Cian O'Callaghan (Dublin Bay North, Social Democrats) | Oireachtas source

I warmly congratulate the Minister of State, Deputy McConalogue, on his appointment. I am concerned after listening to the Taoiseach's comments, specifically around the recovery fund allocation and the new proposals being put forward which will be discussed at the European Council meeting on Friday and Saturday. Under the new proposals, 70% of the funds would be allocated straight away in a formula that is not at all favourable to Ireland and the remaining 30% would be allocated in 2022, depending on economic performance. Under these proposals, Ireland will receive one of the lowest shares of the fund despite having the third largest negative revision of GDP in the Commission's autumn and spring forecasts.

The European Commission formula relies on GDP being an accurate measurement of economic activity. As all of us know, Irish GDP and GNI are heavily skewed by the investment activity of foreign multinationals and investors rather than by the activity of the domestic economy. The Commission proposal is therefore heavily skewed against Ireland owing to foreign direct investment in Ireland and the resulting GDP distortion. In addition, as a small open economy, Ireland is more vulnerable to global trade shocks than other countries and this should be taken into account by the EU when coming up with these formulas for allocation of resources.

I am concerned by the comments of the Taoiseach, from which it appears that the Government is more or less happy with this proposal to be put before the European Council meeting on Friday and Saturday, so I ask the Minister of State to clarify this in his comments in the wrap-up. Is the Government essentially happy with these proposals, which are very unfavourable towards Ireland compared to other EU countries, or will we be seeking a substantial change to the formula? This is the crux of the European Council discussions that will take place and this question is at the crux of how Ireland will fare in the allocation of these resources. It is very important for our general interests, so I ask for clarification on that in the closing comments.

On the proposed revenue raising measures, I welcome the comments from the Taoiseach on support for the plastic waste tax. That is a sensible proposal and we are 100% right to back it. However, I am concerned about the lack of support for measures in terms of carbon. I am surprised, with the Green Party now in government, that the Government is not supporting these measures.

On the digital tax, the US has walked away from the OECD process on digital tax and threatened the EU with retaliation measures if the EU brings in a digital tax. I note the comments of Benjamin Angel, acting Director General of the European Commission's Directorate-General Taxation and Customs Union, on Monday, when he told a hearing of the European Parliament that we had to accept the OECD process is not moving as quickly as we hoped. He also said there would need to be a plan B on digital tax. We have seen that a number of corporations in Ireland and across the world are beginning to stand up to the digital platforms and to withdraw their advertising revenue in protest at hateful and misleading content. It is time Ireland showed some leadership on this and insisted digital corporations paid a fair share of taxation. Furthermore, it is important that the Government stops resisting attempts to bring in an effective digital tax. We must show leadership regarding digital platforms which are lax on stopping hate speech and cyberbullying and which are not paying a fair share of taxation and making a fair contribution.

On the Brexit funding and the proposed allocation of €5 billion for countries badly affected by Brexit, we need to know if the Government thinks this is sufficient funding, given that we are still looking at a potential worst-case scenario in terms of Brexit. We also need to know how much of that €5 billion we think will be allocated to Ireland. Will there be any constraints or conditions attached to that €5 billion funding?

In terms of the measures on climate, I welcome the 30% of the recovery fund that will be targeted at climate-related projects. However, on the one hand, while the EU is correctly investing that funding into climate-related projects, on the other hand we know that a lot of the other proposed funding will continue to go into toxic and polluting industries, in many ways cancelling out the climate-related investment. Research by Greenpeace has shown that a lot of funding at EU level continues to go into those industries. There is a strong case that all the EU budget and all of the recovery fund should be climate-proofed, so we are not investing on the one hand and undoing that with investment and with other measures. There has been no reference as to whether Ireland will raise this at the European Council meeting but I ask that we make the case that all the investment from the EU budget and recovery fund is climate-proofed.

The EU's response to the pandemic has made it very clear that its competence in respect of transnational pandemics is too weak and must be strengthened. It is also very clear that the European Centre for Disease Prevention and Control needs to be beefed up. There must be substantial learnings from this pandemic. Is Ireland making the case for greater investment in public health at an EU budgetary level?

The situation in both Hungary and Poland gives cause for concern. One third of Polish municipalities, which include 90 towns and cities, have established so-called LGBT-free zones. There are ongoing attacks on the rights of trans people in Hungary as well as attacks on civil society organisations. Noting the results of the presidential election in Poland and that the country is about to receive some €16 billion from the EU's recovery fund, it is of critical importance that the rule of law, democracy and respect for human rights be explicitly tied into the EU budget and the fund. There is a great deal of ambiguity around that and, therefore, I ask the Taoiseach to press the issue at the European Council. I note there was no confirmation in his comments of an intention to do that. I have raised this issue previously, including in writing, with the Minister for Foreign Affairs and Trade. I would like some meaningful action on it.

Following the election of the Minister for Finance as president of the Eurogroup, it is worth noting that this body started life as essentially a dining club for eurozone finance ministers before morphing into a forum where the fate of nations, including Ireland was, in effect, decided. No minutes were taken at the meetings where the terms of the bailouts during the eurozone crisis were agreed. Irish public services, including healthcare, childcare and housing supports, have been starved of much-needed investment partially as a result of decisions that took place at Eurogroup meetings, which were not minuted. Economists have pointed out that meetings of the Eurogroup are unaccountable and opaque and have no proper legal status. Now that Ireland has a leadership role in the Eurogroup, the Government should insist that transparent legal structures be put in place to underpin the workings of the body.

We should, furthermore, seek policies that will bridge the gap between stronger northern European economies with strong public services and the weaker southern economies. That is necessary to ensure a level playing field, and the Taoiseach's comments in this regard are welcome. He is absolutely right that any weakness in the EU affects all of us in economic and social terms. Doing as much as we can to ensure there is strong economic and social recovery across the Union, at the European Council meeting and through the Eurogroup, is fundamentally in our interests as trading partners and EU members. The stronger every country in the Union is, the stronger Ireland will be. I welcome the Taoiseach's comments to that effect and I urge him to make that case as strongly and forcefully as he can at the Council meeting and through the Eurogroup.

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