Timmy Dooley (Clare, Fianna Fail) | Oireachtas source

It is clear from all speakers in this debate that the European Union, as we know it today, is in a state of flux. Crisis after crisis, summit after summit, the Union has found itself asking the same question: where do we go from here? That question has yet to be answered by those who are currently driving the European project. In fact, the only constant since the economic and financial crisis in Europe began five years ago is the absolute lack of leadership being shown by the European political elite. This is a great shame as the potential of unlocking the energy and talent of 27 countries, together with more than 500 million people, has been lost over the past five years.

It is regrettable that an entire generation of young Europeans have seen nothing other than crises. I believe this is leading to a disinterest and lack of belief in the European project which so many people, including those in the Minister of State's party and in mine, put so much time and effort into, with a view to building around that vision set by some of the great people of the past. Sadly, the response of the current crop of leaders across Europe has effectively been found wanting and, I believe, has created a level of disinterest and disconnect that has led to this re-emergence of nationalism, which is damaging to the long-term vision.

I know the efforts the Minister of State, Deputy Creighton, has been making in her role. While I do not want to put words in her mouth, I can imagine it has been difficult to try to force certain parties and certain leaders in Europe to really understand the disenchantment that has been inculcated in society and among a younger generation who did not know Europe in the past. That generation did not know from where it had come from and did not understand the genesis of the peace process that brought us to accept that countries had to work together. In addition, they have not really understood the benefits because they did not know what was there previously. For that reason, a huge amount of work will have to be done to recapture this generation.

Watching the European response to the economic developments we have witnessed since 2008 has been at best disjointed and at times farcical. The past carry-on of a senior player from France was outrageous and certainly degenerated into farce on many occasions, which is what has led to much of the cynicism. The ink on various statements from the conclusions of European Council summits would be dry only seconds before they became inconsequential and were overtaken by what was happening in the markets. Thankfully, we have moved away from the continual crisis model of management, thanks more to actions in Frankfurt than in Brussels.

For Europe, though, many deep problems remain. The EU faces a number of exceptional difficulties at this time. Despite the current period of relative stability, we have still not seen the end of the eurozone crisis. Ten out of 17 eurozone countries experienced stagnated or declining economic activity last year. Indications are that economic activity will decrease further this year as the recession spreads to the eurozone core and deepens further, as it clearly will do. The monetary response has been more forthcoming since the appointment of Mr. Mario Draghi as President of the ECB, which is to be welcomed. I have to say that the previous administration at the helm of the ECB did more to damage the credibility of the efforts of some of the Governments by responding in a way that sought to protect only one country. It tried to take its role in regard to inflation across the zone, which obviously impacted Germany more than anywhere else, as being the only criteria by which it would move, which was damaging. Mr. Draghi has taken a much more enlightened approach and the markets and leaders across Europe certainly recognise that.

The fundamental structures and legal basis of a true economic and monetary union remain unfinished, leaving much uncertainty about the future of the euro project. A more complete economic and monetary union is necessary to ensure the mistakes of the past can never happen again. Last June, the European Council concluded that a vital element of European recovery would be the separation of sovereign debt and banking debt. This statement was welcomed then and is still to be welcomed today. However, the actions arising from this statement have yet to be carried out.

The Minister of State referred to the European affairs committee, which has done sterling work under its chairman, Deputy Hannigan. Last week, the Governor of the Central Bank, Professor Honohan, came before that committee to talk about the unfinished business of the banking union and the various different strands within it which need to be completed. While there is a considerable amount of work to be done, there would appear to be a tardy pace with regard to moving towards ultimate banking union. I accept it takes time to get everyone on board for the various different aspects. However, it sends a bad signal to citizens across Europe who are suffering and in a dreadful situation.

One need only look at the impact here. That June statement contained commitments that the Irish debt position would be looked at favourably. I accept the position in June related more particularly to the recapitalisation of the Spanish banks, which, ultimately, did not take place, but there was an expectation in this country that the investment in the legacy banks would be addressed. While that was not specifically set out, the expectation was that the ESM would take a stake in the two pillar banks in lieu of the €30 billion that had been invested by the Irish State and taxpayer, and that this would go towards reducing or stock of national debt. This would then make it more possible for the State to get back into the markets and borrow for project finance for various infrastructural projects, which would act as a stimulus to job creation. We are now led to believe this might happen, might not happen or could happen, or that it has yet to be fully realised how it will impact. We are hearing from certain people within Europe that they did a deal with us on the promissory note and on the interest rates, although this had more to do with the negotiations on Portugal at the time, and, therefore, as we got a lot, we may not get any more. However, we have seen nothing by way of debt write-down. This is the only way we would see some recompense for the sacrifices we have made. In the other instances, all we have done is kicked the repayments further down the road. It is helpful from a cash flow perspective but not in dealing with our overall debt position.

It is Europe Day and we are trying to look at this in a critical way while at the same time recognising the importance of Europe. However, the people who are affected by this are those who are unemployed. They would benefit from that kind of a cash injection in recompense for what the State had invested by the ESM taking a stake, and I believe this would show good faith by European leaders towards Ireland and would assist towards getting people back to work. It cannot be all just about fiscal rectitude, which of course is a central tenet and what banking union speaks to. However, there has to be a quid pro quo. We have to try to get people back into work in parallel with the recalibration of our fiscal position.

The goal of a banking union is proceeding slower than one might have hoped for and has resulted in further uncertainty in the European banking sector. In an integrated banking system where free movement of capital across borders can create instability in the market, it is vital that supervision of our banks is carried out on a European-wide basis. EU banking regulation is an important piece of the jigsaw in repairing Europe's broken financial system. A functioning banking system with proper regulation and wind-down mechanisms would be a key step in breaking the link between sovereign debt and banking debt. Europe needs a credible, competitive banking system that has the capacity to lend to its small and medium size businesses. This is vital for sustainable growth in employment into the future.

With regard to banking regulation, Mr. Michael Somers, the former head of the NTMA, made reference to an issue I had been made aware of through my role on the finance committee, namely, some financial institutions and international banks are finding it very difficult to operate in Ireland now because of the very strict regime of financial regulation that has been implemented. I find it hard to believe that a number of institutions like Goldman Sachs would have handed back their banking licences, not for domestic activity but for internationally traded services where their customers are largely outside of Ireland. They are not able to operate in our financial services centre but are moving to places like Frankfurt and London. There seems to be a lack of uniformity in the implementation of the financial regulatory regime that is being put in place.

That is something I am disturbed about because if we are to have commonality of regulation, the expectation is that there would be uniformity with regard to the implementation of those regulations. However, this does not seem to be happening and is impacting negatively on our capacity to continue to retain these financial institutions and increase the number of people working in them. Sadly, we are seeing a reduction in employment in this area. This is about internationally traded financial services. It is not about the major issue we had, namely, our domestic banks which lent recklessly. The institutions we are talking about here had nothing to do with that so that is something we need to be very careful about because it is impacting on unemployment.

The scourge of high unemployment has returned to many EU member states. I need not remind Members that in April 2013, EUROSTAT estimated that over 26.5 million men and women were unemployed in the EU. They are 26.5 million men and women for whom the Union has failed dreadfully. The experimental policies of the past four years emanating from Frankfurt and Brussels have in many instances made the crisis deeper and, some would suggest, much more prolonged and the end is not yet in sight. Worse still are statistics relating specifically to youth unemployment. One in every two people between the ages of 15 and 24 in Spain and Greece who are not in education are unemployed. That is a startling figure. The youth unemployment rate in the EU is higher than 23% and is creating a lost generation in many states. I spoke about this at the beginning of my contribution.

These are the people who really have lost faith in Europe. It is alright for those of us who are a bit older and have the capacity and knowledge of history to see the benefits the European project has brought. We can put the current crisis in some context. Young people cannot put that into context because all they knew was a thriving European project with little recognition or knowledge of the war-torn landscape from which the EU emanated. It is not acceptable and has given rise to political extremism in the most affected countries. The rise of the far Right in many European countries is a chilling reminder of why this Union was created back in 1951 after the devastation of the Second World War. Increasingly, people who have lost all hope in moderate politics turn to the extremes to give them answers that moderate politics supposedly cannot. This can and must be challenged by democrats across Europe, both Left and Right. We must provide the answer. Europe must provide the answer to its citizens who cry out for work. We need to remember the values and principles of the foundation of this great project, which has secured peace and prosperity for more than half a century in a Continent which knew nothing but internal wars.

The focus needs to be on creating new jobs in growing sectors of the economy where we hold the competitive advantage. Europe needs to focus on its strengths in the pursuit of increased employment. Creating high quality products that consumers want is central to this. Increased investment in research and development in our university sector is also key. This investment in areas which have the potential to create thousands of new jobs is vital for Europe's future success. Investment in building an integrated European energy grid, better transport connections and more business-friendly regulations across the Union would serve as an impetus to boost growth and employment in the coming years. The EU must become a Union of enterprise, strong social protection and sustainable prosperity in order to guarantee a better future for all its citizens.

Europe needs a new vision and a new direction which delivers for all its citizens - north and south, east and west, peripheral and core. The equality of treatment between member states and the solidarity between governments needs to be restored to the European project. Indeed, the use of the Community method of decision making where the Commission, reflecting the Union's interests and no singular government interest, needs to be the basis on which we move forward as a single bloc. Sadly, during the crisis, we have seen the work of the Commission much maligned and we have moved back to just one or two countries taking the lead. Over the past five years, we have seen an increasing use of intergovernmental deals, which leaves many out in the cold and creates a fracture amongst member states.

As a small nation which has benefited greatly from EU membership but which also has a proud record of contributing to the building of the Union, Ireland must strive to ensure that the basic values of the EU are protected and promoted. With an ever increasing Union expanding to 28 members in July with the accession of Croatia, about which we are all very excited - both the Minister of State and I have a keen interest in Croatia joining as it will add considerably in terms of the skillset it will bring - we need to find new ways to accommodate all voices and not just those with the largest populations or biggest GDP. Europe also needs to listen to its citizens more and work to enhance their livelihoods.

The establishment of a European Union was a brave and bold move taken by men and women of vision and belief in the future. Europe needs that vision again today. Brave and bold actions are once again required to consolidate and advance the Continent's achievements of the past 50 years. United in diversity, Europe can offer the solutions required to the challenges we face today.

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