; it is because it enables us to create jobs and have better social institutions. The rhetoric from European Council meetings should be less fiscally focused and instead offer, not the Obamaesque idea of unbridled hope and a new horizon but a plan to map out what we want to achieve. That is something we could do for our own sake as well.

The corrections therefore must be made for a social purpose. We should remind ourselves constantly that the European Union is not simply an economic union, but is also a political and social union. Its founders came together after the Second World War with the purpose of building a better Europe for its citizens, with better prospects for the environment as well as improved living and working conditions. When we are making hard decisions those elements must always be included.

In the economic context, I also wish to talk briefly about three other matters. I strongly agree with the previous points made concerning the ratings agencies. The notion that we are now slaves to those agencies grates on everybody. They gave triple-A ratings to rotten bonds, sold them on and encouraged people to invest in them. These same people who have patently failed are now setting the criteria that we have to dance to, whether we like it or not. They are affecting the rates at which this country can borrow. There is a strong case to be made, which I would like to see front-loaded, for a European ratings agency that is independent of Government. I am not sure the existing ratings agencies are independent and one must ask who is paying for them.

I also wish to mention the G20 summit in Seoul, to which the Minister of State, Deputy Roche will refer in due course. As Deputy Barrett said, it concerned world trade. I was in Brussels last week and met with the South African and Namibian ambassadors to the European Union who feel they are being bludgeoned into trade agreements. They are both members of SADC, the Southern African Development Community. A number of SADC countries have already been arm-twisted into signing interim economic partnership agreements. They have all been told that they must have permanent agreements signed by the end of this year. We have a good record in this area as a country and we should seek fair trade as well as open trade. We have an open economy but we must do this on the basis of fairness. Ultimately, the notion that one can bully someone into a good deal for oneself never works. The Minister of State will be aware that I come from a trade union background and that in such an environment one always leaves the other side believing they have not been done down.

I refer to the Cancún conference on climate change. As Deputy Barrett noted, it will be affected by the congressional results. I recall the lead up to the Kyoto agreement, when the Clinton Administration was very much in favour of the proposals. However, the subsequent Bush Administration effectively dissolved the United States Environmental Protection Agency, the chief executive of which was the chief USA negotiator at Kyoto.

I had the privilege of the chairing the preparation conference for Kyoto as president of the EU Council of Environment Ministers. Ireland played a very important role in that process. I seek clarity with regard to what role we are playing now especially if Cancún falls the same way as the Copenhagen conference. Let us not gild the lily; Copenhagen was a failure. If Cancún is another failure, which is possible, what will the European Union do? It declared it would reassess its position post-Cancún, but what is Ireland's position? This morning, my colleague referred to the climate change Bill, which, effectively, has not seen the light of day. We must make progress in this area, because there is an economic advantage to our doing it right in this regard. Unfortunately, I do not have much time to develop the point but perhaps the Minister of State will refer to it in his contribution.

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