Dáil debates

Wednesday, 31 March 2010

11:00 am

Photo of Aengus Ó SnodaighAengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Question 1: To ask the Taoiseach if he will push for the adoption by the European Council at its meeting on 25 and 26 March 2010 of a commitment from each member state to reduce by 25% the number of its own population living in poverty by 2020 as a core target to be contained in the EU 2020 strategy. [12636/10]

Photo of Aengus Ó SnodaighAengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Question 2: To ask the Taoiseach if he will push for the adoption by the European Council at its meeting on 25 and 26 March 2010 of annual or biannual poverty reduction targets leading up to 2020 in the EU 2020 strategy. [12637/10]

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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Question 3: To ask the Taoiseach if the agenda for the March meeting of the European Council has been finalised; and if he will make a statement on the matter. [12957/10]

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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Question 4: To ask the Taoiseach if he will report on his attendance at the European Council meeting on 25 and 26 March 2010; and if he will make a statement on the matter. [13618/10]

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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Question 5: To ask the Taoiseach the bilateral meetings he had on the margins of the March meeting of the European Council in Brussels; and if he will make a statement on the matter. [13619/10]

Photo of Eamon GilmoreEamon Gilmore (Dún Laoghaire, Labour)
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Question 6: To ask the Taoiseach if he will make a statement on the outcome of the European Council meeting on 25 and 26 March 2010. [13688/10]

Photo of Lucinda CreightonLucinda Creighton (Dublin South East, Fine Gael)
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Question 7: To ask the Taoiseach if the European Council has discussed the loss of economic competitiveness at member state level; and if he will make a statement on the matter. [13750/10]

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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I propose to take Questions Nos. 1 to 7, inclusive, together.

I attended the spring meeting of the European Council in Brussels on Thursday and Friday, 25 and 26 March. As I will be making a statement to the House later today, I will confine myself to giving a summary account of the proceedings now.

The meeting discussed a new European strategy for growth and jobs, often referred to as EU 2020, which is intended to improve Europe's competitiveness in light of increasing global competition. The draft strategy is consistent with Ireland's efforts to move towards a smart economy with innovation and sustainability at its core. The council agreed the five headline targets for the strategy which centre on labour force participation, educational attainment, research and development, climate change and sustainability, and poverty reduction. I will elaborate on these in my statement later.

There are different views on how best to measure poverty fairly. As a result, we agreed that we would have to come back to this target, as well as that on education, at our June meeting. The elaboration of the strategy, including the setting of national targets and implementation arrangements, will be the subject of intensive work at several sectoral councils in the coming period. It is intended that the European Council will sign off on the strategy at its meeting in June.

The European Council discussed competitiveness and there is a considerable focus throughout Europe both on competitiveness vis-À-vis the external world, as well as relative competitiveness giving rise to imbalances among member states. The issue of competitiveness is at the heart of the EU 2020 strategy. The Heads of State and Government also discussed the situation surrounding global climate change negotiations following the disappointing outcome at the summit in Copenhagen last December, and agreed on a number of steps intended to support those negotiations.

Further to the statement agreed at the informal European Council meeting of 11 February, the Heads of State and Government of the eurozone countries concluded that, should it prove necessary, all eurozone member states would contribute assistance to Greece by means of bilateral loans, and that this would occur alongside significant support from the International Monetary Fund. The availability of this mechanism, which is heavily conditional, is intended to ease the pressure on Greece as it seeks further funding in the market place. I have arranged for a copy of the agreed statement by the Heads of State and Government of the eurozone countries, which sets down the arrangements, to be laid in the library of the House along with the conclusions of the spring European Council.

Photo of Caoimhghín Ó CaoláinCaoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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What is the Taoiseach's response to Social Justice Ireland's assessment of the European Council's failure to set targets for poverty reduction and educational disadvantage? The Social Justice Ireland commentary on the European Council meeting concluded that European leaders seem to be abandoning the most vulnerable people in Europe. Let us consider the draft EU 2020 strategy presented by the Commission to the council. It set very modest targets indeed but it was not even accepted. It was overturned and rejected by the Heads of Government in favour of what Social Justice Ireland has described as meaningless aspirations.

Does the Taoiseach agree with the European Anti-Poverty Network that this sends a remarkably negative message about our commitments, that of the Taoiseach and the Government and about the EU's purported desire to tackle poverty and social exclusion given that 4.2% of our population are living in consistent poverty, 14.4% live in relative poverty and, at present throughout the European Union, some 84 million live in relative poverty? How does the Taoiseach explain the failure on his part and that of the Irish representation and the European Union to act against this very sorry set of statistics? It is very important because sometimes the view is that job creation of itself is the entire panacea for the issue of tacking poverty. Does the Taoiseach not accept that some 30% of those here living in poverty have jobs? They include the heads of households who are at work but they are living in poverty because of the low-pay circumstances in which they work.

Does the Taoiseach not accept that a more complex and broad response is required to truly tackle all causes of poverty? Does the Taoiseach not agree that a poverty reduction strategy with binding periodic targets enforced by the European Union with at least the same vigour with which it pursues its economic goals should have been adopted at last the European Council meeting last Thursday and Friday?

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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I do not accept that the EU is unmindful of the need for social cohesion. As part of the fundamental objectives of the union there is a cohesion policy to provide for a socially inclusive society and one which is economically dynamic and which can provide standards of living, jobs and a quality of life for the European Union. We must do this in the context of a very competitive world trading environment. From a consideration of world investment patterns it is clear Europe has much work to do if it is to deal with some of the disadvantages it has in terms of demographics vis-À-vis other parts of the world. Social costs will increase inevitably and we must improve and increase the potential of our human capital. People must be able to create greater productivity and wealth to fund the increased social costs that will inevitably emerge as we try to maintain the political, social democratic model that is at the heart of the European Union.

In that context, the 2020 strategy is being devised in an effort to learn from the lessons of the Lisbon Strategy, where there were many targets and many, as they call them, score sheets on a range of criteria, which unfortunately became a box-ticking exercise in some respects rather than looking at having a better outcome with fewer targets. The President of the Commission outlined that one would have these five targets but underneath that one would have flagship initiatives by the European Union cutting right across all of its area of activities in social and economy policy to help achieve these targets. It would not be a question of setting targets, letting matters flow along and hoping that one reaches them. It is an integrated strategy that is trying to minimise the number of targets - five, as have been outlined.

Deputy Ó Caoláin mentioned one of them, coming specifically to his question on poverty reduction. There is a need to look at more than merely the initial indicators that were set out in the draft, and we suggested that. We felt further work should be done on it. They have agreed that further work will be done so that we can try to ensure the poverty reduction target can be met. Therefore, more work is to be done between now and the June Council to satisfy Heads of State and Government that there is a sufficient level of work done that would convince us that we would be more likely to achieve it than simply using it based on the information we have at present. Far from it being dismissive of some of the social objectives set out in Lisbon 2020, the fact that more work needs to be done on it is an indication of the need to have a robust and rigorous analysis of that aspect of the targets no more than one would have on the more strictly economic ones.

Photo of Caoimhghín Ó CaoláinCaoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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There is nothing in the Taoiseach's response, in what I have been advised of the European Council engagement last week or, indeed, in the commentary from Social Justice Ireland and others such as the Anti-Poverty Network, that gives me a sense that he utilised his opportunity of representing us at that Council meeting last week to press for a robust anti-poverty strategy. Ireland is not playing the part that it can and should.

The Taoiseach will respond in his own words, but the fact of the matter is I fear that he is leaving it to the big wigs to make all the decisions. What objection did the Taoiseach raise to the rejection by the Heads of Government of the draft 2020 strategy presented by the Commission? They were basic propositions. Why could that not have at least been accepted instead of being rejected for what have been widely described as meaningless aspirations in the commentary by SJI since?

Ireland has not played the part that it must on the European stage in seeking to put robust targets in place. Only a week before the European Council meeting, in a written response to parliamentary questions from the Sinn Féin team, the Taoiseach indicated that Ireland supports inclusion of a target to capture progress towards greater social cohesion. The precise position he would adopt, the Taoiseach went on to state, would depend on what emerges from the ongoing analysis and preparatory discussions. That gives me no confidence that the Taoiseach was going there with a clear purpose and intent to argue the position cogently and forcefully.

Photo of Séamus KirkSéamus Kirk (Louth, Ceann Comhairle)
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Could we have a question?

Photo of Caoimhghín Ó CaoláinCaoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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I am concluding with this. With so many other voices looking over the work apparently done over the last two days of the past week, these were not good days work in the interest of people who are suffering at the margins of our society and the European Union community. Does the Taoiseach realise that if we do not take this lead, a position that he, the Government and this country can take within the European Union, certainly we cannot depend on some of the other member states to provide the answers? They will not do it. It will need leadership from countries such as ours. Would the Taoiseach not agree that we should be to the fore in demanding the most stringent targets over a ten-year plan with reviews at periodic points along the way to ensure that the targets are being met? Can he give us any hope that he will approach this issue with the robustness and determination that it quite clearly requires?

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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As I explained to the Deputy, this issue was raised by our delegation and others. This was a work-in-progress discussion the Heads of State and Government were having and it was agreed by everybody that further work was needed in this area. The fact it was highlighted and such work will now take place is an indication that there was not a dismissive attitude being taken to this target no more than other targets. Much official work will be ongoing and Ireland will make its views known.

We have had our own national anti-poverty strategy. The basis upon which these European Union strategies can work is that we need to reflect them as well in national strategies. The total budget of the European Union is less than 2% of total spend in budgets throughout the European Union. National governments have a considerable responsibility to try to integrate the strategies outlined at EU level with national budgets and priorities. Mr. Felipe Gonzales, the former Minister of Spain, who is chairman of the reflection group and who attended the dinner that night and spoke on this question, made this point, that it is important when there are EU strategies that national strategies tie into them. Otherwise getting the outcomes that one expects is less likely unless one applies the resources, the far greater proportion of which are spent at national level than at European level.

On the question of legally binding targets, one is outlining a strategy here. There are directives and various other legal instruments in the implementation of strategies during the course of the period between now and 2020 that can be considered in terms of how one improves the lot of those who are at the lower end of the income scale, but I do not envisage the strategy going into that sort of detail. The strategy must outline the orientation, priorities and general direction in which we can take Europe forward, and how would that feed into subsequent debates on the budget review, etc.

On our own situation, for example, at the meeting I highlighted the fact, which was reflected in the conclusion, with total support from President Sarkozy after I made the intervention, that when one is looking at the future of Europe and providing more jobs in Europe, the biggest manufacturing industry in the European Union is the food and drinks industry, which depends for its primary source of production on agriculture. It is almost getting to be the case in some quarters that one cannot mention agriculture as if one is some hidebound dinosaur from the past who should not be mentioning probably the one effective common policy the European Union enjoys at present. We have competitive advantages in that area and certainly within the European system of agriculture, we ourselves have competitive advantages vis-À-vis other European countries. Whether in food safety, environmental sustainability, the future of rural communities, maintaining indigenous industry, providing for research and development tranches to go into that industry as well as the more esoteric bio-tech, bio-pharm and other such industries, we want to ensure that we do not throw out the baby with the bath water in terms of new strategies. It would not make sense, in any corporate review or in any company looking at what it needs to do for the future in the context of a more trading environment, to decide that the business at which one is biggest within one's own operation, that is, in terms of manufacturing, should no longer be a fundamental part of how one will compete in the future. That was strongly reflected in the conclusions.

At these work-in-progress meetings, pending the June Council meeting, Ireland makes its voice heard and seeks to make an input to ensure a balance is achieved that not only reflects our priorities but makes sense of the European strategy. There is no point in attending them simply to make a national case. If it can be shown to be in the interests of Europe generally, one is likely to get greater support at the summit table. The new format for European Council meetings, with just Heads of State and Government around the table, allows for better interaction and political debate than in the past when there were large meetings which tended to be more pro forma and scripted.

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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At a recent European People's Party meeting, which several Heads of Government attended, much concern was expressed about the Greek economic situation and how it had got so far out of line. Germany and France broke the Stability and Growth Pact several years ago. Accordingly, the general feeling was there was little point in imposing financial penalties on a country in serious financial difficulties arising from the condition set out in the pact.

It was reported from the recent European Council meeting that the German Chancellor, Angela Merkel, commented on the possibility of a requirement for a European monetary fund, similar to the International Monetary Fund. As the Taoiseach is aware, this would require another treaty. I do not think anyone here wants to get into that again. What is the Taoiseach's view on this proposal?

In addition to the loans Greece may receive from the IMF, will the Taoiseach inform us as to how much Ireland will be expected to contribute to a bilateral loan for Greece and what conditions will attach to it?

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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There was no request from Greece for funds before the Council. This meeting was a follow-up on the February Council statement which said it would provide support for Greece. That was to satisfy the markets from which Greece is trying to obtain funds. Greece wishes to handle this matter itself as a sovereign state and it is taking tough measures to do that. There was no request before the European Council for support for a fellow member state. Instead, there was a request for the Council to devise or indicate what mechanisms would come into play as a matter of last resort should such a requirement arise.

The statement from the European Council sets that out clearly in the interests of showing solidarity in the Union and that it is serious about defending its currency. That is important for Ireland, even if the problem pertains to Greece or another member state. Any attack on the currency is an attack on the whole zone of stability the euro represents.

We indicated, as did all other member states, the basis on which we would be prepared to assist should a request come. I refer Members to the statement by the European Council which sets out the mechanism as distinct from the idea we were committing specific amounts of money. We indicated the majority of assistance would come from Europe but would include the participation by the IMF. That represented a compromise from previous views expressed prior to the Council meeting by various Heads of State and Government, notably Germany's.

There is also an agreement to have work completed by the end of the year to ensure such a situation does not arise again. The economic difficulties that arose in Greece during its change of government were because the real public finance position was different from what had been submitted to the European Commission. That cannot happen again. Every member state needs to know each other's true economic position.

Speculation is idle on how the Stability and Growth Pact should operate with excessive deficit procedures and what carrot-and-stick approach should be adopted until this detailed work is done by all member states. It will be at the end of the year when we will know from ECOFIN and the European Council precisely what amendments are needed for the pact. The question will then arise whether there needs to be an amending treaty. We all hope it would be possible to provide the necessary rigour and improvements to the system without such an amending treaty. I cannot anticipate the outcome until we see how the situation develops, it is resolved and what is regarded as a proportionate response to the developments with which we are contending.

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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I support the protection of the euro. I listened to the Minister for Communications, Energy and Natural Resources, Deputy Eamon Ryan, describe what might trigger leaving the euro, a view I do not share.

Greece has to re-finance serious loans due shortly. It will have to borrow €53 billion this year to re-finance debts that are expected to rise to €290 billion. The Council's decision has given a stay to allow some sense of stability to be brought back to the Greek position, and as a consequence, to the eurozone.

As the level of debt and borrowing requirements for Greece will become evident in the next eight months, was there a view at the Council meeting that the strategy adopted will be able to deal with it? Will the member states agree to some conditions attaching to a bilateral arrangement with Greece? Has a framework being worked out if, at the request of Greece, the IMF will have to give it serious financing while the other member states do so in proportion to their capacity? Has a detailed framework for Ireland's contribution, one that would be repaid with normal interest conditions, been sent on to the Taoiseach subsequent to the meeting?

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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First, Greece has not requested such an outcome. Should that eventuality occur, the European Central Bank and the European Commission would work out what conditionality they regard as appropriate and necessary which would then be put to the Council. Tables have been set out outlining the nature of our contribution. It would not be a question of each member state deciding what conditions it would put on such a loan. The Council, if it came to it, would then decide to formally adopt such a decision.

The point made after last week's meeting was about the nature of the mechanism and how it would work should it be required. Coming to the amounts involved and the conditionality, that will be based on a composite proposal by the ECB and the Commission to the Council for consideration.

Photo of Eamon GilmoreEamon Gilmore (Dún Laoghaire, Labour)
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What is the Taoiseach's estimate of the amount Ireland will contribute in the event Greece draws down the loans from the EU and the IMF? I understand the figures amount to €15 billion of EU money and €10 billion from the IMF. There is speculation in some newspapers that Ireland's contribution will be in the order of €250 million. Is that speculation accurate or close to the mark?

Regarding the quid pro quo Chancellor Merkel sought in return for the package from Greece - strengthened powers of supervision from the EU over the finances of member states - what is the view of the Taoiseach? Does he agree or is he opposed to it? My understanding is that as a country we were opposed to any such role for the European institutions in respect of the finances of individual member states.

Regarding the 2020 strategy, my understanding is that each member state must draw up a national programme to set out in detail the action taken to implement the strategy. The live register figures have just been published and are in excess of 435,000 for March, the tenth successive month in which the live register figure has been over 400,000 and it amounts to 65,000 more than this time last year. Apart from the European agreement on the matter, this is of some urgency. Of the Government members, who will be responsible for drawing up that programme and when is it likely to be presented?

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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In the aftermath of the strategy being adopted at EU level, national programmes are devised thereafter. We are in the process of discussing the European strategy and the national programme will be devised in the aftermath of decisions adopted by Europe. The general thrust of the strategy proposed, considering the importance of research, development and innovation, is in line with the consensus approach nationally to the general direction the economy needs to go in terms of export-led growth, providing more prospects for business, developing more business and having a good entrepreneurial environment in order to create jobs and get entrepreneurs to come up with ideas to provide the goods and services of tomorrow that provide the jobs of today and tomorrow. I do not have a fundamental problem with the general orientation of the strategy but obviously there are issues, such as those I have mentioned in previous contributions here, which we will highlight. This is so there will not be an understanding that those industries are being relegated or not part of the future of Europe. If the question is what is the national strategy that comes after the adoption of the European strategy currently under debate, dealing with employment is part of the European approach. We will look to Europe to assist to complement the efforts we are making to provide a greater degree of social inclusion in society.

Photo of Joe CostelloJoe Costello (Dublin Central, Labour)
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This time last week, prior to the trip to Brussels for the summit, I raised the issue of whether the Taoiseach would make a statement or enter into discussion in the Dáil on his intentions at the summit, particularly in respect of the eurozone and Greece. Where this country commits a certain amount of money for the Greek bailout, which we understand to be €250 million, it is imperative that there is some discussion in this House prior to that move. In the future can we adopt the same position adopted by the Joint Committee on Foreign Affairs whereby the Minister for Foreign Affairs comes before the Joint Committee on European Affairs? The Taoiseach should come before a plenary session of the House prior to the summit where important decisions are being made, important positions are to be taken by the Government and commitments are made in respect of finance. The Taoiseach should give the House some opportunity to hear his position and his intentions and give Members the opportunity to express views on the matter.

The target of 25% poverty reduction by 2020 is the subject of non-governmental organisations throughout Europe exercising the citizens' initiative. They are collecting 1 million signatures in order to put it on the agenda for the Commission. Is it not desirable that over the next ten years, from now to 2020, the national reform programme includes that as one of our targets and objectives? We should include in it a statement on overseas development aid and whether we would meet the target. We have less than 0.5% at the present time despite having had a commitment to 0.7%. We should at least include that in the 2020 strategy.

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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Taking the last point first, the economic and social strategy of the EU does not get into the detail of overseas development aid commitments, even though the European Union is the largest contributor of overseas development aid in the world. I do not envisage that point being incorporated into the strategy. That is not to say it is not an important issue but it is not part of the parameters of discussion in respect of this aspect of European policy for the future.

Deputy Gilmore raised the point that there is a capital key in the order of 1.2% and if the figure mentioned by Deputy Gilmore was the total amount to be raised, it would be in that ballpark. We must show solidarity with colleagues in the Union and that involves everyone taking on national responsibility as well. I do not have a problem with the statement issued by the European Council in respect of the mechanism mentioned. We will not have a situation where the lending state will pay more. If we are borrowing money at X%, the state to which we lend money will have to cover the X% as well. Costs are covered. The state provides the money but ensures the interest costs are recouped in the repayment arrangements by the state one is assisting. That is an important point when people are considering this matter. Technical arrangements have been devised to allow that to happen. Without going to the detail, it is a point I want to make for the purposes of clarification.

Regarding the preparations for the European Council, the General Affairs Council is the Foreign Ministers Council and is the Council that still has a requirement under the treaties to prepare the content and agenda items of the European Council meetings. I suggest, therefore, that the Foreign Affairs Council, through the Minister for Foreign Affairs, continues to be utilised by any committee seeking to know what is emerging on the agenda of a European Council meeting prior to the holding of such meeting. Members will be aware that agenda items are often overtaken by events. A debate held one particular week might not be relevant to what emerges the following week. An example is the Greek situation, discussion on which again took place at the European Council owing to the emergence of an agreement on the mechanisms. This discussion took up the first part of the meeting. Having a prior meeting does not necessarily mean one gets an accurate reflection of what will take place at a forthcoming meeting. I believe the Joint Committee on Foreign Affairs remains the best forum for that type of interaction between Parliament and the Government.