Tuesday, 29 March 2011
Ceisteanna - Questions
European Council Meetings
I propose to take Questions Nos. 1 to 5, inclusive, together.
Last week's meeting of the European Council discussed two major international issues, Libya and Japan. On Libya, we endorsed UN Resolution 1973, which authorised actions to protect civilians. We reiterated our call on Colonel Gadaffi to step down immediately. The European Union has already moved swiftly to implement sanctions and we stand ready to adopt further measures to ensure that the Gadaffi regime does not benefit from oil and gas revenues. The humanitarian situation, both within Libya and on its borders, remains a source of serious concern. The European Union will continue to provide assistance to all those affected, working closely with the UN and NGOs.
On Japan, we said again that the European Union will support Japan as it strives to overcome the immense challenges it faces after the earthquake and tsunami. We stand ready to provide further support at Japan's request. There are lessons to be learned from what has happened, including in the area of nuclear safety, and the Council has asked for the safety of nuclear plants to be reviewed through a full and transparent risk and safety assessment.
The Council also decided a comprehensive package of economic measures. We agreed arrangements to improve the operation of the current financial stability facility, from which Ireland is receiving assistance, as well as the features of the permanent mechanism which will replace it in 2013. We also finalised agreement on the change to the treaties needed to place the mechanism on a firm and legal footing. We pressed forward with the implementation of the new European semester under which member states will submit programmes, covering budgetary plans and structural reforms, in April. We endorsed the agreement on the six legislative proposals on budgetary and macro-economic surveillance and look forward to their adoption in June.
We concluded the Euro Plus Pact, as adopted by the Heads of the euro area on 11 March and welcomed a further six non-euro member states that decided to join it. Participating member states will present their commitments under the pact in their reform programmes next month. The Council underlined the importance of the European banking stress tests and agreed that member states will have ambitious strategies in place to deal with any consequences prior to publication of the results. We also heard from Prime Minister Socrates on recent developments in Portugal. With regard to issues of particular concern to Ireland, my European Council colleagues agreed with my view that it makes sense to come back to these when the results of our banking stress tests are known. I suggested that Ministers for Finance be asked to take this work forward and this approach was agreed. We want to move forward swiftly once the position is clear and will remain in close contact with European partners, both in capitals and institutions, as the work progresses.
On bilateral or foreign visits, I have not yet finalised travel plans for the year ahead.
Bhí mé ag éisteacht leat, a Thaoisigh, agus ba chóir don Taoiseach seasamh suas ar son phobal na h-Éireann ag an gcruinniú sin. Dúirt sé sa chlár Rialtais gur lorg sé agus go bhfuair sé sain-ordú láidir margadh nua a dhéanamh.
I am very disappointed that the Taoiseach did not take the opportunity at the summit to raise the crisis pressing down on the people of this State, that he agreed to that issue not being discussed and being taken off the agenda. He told the Dáil and the Irish people that this debt was "grossly unfair-----
Tá mé buíoch don Teachta Adams as ucht an cheist a chur seo orm. Bhí mé ag seasamh suas ar son mhuintir na h-Éireann. I did not actually agree that the issue should be taken off the agenda. In fact, I proposed that it be taken off the agenda. I agreed that with President Van Rompuy the day before because I wanted to be clear that we would be in a much better position to do any negotiations about either an interest rate reduction or adjustments to the programme under the IMF and EU package once the extent of the banking stress tests is known here in Ireland. It was not a case of agreeing, but rather a case of proposing and achieving agreement. The decision of the Heads of Government was that as there will not be a full Council meeting again until June, it would not be appropriate that the Ministers for Finance should take the next step until we were clear after next Thursday about the scale and extent of the stress tests.
There will be an interest rate reduction. I said that last week. The reality is that the Taoiseach has accepted the IMF-EU deal. He has also accepted the austerity measures that go with it. This includes the very oppressive universal social charge. He also agreed to a pact for the euro at the summit, but did not think to bring it back here to allow the people of this State to decide it in a referendum. Why not?
The interest rate reduction was agreed at the eurozone meeting in Helsinki in respect of countries that are in the EFSF package. That interest rate reduction was extended to Greece, which is not in the EFSF package. The agreement reached in Helsinki by the eurozone leaders was that countries within the EFSF could have their interest rates reduced. Conditionalities for the interest rate reduction were applied to Ireland, but I was not prepared to accept them.
The euro pact is outside the treaties and our political discussions about how to strengthen the euro dealt with qualifications across, competitiveness, dealing with pension problems and so on. From that point of view, there was a general consensus about the "euro plus pact" and countries outside the eurozone were invited to join it on a voluntary basis. Some of them did so. I already mentioned this on the report before the European Council meeting. We will continue with the tradition that applied heretofore of reporting to the House on the consequences and the aftermath of each European Council meeting. The Deputy will appreciate that I have committed myself to coming to the House in advance of such meetings, which is a break with tradition, to allow all Deputies to have their say about European issues of interest to them.
Of course the question of the Shylock-like rate at which our so-called partners in solidarity have fixed the interest rates is a massive one. Is it not true that the critical issue is the tens of billions of euro in bad gambling debts that the European banks placed with Irish banks, speculators and developers? If the next meeting of EU leaders is not until June, why did the Taoiseach not insist on raising as a critical issue the need for those bond holders to take their losses? Was it not reckless or negligent in every way for him to hand something over to the finance Ministers which they, in turn, will probably lob to the next leaders' meeting in June? Why did the Taoiseach propose this would not be discussed? Was it because his colleagues in the European People's Party asked him not to raise the issue so that Chancellor Merkel would not be embarrassed in front of that element of the right-wing constituency on which she depends in Germany?
I would like to make a final point. Is it credible to suggest that the European Union, the International Monetary Fund and the European Central Bank hammered out a massive deal with the Government, in the process hammering the living standards of our people, without knowing the extent of the disaster in the Irish banks? Is it credible to say we have to wait until next Thursday for some marvellous revelations?
In any event, my approach was neither negligent nor reckless. The Deputy, of all people, should know that one cannot attempt to buy a house unless one knows the price of it and what one has in one's own account. In the same way, I considered it was appropriate that we should not discuss at length the question of an interest rate reduction, or any adjustment to the IMF-EU package, without knowing the extent of the liability following the stress tests.
We do not want to continue in a monthly sea of confusion about where we stand. There was general agreement among the heads of government that be the case. Following my proposal that the matter should not be discussed, there was agreement that the next meeting of the finance Ministers will take it forward after we ascertain the level of liability. The Deputy is aware that long before the recent general election, I made the point that I considered that the IMF-EU deal, which was done with Ireland as a sovereign country, needed to be adjusted in terms of the interest rates and the cost of the banking structure. Clearly, I do not disagree with the Deputy's comment about reckless banking practices. That is why a number of serious investigations are ongoing.
Does the Taoiseach accept that the Fianna Fáil Government agreed this onerous agreement with the EU and the IMF without the EU, the IMF or that Government knowing the extent of the disaster of the debt crisis in the banks?
The previous Government did a deal after denying the IMF was already here making assessments on our liabilities and economic position and that deal was voted on in the House. In my view, as I stated prior to the election and as other Members of the Government have pointed out, this was not a good deal for Ireland. That is why efforts have to be made to restructure the deal so that we are in a position where we can pay our way but at the same time grow our economy, create jobs and provide career opportunities for thousands of people.
Does the Taoiseach agree that in essence the problem has been the failure of European leaders to deal comprehensively and substantively with the euro issue? All of their steps have been too little, too late from the onset of the Greek problem to the present. What essentially happened last week was that the electoral considerations in certain member states took precedence over the objective needs of the European Union and, in particular, the eurozone. I flagged that issue last week as one of the central factors that have in many ways hindered or obstructed a fundamental and comprehensive resolution of this problem.
A fortnight after the previous summit, a well-placed German source indicated there had been no talks between Berlin and Dublin since the last summit. That source stated: "Talking is the only tool we have at our disposal, but if someone doesn't make use of this tool we can't get anywhere...With no concrete ideas, there are so many rumours coming out of Dublin at this stage that I [we] have had to stop." That suggests to me a worrying lack of engagement on the substantive issues. We have had a lot of spin and I put it to the Taoiseach this suggests a lack of substantive engagement between Dublin and Berlin in the lead up to the summit.
In its banking document, Fine Gael promised - credit where credit is due - that it would take unilateral action to force losses on bondholders. I stress the words "unilateral action". Did the Taoiseach raise the issue of unilateral burden sharing with his EU colleagues at last week's summit?
I am somewhat surprised there are no plans for bilateral visits. Given the gravity of the situation and the importance of the issue, a quick tour of capitals across the European Union, and eurozone countries in particular, would be worthwhile in the period between now and June in terms of advancing some of these issues and giving a more detailed account of our perspective on a variety of issues that are encompassed by the economic situation.
The Deputy's first and last questions are related. It is fair to say that serious self-analysis is ongoing within a number of countries in Europe. The Greek Government is experiencing severe economic difficulties and, as the Deputy is aware, the Portuguese Government has fallen. There is a new trend in many countries that diverges seriously from what obtained heretofore. The CDU lost in Baden-Württemberg for the first time in 60 years, a loss which was exacerbated by the increase in support for the Greens arising from the nuclear reactor difficulties in Japan.
There are no towering political figures on the European stage in the way that people used to consider there were before. I spoke to all the leaders on a number of occasions around the table over the two days at the Council meeting. I held a number of discussions with some of them.
I do not disagree with the idea of arranging a number of bilateral visits. There may be some merit in the suggestion and, obviously, I will discuss it with the Tánaiste and Minister for Foreign Affairs and the Minister of State at the Department of Foreign Affairs with responsibility for European affairs. It is necessary in some cases because under the previous Government there were occasions on which Ministers did not turn up for whatever reason. There is a serious need for bridge-building.
The Deputy will be aware that part of our programme for Government is the recall of all our ambassadors to Dublin at an appropriate time to discuss re-motivation and the restoration of Ireland's status abroad and to give them missions they must fulfil in the areas of trade, business and regenerating links. That is something on which we intend to follow through.
There was no discussion about burden-sharing at this meeting. As I outlined, there were discussions about Libya, the problem with the nuclear reactor in Japan, and a number of other issues, including the Euro Plus Pact. I made the point that the European Commission is perfectly entitled to produce its legislative papers at any time and that this country, no more than any other, would participate in discussions on whatever papers are produced. In respect of the proposal for a common consolidated corporate tax base in the Commission paper, while we will discuss the paper in general, I have a healthy scepticism about that proposal. The question of the corporate tax rate was not raised at all.
I did not ask about corporate tax; I asked whether the Taoiseach raised the issue of unilateral burden-sharing, which he clearly did not. He has confirmed that he did not raise this at the meeting itself.
We visited other capitals - I certainly did - and the Taoiseach should do that in the period between now and June. That would be worthwhile and constructive. There is no point in making petty political points about it; I just think it is a good thing to do, and should be done.
The recall of ambassadors happens every year. It does not have to be part of a programme for Government. It is a fairly basic thing to recall ambassadors for a general discussion, and this tends to be done anyway as a normal part of operations. There are regular briefings for missions about the objectives of the Government and the external objectives of various Ministers and Departments in economic and foreign policy.
I note the Taoiseach's comments that there are now no towering figures in Europe, as in previous years. I made that point in the debate last week, and it is a serious issue for this country. Every time, the response is too late. The issue with Portugal arose in the 24 hours before the recent summit. The reaction to similar events in Greece was too late. All along, even the changes to the pact and the permanent mechanism have been too late and have failed to convince the markets. The international credibility of Europe and the pact for Europe has been reduced considerably because of this.
I put it to the Taoiseach that outside Europe, people do not believe that Europe is, so far, demonstrating the capacity for a pan-European comprehensive resolution of this problem. He said there was a degree of self-analysis going on in Europe. What we really require is not self-analysis on a member-state-by-member-state basis, but a Europe-wide analysis with the aim of achieving permanent resolution of the issues that face not only Ireland but the eurozone in its entirety.
There is merit in what the Deputy says. Clearly, national political considerations play a part in the activity level and the response of a number of European leaders. That goes without saying. I have made the point at European People's Party meetings for several years that in the production of the Lisbon agenda Europe failed to deal with that - as the Deputy knows, it was a proposal under which Europe was to measure up to the United States on the one hand and countries of the Far East on the other in terms of economic activity and the creation of jobs. There is now a refocusing on what Europe, as a union of 500 million people, can do. There were a number of comments about that.
As the economic situation has become clearer in a number of countries, people are focusing on the necessity of a European response with regard to the protection of the euro. This was a central feature of last weekend's discussions and it will obviously be discussed on many future occasions. I did not raise the issue of burden-sharing individually. However, the programme for Government is committed to it. When the stress-test position becomes clearer on Thursday, we will decide how best to deal with the consequences.