Michael McGrath (Cork South Central, Fianna Fail)

I welcome the opportunity to make a brief contribution to this debate on the forthcoming Irish Presidency of the European Union. In the midst of a referendum campaign that will play such a crucial role regarding our position in the future of the Union, it is fitting that we use Europe Day to reflect upon what the future will hold. It is an opportunity to consider what we hope to achieve when we hold the Presidency of the European Council next year. It is also a moment to reflect upon how far Europe has advanced since the Schuman declaration first echoed through the Continent in 1950 and the European movement was begun.

First, I wish to speak about the theme developed by the Governor of the Central Bank, Professor Patrick Honohan in London yesterday when he floated the idea that the European bailout fund would be used to directly recapitalise banks throughout Europe. The Fianna Fáil Party supports this view. Any objective analysis of European Union policy with regard to the sharing of the burden of bank losses will conclude that the current policy is fundamentally unfair. The Irish State has injected approximately €64 billion into the Irish banks, which amounts to approximately 40% of Ireland's GDP. In view of the trenchant policy of the European Central Bank, senior bondholders would not be asked to contribute one cent towards those losses. We can argue about domestic policy decisions all we like but that ECB policy alone is central to the fact that the Irish people have had to take on that burden. An issue now arises with regard to Spain's third largest bank and there will be major issues with regard to many other banks in the European Union who may require additional capital injection. If there is to be any European assistance for the recapitalisation of banks, then Ireland should be first in that queue. The Government should be making that case at every opportunity. There is an opportunity to retrospectively apply the provisions to which Professor Honohan referred, to Irish banks. This would probably arise in the form of the European bailout fund taking a direct stake in the Irish banks which have been bailed out and recompensing the Irish taxpayer in that respect. We believe there is great potential in this proposition.

As regards the Irish Presidency, the Government should be prepared to take the initiative on a number of key issues and to show leadership. Adequate resources in terms of diplomats, technical assistance and most critically, the time and energy of Ministers, will need to be fully committed if we are to make progress and secure tangible achievements during our Presidency. By January 2013 of next year, the EU will have taken steps, through the intertwined stability treaty, and the European Stability Mechanism, to stave off the storm clouds gathering around the euro. However, in order to drive growth and create jobs to tackle the rising unemployment queues throughout the Continent, much more action will be required. The consensus is growing across Europe that fiscal prudence alone will not be sufficient to stem the most severe crisis the developed world has witnessed since 1929. A comprehensive stimulus package, as our party has consistently called for, is an integral part of any meaningful solution to address the crisis. This must be a strategy that will take people off the dole queues and get Europe working again.

Taking steps to address the debt problem through strong fiscal rules combined with measures to stimulate growth is the only feasible strategy to tackle the economic problems of Europe. The multi-annual financial framework from 2014 to 2020 is currently being worked out in Brussels. This will have a major impact on what resources will be available to the cornerstone of the Union. The resolution of the multi-annual financial framework may fall under the watch of the Government if negotiations continue to drag on. Taking leadership on a growth agenda, possibly using the multi-annual financial framework, should be a key priority for the Government when it assumes the Presidency.

Another critical issue from an Irish perspective will be the resolution of the CAP post-2013 negotiations. The decisions by the multi-annual financial framework as to who gets what in the EU will have a significant impact on the future of CAP. Several areas of contention threaten to have a very greater impact on Irish farmers. The introduction of a flat rate payment system, the intricacies of greening, a 2014 reference year and supports for young farmers all need to be addressed during our Presidency. These issues will have a profound impact on the shape of agriculture in Ireland, on our landscape and for a major section of our economy. The timing of our Presidency and the deadline for reform make it an ideal opportunity to press home changes that will benefit Ireland and Europe as a whole.

The challenges that face Europe are immense but through co-operation as equal partners with our European neighbours we can rise to face them. I look forward to the EU Presidency as an opportunity for Ireland to take a strong role in this regard.

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