Micheál Martin (Cork South Central, Fianna Fail) | Oireachtas source

The member states of the European Union are going through a deep economic crisis. Unemployment is at historic and rising levels. States must pay excessive amounts to fund public debt and are cutting essential services. Growth projections for the years ahead continue to be reduced. The foundations of the common currency shared by most states are under threat. These are the uncontested facts that formed the background to this summit. Yet the leaders of Europe managed to meet for two days without discussing even a single measure that might help address any of the problems facing the Union today. Their failure to agree on a multi-annual budget was not a surprise or a major issue in itself. What is a further blow to confidence in the Union and its leaders is the lack of either ambition or urgency. The only item actually agreed at the summit showed an elite club mentality in the dismissal of a rarely used prerogative by the European Parliament.

With regard to Ireland’s immediate needs, there have been significant developments in the Government’s position. With regard to the budget, the strategy has been to follow France and little more. However, there have been major developments with regard to the financing of bank-related debt, which were not addressed directly by the Taoiseach.

The summit was called specifically for the purpose of agreeing the next EU budget. The decision to separate it from a regular summit meeting was in order to concentrate everyone’s attention and maximise the chances of success. In terms of its specific objectives, the summit was clearly a failure. Difficult budget negotiations are as old as the Union itself. There is no major problem with rolling over one year’s budget while a final agreement is being sought. What is a major problem is that the likely shape of the final agreement will undermine the ability of the Union to address the urgent economic crisis.

It is now clear that the final budget will involve a real reduction in EU spending. What is also clear is that the arguments are now mainly focused on which programmes can be cut in order to finance urgently required supports in areas such as innovation. This represents bad news for anyone who believes the EU can play a constructive role in helping Europe to return to growth and job creation. First, a budget of roughly 1% of the total national income of the member states is far too small to be able to make any serious contribution to renewed growth. One of the most important lessons of the crisis is that we cannot have a genuine economic union if transfers within the union are capped at a very low level. The contract to which members signed up stated that there would be support to aid development in return for unrestricted competition. For many of Europe’s regions feeling the impact of this recession through ever-rising unemployment, this contract is being broken.

Second, the pressures on the Common Agricultural Policy continue unchecked and threaten what is by far the most successful common policy. President Hollande has been forceful in demanding that the CAP budget not be reduced in order to fund other programmes. Hopefully, he will be successful for the most part. What is of much greater concern is the idea that funding might be restructured in such a way as to give undue priority to larger producers. This would be a betrayal of the spirit of the CAP and would directly undermine rural communities.

The Taoiseach has said on a number of occasions that he is emphasising the agrifood sector as a potential engine of growth and rising competitiveness for the Union. He is right in this regard. Ireland has a strong record of being innovative in the sector. The former Minister for Agriculture, Fisheries and Food, Deputy Smith, prepared Harvest 2020, which is still the blueprint for growth through innovation in the agrifood sector. To be fair, the Minister, Deputy Coveney, has acknowledged the vision and strength of this programme and the role of Deputy Smith in preparing it. Research and innovation programmes in the Department of Jobs, Enterprise and Innovation have been running successfully for a decade. However, I was surprised to hear the partisan, petty and blatantly untrue comment that was made by the Minister, Deputy Bruton recently. I refer to his claim that the State has done nothing to develop the research capacity of our world-competitive food companies.

The Taoiseach is wrong to place an emphasis on CAP having a concentration of support in the hands of larger producers. That should not be done at the expense of the wider agenda of increasing the quality and innovation of the sector. The support of rural communities and the environment are the soul of CAP. Ireland must do nothing to damage this. Under no circumstances should we support or implement a revised programme which is weighted against smaller producers. The Taoiseach has said on a number of occasions that the support of growth and employment is a major objective for the budget. However, this is not reflected in the likely budget. No net stimulus effect is possible if we reduce the budget in real terms while doing nothing to increase significantly support for job creation or the wider productive capacity of the Union. It would be a lot better for everyone if the empty claims about a budget for growth and jobs were put aside. I advise the Taoiseach to watch the rhetoric because it means nothing. It is beyond me that anyone can suggest that a budget which will be reduced significantly in real terms will be a budget for jobs and growth.

The fact that Ireland's role in these negotiations has been reduced to cheerleading for President Hollande is a direct reflection of the decision of the Taoiseach to opt out of all of the multilateral and bilateral budget initiatives which have gone on this year. I have referred to this previously. The Taoiseach is one of just three heads of state or government not to have joined one of these initiatives. The reason for this remains unclear. Now that the importance of the rotating Presidency has been significantly downgraded at the level of leaders, the burden of finding an agreement falls primarily to President Van Rompuy. Britain has a chance to parade its anti-Brussels rhetoric. Other countries should be satisfied that a symbolic cut in activity has been achieved. An agreement is likely to be reached by the meeting of the Council next spring, at the latest. Given that leaders have displayed an unerring ability to turn a problem into a crisis in the last few years, however, it is clear that nothing can be taken for granted.

The only formal decision taken at the summit involved the completion of the appointment of the President of the Central Bank of Luxembourg to the executive board of the ECB. This retrograde step reflects the arrogance of a group that is unwilling to accept legitimate opposition. While it is clear that Mr. Mersch is qualified to serve on the ECB's executive board, nothing unique in his qualifications required that he be pushed forward in the face of the opposition of the European Parliament, which has exercised considerable restraint over the years in using its powers to object to appointments to various institutions and has performed its role in a responsible and professional manner. It is not good enough that there has never been a woman on the most important body within the European Central Bank. It is a disgrace that there will be no woman on the executive board for at least another three years.

The appointment of the new Governor of the Bank of England has shown that a large number of highly qualified people can fill these roles. The candidates for such positions are not limited to a handful of people at senior levels in a few countries. It is a concern that Mr. Mersch appears to have been promoted as someone who would advocate a conservative approach to the ECB's role to counterbalance Mario Draghi's innovative approach. The membership of the ECB's executive board is unbalanced in nearly every key area. It does not have the range of members, in terms of gender, nationality, outlook and experience, to allow it properly to run the monetary policy of a union as diverse as the eurozone. It is clear that the failure of Ireland and of the Taoiseach to stand with the European Parliament on this issue was wrong. The President of the European Parliament was here not so long ago. The Taoiseach should have gone with the European Parliament on that. The process of inside deals must end. Ireland should join countries like Spain and Portugal that have said they will not agree to any more ECB appointments being made in this way.

Given that so much time was available for this summit, including the possibility of working into Saturday, it is surprising that the breakdown happened so quickly and that the leaders ran home as quickly as possible. It is inexplicable that this extra time was not used to attempt to unblock other vital negotiations. The negotiations on the banking union, which was agreed in general principle in June, remain blocked on fundamental issues. The deadline of having the legislation and the framework ready for implementation by January will be missed. The Taoiseach confirmed yesterday that it has not been replaced with a new target. It is an extraordinary development in light of the hype surrounding the June and October summits. For months I have been unsuccessfully trying to get the Taoiseach to outline Ireland’s position in relation to the banking union. During his filibuster of his own Question Time yesterday, the Taoiseach finally gave some detail. Given that there was no opportunity to follow up on those points and there is no coverage of what he said in today's media, it is worth going over his comments again.

The Taoiseach said that Ireland believes in a banking union which covers all European banks in a single system. This is perfectly reasonable and reflects all independent advice. He went on to confirm that Ireland is arguing against any proposals which might require a change in the Union's treaties during the lifetime of this Dáil. This is an extraordinary position. If there is one thing everyone knows by now, it is that the eurozone sovereign debt crisis has largely been caused by countries putting politics ahead of implementing the right policies. At every stage of the euro’s life, especially in the last three years, there has been a desperate attempt to do as little as possible rather than doing whatever is needed. That is why confidence has been undermined. The Taoiseach said yesterday that treaty changes should not even be considered until the term of the next European Parliament begins in two years' time.

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