Brian Hayes (Dublin South West, Fine Gael) | Oireachtas source

I thank colleagues for their contributions to this debate in advance of the important Council meeting later this week. I will take up Deputy Stephen Donnelly's very generous remarks, particularly about the officials who represent this country not just at the permanent representation in Brussels but also the officials across the Departments. They have worked tirelessly over the last six months in co-operation with colleagues in Government on a number of these files to get them over the line. The reaction the Deputy got from people in the European Parliament is the reaction I constantly get. This is our seventh Presidency and we have built up a great deal of experience. The real unsung heroes and heroines in this are the Irish public sector officials, particularly those who have been dealing in such a clear way with all of the work. We owe them a great debt of gratitude. I say that on behalf of the Government.

On the second issue Deputy Stephen Donnelly raised, we will attend an ECOFIN meeting again tomorrow evening at which we will hopefully obtain agreement on the bank recovery and resolution area, which is the second pillar of banking union. A clear responsibility has been given to us by the political leaders of Europe to resolve the outstanding difficulties on banking union. The Deputy is correct to say that the way in which the bailouts were constructed, particularly in this country, was a disaster. There is an understanding across the European system about the scale of the burden that was placed on Irish taxpayers as a result of that disastrous policy. We are trying to unwind that and work it through. The fact that the Minister for Finance, Deputy Michael Noonan, obtained a recognition in the eurozone statement of last Wednesday that the ESM could provide the opportunity for retrospective recapitalisation of the banks was important, but there are outstanding issues on the banking union side that must be agreed tomorrow evening.

The first of the two issues is the hierarchy of the bail-ins. There was a sacrosanct agreement that no depositor with a deposit up to €100,000 would be touched. Clearly, the difficulties that obtained in Cyprus in terms of the construction of the deal were such that it was not positive; that is the most diplomatic way of saying it. Second, it was agreed that unsecured creditors would take a hit, followed by those associated with subordinated or junior debt who, in turn, were to be followed by senior bondholders. The ultimate question is the extent of the bail-in and the nature of the hierarchy.

There is a wide variety of views among the 27 member states. In the past two decades many member states, including Sweden, have gone through what I have described. The scale of the bail-in was different from one country to the next. The fundamental issue is the flexibility afforded by the non-eurozone countries as opposed to those in the eurozone. If the ESM is too flexible, it will not have the durability and power it should have. If it is not flexible enough, we will not obtain the agreement of the 27 member states. It is in the middle of all this that we are trying to construct an agreement with colleagues which, as I said, we hope to conclude tomorrow evening. It will be difficult, but we should not pretend otherwise.

If we are to obtain the confidence of the markets and citizens, the banking union system should be robust, strong and able to meet the kinds of challenges that presented some years ago. That is obviously a crucial issue in the last week of the Irish Presidency and one on which we will continue to work.

The youth unemployment problem was referred to, as was the youth compact, which is such a fundamental part of the MMF negotiations. Some of the remarks made on what was just a political attack on the Tánaiste for his work in the MMF negotiations were badly thought out. More than anyone, the Tánaiste has been attempting to marry the concerns of the Parliament and the Council in trying to obtain some agreement on what will be a crucial area of investment for the European Union in the next seven years. We need to reach agreement on this issue. European citizens who recognise the importance of the European Union's budget also agree that we should reach agreement. That is what the Tánaiste is attempting to do, not just on our behalf but on behalf of the entire European system.

Finance is the key; I do not disagree at all with this, which is why we are examining new means of non-bank funding and the opportunities of the European Investment Bank, particularly as it would ease the funding strain on SMEs. It is worth highlighting, as the Taoiseach did, that over €650 million in investment by the European Investment Bank is available to this country this year if we can get the projects and private sector capital in place. I had an opportunity to meet the president of the bank, Mr. Hoyer, in Luxembourg last week. He is more than aware of the challenges we face in Ireland. The European Investment Bank wants to help Ireland and make funding available in order that we can provoke public sector infrastructural capital projects again. It is worth saying that we now have PPPs across the line is a significant step because it means people are again prepared to invest in Ireland.

All of these matters will be very important, right up to the last moment of our Presidency. The positive remarks in this House on what we are trying to achieve are greatly appreciated.

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