Enda Kenny (Mayo, Fine Gael) | Oireachtas source

The Deputy was correct when he said there were 26 million people unemployed in the European Union. Growth is sluggish around the world, which is a major problem and a scourge in many countries, causing a great deal of concern and anxiety inside and outside the eurozone and the European Union. Other countries have a growth rate of 5%, 6% and 7%.

When speaking about Ireland, the former US President, Mr. Bill Clinton, made the point that there was opportunity in the European Union market of 500 million which was enhanced by a further 500 million on the edges where growth was very strong. This means trade is an issue for the European Union. With 90% of world trade taking place outside the borders of the European Union, clearly there are opportunities, which is why we need to address issues with Japan, Singapore and Canada and get negotiations between the European Union and the United States under way. I was very happy that the high level report recommended that this should commence. The European Union under the Irish Presidency has been very happy to say that should become a reality. I was glad to note that in his State of the Union address President Obama referred to this issue specifically. The indications are that were we to conclude these negotiations - obviously, it would take some time - there would be the potential to create at least 2 million jobs in Europe and to raise the figure for economies by at least 2%.

In respect of the budget agreed by the Council but to which approval has not yet given by the Parliament, the consent of which is necessary following the Lisbon treaty, €6 billion was included for youth unemployment initiatives in the most affected areas. I hope our share of this sum will be used effectively. The budget includes a €3 billion youth unemployment initiative; €125 billion for competitiveness and growth measures to create jobs with, for instance, the ERASMUS programme and research and development measures being singled out, over and above the 2013 amounts; €325 billion in Cohesion Funding, a major tool for job creation, and €100 million for rural development measures and the BMW region.

The Deputy referred to the promissory notes.

Clearly, the signals internationally have been very positive in terms of the rating agencies looking at Ireland differently and the investment line continuing to be very strong. I met with the representatives of a multinational this morning and they were exceptionally taken by the way Ireland and its people are dealing with this challenge. They made the point that many other countries should look at how we are making progress towards emerging from this very difficult situation.

The benefits of the promissory note decision were outlined in the course of the debate in the House. The provision of a longer-term non-amortising portfolio of Government bonds to replace the promissory notes will have a significant benefit from a market perspective as it ensures the liability to repay is beyond most credit investors' time horizon. It spreads the cost of the promissory notes from a weighted average life of seven to eight years to 34-35 years at a lower funding cost for the State, resulting in significant annual interest savings. There is a substantial annual cash flow benefit to the State from replacing the promissory notes with non-amortising Government bonds amounting to €20 billion over the next ten years in reduced borrowing. Obviously, there is a reduction in the general Government deficit or debt over time, efficiency gains from legacy assets in a single vehicle, the removal of IBRC from the financial landscape and the removal of exceptional liquidity assistance and the inherent risk associated with short-term borrowings which have had to be rolled over on a fortnightly basis. The overall effect is that we enhance our debt sustainability and assist our return to the markets. This solution does not address other issues in the Irish banking system which must be addressed, notably the question of distressed mortgages, which we have debated here previously, the reports that come in about remuneration and the question of getting the maximum amount of money we can for our taxpayers.

I have given the Deputy the figures for the elements that are included in the MFF. The two-pack that was agreed was brokered by the Irish Presidency in talks with the European Parliament and the European Commission. This is a key piece of the eurozone's economic architecture and was a priority of our Presidency. The new rules will improve budgetary and economic co-ordination among eurozone countries. They will ensure that we will have full knowledge of developments across the eurozone and assist in preventing future crises. As I said during a previous Question Time, this means the Government will make a decision in regard to the timing of the budget, which will be earlier this year than last year. The Government will set out at an earlier date the overall picture of the budget for 2014. It has not yet made a decision about the date of the budget, which will be presented later this year, but it will be earlier than December.

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