Gerry Adams (Louth, Sinn Fein)
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Question 3: To ask the Taoiseach if he will report on his participation in the EU summit on 11 March 2011; and if he will make a statement on the matter. [5309/11]

Gerry Adams (Louth, Sinn Fein)
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Question 4: To ask the Taoiseach his priorities for the next European Council meeting [5310/11]

Micheál Martin (Cork South Central, Fianna Fail)
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Question 5: To ask the Taoiseach his views on proposals for a greater role for Eurozone summits; and if he will make a statement on the matter. [5335/11]

Enda Kenny (Mayo, Fine Gael)
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I propose to take Questions Nos. 3 to 5, inclusive, together.

I attended an extraordinary meeting of the European Council and an informal meeting of the Heads of State and Government of the euro area in Brussels on 11 March. There will be a further meeting of the European Council on 24 and 25 March. As I will be making a statement to the House later, I will confine myself to some brief remarks about these meetings.

The extraordinary meeting of the European Council was convened by President Van Rompuy to discuss developments in Libya and the southern Mediterranean region and set the political direction and priorities for future EU policy and action. We agreed on the importance for Europe of developing a new enhanced long-term partnership with the countries of the southern Mediterranean area as they move toward democracy.

The informal meeting of Heads of State and Government of the euro area was convened to discuss how to develop stronger economic policy co-ordination in the euro area. This was an important stepping stone towards the meeting of the European Council that will take place later this week.

Leaders agreed on a "pact for the euro" aimed at fostering competitiveness and employment and contributing to sustainability of public finances and restoring financial stability. There was also important agreement on three features of the temporary European Financial Stability Facility, EFSF, and the permanent European Stability Mechanism, ESM. Effective lending capacity was increased to €440 billion for the EFSF and €500 billion for the ESM. Both will have the capacity to intervene in the primary debt market. Interest rates will be lowered to take greater account of debt sustainability, while still complying with IMF pricing principles. Finance Ministers were asked to complete work on the design of the new ESM, which will enter into force in 2013, in time for this week's European Council.

It was agreed that there should be a reduction of 1% in the rate that applied to loans to Greece which do not take place under the EFSF, as Greece is not in that package. The maturity of Greek loans was also extended to 7.5years. In return, Greece committed to speedily completing its €50 billion privatisation and real estate development programme.

I briefed colleagues on the severe economic challenges that Ireland faced and the pain this had meant for the Irish people. I restated our commitment to the EU-IMF programme and reaching the 3% deficit target by end-2015 and recalled the extensive adjustment measures already undertaken. I stressed the importance of getting Ireland back onto a path of sustainability. I briefed European colleagues on the situation in our banks and the challenge this represented for us. I noted the stress tests that were under way. These are being carried out independently and due to be finished by the end of the month.

While Ireland would welcome a lowering of the interest rate it has to pay, it was not possible to reach agreement on this issue at the meeting on 11 March. Discussions on the issue are continuing. These will be difficult, but I am convinced that we can find a way forward. I can reassure the House that, while I will be as constructive as possible in seeking to reach agreement, Ireland's 12.5% corporation tax rate is not up for negotiation. It is central to our ability to attract inward investment and secure our economic recovery. I know that I have the overwhelming support of the House on this issue.

The issues before the European Council this week are important. It is expected that the Council will adopt a wide range of measures forming a full and comprehensive package designed to lay the ground for sustainable and job creating growth. I expect that the Council will also take stock of international developments, including in Libya and Japan.

With regard to a greater role for eurozone summits, it is the Government's position that no new formal structures are needed. However, it should continue to be possible for Heads of State and Government of the eurozone to meet as required.

Gerry Adams (Louth, Sinn Fein)
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I wish the Taoiseach well at the next European Council meeting, but I note with disappointment that at the last session he restated his commitment to the EU-IMF deal and to the austerity package. In an earlier answer the Taoiseach spoke of the gap between the Government and the people. That gap is being deepened by the universal social charge. It is the price citizens are paying for this deal.

The Minister for Finance has said that the lumping of banking debt and sovereign debt is not sustainable. The head of the European Central Bank has made clear his insistence that it is sustainable, saying that Ireland can do it and will do it. This is clearly Frankfurt's way. Will the Taoiseach make clear to the Irish people and to our partners at the European summit, contrary to what he said a moment ago, that we will not proceed with this deal because, as the Minister said, it is not sustainable? We cannot afford it and it will sink us if we keeping going as the Government is going, following in the footprints of Fianna Fáil.

Enda Kenny (Mayo, Fine Gael)
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I am sure the Deputy was not disappointed at my stance in respect of how important the corporation tax rate of 12.5% is to this country.

Gerry Adams (Louth, Sinn Fein)
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That is a given.

Enda Kenny (Mayo, Fine Gael)
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What the Minister for Finance indicated was that in certain circumstances the debt might become unsustainable. We made it perfectly clear-----

Gerry Adams (Louth, Sinn Fein)
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That is not what he said.

Enda Kenny (Mayo, Fine Gael)
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If the Deputy checks the Minister's words he will see that is what he said. We made it perfectly clear when this deal went through that we considered it a bad deal for Ireland and a bad deal for Europe and that it required adjustment so that Ireland could live up to its responsibilities in being central to the European process and in paying our way. The deal was structured at the time on the basis of Ireland being able to do that while at the same time allowing us to grow our economy and trade our way to a position where we are able to pay back what was given to us as a loan under the package. The extra flexibility and the extra tools that are required were the points of discussion at the meeting of the Ministers for Finance and will be again at the upcoming European Council meeting and as things become clearer when the stress tests are completed.

Gerry Adams (Louth, Sinn Fein)
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The Taoiseach said we need to live up to our responsibilities in terms of our European partners, and I do not detract from that. However, our first responsibilities are to our own citizens. The Taoiseach went on to say that we need to repay what was given to us. Nothing was given to us; this was not an act of divine mercy. These were very hard-nosed people coming in and saddling Irish taxpayers with private banking debt.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Does the Deputy have a question?

Gerry Adams (Louth, Sinn Fein)
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The Taoiseach must make it clear to them, to quote the Minister for Finance, that this is not sustainable. Why would the Taoiseach follow through on what he already says is a bad deal for Europe and for Ireland?

Enda Kenny (Mayo, Fine Gael)
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I agree it was not an act of divine mercy that this was given to us, it was part of a loan package and Ireland has a responsibility to repay loans and we will do that if we are given sufficient flexibility and some extra tools. The universal social charge has been looked at by Government and we have already said in the programme for Government that we will review it before the budget for 2012.

At the conclusion of the eurozone meeting there was an agreement that there should be interest rate reductions for those within the EFSF package. Ireland is the only country in the package at the moment; the Greek Government is not part of it, so a 1% reduction was extended to it and the time extended to seven and a half years for its loans. From that point of view, the principle has been accepted that there can be a reduction of interest rates, which is part of what needs to happen in respect of Ireland's position. It was not possible to reach agreement at the last meeting of eurozone heads of Government and the matter is still being discussed.

Micheál Martin (Cork South Central, Fianna Fail)
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We must look at this issue with a degree of frankness, transparency and honesty. Work has been underway for some time, even before the general election, to revamp the mechanisms deployed by Europe, particularly in terms of the EFSF and ESM, focusing on the enlargement of the fund and a reduction of interest rates to enshrine the principles of sustainability and recoverability and to send a strong signal to the markets that Europe as an entity was determined to stand squarely behind the euro as a currency. That work has been underway for some time, the reduction in the interest rate has been on the table and there is a growing consensus among EU member states that the mechanisms must be revamped, mechanisms that were established before Ireland had to avail of any programme. It is important to acknowledge that.

Equally, in response, Ireland has indicated its acceptance of the idea of new fiscal rules for deficits and debt burdens. That was desirable and welcome, not just from an Irish perspective but from a European and eurozone perspective.

It is unacceptable however - this is the real issue - that from the outset of the crisis, the fundamental flaw has been that the major powers in Europe have not dealt comprehensively with the issue. The approach has been faltering and halting. From the onset of the Greek crisis, it has been too slow, with too little, too late. That is what we are now witnessing in the build up to this summit and in the outcome of the last, namely, new attempts to arrive at a comprehensive resolution of the issues.

The danger is that the major powers are again collectively stopping short of reaching the comprehensive resolution required from a Europe-wide perspective. This is not just about Ireland on its own, and there has been a lot of talk about bad deals but that is just politicking. The reality is that these were pan-European mechanisms that were established before Ireland ever had to avail of any deal and before any interest rates particular to Ireland were decided upon. The rates were decided in advance of Ireland availing of such programmes.

The net point is the domestic political situation in some EU member states has informed the situation, such as the electoral concerns of the German Government and the French President and, to a lesser extent, the Finnish Government. Does the Taoiseach agree that we are dealing with different perspectives of different electorates on the core issue? We are giving a lot and are contributing to the resolution of the fundamental issues pertaining to the euro itself.

We showed good faith by introducing a detailed and sustained austerity programme in recent years. I do not believe the French President or the German Chancellor are entitled to the kind of responses they are seeking in respect of corporation tax etc. Does the Taoiseach agree the fundamental issue is that the leaders of Europe must put aside their domestic electoral concerns and focus instead on the wider concerns relating to the European Union and the sustainability and viability of that entity in the coming years?

Enda Kenny (Mayo, Fine Gael)
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I agree that the European process relates to consolidation and to allowing each of the 27 member states to develop to their best potential, to create employment opportunities and to maintain both a healthy balance of payments and secure financial positions. Ireland and a small number of other countries obviously occupy a particular position in this regard at present. For whatever reason, I detect a certain level of suspicion in respect of Ireland. The degree of trust I would like to see is not evident at present. This is despite the fact that Ireland has always measured up in the context of its European requirements.

The ECB-IMF package is very particular in nature. Representatives from the IMF met Government officials recently and, as a result of the former's analysis, the fiscal targets set out in the programme for Government have been endorsed. The Deputy and I are aware this is a matter of great concern and anxiety to many people. This weekend, the European Council is likely to deal with a number of issues relating to this matter. That will at least lead towards some co-ordination in the context to which the Deputy refers.

The first of the issues to which I refer relates to the reinforcement of the European semester, including the targets and strategies member states will be presenting in their national reform programmes and programmes for stability and convergence that are due to be published in April. The second issue relates to the presentation of the pact for the euro, which aims to improve competitiveness, employment, public finances and financial stability and which will involve member states identifying commitments they are prepared to make at national level and that will, in turn, be reflected in national reform programmes and stability and convergence programmes. Non-eurozone member states will be invited to participate in this process.

The third issue involves a recommitment to the early adoption, by June of this year, of the so-called "six pack" of legislative proposals to strengthen economic governance in the Stability and Growth Pact. The fourth issue relates to the decision to amend the treaty to allow for the establishment of the permanent fund, namely, the European stability mechanism, ESM. There will also be confirmation of the detailed adjustments of the European financial stability facility, EFSF, and the ESM. As already stated, broad agreement was achieved at eurozone level on 11 March in respect of the latter. The Council meeting will also note the ongoing work in respect of the stress tests relating to the banks and will contemplate the measures that are likely to be required to respond to the outcome of those tests.

I would like there to be a much stronger reflection of the problems that exist across Europe at the meeting. I accept that Ireland is the subject of a particular level of focus and our discussions must be based on that reality until we discover the extra flexibility and tools that will permit us to restore our status and reputation and once again place us in a position to pay our way.

Micheál Martin (Cork South Central, Fianna Fail)
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The speculation is that the work done last week and that which will be done next week will come up short in the context of dealing with the fundamentals involved. There is also a suspicion that the issues of burden sharing, restructuring and debt will be kicked down the road until post-2013. Again, the latter is possibly as a result of domestic electoral considerations in the countries to which I referred earlier. There is a reluctance among the electorates in France, Germany and other countries to face up to the reality that obtains in the context of their banking systems and the ongoing vulnerability thereof. There appears to be a hope that this weekend European leaders will be in a position to put together a plan that will keep the show on the road and that will satisfy the markets - particularly in the context of their focus on Portugal - in the medium term. However, we must continue to ask whether what is on the table is sufficiently comprehensive to achieve what is envisaged in the short to medium term.

The former Minister for Finance, Deputy Brian Lenihan, worked hard on this issue. Contrary to what is being spun by spokespeople on the Government side, relations between EU member states and Ireland are strong and have been for quite some time. I have been a member of the General Affairs and External Relations Council and was on first rate terms with many of my colleagues. That is the factual position. I was delighted to hear the Minister of State, Deputy Lucinda Creighton, acknowledge that there is much goodwill towards Ireland. It is dishonourable to overspin about bridges being burned left, right and centre.

Ray Butler (Meath West, Fine Gael)
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That is a good one, coming from Deputy Martin.

Micheál Martin (Cork South Central, Fianna Fail)
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It does not stack up.

Jerry Buttimer (Cork South Central, Fine Gael)
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Will the Galway tent be opening again?

Micheál Martin (Cork South Central, Fianna Fail)
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It is more transparent than the K Club.

Timmy Dooley (Clare, Fianna Fail)
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Deputy Buttimer should read today's report.

Enda Kenny (Mayo, Fine Gael)
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I cannot speak for leaders of other countries. Electoral considerations are being taken into account in France, Germany, Finland and a number of other countries, where elections are due to take place.

Micheál Martin (Cork South Central, Fianna Fail)
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They do not appreciate what they perceive as a bailout.

Enda Kenny (Mayo, Fine Gael)
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There has also been a lack of trust in respect of the way Ireland has had to conduct its business, which was epitomised by the French Minister for Finance walking out of a meeting at a crucial time and her non-acceptance of what was being said. Comments made on behalf of Government which were neither achieved nor capable of being achieved led to a sense of confusion.

There is no point in turning away from a crisis. It must be faced. There is a serious challenge ahead for Ireland. We will all be in a much stronger position to deal with the crisis when we are aware of its full extent, and we do not know what its full extent might be. Until the bank stress tests are completed, the adequacy of the preparation of a response to the crisis will not be clear.

The Government is considering a number of measures. The Minister for Finance has been speaking to his European counterparts and to the Central Bank about those measures and about the financial position in which we find the country. This is a legacy that must be dealt with. I would like to be absolutely clear about the scale of the problem. I will not know this, nor will Deputy Martin, until the bank stress test results are published.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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I will allow two short supplementary questions. Later this afternoon the House will debate upcoming European Council meetings. I want to be fair to Deputies who have tabled parliamentary questions. I will allow a very short supplementary question from Deputies Richard Boyd Barrett and Joe Higgins. Deputy Mick Wallace may also ask a very short supplementary question.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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As a new Deputy, I am just getting used to procedures. I was not aware I would have a chance to come in. I feel I have to comment on the-----

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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You do not have to comment, Deputy.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I feel I do, a Cheann Comhairle.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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I remind Deputies that this is Question Time.

Micheál Martin (Cork South Central, Fianna Fail)
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The Deputy will comment in a rhetorical manner.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I am confused by some of the things the Taoiseach has said. The tone and attitude of the Government in its discussions with the European Union-----

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Have you a question, Deputy?

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Am I right in saying there is a sharp difference in the attitude we are now taking in the discussions on the IMF-EU package? We are hoping and pleading for small changes in the interest rates, possibly some time further down the road, and this contrasts sharply with the Fine Gael economic manifesto, launched in February of this year, which stated-----

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Deputy, I said I would allow a short supplementary question.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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The manifesto promised that Fine Gael would unilaterally restructure unguaranteed senior debt if Europe did not play ball and grant a fairer package. Is the attitude we are now taking towards our European partners and their attempt to ram this unsustainable deal down our throats not a massive backing away from what Fine Gael said before the election?

Joe Higgins (Dublin West, Socialist Party)
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Does the Taoiseach agree it is rather disingenuous to blame the electorates of Germany and France for the line taken by the leadership of those countries when in fact what they want to do is save the skins of their major banks and salvage them from their reckless gambling in Irish property? With regard to so-called burden sharing, or what more of us would call "burn the bondholders", although it is really the bonds we want burned and we do not care what happens the bondholders, the Taoiseach must clarify the issue. The Minister for Finance was quoted in The Irish Times-----

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Regardless of what was said in The Irish Times, will the Deputy ask a question?

Joe Higgins (Dublin West, Socialist Party)
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It is a simple point of clarification, a Cheann Comhairle. The Minister for Finance said we are no longer pursuing that option, namely, burden sharing. In reply to me earlier, the Taoiseach contradicted the Minister. Which is the Government policy?

Mick Wallace (Wexford, Independent)
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I want to know what the Taoiseach might say in Europe this week in regard to Libya. Recent history has taught us that dropping bombs on people is not necessarily the best way to introduce democracy. Does the Taoiseach agree that some of the major powers that have formed a coalition have been a bit selective as to where they might introduce no-fly zones, not to mention drop bombs. There does not seem to be much interest in introducing a no-fly zone in Bahrain or Yemen, and the same powers were certainly not interested in introducing a no-fly zone over Palestine two years ago. Does the Taoiseach agree that Mr. Sarkozy, who has also not behaved well with regard to our corporation tax, has been very trigger happy about dropping bombs on Libya? He did not even approve of the democratic protest in Egypt and Tunisia but he just could not wait to have his Thatcher-Falklands moment in order to drop bombs on Libya. Would the Taoiseach like to challenge Mr. Sarkozy on that issue?

Enda Kenny (Mayo, Fine Gael)
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In reply to Deputy Boyd Barrett's question, there is no change in attitude. The Government made it perfectly clear what we wanted to see was an adjustment in the terms and conditions of the package and there is neither a change in tone nor attitude. It is a question of focusing on the problem the country faces and the options we consider are important in being able to deal with that. I do not want to blame the electorate in Germany, France or any other country for their attitude as that is their business and none of mine. Our concern is not only in respect of our own country, people and financial position but also as part of the European Union of 500 million people and the potential this allows.

Deputy Higgins' comment in respect of the Minister for Finance is again incorrect and he needs to check the context in which he quotes that comment.

There was quite a deal of discussion at the eurozone meeting on the introduction of a no-fly zone in respect of the unfolding events in Libya. People were very concerned at the slaughter and threatened slaughter of innocent civilians. When I was in America last week and this became a reality, President Obama made it perfectly clear that US troops would not be deployed in Libya and that the no-fly zone was based on the sanction of the United Nations Security Council by vote. On that basis, measures have been taken to prevent the wilful slaughter of innocent people in Libya.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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We move on to Question No. 6.

Micheál Martin (Cork South Central, Fianna Fail)
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For clarification, I would like to ask the Taoiseach a short question on that final point.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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We have given this question some time and there is a debate coming up. To be fair, Deputy Adams has a question.

Micheál Martin (Cork South Central, Fianna Fail)
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It is just a one-line question. Has any official statement emanated from the Government on the Libyan situation?

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Will the Deputy please respect the Chair? This is Question Time. I call the Taoiseach on Question No. 6.