Eamon Gilmore (Dún Laoghaire, Labour)
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Question 1: To ask the Taoiseach Taoiseach if he will make a statement on his participation in the European Council meeting on 17 June 2010 [26251/10]

Eamon Gilmore (Dún Laoghaire, Labour)
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Question 2: To ask the Taoiseach Taoiseach if he will make a statement on meetings he has had on the margins of the European Council meeting on 17 June 2010 [26252/10]

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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Question 3: To ask the Taoiseach Taoiseach if he will report on his participation in the EU summit in Brussels on 17 June 2010 [27260/10]

Enda Kenny (Mayo, Fine Gael)
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Question 4: To ask the Taoiseach Taoiseach if he will report on his attendance at the June meeting of the European Council; and if he will make a statement on the matter. [27644/10]

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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Question 5: To ask the Taoiseach Taoiseach the meetings he had on the margins of the European Council meeting of 17 June 2010; and if he will make a statement on the matter. [27962/10]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I propose to take questions Nos. 1 to 5, inclusive, together. I attended the June meeting of the European Council on Thursday, 17 June. Since I will make a statement to the House following the Order of Business today I will confine myself to providing a summary account of the proceedings. Much of our discussion at the council focussed on the progress being made by the EU to address the current economic and financial challenges, including, in particular, the work being carried out by the taskforce chaired by the European Council President. We also agreed conclusions to the effect that members states should introduce systems of levies and taxes on financial institutions and publish the results of bank stress tests. The council also endorsed the 2020 strategy for jobs and growth.

In addition, the council discussed the European Union's input into the G20 meeting, which took place in Toronto on 26 and 27 June, the UN millennium goals, climate change, Icelandic accession, the Estonian adoption of the euro and Iran. While I had no formal meetings on the margins of the council, I held brief discussions with several of my European Council colleagues. In particular, I spoke with Prime Minister Cameron. This was the first time we met since he became Prime Minister. The council meeting took place two days after the publication of the Saville report and I repeated my appreciation of his response to the report. We agreed to meet bilaterally in London the following week.

Eamon Gilmore (Dún Laoghaire, Labour)
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I wish to ask the Taoiseach about three of the conclusions reached at the summit. First, each Government must now submit a draft budget for 2012 for the approval of the Commission by the spring of next year. How will this system work in practice? In our system, budgets are not normally finalised until some days prior to their delivery. We do not know what they contain until they are delivered. How much information will be required to be submitted to the Commission? Will the budgetary system here need to be changed to conform to this new requirement? Will the information being submitted to the Commission be made available to the House?

Second, the Council agreed that member states should introduce systems of levies and taxes on financial institutions. To what is it intended these levies and taxes will be applied? Will they apply to profits, balance sheets or transactions? What rate will likely apply? To whom will the revenue go? Will it go to national governments or to the European Union?

Third, it was agreed that the introduction of a global transaction tax should be explored further. However, I note that the idea of a transaction tax was not agreed at the G20 summit. Is it intended that this proposal will be progressed as an EU project on a unilateral basis?

Brian Cowen (Laois-Offaly, Fianna Fail)
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I do not envisage any support for it to be progressed as an EU project. It is a question of trying to get a wider consensus around this issue. The mobilisation of capital and financial services, the provision of financial services in industry and the jobs this provides make it important that a wider consensus applies rather than simply one involving Europe. That was the basis upon which the transaction tax issue was being discussed and put forward. We would prefer to see a consensus emerge but not one restricted to the EU only.

I refer to the question of levies. As the Deputy will see from the conclusions, the discussion related to levies or other mechanisms being provided against the banks in an effort to repay or to recognise the fact that taxpayers have had to step in throughout Europe in all counties as a result of the impact of the financial crisis on the banking system. This is something we are doing at the moment through the guarantee scheme. It is a matter for national governments to decide how that should be dealt with. National circumstances differ from country to country.

I refer to the budgetary question. This does not involve a change in our budgetary procedures. It is a question, rightly in my opinion given what has taken place in the financial area generally throughout Europe, of the need for better and more effective surveillance and monitoring by the European Commission and the European Central Bank of budgetary policies to ensure the obligations under the Stability and Growth Pact are adhered to. It is a question of providing macro-economic data sooner and setting out the overall strategy of governments using peer review as a means of ensuring that the Stability and Growth Pact issues are dealt with effectively. This is the issue. It is not a question of producing a budget in March that will not be effected until December.

Eamon Gilmore (Dún Laoghaire, Labour)
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As I understand it, the Government has already submitted its targets and projections for 2013 and 2014 to the Commission. What additional data will be provided next spring for 2012? As I understand it, the Government has already submitted to the Commission its targets and budgetary objectives to comply with the Growth and Stability Pact until 2013 and 2014. What additional information will be submitted next spring in respect of the 2012 budget that the Commission does not have already?

I refer to the targets set out for 2020. Several targets were set out, including an objective of a 75% level of employment of men and women between the ages of 20 and 64 years. Given the significant size of the live register, how is it proposed that we will reach this target? How far off that target are we already?

I refer to research and development. I understand a target of 3% of GDP for research and development was agreed. This would involve a doubling of the amount committed to research and development here. When can we expect to see progress being made on that target?

Brian Cowen (Laois-Offaly, Fianna Fail)
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Much progress has been made in research and development. The Deputy will recall that when we came into office in 1997, no moneys were provided in this area, as was the case in many other areas. Thankfully, we have been able to improve the situation over a period. I refer to the EU funded research programmes for which the Irish Commissioner has responsibility. We believe that the seventh framework research programme will provide opportunities for Ireland to obtain co-funding in several areas due to the well-regarded research programmes we have built up over the years since we came into office. There is a question of national and EU funded improvements to be considered.

I refer to the question of participation rates, etc. The percentage of our participation rate is somewhere in the mid to high 60s at the moment. These matters will continue to be examined. There is no doubt that the taxation policies in the past have enabled us to see a great improvement in the participation rates. The number of jobs created during the good times amounted to 600,000. They enabled females, who in the past had more traditional roles, to come back into the workforce. That is a welcome social change and it has been a major contributor to economic growth and prosperity in the past.

I refer to the question on budgetary issues. This matter will now be taken up by ECOFIN in terms of the detail required and discussions will take place in the coming months in this regard. It is important to point out that it is not a question of the detail of budgets being decided upon in March. It is a question of ECOFIN, the eurogroup, the ECB and the Commission being satisfied with the overall budgetary strategy. I welcome that the Labour Party Leader acknowledges a plan is in place which must be adhered to. I look forward to everyone in the Opposition being able to come forward with detailed proposals of how we should meet these budgetary targets in a realistic way. The Deputy can be sure the Government will seek to adhere to the plans that we have agreed, as challenging as they are.

Eamon Gilmore (Dún Laoghaire, Labour)
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The Taoiseach, in replying both to these questions and to leaders' questions, seems to have a fascination with 1997.

Brian Cowen (Laois-Offaly, Fianna Fail)
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It is just a reminder.

Eamon Gilmore (Dún Laoghaire, Labour)
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Does he remember that in 1997 the public finances were in surplus but they are now in serious deficit, we were creating 1,000 extra jobs a week while the current Government has been losing 2,000 jobs a week and he inherited an economy from the outgoing Government, which was in a healthy state, and has made an absolute mess of it?

Brian Cowen (Laois-Offaly, Fianna Fail)
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Yes, I also remember that the Deputy was a member of a Government that, even with the surplus, decided that 30 bob was enough for an old age pensioner. I also recall that with the surplus it decided that €1 million was sufficient for emergency disability services. I have heard all the political rhetoric and hypocrisy that passes for current political dialogue as a result of the present situation. I stand over my record; the Deputy should try to stand over his.

Eamon Gilmore (Dún Laoghaire, Labour)
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I would not stand over the Taoiseach's record too much because he made a mess of it and all the Ministers with him.

Brian Cowen (Laois-Offaly, Fianna Fail)
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That is what the Deputy voted for. Is is not hard to take it?

Eamon Gilmore (Dún Laoghaire, Labour)
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The Taoiseach should get used to it.

Brian Cowen (Laois-Offaly, Fianna Fail)
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It was the Deputy's socialist philosophy then to give 30 bob to an old age pensioner with a surplus.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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In the context of the current economic challenges, as the Taoiseach referred to it, discussed at the recent EU Council meeting, he indicated in his reply that the detail of the budget is not what will be submitted for so-called scrutiny and peer review, as has been indicated theretofore. What extent of the budgetary intentions and detailed information concerning budget 2011 must be submitted by the Government to Brussels in advance? Can he give the House some sense or understanding of that? Will that apply to the current year? Has information been provided? Will more information be provided in advance of the representatives of the Irish people, the Members of this House, having the opportunity to learn the Government's intentions regarding budget 2011? How does the Taoiseach reconcile that arrangement with, say, the pillars of democracy and national sovereignty? It strikes me as strange and challenges my understanding of these important tenets. Where is this at? What level of information must be provided? When is it to be provided? Will he comment further specifically on the provision of budgetary information to Brussels?

Brian Cowen (Laois-Offaly, Fianna Fail)
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As I have explained, detailed budgetary decisions at a national level are not required to be provided in March of the previous year. That is a misunderstanding of the situation. The role of the Eurogroup and ECOFIN generally is to improve monitoring and surveillance of broad economic policies. Broad economic guidelines are set out, there are requirements under the Stability and Growth Pact and agreements are being reached with the many countries in excessive deficit procedures at the moment, including our own country. As Deputy Gilmore indicated, we have set out in detail what the budgetary adjustments have to be in the coming years. If they are agreed, they have to be pursued and dealt with.

By giving an indication of the commitment of Government in March to meet these targets, it reinforces confidence in the plans being implemented and reassures markets that the plans will be dealt with in the way envisaged. Other countries have specific requirements in that regard. The vast majority of countries in the Eurogroup are in excessive deficit procedures and there are procedures in place once that happens, which require governments to show how they intend getting back within the 3% deficit limit set out in the Stability and Growth Pact. This is a question of increased and improved surveillance and monitoring by the Eurogroup and ECOFIN generally of budgetary policies in line with the pact's requirements.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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Is it the case that this proposal does not apply to the current year if March is the critical month of action? Has the information for budget 2011 been provided? Will there be a continual feed of information between March and the presentation of the budget to the democratically elected Members representing the people of this State?

The Taoiseach mentioned the Stability and Growth Pact. Does he accept that during the boom years the pact, which compels member states to operate within a 3% budget deficit, was routinely ignored by many of the larger member states and this State was presented by many as an example of best practice, as a succession of governments adhered to the pact's requirement regarding budget deficits? However, the budget deficit is now of the order of 12.8% of GDP and the Government is promising Brussels we will return to the pact's requirement by 2013. Is that not cutting the expectation too fine? The year, 2013, is a short distance around the corner and the reality is in trying to meet such a target date, the Government has had to impose severe cuts in public services resulting in job losses across a range of sectors and a failure to recruit essential front-line staff because of the embargo in situ. The measures employed to reach the target are hurting people on a daily basis. Would it not have been better to have set a more realistic target and spread the pain over a longer time, thereby lessening the pain and reducing the impact on people's lives? Would that not have been a better approach rather than setting a problematic target, which is causing enormous difficulties and will continue to do so over the period ahead?

Brian Cowen (Laois-Offaly, Fianna Fail)
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The advocation, as we heard earlier, of the status quo plus is not an option of any Government in this country for the foreseeable future. We require transformation agreements and they has been agreed in the public service agreement we have negotiated with trade unions across a range of sectors, including for health and disability services. The fiction being portrayed by Opposition party leaders is that we can maintain services on the basis of existing service delivery arrangements but that is not possible and, therefore, we need to be prepared to implement changes to the non-front-line delivery of services in as many areas as possible to protect to the greatest extent we can those who require services. The status quo plus is not an option but it is being advocated by the Opposition because that is a nice, handy way of suggesting to the public how politics can run in this country. Unfortunately, it is not politics as usual.

Eamon Gilmore (Dún Laoghaire, Labour)
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What is the Taoiseach talking about?

Brian Cowen (Laois-Offaly, Fianna Fail)
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I have just explained the Deputy's advocation of status quo plus is not an option.

Eamon Gilmore (Dún Laoghaire, Labour)
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What is status quo plus? The standing ovation has gone to the Taoiseach's head.

Brian Cowen (Laois-Offaly, Fianna Fail)
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The standing ovation has not gone to my head. I have made this point frequently. The fact that the Deputy does not have the responsibility to deliver the service enables him to have the luxury of talking out of both sides of his mouth every day of the week and getting away with it.

Eamon Gilmore (Dún Laoghaire, Labour)
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Who uses the phrase, "status quo plus"? Where did the Taoiseach get that?

Brian Cowen (Laois-Offaly, Fianna Fail)
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I get it from the advocacy of the Deputy's argument,-----

Eamon Gilmore (Dún Laoghaire, Labour)
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The Taoiseach made it up-----

Brian Cowen (Laois-Offaly, Fianna Fail)
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-----which suggests that he wants to maintain services and do this, that and the other-----

Eamon Gilmore (Dún Laoghaire, Labour)
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-----like he made up everything else. He made up the bank figures as well.

Brian Cowen (Laois-Offaly, Fianna Fail)
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-----but he will find out in due course that it is not possible.

Eamon Gilmore (Dún Laoghaire, Labour)
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The Taoiseach is making it up as he goes along.

Brian Cowen (Laois-Offaly, Fianna Fail)
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No, I am not making it up.

Eamon Gilmore (Dún Laoghaire, Labour)
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He is making it up; nobody used that phrase.

Brian Cowen (Laois-Offaly, Fianna Fail)
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I am obviously getting under the Deputy's skin-----

Eamon Gilmore (Dún Laoghaire, Labour)
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Nobody uses that phrase.

Séamus Kirk (Louth, Ceann Comhairle)
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Deputy Gilmore, please desist.

Eamon Gilmore (Dún Laoghaire, Labour)
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No, the Taoiseach is twisting things.

Brian Cowen (Laois-Offaly, Fianna Fail)
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He can give it but he cannot take it. That is his problem.

Eamon Gilmore (Dún Laoghaire, Labour)
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The Taoiseach is twisting things.

Brian Cowen (Laois-Offaly, Fianna Fail)
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As regards Ard-Fheis speeches, I heard the Deputy's speech and I know all about the suggestions he has been making regarding those areas. He got his kick and his bounce out of it, and the best of luck to him.

Regarding the realities we must deal with, which is a different question, and the issue that arises with the budgetary situation, the Deputy suggests that we should prolong the time. That is not possible. The European Commission has sat down with the Government and we had to indicate the position so we could continue to fund deficits as we correct the public finances. These deficits we are funding are quite substantial. Even over the period we are talking about they will be substantial. We also, of course, want to get growth into the economy as a way of also helping to finance these issues. All the policies we have taken and the adjustments we have made are indicating that despite the difficulties with volatility in financial markets, and we hope they will not become more volatile, Ireland is regarded as having taken the right decisions. They clearly impose difficulties on our people but that will be case regardless of who governs this country and wishes to take on the responsibility of dealing with the issues as they are, rather than as they would like them to be. This Government is committed to doing that.

The relationship with the European Union and our membership of a common currency require us to play by the rules. It is not correct to state that during the good times a vast number of people were in excessive deficit. There were some countries, three that I recall from my term of office. Germany was one of them but it got itself back within the rules within a reasonable period of time. Of course, the costs of unification of that country were huge. However, it put its public finances in order and is a major paymaster of the European project. The situation with Ireland is that we have a challenge on our hands. We have an agreed plan with the European Union as to how we will move from the current position to where we need to be. Yes, it involves major challenges that will not be easily complied with but that must be done. The reason they must be complied with and the reason we have the support of the financial markets at present is that Ireland is, in fact, showing its determination with those issues it can control, which include its expenditure and taxation policies, to move along the line envisaged in those plans.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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I did not refer to what the Taoiseach has described as the status quo plus. My questions are inspired by the fact that I recognise a status quo minus, minus, minus by every week.

Séamus Kirk (Louth, Ceann Comhairle)
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Deputy, this series of questions is about European Union matters, not budgetary matters.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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I remind you, a Cheann Comhairle, that the Taoiseach's opening reply said that the context of the current economic challenges was part of the agenda discussed and I am quite legitimately following up on that. It was the Government which put forward the proposals regarding 2013. Why did it set such a difficult timeframe? Who was it to impress? My questions are serious and reasonable. Would it not have been preferable to extend the deadline expectation to lessen the impact on so many of our citizens who are currently suffering as a consequence of the very restrictive deadline imposed and the cuts that have had to be introduced to try to meet the deadline? It takes no cognisance, sadly, of the huge pain being suffered by so many ordinary, decent people as exemplified in the streets of this city and other towns today, which deeply disturbs me.

I am asking a legitimate question. Why was such a strict and tight deadline chosen? The Taoiseach said it was agreed with the European Union. The Government did not have to agree this. It was the Government that put forward the idea of 2013 and now it is trying to deliver on something that is causing enormous distress on a daily basis and, make no mistake, real hardship for people. I have a legitimate point of view. I accept that these are difficult and challenging times and whoever is in the Taoiseach's seat would have to face them, but there are other ways of facing them. Again, would it not have been wiser to have spread the pain over a greater period of time and thereby lessen the impact?

Brian Cowen (Laois-Offaly, Fianna Fail)
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How long does the Deputy think it is sustainable to be spending €50 billion with an income of €32 billion? How long does he think one can maintain that and expect to be funded at a time when markets are so volatile? If we do not make these changes now, what is the level of adjustment that will have to be made eventually to find a sustainable position? Those are the real questions and choices that must be debated publicly, in this House and outside.

The Deputy suggests there is an option to continue providing services greatly in excess of what is being provided by the taxpayer in a way that is sustainable. That is the ultimate contradiction. It is not possible to do that. It is not possible even though, thankfully, as a result of policies we pursued during the good times, we were able to reduce our debt and provide ourselves with some head room to take on greater indebtedness as we make this adjustment. We see other countries that do not have that head room being obliged to make even more serious decisions, which are providing for real cutbacks in services across the board. In fact, if they do not make those decisions, others will make them for them because they will not be in a position to fund their states. That is how serious the situation is. The idea that there is some type of holiday whereby we can pass it on for another few years and to suggest that as a way forward is not the real world. We need to recognise the seriousness of our situation and discuss what the options are within that realistic framework, rather than suggest there is an alternative unrealistic framework.

Enda Kenny (Mayo, Fine Gael)
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Perhaps the Taoiseach should recognise that the two banking reports indicated that 75% of the crisis was home grown. He does not refer to that very often.

When does the Taoiseach expect to publish the national reform programme? The EU 2020 strategy adopted at the Council on 17 June provides for a plan for jobs and smart sustainable growth. It is accepted that the strategy will assist EU member states to emerge from this crisis with the capacity to deal with the problems of the future. Five headline areas are outlined - job creation, improved research and development investment, reduction of greenhouse gases by 20% compared with 1990 levels and increasing the share of renewables in final energy consumption by 20%, improving education levels and particularly reducing school drop-out rates to less than 10%, and promoting social inclusion through a reduction in poverty. These are laudable headlines. When the national reform programme is published by the Government is it expected that the five headlines adopted at the Council meeting will be addressed in it in some detail?

Brian Cowen (Laois-Offaly, Fianna Fail)
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This is a strategy for from now to 2020. Obviously, all these targets are issues for governments to pursue over that period. There are different requirements, priorities and levels of adjustment required to meet those targets in various countries. This country has made a great deal of progress on these targets as a result of our successive social partnership programmes over many years. The ability to improve social outcomes as a result of our economic policies has been significant. Many progressive policies have enabled this to happen. I refer to increased participation rates and increased investment in education. The challenge of unemployment obviously requires us to look at active labour market policies again to see how, despite the economic difficulties, we can address the issues as we did in the past. That will be an ongoing framework of work for Government.

Deputy Kenny made the point about the Reisling report. This report made it very clear that the issues of lending policies within banks were primarily responsible. It also refers to the regulatory situation and to macro-economic policies and fiscal policies of Government which I have spoken about and which I will defend as to our situation at the time. Hindsight is a great leveller for everybody. I refer to the Deputy's point about the targets set out in Europe 2020. These targets now provide the benchmarking for the work of successive Governments over the course of the next decade.

Enda Kenny (Mayo, Fine Gael)
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In December 2008, the Government published its framework for sustainable economic renewal which contained 125 action points. I have referred previously to one of those points which was new, the innovation fund of €500 million. I ask the Taoiseach to clarify the position. My understanding is that nothing has yet been spent with regard to this fund. Is this €500 million still intact? Is there a programme for expenditure in the innovation area of the €500 million identified in that report? How does the line Minister propose to deal with it or spend it? I am concerned by the recent remarks by the chief executive of Science Foundation Ireland about the concerns for our programme for innovation and the decrease in the number of doctoral students. This is an important point in that plan and €500 million is a very substantial amount of money. I believe in innovation and research-----

Séamus Kirk (Louth, Ceann Comhairle)
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The Deputy is going off on a tangent in his series of questions.

Enda Kenny (Mayo, Fine Gael)
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I ask the Taoiseach to clarify what is the current status of that fund.

Brian Cowen (Laois-Offaly, Fianna Fail)
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I have explained in previous replies to Deputies that this is not simply about Exchequer-funded money; this about bringing forward a fund to increase interest from venture capital companies in start-up companies in Ireland and perhaps also enticing companies that might otherwise set up in Europe to look at Ireland as a good location for start-up and development of businesses. Much work has been undertaken in this area and this work is ongoing. It is being undertaken by the National Treasury Management Agency personnel and the personnel in my Department and in the Department of Finance.

The Deputy will know this has not been a very good time for venture capital investment because of the recession and the change in the economic climate. However, much detailed work has been ongoing and I still remain confident that this innovation fund can become a reality and that there will be opportunities for small and medium-sized businesses to look to it as a source of capital investment for the future for building up businesses and trying to provide a framework in which those successful start-up companies, in particular, technology-led companies, would consider further investment for expansion and remain in ownership Ireland rather than looking to sell the intellectual property rights attached to many of these companies to bigger operators outside the country. It is a private market and these are business issues at the end of the day but we need to provide an opportunity for people to look at other options for how companies with future real high growth potential are developed in this country.

Michael D Higgins (Galway West, Labour)
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I wish to ask two questions of the Taoiseach. The first is with regard to Europe 2020 which has a set of aims and projects to be achieved. If these are not to be aspirational, how can they be made consistent with the Stability and Growth Pact and what is to be achieved within that? With regard to the emphasis on a return to growth, all of the European evidence shows there is a dangerous lag between the technical return to growth and any reduction in unemployment. Given the rise in unemployment, which creates a new circumstance that should be taken into context if interpreting the Stability and Growth Pact, how, then, is Europe 2020 to become meaningful when it is contradicted by the requirement of the pact?

The Taoiseach referred to the UN millennium development goals. My second question is whether the European Union's common position is one that will be based on additionality for where the goals are being missed and flexibility between expenditure between the goals where specific countries are involved.

Brian Cowen (Laois-Offaly, Fianna Fail)
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The context for this debate on the broad economic policy or direction of Europe is to do with making Europe, as a regional economy, far more competitive than it is today. The potential growth rates in Europe, as things currently stand, are less than will be anticipated in other regions of the world with which we are competing. The question of competitiveness and how we build the prospect for employment growth is based on economic growth.

It is true to say that in the aftermath of recession, particularly one as deep and as widespread as this, the question of achieving growth, in terms of the process of how growth is achieved, such as increasing demand which has been depleted and building up companies that are more competitive, has meant that people have had to look at their cost base, including their labour cost base. The question of how to increase productivity is a fundamental part of how economic growth is achieved. This involves investment in education and it also involves correction in the public finances and there is no way around that. We cannot create jobs in a vacuum and neither can we create jobs on the basis of continuing lagging of competitiveness in Europe vis-À-vis other regions of the world.

The Europe 2020 strategy is balanced in this respect, in my view. It speaks about social outcomes and social outputs as well as economic targets. The European model has been characteristic in that respect of not just looking at economic growth for its own sake, as would be the case in other countries such as China and India, for example, without any real effort being made to deal with social outcomes. The market economy we have in Europe provides for the prospect of social as well as economic improvements.

To answer the Deputy's question, with regard to member states, now that these strategies have been set out, we will set national targets as part of the process of preparing what are called national reform programmes to meet these set targets and these will be outlined in the coming months and years as we progress these targets. On the reason the headline targets are so few, one of the lessons to be learned from the Lisbon strategy has been that perhaps there were far too many targets and far too many boxes being ticked without the overall picture being considered. The headline targets with regard to employment, as has been referred to in an earlier question, aim to raise to 75% the employment rate for women, including through the greater participation of young people, older workers and low-skilled workers and the better integration of legal migrants.

The Deputy will be aware of the various other targets set in research and development, greenhouse gas emissions, renewables and education levels across Europe, etc. The targets also include the reduction of poverty in which it is aimed to lift at least 20 million people out of the risk of poverty and exclusion by the implementation of the strategy across the European Union.

The Deputy may disagree but, in my view, the Stability and Growth Pact is an absolute necessity, particularly in the context of the current volatility in the financial markets. It is questioned by others whether Europe has the political will to put public finances back in order. The consequences of not doing so have been very severe. We can look to other European countries where that has not happened and very serious adjustments have not only been contemplated but implemented.

With regard to the international development area, we seek to continue our serious commitment. Europe is the largest contributor of international aid in the world. In discussions leading up to the adoption of the strategy, I did not detect any lessening of the commitment. There was recognition that Europe can play a role in that area and that Governments must meet their commitments as best they can.

Michael D Higgins (Galway West, Labour)
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I appreciate the reply. In the Finnish economy, the gap between the growth recovery and the reduction in unemployment was five years. If the Taoiseach decides not to invest in the social economy, demand collapses as evidenced by what is happening across Europe. Will the Taoiseach consider whether Europe 2020 becomes merely aspirational because of the obduracy in sticking to strategies of economic adjustment that are collapsing employment and depressing demand?

Regarding the world millennium development goals, the UN meeting in September will hear that specific goals are not being achieved in specific parts of the world. The issue is whether there will be additionality in the pledges and additionality in the delivery and whether people can move from one non-performing part of the world across each of the aid goals.

Brian Cowen (Laois-Offaly, Fianna Fail)
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Consumer demand is an important factor in growth rates and the potential to return growth to depressed economies. I take that point. In our country, with a relatively small domestic consumer market, export-led growth is of far greater importance than to larger countries with a domestic consumer market where domestic spending is a bigger factor in recovery. With 50% of our exports to the US and UK combined, we look to those economies recovering. Being a small open economy, what happens elsewhere has a determinant effect on how quickly we can establish growth and employment as a result. We know there is a lag between establishing economic growth and employment growth. Companies and businesses must be satisfied that the change in the economic cycle is such that they can take on more labour to produce more goods and services on the basis of recognised extra demand.

I hear what Deputy Higgins says in respect of the Finnish experience. Finland did a remarkable job in the aftermath of the fall of the Soviet Union when the country lost 40% of its market almost overnight. Through research and development and investment in important areas like education and a good business environment-----

Michael D Higgins (Galway West, Labour)
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A social economy.

Brian Cowen (Laois-Offaly, Fianna Fail)
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I take the point that it is a good example of how one tries to make an adjustment. Lessons can be learned. For us, export-led growth is the key and consumer demand at home will make its contribution. Mirroring international confidence in what we are doing economically at home with a far greater degree of domestic conference would help us in that respect. In data of recent months, there have been indications that coming off a base that saw a significant decrease in consumer spending, there is now a month on month, year on year, May to June increase in domestic demand appearing in the economy.

Regarding the point on international development aid, I cannot be more specific and a more detailed question to the Department of Foreign Affairs would elicit a more accurate and relevant answer. Pressure on public finances will have an impact on the ability of countries to contribute in the way they have in the past. In the review by the UN of the millennium development goals it is clear we are not meeting the targets. The Minister's recent visit to Uganda and Ethiopia are better examples of what can be achieved but it comes down to governance issues within these countries and the ability to use international aid and assistance in a way that is beneficial to the native populations. We cannot say this is uniform across many underdeveloped areas.