Brian Cowen (Laois-Offaly, Fianna Fail)
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I attended the meeting of the European Council in Brussels on Thursday and Friday, 19 and 20 March. I was accompanied at the meeting by the Minister for Foreign Affairs, Deputy Martin, the Minister for Finance, Deputy Brian Lenihan, and the Minister of State with responsibility for European Union affairs, Deputy Roche. The agreed conclusions have been laid before the Houses.

The global economic and financial crisis inevitably provided the backdrop to our discussions, as we discussed issues such as stimulating economic recovery and the need for improved financial regulation. However, we also covered other topics, such as energy security and climate change. Policy in each of these areas can bring tangible benefits to Ireland, but by our participation within the Union, we are exercising not only our capacity to shape European issues, but also to influence global issues. Whether on the G20 summit, which will take place tomorrow, Thursday 2 April, the future development of the International Monetary Fund, IMF, the Copenhagen climate change conference later this year or our relations with European countries to the east of the Union, Ireland is helping to shape the Union's policies and how it influences global responses where they are possible.

I will first turn to the economic and financial crisis. In advance of the Council, there was considerable discussion of the different attitudes to economic stimulus. This discussion has continued in the lead up to the G20 summit, with different perspectives on the appropriate scale of the Union's efforts, but we must not lose sight of the relatively generous social protection payments in Europe that are of direct and immediate effect. The scale of the total EU stimulus, both national and central measures, is estimated at about 3.3% of GDP or €400 billion.

There was a shared view that the primary focus of stimulus efforts must be on preserving jobs while ensuring that measures adopted do not amount to distortions of trade or protectionism. As a small trading nation, Ireland depends on access to open trading markets refereed by trusted institutions. A move towards protectionism would hit us harder than most, so we welcome the commitment to keeping markets open on the road to recovery.

We discussed the linkages between the financial and banking crisis and the real economy and the impact on people's lives. The Council welcomed good progress by the European Investment Bank to boost the availability of financing to the small and medium enterprise, SME, sector. We have seen the fruit of that work in recent days with arrangements between the EIB and Irish banks to provide additional lending facilities for SMEs in this country.

On the international financial front, the Council agreed that IMF resources should be substantially increased so that the fund can help members in difficulties. In terms of specific crisis support, EU member states indicated that they are ready to provide on a voluntary basis increased IMF lending capacity of €75 billion. The Council also welcomed the Commission's intention to make a proposal for doubling to €50 billion the overall ceiling for loans for medium-term financial assistance to member states that have not adopted the euro and are experiencing or are threatened with difficulties in their balance of payments. This strengthening of the IMF and the Union's own capacity to act reflects the interdependence of countries and markets, but also the readiness of the EU to ensure that mechanisms to support countries in difficulty are sufficiently robust.

The Council also agreed to accelerate work on more effective mechanisms to regulate financial institutions operating across borders. Building on the De Larosière report, ECOFIN will take this work forward to enable a more detailed discussion at the European Council in June, followed by legislative proposals in the autumn.

The Council agreed the Union's approach to the G20 discussions tomorrow. The Union aims to lead international action to promote a swift return to sustainable economic growth, keeping markets open, strengthening the international institutions such as the IMF so that they can manage and prevent crises, improving the regulation of financial markets to avoid the errors of the past and supporting developing countries in responding to the crisis.

As part of the measures to stimulate economic activity across the Union, the Council agreed on a financing package of €5 billion for certain infrastructure projects. This agreement is very important for Ireland. We have secured funding of €110 million for the east-west electricity interconnector between Ireland and Britain. In addition, there is potential to obtain funding relating to the North Sea grid component of the offshore wind energy initiative and we will also be able to pursue new funds agreed for rural development and rural broadband.

The €110 million funding contribution to the interconnector project is a major achievement. This project is an essential piece of infrastructure for the country for a number of reasons. It will connect our grid to a much larger market, helping to reduce the cost of electricity. It will help energy security by establishing an important new supply route. It is essential for our plans to increase electricity production from renewables, particularly wind energy, as access to larger markets will make it more economical. The EU is supporting this project because it will add to the integration of EU energy markets. This, in turn, is very much in Ireland's interests, improving both supply and efficiency.

The Council's discussion on climate change focused on the UN summit at Copenhagen later this year. The EU continues to give leadership through our unilateral commitment to cutting emissions by 20% and our willingness to do more if others are prepared to play their part in a fair global deal. It is likely that this work will form a key part of Sweden's Presidency, which begins in July of this year.

The Council also adopted a declaration launching the eastern partnership to promote stability, good governance and economic development in those countries to the east of the Union's borders — Armenia, Azerbaijan, Georgia, Moldova, Belarus and Ukraine. The partnership will be formally launched on 7 May in Prague. The Czech Presidency has invited all Heads of State and Government to attend.

I wish to conclude my remarks to the House with some comments about the Lisbon treaty. As we know, there is agreement on the need to reform the Union and the Lisbon treaty is the agreed way of doing that. I spoke earlier of how the agenda at this Council reflected very much our domestic agenda, but of course it is only through our participation in the Union that we can shape the necessarily international response to many of the current challenges. So we need a Union that is effective. For example, on energy, even were the Union not supporting the interconnector, we would want to see our energy market more integrated with the rest of the EU because that is in our interest both as generators and consumers of electricity.

During the Council, I was invited by the Presidency to provide colleagues with a brief update on progress in fleshing out the commitments made to Ireland at the December European Council regarding the Lisbon treaty. I made clear that we are continuing to work towards the June Council as the point at which we would hope to secure agreement on guarantees for Ireland. I reminded my colleagues of the importance of the commitments given last December, including agreement that should the treaty enter into force, the number of Commissioners would not be reduced. I stressed that these guarantees promised in December must be legally robust in order to reassure the public about the treaty. While I respect the fact that other member states do not wish to re-ratify the Lisbon treaty, I made it clear that, for my part, the legal guarantees will have to be attached to the EU treaties at the next possible opportunity.

Presuming that we reach a satisfactory outcome over the coming months, I believe we will have a good basis for consulting the Irish people again later this year. I informed my colleagues that the Government has begun discussions with the Council Secretariat and legal service and remains in close contact with the Czech Presidency to which I expressed my thanks for its support.

We are very much on track for the timeline we envisaged in December, that is, agreement on the guarantees by mid-2009 preparing the way for a referendum before the end of the term of the current Commission. Recent poll figures suggest a favourable disposition among the public towards Europe. It may reflect greater recognition of the importance of the EU to Ireland in these economically challenging times, but I can assure the House that we will not be complacent.

This House and its Members will have an important role to play in ensuring that the public fully understands the issues before it. I recall the commendable work of the Sub-Committee on Ireland's Future in the European Union and I acknowledge that those Opposition parties in favour of the Union and a Europe that can deliver for its people have approached these issues in a constructive manner.

Recent events have, I believe, underlined how vital membership of the Union is to Ireland. However difficult people may find today's challenges, we benefit immensely on a daily basis from our guaranteed full participation in the Single Market and our membership of the euro. These are real strengths, without which our future would be far more difficult. If there is one message that came from the Council meeting, it is that we are stronger when we work and act together. The Council again demonstrated that member states can find the compromises necessary in pursuit of the shared goal of a return to sustainable economic growth and the minimisation of the impact on jobs of this current crisis.

For the information of the House, I had a prearranged meeting with the President of the Commission at the margins of the Council at which we discussed the current economic situation and the situation pertaining to the Lisbon treaty. I also wish to inform the House that I have told President Barroso that I will support his re-appointment as President of the Commission later this year. I believe he has displayed the right balance of leadership and consideration and that the Union will be well served by a second term with President Barroso at the helm of a strong Commission.

Enda Kenny (Mayo, Fine Gael)
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I wish to share my time with Deputies Timmins and Creighton.

John O'Donoghue (Kerry South, Ceann Comhairle)
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Is that agreed? Agreed.

Enda Kenny (Mayo, Fine Gael)
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I am glad the Taoiseach has stated he will support the reappointment of President Barroso as President of the Commission. At present, he appears to be the only candidate from the EPP group at least. Moreover, while the leader of the Conservative Party in Britain, Mr. Cameron, may decide to remove his Conservative Party from the EPP, he indicated to me that in the event of that party either forming or associating itself with another centre-right group, there still would be willingness to support Mr. Barroso. I welcome the Council meeting's focus on the economic crisis. Following from that focus, the next Council meeting should concentrate on the Lisbon Agenda, the original intention of which was that Europe should be able to compete with and match job provision and creation in, the United States. Europe fell down on that, it never happened and the impetus should be on this issue for the next Council meeting.

I welcome the support that is being made available from the Union, through the European Central Bank, for different countries. However, there is a need for much stronger recognition of solidarity within the Union for whatever decisions any country takes to protect its own banking and financial systems and so on. While it is fine to have the ECB as a central core, there must be visible support from the Union for whatever decisions are taken within each individual country. One does not wish to see the individual growth of so-called economic nationalism.

I hope the G20 summit meeting in London this week will produce something tangible. I welcome President Sarkozy's statement that he hopes some common ground can be found this week. There was a measure of criticism of the Americans within Europe at the margins of the Council Meeting, pertaining to the pressure exerted by America to the effect that Europe should match American funds in this regard. No less a person than President Barroso himself pointed out that after six months in the United States, a car worker who has been made unemployed will be in receipt of food vouchers. The difference between the United States and Europe is very deep in this regard.

The Taoiseach attended the meeting of the European liberal party leaders in advance of the European Council, which is a matter for the Fianna Fáil Party itself. If Fianna Fáil decides to join the liberal group or if the Taoiseach has decided to so do, he will have an opportunity to use his position as one of the few heads of Government within that group. Given the potential that exists in Ireland as an outstanding location for the production of food of the highest quality, the growth in world population and the clear requirements that exist for further food production, the Taoiseach should try to address the liberal group's view in respect of the Common Agricultural Policy. Its view differs greatly from ours in this regard and I am sure the Taoiseach will be able to use his undoubted strength and influence in this regard.

I welcome the making available of €110 million for the interconnector, which is very important. However, potentially there are a number of other projects in Ireland that could be put into line for approval in this regard. For example, I refer to Ireland's capacity for pumped storage, whereby wind turbines would drive water up mountains from lakes or the sea that then is used to generate power coming back down again. While a major investment programme would be required, from my experience of international power corporations looking at locations in Ireland, some of the projects envisaged could provide half the needs of the country. I welcome the Libertas organisation's decision to contest the European elections in Ireland. These elections cannot be turned into a proxy referendum because we will vote again on the Lisbon treaty. Deputies Timmins and Creighton will deal with this issue. However, I am concerned about the manner in which this organisation has gone about registering itself as a European party. This issue must be addressed. My concern becomes greater on learning that the founder of the organisation has agreed personally to pay back the loans of the Libertas organisation in Poland, contrary to Polish electoral law. I am further concerned that the Libertas organisation has stated that it will produce all evidence regarding expenditure for the future and that it will bring forward proposals in this regard. It first should comply with the SIPO regulations in Ireland and have its obligations in this regard above board before going on to proffer suggestions and solutions for everyone else.

I look forward to the Lisbon treaty referendum in the autumn and welcome that the IFA recently signalled, through its retiring general secretary, that the farm organisation would wholeheartedly back the treaty the next time. It is a pity that many organisations did not do so in the past. The Taoiseach should deal in sequential order with all the issues that were of concern but that were not relevant to the Lisbon treaty. He can rest assured that the Fine Gael Party will campaign openly, strongly and forcefully for its ratification. It is necessary to the futures of all in the new, expanded Europe.

Billy Timmins (Wicklow, Fine Gael)
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An issue of concern to Fine Gael in recent weeks has been the internal political situation within the Czech Republic. While the Taoiseach did not allude to it, I believe he has outlined how it would not have an impact on the operation of the EU and the Czech Presidency in the months ahead. Perhaps the Minister of State with responsibility for European affairs, Deputy Roche, might respond to or deal with this issue during the question and answer session because it will be important that the guarantees we have sought are put in place.

It also is important to be aware that we do not want complacency to set in with regard to the second Lisbon treaty referendum. I acknowledge the opinion polls show overwhelming support for the treaty at present as there is more time to consider the issue, even though no campaign is under way. People must familiarise themselves to a greater extent with the detail of what it actually involves and in addition, economic circumstances have changed in a manner that has concentrated minds. However, Members cannot become complacent and nor should they assume that the next campaign will be fought on the same grounds as was the last one. Members must anticipate and prepare for this because those who state they are pro-Europe but anti-Lisbon are opportunistic and do not know whether they are pro-Europe. I strongly believe they are disingenuous, will move the goalposts and that the arguments the next time will be completely different. Members must anticipate this and, most importantly, rather than getting bogged down in its detail, we must set out in broad narrative terms what the Lisbon treaty is about and how it benefits Ireland, particularly in respect of the economic difficulties we have encountered recently.

Deputy Kenny mentioned the G20 summit which is taking place in London starting today. The Joint Committee on European Affairs has discussed the de Larosière report, which contains 31 proposals on how the financial regulation of Europe might be progressed. While I believe it is important to have global regulation, I do not believe this will be possible because of opposition from the United States. Does the Minister of State have a view in this regard? In addition, is there uniformity within the EU regarding the sort of regulation that should be adopted? It was not prescriptive and I could not ascertain this yesterday, but is there uniformity with respect to what should be the bonuses and incentives? Is there a barometer by which all countries in Europe would agree to abide?

Until we joined the EU we did not have sovereignty in this country. Now we are clamouring for protection in a common fiscal approach, which is not dealt with in the Lisbon treaty. The Taoiseach referred to an aid package of €50 billion, increased from €25 billion, for the EU countries that are not part of the eurozone. He also mentioned the €75 billion allocated for other countries. Is that for European countries or is it worldwide? How will we make a contribution to this? Where will the money come from?

I refer to the reconstruction of Gaza, which was dealt with at the Council of Ministers meeting. Europe must take the lead. During the Bush presidencies Europe was content to stay in the background. We should seek to drive this because until we get an agreement to the Palestine-Israel crisis we will have difficulties in the West and the East, if I may put it in simplistic terms.

I acknowledge the presence of Mr. John Ging, who appeared before the Joint Committee on Foreign Affairs. I compliment him on the excellent image he projects of the UN and this country. We could take our line from him because in Ireland the issue can be divisive. It is not a case of right and wrong; it is a case of rights and wrongs.

Lucinda Creighton (Dublin South East, Fine Gael)
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I refer to a number of the conclusions of the Council meeting. Regarding the objective of member states acting in a more co-ordinated fashion on a response to the economic crisis, I wish to hear the views of the Taoiseach and the Minister of State on the Government's position on enhancing the ability of the EU to impose sanctions in the sphere of economic policy as opposed to monetary policy. That area has been left untouched in respect of subsidiarity and the wishes of the member states. That position is unsustainable in the long term because, if we are to compete with emerging economies and have a more co-ordinated approach from the EU and particularly in respect of the eurozone, we must examine greater co-ordination coupled with the ability to impose sanctions.

At the meeting of the Joint Committee on European Affairs yesterday we discussed the De Larosière report. Some of the recommendations were quite far-reaching in respect of cross-border, almost criminal sanctions for the breach of financial regulations by member states and potentially institutions and companies. That would move the EU in a new direction. I would support it but we must examine this from a national perspective and adopt a clear position on it. It would have an impact on our position on justice and home affairs as well because we have, unfortunately, opted out of that to date. Perhaps we can re-evaluate much of what is going on in the economic sphere.

I refer to the commitments at the Council meeting on the reduction of VAT rates. It is an aspiration and an objective rather than a definite agreement but it is relevant in the context of the national debate, particularly in light of the forthcoming budget. Everyone accepts that a grave mistake was made at Government level with the 21% VAT rate increase. Now that there is a stated objective from the Council meeting, the reduction of VAT rates, in addition to the commitment on the European Investment Bank supporting SMEs and trying to create a better system of financing of SMEs, will we see a tangible result from these in next week's budget? It is a stated commitment of all member states.

The Stability and Growth Pact in respect of the conclusions of the Council meeting was to create sound public finances. We accept that Ireland has deviated far from sound public finances. I am interested to hear if the Taoiseach has picked up tips or new ideas in light of discussions at the Council meeting.

There is much talk about creating an appropriate crisis mechanism for energy security. This is important in the context of what happened in central and eastern Europe at Christmas time. What will that involve?

The Lisbon treaty will be dealt with at the next meeting in June. Will texts be presented to us on the concessions and agreements pursued by the Government at European level? Will the texts be laid before the Dáil or made available to the Opposition? Will we receive them in one tranche or will we have texts on neutrality preceding texts on family policy?

I urge the Taoiseach to reconsider the matter of justice and home affairs. This is too important for Ireland to opt out of and we must acknowledge that a mistake was made with that Cabinet decision. I hope it will be reconsidered in the context of the forthcoming Lisbon treaty referendum.

Joe Costello (Dublin Central, Labour)
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I welcome the contribution made by the Taoiseach on the Council meeting of 19 and 20 March in Brussels. The spring summit built on the winter 2008 summit in addressing the financial and economic crisis. When we consider the package, including what was introduced on 19 and 20 March, it indicates the strong co-ordinated response from the EU to the crisis. It shows the level of commitment to solidarity that can be achieved and how valuable the EU is in the framework context for Ireland and other member states. Already a fiscal stimulus of €400 billion, 3.3% of the GDP, has been injected into the EU economy. In October €30 billion was provided from the European Investment Bank, from which small and medium-sized enterprises may borrow. At the summit, a further €75 billion was made available for borrowing by member states to meet a crisis situation where states were unable to meet the balance of payments. That is a bail out proposal of the last resort. Some €50 billion was announced for financial assistance for non-EU member states. The final package was a €5 billion package, including €110 million for the interconnector in Ireland. That is a sizeable combination of stimulus packages and infrastructure packages. I compliment the Irish Government and officials on presenting the interconnector plans at such an advanced stage that we are in a position to draw down this infrastructural funding when other countries may not be as prepared.

The interconnector is a valuable link. Bord Gáis is spending €4 billion on providing a transmission and distribution grid throughout the country. This is starting from and largely based around the Corrib gas field. At the same time, I am not sure Shell has made any contribution to that distribution and transmission link. This transmission grid link will cost the State €4 billion and the interconnector will allow transmission to the Continent if required. On that basis, does the Taoiseach not believe the support framework deserves some contribution from one of the major beneficiaries? This relates to the parties which discovered the Corrib gas and oil field, namely, Shell.

This compares very poorly to the amount of money invested in ocean energy. I understand there is approximately €26 million going into that. The grid itself costs €4 billion on the island of Ireland alone, with approximately €26 million going into the development of ocean energy, which could be a major sustainable energy supply in future for us.

The elephant in the room was still the Lisbon treaty. The loss of a confidence vote by Prime Minister's Topolanek's Czech Government has handed the initiative to the deeply Eurosceptic Czech President Vaclav Klaus and the Czech Senate as we move towards the final ratification process. That is not a very positive development.

The Taoiseach has stated this House has a major role to play on the Lisbon treaty but we would like to know when it will do so. The Government has already reneged on the commitment given to engage with the main Opposition parties in preparing the text of the legal guarantees and assurances that are directed to bolster the prospects of a successful second referendum. It is now three and a half months since the December summit and neither we nor the country is wiser about the Government's intentions. We do not know the date of the next referendum or the text of the referendum provisions and there is no sign of enabling legislation. There is no sign either of the Referendum Commission and there is no explanatory documentation in the public domain to inform the electorate.

It seems as though history is repeating itself, although the previous referendum was only in 2008. The Government's carelessness at that time was a major contributory factor in the loss of the first referendum and its lack of preparedness and carelessness could easily be the determining factor in the second referendum in 2009. In the growing current economic and political instability, it is crucial that every effort be made to keep Ireland at the heart of the European Union and I would like to see a more proactive response from the Government on the way forward at this time, with only a few short months left until the Irish electorate will be asked to vote again in a referendum.

With regard to the economic crisis, the Council commended the member states for their financial recapitalisation measures and it was agreed to continue to act in a co-ordinated fashion in accordance with European Commission guidelines. The Council also agreed that there was a need to reshape the macroeconomic global management and regulatory framework for financial markets and investment in financial institutions. Most importantly, it agreed that the high-level group on financial supervision, chaired by Jacques de Larosière, was the basis for regulatory and supervisory action.

It was also agreed that the first decision would be taken at the summer summit in June on a new supervisory and regulatory financial system. Under the report the member states must first put their own houses in order in accordance with strict guidelines. The EU will then establish three supervisory authorities to cover banking, investment and insurance institutions.

Although it is a detailed and complex document, the de Larosière report is a very valuable initiative as it marks the end of the neo-liberal light regulation policy which was pursued by the Commission and particularly by our own Commissioner McCreevy. This facilitated the destruction of many financial institutions and economies, with the loss of millions of jobs and the impoverishment of millions of people. This light regulatory mechanism permitted such events.

The availability of loans is a very important part of the approach by the European Union and I have previously raised this matter, to which the Taoiseach also referred. The European Council welcomed progress on the €30 billion fund made available to provide credit for small and medium-sized enterprises but there has not been much progress in Ireland in this regard. The fund was made available by the Commission on 3 October, approximately six months ago.

Ulster Bank, AIB and the Bank of Ireland have just got approval for €100 million each in loans that will be distributed over 18 months to small Irish businesses. That is a drop in the ocean and I cannot understand why it has taken so long to begin to draw down the funding. None of it has entered the economy yet. Bank of Scotland was able to draw down the money in December 2008 so why has it taken the Irish banks so long to draw down a cent of the money available for the hard-pressed small and medium-sized enterprises? One can consider that nearly two thirds of private sector employment and 50% of all jobs are in the small and medium-sized enterprise sector, which consists of over 800,000 workers, so it is unforgivable that Irish banks are neglecting it.

The recapitalisation of AIB and Bank of Ireland was completed yesterday with the transfer of €7 billion of taxpayers' money, following on from the €500 billion guarantee scheme. Surely the Government can now insist on the banks doing what they are supposed to. Instead of destroying the economy — which they have done in many ways — they should support it because of all the investment and support we have given them.

Small and medium-sized enterprises are unable to source a regular credit flow and the failure of banks to lend their own money or draw down some of the €30 billion waiting in the EIB is depriving small businesses of the lifeblood of their daily operation. It is a scandal and the private banking system has already brought the economy of this and many other countries to their knees through irresponsible lending and private greed.

This cannot be allowed to hold the country to ransom in this time of crisis. It is time to look at a new financial vehicle for protecting the interests of the economy and the citizen. It is time to reflect on the role played by the ACC and the ICC in ensuring the flow of credit to the agricultural and corporate sector in Ireland in the past. It is time to establish a State investment bank which would have a special role in lending to the small and medium-sized business sector and drawing down European Union funds when available. It seems the nationalised Anglo Irish Bank has the potential to be that vehicle. It must first be cleared of toxic debts and be reconfirmed as a State bank before being recapitalised and given the new role and, finally, a new name.

These were the main issues addressed at the meeting of the Council. The employment summit, which was briefly referred to, was meant to take place in May 2009 in Prague. It concerns the maintenance and creation of jobs and at the summit all the Heads of State would have participated. It now seems that the leaders will no longer attend the meeting and it will be downgraded to the Troika of countries attending and reporting back.

That is a major disappointment because we cannot speak of financial stimulus, recapitalisation and guarantees for banks unless we talk about protecting and creating jobs. That meeting is even more important than what was going on in the Council in March and which will continue with financial and regulatory measures in June. Will the Government seek to act as an honest broker or another major role in the issue? Given that the British and French Governments are the major players involved in downgrading this summit, Ireland should work with other small European states to ensure that it will be upgraded again and that the emphasis will once more be placed on employment, the creation and retention of jobs and the Lisbon Agenda.

An issue which exercised the House, the Joint Committee on European Affairs and the Joint Committee on Foreign Affairs was the siege of Gaza and the developments that have taken place in the interim. Was the situation in the Middle East discussed to any great extent by the European Council? None of the reports issued indicates whether it was discussed. If it was discussed, what determinations were reached in respect of it?

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Last month's meeting of the European Council focused on finding solutions to the current economic crisis. Once again, the Council came up very short.

Is mór an trua nár thapaigh an Chomhairle Eorpach an deis. Is am cinniúnach dúinn agus don Aontas é seo. Tá geilleagar na hÉireann agus an geilleagar domhanda i gcruachás. Tá dúshlán mór romhainn. An mí seo caite, measaim go raibh deis ag an Chomhairle Eorpach déileáil leis an cheist seo. Is trua nár deineadh é sin. Tá súil agam go ndéanfar i bhfad níos mó amach anseo.

Not only were the solutions arrived at by the European Council inadequate, they failed to recognise that policies such as deregulation, liberalisation and privatisation — which have been pursued fanatically at member state and EU level — are at the heart of the current global recession. If we are to come to grips with this crisis, these policies must be reversed.

Má táimid chun eacnamaíocht an tír beag seo, atá ar imeall na hEorpa, a tharrtháil, caithfimid féachaint ar cúiseanna na fadhbanna sin, atá luaite agam cheana. Tharla caimiléireacht éaguimsithe de thairbhe teip iomlán na margaí aigeadais. Níor dheineamar na margaí a rialú, nó a riaradh, i gceart. Chuidigh sé sin leis an meon "rip-off" a bhí i measc an lucht gnó agus na bainc, ní hamháin sa tír seo ach ar fud an domhain freisin. Measaim nár dhein cruinniú an Chomhairle Eorpach aon rud chun roinnt de na fadhbanna sin a réiteach.

The absolute failure to properly regulate the financial markets was always a road to rip off and corruption. Obsessive deregulation and privatisation of public services has, and will, if left unchallenged, continue to prevent sustainable economic growth which will deliver a fair society.

Brian Cowen (Laois-Offaly, Fianna Fail)
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Gabh mo leithscéal, a Theachta, tá orm imeacht anois.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Ceart go leor.

The Council refused to acknowledge that the same failed economic policies which have led us to our current position are exactly those which are reinforced in the Lisbon treaty. These policies have been exposed as being in contradiction with the economic needs of the moment. However, the Council persists with the myth that the Lisbon treaty is necessary to deal with the crisis.

Neoliberalism has failed. Its excesses and the logic behind it have put at risk the hard work of an entire generation and threaten to plunge whole populations into poverty. The simple fact is that ratification of the Lisbon treaty would make matters worse rather than better.

There is a need for a fundamental change in EU policy and in its treaties. These matters should have been the subject of European Council's deliberations. The protection of jobs and creation of new employment must be the absolute priority in the midst of this economic crisis. The haemorrhage of jobs must be stopped and that will require proactive interventions by the governments of member states.

Political leaders are casting about for solutions without understanding the nature of the problem. If we do not put the needs and interests of people at the heart of the future economic system, that system will also be doomed to failure. The approach of political leaders to the Lisbon treaty is exactly the same. In light of the major changes that have taken place during the past six months, it is bizarre to listen to EU leaders trying to force through a treaty which was designed to deal with an entirely different economic and political environment. We believe the treaty was a bad deal then and it is probably an even worse one now. The Lisbon treaty is old hat and is a charter for the policies of failure. We need a new treaty for a new time.

The media reported that the Taoiseach would use the opportunity presented by the summit to update his European colleagues on the Lisbon treaty and the development of the so-called legally binding guarantees agreed at a previous EU summit held last December. It is absolutely astonishing that he updated his colleagues in Brussels on the Lisbon treaty and the development of guarantees for Ireland but that he feels no compulsion to extend the same courtesy to the Irish electorate. For some months, Sinn Féin has been calling on the Government to publish the wording of those guarantees if, in fact, any such guarantees have been secured. I wonder whether these will be guarantees at all or whether they will be mere legalistic verbiage.

In light of their reluctance to speak out on this matter, it appears that the broader issues of the EU's democratic deficit, its erosion of workers' rights and public services, its emerging foreign and defence policy agendas and its promotion of free trade over fair trade have not been dealt with. Ensuring that the facts emerge may well provoke a debate in which the Government does not wish to engage prior to the European elections.

A meeting of the 27 member states' Commissioners also took place last month. The reason for this meeting was to discuss a strategy for Ireland's rerun of the referendum on the Lisbon treaty that the Government is due to hold later in the year. The Commission's representative in Ireland warned those gathered in Brussels that the political and economic situation in Ireland could lead to a second "No" vote. The people gathered for the Commission's "brainstorming" session also discussed the €2 million they intend to spend on an advertising campaign which will precede the rerun of the referendum and which will try to promote the pro-Lisbon agenda. A spokesperson for Commission President José Manuel Barroso claimed that it was their intention to distribute factual information on EU policies and the Lisbon treaty to citizens in Ireland and in other member states in order to allow a vigorous debate to take place. However, the last thing EU leaders want is a real debate taking place either in Ireland or elsewhere in the Union.

What is proposed is a waste of €2 million, which, in view of the current crisis, could be better spent on social projects. The Irish electorate will not be bought by the European Commission or bribed by it or anyone else to vote in favour of the Lisbon treaty. We have already made our decision and, in my view, this decision will be reinforced if the Government proceeds with its plan to rerun the referendum.

If the Commission, the Council or the Parliament truly want a vigorous debate on the Lisbon treaty or on the current direction of European policy, they would not have done everything possible in the wake of the rejection of the proposed EU constitution by the Netherlands and France in 2005 to ensure that there would not be a popular vote on the treaty in member states. The Commission does not want an open debate on the Lisbon treaty; it merely wishes to persuade us of its way of thinking. This will not happen.

The people of Ireland and Europe deserve better than the Lisbon treaty. We need a new treaty for new times. Ireland's place is firmly within Europe. The Irish people have been loud in their support for the European Union but they will not accept a bad deal for Ireland. They do not want to hand decision making power over our future to unelected bureaucrats in Brussels.

The people of Ireland want a different Europe, and they have stated that in a referendum. Member state citizens across the Union want a different Europe but they have not been given the opportunity to state that in a referendum. We want a Europe based on solidarity and fairness, a Europe of peace that respects the right of each member state to make its own decisions on sovereign matters and one that prioritises workers' rights and public services — a Europe of equals. That is the opportunity before us. The people are ready to take up the challenge, and it is time for the European leaders to catch up. Ireland must remain at the heart of Europe but we want a change of policy direction in Ireland and also in Brussels. We need a new treaty for a new time, a new dispensation. We need new political leadership but it is not coming from the opposite side of the House.

I refer to the question of the Palestinians, previously raised by Deputy Costello, and the onslaught by Israel over the new year which resulted in the slaughter of over 1,500 people in the Gaza area. Given the logic of the position of the Minister for Foreign Affairs, Deputy Martin, as espoused at the Fianna Fáil Ard-Fheis, will the Minister of State indicate whether anything was said about the Palestinian situation at the recent Council meeting? Were the Minister's views common to other European leaders because he stated: "It is very clear to me that very serious offences and almost certainly violations of international humanitarian law were committed by both sides". On the use of white phosphorous by Israeli, he went on to state: "The use of such weaponry in a densely-populated area such as Gaza is completely unacceptable and does represent in my view a violation of international humanitarian law and raises serious questions regarding the conduct of its military campaign in Gaza which the Israeli Government will have to address".

Questions must be raised at European level about the Euro-Med agreement, the preferential trade agreements with Israel, and the fact that the European Union is continuing with them despite breaches of humanitarian law and international territorial law. If it has not been done to date, will the Minister give a commitment at the next European Council summit meeting that he will be to the fore in demanding the suspension of the trade agreement, which is the logic of his statement?

I draw the Minister of State's attention to comments made by the United Nations special rapporteur on human rights in the Palestinian territories, Richard Falk, on the Geneva Convention and the requirements for warring forces to distinguish between military targets and surrounding civilians. He stated: "If it is not possible to do so, then launching the attacks is inherently unlawful and would seem to constitute a war crime of the greatest magnitude under international law". A war crime dictates to the European Union that the trade agreement must be suspended.

On a related matter, has the European Council re-examined its policy of excluding Hamas and not dealing directly with the elected Government of the Palestinian people, and the effects its policies are having on those under siege in Gaza and the West Bank? Has any thought been given to suspending the trade agreement due to Israel's ongoing policy in the West Bank, namely, the capture of land and the illegal settlement, another issue which would be sufficient to conclude that the agreement must be suspended?

Will the Minister of State indicate if there was any discussion on how the EU, as a member of the Quartet, would help in lifting the ongoing siege of the Palestinian territory called Gaza? It is no longer on the media's radar but there is an ongoing siege and humanitarian aid, food and reconstruction equipment cannot get into an area which was bombarded continuously for three weeks. That serious question must be addressed. I hope it will be addressed and that the Minister of State can give a commitment that there will be more discussion at future EU Council meetings.

Kathleen Lynch (Cork North Central, Labour)
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We will now have a question and answer session for 20 minutes. I call Deputy Creighton.

Lucinda Creighton (Dublin South East, Fine Gael)
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I refer again to a point I raised in my contribution, which concerns the justice and home affairs measures contained in the Lisbon treaty. I would like a response from the Minister of State as to whether there is at least an openness at Government level to reconsidering the position adopted by the Cabinet in advance of the Lisbon treaty referendum last June. In my view and that of my party it was a flawed decision. It contributed to the negative outcome in the referendum. There is an opportunity now to address that and adopt the correct position. It would also lend considerably more support to the outcome of the next referendum.

Dick Roche (Wicklow, Fianna Fail)
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I would like to deal with a number of the points raised by Deputy Creighton, all of which are germane.

Our position on justice and home affairs measures was not discussed during the course of the European Council and is not covered in the conclusions. I should make the point that we had a lively debate on that particular issue last year, and there is a three year review built into it.

I will link that to a number of the other points made. Deputy Creighton and other Deputies asked about a number of specific issues. Deputy Creighton touched on the issue of the need for better regulation and how Europe could lead in that. There was a lengthy discussion on the issue. There are two important documents before us at the moment. One of them is the Solvency II arrangements, which are very important in dealing with the insurance industry. The elements within that are of vital importance. I firmly believe that better regulation in that industry is critical. If we consider that the meltdown commenced from the moving of toxic assets in the United States, which affected the whole of the financial services industry, it is clear that something is being done in that regard.

I understood Deputy Creighton to make the point, and I fully agree with her, that this illustrates how critically important it is for Ireland to be at the heart of the European Union and to be part of the eurozone because the decisions that must be made under the Solvency II arrangements, for example, which will take up to 2012 to come into operation, can only be made by 27 sovereign states sitting around the table and working them out. Contrary to the contribution from Sinn Féin, which is, to use the expression, "from the teeth out" in its support for the European Union, this is one of those practical examples of why the lives and livelihood of every citizen, small, medium and large businesses, our banking systems and the entire financial system, is very much determined by how we play a part in Europe.

Deputies Costello and Timmins mentioned the de Larosière report. The report argues a prudent move to back to better regulation in banking. As Deputy Timmins said, and I believe Deputy Costello made the point also, there are 31 key rules in this. I would agree with Sinn Féin on this point, and I am surprised its Members have not been jumping up and down supporting this, because the report suggests a move back to more prudential banking controls. We are a small, open economy. That will not occur through Ireland taking decisions in isolation but only if Europe as a whole moves in that direction.

Justice and home affairs did not form part of this discussion, it was a domestic discussion where we made our own decisions subject to review in three years.

Joe Costello (Dublin Central, Labour)
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There will be a summit in Prague in May on job creation and job protection. It is one thing to provide financial support for loans but it is another thing to address the fact that every country is haemorrhaging jobs. If we could retain and create jobs, economies could stabilise. We need a combination of financial stimulus, job maintenance and creation and upskilling. Could Ireland play a prominent role in restoring that summit to its original intention, that it would have the Heads of Government of all 27 member states coming up with proposals and then, with assistance from the European Union, delivering them to the member states? If that summit is downgraded and the Heads of State of the main countries do not turn up, we will not make much progress. Could we play the white knight and push the issue with other countries?

The Lisbon treaty debate was an afterthought at the Council meeting. What degree of detail did the Taoiseach offer his colleagues? Very little information has been given to Members of this House, despite commitments. When is the Taoiseach going to share this information and when will he ask for dialogue on the legal preparation of texts? When will this stop being a secret where discussions are going on behind closed doors? A referendum is a public matter where we change the Constitution.

Will the Minister of State explain why the Irish banking system has not availed of the money available in the European Investment Bank to inject into the Irish economy? The banks said they do not have a problem with recapitalisation but they are not giving money to those who need credit and they are not drawing down money from Europe to lend out. Is it because they are not getting the returns they want or because they cannot be bothered? Why is the Government not using its muscle, having guaranteed and recapitalised the banks, to ensure the banks start to resource the Irish economy by providing lines of credit to small and medium enterprises? This is why we have Council meetings, to ensure these decisions are taken and then implemented. If our institutions do not implement them what are we going to do about it?

Perhaps the Minister of State will address my suggestion about a State investment bank so we could bypass the private banks, which have reneged on their responsibilities.

Dick Roche (Wicklow, Fianna Fail)
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As Deputies know, I spent a lot of time lecturing on public administration and it is interesting to read the debates on the creation of ICC and ACC to see how relevant those debates are to the current situation. Deputy Costello is right, the banking system has gone through an extraordinarily fiery period. The banks drew this on their own heads, greed rather than prudence drove many banking decisions. The Deputy mentioned Royal Bank of Scotland drawing down some of the funds already. Given that corporation's history, I would not use it as a model but I see the point. Is it not extraordinary, as we both agree, although Sinn Féin would not agree, that on this occasion rather than taking money out of banks, something Sinn Féin is more familiar with than most of us, we are willing to provide support through the banking system for small and medium enterprises?

On the Lisbon treaty, my door is open, I am willing to talk to anyone, including those who oppose us. Information should flow but we are still working on texts. There is no desire to withhold information and I am willing to provide briefings for Deputies. We did this successfully in the second Nice referendum, although I accept we were less successful during the first Lisbon campaign. In preparation, however, we should have more direct co-operation. Co-operation will flow as soon as we have a text, there is no point in talking before then.

I believe, given the circumstances, that the Czech Presidency has been successful to date. It was always made clear that the major priority in the first half of the Czech Presidency, until the spring Council, would be the economic crisis and institutional issues related to Lisbon would be taken in the second half.

I was inclined to the Deputy's point of view when it turned out that the summit on jobs was in effect a troika plus social partners. The point can fairly be made that there was a special meeting of the Heads of Government on 1 March and a spring Council. An excessive number of formal summits can be counter-productive because it is hard to see how we can produce decisions that will dramatically change from those made four weeks earlier. Meetings between the troika that acts as the driving force in the EU and social partners are a new format and might be a good one. There could be a lot of benefit from a more flexible format than the traditional summit. European summits are highly institutionalised and formalised and a smaller arrangement will facilitate more informal changes. It could have the beneficial effect the Deputy is seeking.

Deputies mentioned the Middle East peace process. This was discussed at the Foreign Ministers element of the summit meeting and last Thursday and Friday at the Gymnich meeting in the Czech Republic. One of the main concerns at the meeting was the lack of progress and the failure to open the border crossing points. I met with Mr. John Ging, as Members did on the previous day, and was able to brief him on our concerns. The Minister for Foreign Affairs, Deputy Martin, has also made his concerns clear. It is again a pity that Deputy Ó Snodaigh, having asked the question, has found it necessary to leave the House.

Ireland's position on this matter has been firm and clear that the two-state solution is the way forward. Europe's interaction with the Israeli Government and the Palestinian governing authorities will be determined by their performance. The Minister for Foreign Affairs is the lead proponent at EU Council meetings, and elsewhere, for the bilateral approach and that Europe needs to drive the solution to the humanitarian crisis in Gaza. I have repeatedly made the point that ghettoising, or imprisoning, an entire population is the worst way to create the conditions for peace. If there is any lesson that comes from history, it must be that the collective punishment, such as that visited on the Palestinian people, is counterproductive. It is surprising and disappointing that the Israeli State has not recognised this point.

Deputy Ó Snodaigh wilfully ignores the fact that Europe is the leading provider of support to the Palestinian people. Europe has been the leading advocate of peace, democracy and human rights in the entire region. There have been vigorous contributions from myself, the Minister for Foreign Affairs, even at official level, about the concerns commonly shared by the Irish people on the Middle East and the condition of the people in Gaza.

I thank Members for their contributions. The Taoiseach earlier said he would have stayed for the entire debate but events meant he was taken away from us.

The recent EU Council summit was significant and occurred at a critical time when the world is mired in an unprecedented economic and financial crisis. Yet again, it showed how important it is for Ireland to be at the heart of the European Union. Deputy Ó Snodaigh spoke, like the Libertas founder has, of unelected elites. I do not expect better from the founder of Libertas who has only a passing acquaintance with truth or accuracy. I would, however, expect a person elected to this House to recognise that a summit of 27 different Heads of State, Foreign and Finance Ministers is not a meeting of unelected bureaucrats or faceless individuals. It is time that the fundamental dishonesty that has been injected into the debate about Europe is put to one side. I have no difficulty in engaging with Deputy Ó Snodaigh or anyone else on issues. Bogus soundbites, however, are a disservice to democratic debate.

All member states accept there is no foolproof way out of the economic crisis and that solely national solutions would not be effective. Concerted international action is imperative. The EU is well equipped to offer international leadership at this time of great difficulty. It is the only regional body worldwide that has that capacity.

At the recent Council summit, important decisions were taken. The Heads of State pledged to do everything necessary to restore economic growth. I was impressed by Deputy Costello's iteration of the €400 billion recovery injection into the European economy, 3.3% of EU gross domestic product. The fiscal stimulus measures are focused and will achieve results, generate new investment, boost demand and create jobs.

The agreement on €5 billion in EU spending as part of the European recovery plan also sent out an important message about European solidarity and cohesion. Members referred to the importance of the €110 million injection into the east-west interconnector. Energy security is one of the most critical issues facing Ireland and can only be achieved in the European Union. Ireland will also benefit from funding for projects such as the extension of rural broadband coverage and the Common Agricultural Policy healthcheck. The recent European Investment Bank release of €300 million funding for the Irish banks is welcome. The banking system must get these moneys into the country quickly and out to SMEs. The doubling of the ceiling of aid to member states not using the euro to €50 billion provides significant support from the eurozone to central Europe. This is a fundamentally sound indication of the solidarity at the heart of the European Union, counter to the mendacious debate heard from Libertas and Sinn Féin.

A pledge of an additional of €75 billion in support for the IMF again demonstrates Europe is heavily involved in finding solutions to a worldwide crisis. Looking forward to the G20 summit in London tomorrow, the EU spelled out the common position on how to improve regulation and oversight of international financial services. I believe Europe is right in this regard. Those who are sceptical of moving towards better regulation should remember that one factor in the current economic crisis was a lack of appropriate and functional regulation.

The Council also highlighted the importance of EU member states working together under the EU umbrella to cope more effectively with the challenges we face. On the Lisbon treaty, the Taoiseach offered his EU colleagues an assurance that we are on track to finalise our legal agreements by the time of the June Council meeting. In the coming months, we will be seeking to give effect to what was agreed at the December Council. It was never intended that the Council meeting in spring would take the final decision on this. Any Member who wants to be briefed on any issue in my particular purview will find my office door open.

Work on the texts will intensify over the coming period. I am confident the spirit of solidarity we saw since last year's referendum will be reflected and we will be successful in delivering on the commitments made at the December Council meeting. We belong to a Union which cherishes and respects diversity and the solidarity which exists between member states. Our experience last June has highlighted the value of European Union membership. The retention of our position at the heart of Europe will be determined by the vote we take later this year on the Lisbon treaty. We cannot expect to be treated as the golden-haired boy of Europe if we do not play our part in it.

I thank Members for their contributions. The upcoming meetings at international level will be critical. The Government will continue to work on the issues raised by last June's treaty referendum. When we reach finality on these, we will be talking with all parties in the House.