Brian Cowen (Laois-Offaly, Fianna Fail)

In adopting the Van Rompuy report, the Council is involved in preparing six legislative proposals by early summer of next year, four of which will involve, as I understand it, the involvement of the European Parliament. The proposals are designed to strength the Stability and Growth Pact and the EU regulatory framework for members states' public finances and to broaden the scope of economic surveillance beyond the budgetary position. The proposals aim to achieve these by enhancing the importance of the debt criteria, introducing sanctions, including financial sanctions, for euro area member states in the case of persistent non-compliance with the Stability and Growth Pact and a tiered range of procedures and sanctions designed to prevent the emergence of macroeconomic imbalances in a member state that, if left uncorrected, could ultimately jeopardise the functioning of the euro and the euro area.

The Commission's legislative proposals will be subject to the normal procedure of consultation and discussion with member states. We will engage positively in that process, taking account of our own circumstances and needs. The Council has set the summer of 2011 as a target for agreement with the European Parliament in the Commission's legislative proposals.

There are six Commission legislative proposals - a directive on requirements for budgetary frameworks, two regulations amending existing regulations on the Stability and Growth Pact, two regulations relating to the introduction of new arrangements for the surveillance of macroeconomic imbalances and a regulation on proposed financial sanctions in the event of persistent non-compliance with budgetary obligations on the part of euro area member states.

Specifically regarding the question of regulation of credit agencies and where that is at the moment, perhaps the Minister for Finance should be asked where that is with the euro area ECOFIN group. I do not have that information before me, but I know that it is a matter that is under discussion and work is ongoing in respect of it.

The earlier matter referred to by the Deputy related to the questions of markets and the discussion. I share a concern about the need for avoiding read-across by markets. Short-term market sentiment, as we know, changes from time to time. It is one of the reasons we stepped out of the markets in order to find the time and space to prepare a four-year plan and a budget that would enable us to show the credibility of the pathway we are adopting for the purpose of meeting our requirements under the Stability and Growth Pact. That is what is within our control and that is the most important means by which Government can indicate what the country's intentions are. The consensus among the main political parties in the House on the adherence to the 3% target by 2014 is helpful domestically and, I hope, internationally, but it will not be sufficient in itself and greater detail will have to be outlined in that context so that people can assess the pathway being adopted.

When we look at these matters, it is important in the context of the permanent crisis mechanism to ensure that the markets do not get a wrong read-across. One looks at contingencies down the line, but the important point is that it is the intention of all member states to deal with their situations as would be expected. Ireland is no different in that respect. We have been very clear. We believe that we can find a manageable way forward and that the many strengths of the Irish economy show that our potential growth rate is there as a result of our enterprise, industrial and fiscal policies. We must make adjustments on expenditure and taxation, but we must also emphasise the growth potential of the economy. It is important for all of us, regardless of where we stand on the spectrum or the arguments, that we ensure that we portray Ireland as a country that is determined to deal with this situation, as challenging as it may be.

Issues like the emerging balance of payments surplus that we expect next year all show that Ireland is in a position to pay its way in the world. Improvements in our competitiveness, reductions in our unit labour costs vis-À-vis our competitors, the continuing inflow of foreign directive investment and good export performance by both the indigenous sector and the multinationals are all important factors for people determining the future we are charting out for the country. We are all agreed that those are realities that have been built up under successive Governments as a result of policies which were directed at developing the country as a market economy, one that can be a major exporter in the world, given the goods and services we provide. We need to emphasise that all of the time. There are other examples.

We have a structure to our economy that is somewhat different to that of some other continental economies, in terms of the reach of our exports and the investment profile of our country. The idea that Ireland has a greater level of US investment than China is an important issue, one that indicates the profile of our investment, the skill capacity of our labour force and the flexibility of our labour markets. All of these are important issues in the context of the assessments and judgments being made about how Ireland is going to move forward from this position.

As the Deputy and I would say, the sentiment in markets for Ireland, as we have known, has deteriorated for some months. We have stepped out of the markets in order to provide reassurance and further evidence of the determination of Ireland to deal with the situation that has arisen. We need to be genuinely mindful of these facts because everything that is said is picked up and interpreted. I sometimes understand where people are coming from, but we have to be mindful, particularly at this time of preparing these plans and bringing forward these budgets. I am sure there is plenty of discussion and argument about it but we are all on the same side when it comes to that objective.

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