Dáil debates

Thursday, 2 June 2011

3:00 pm

Photo of Pádraig Mac LochlainnPádraig Mac Lochlainn (Donegal North East, Sinn Fein)
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Question 2: To ask the Tánaiste and Minister for Foreign Affairs and Trade the objectives of the Diplomatic Initiative which was announced at the beginning of April 2011, whose purpose, as understood is to gain support across Europe for some form of renegotiation of the terms attached to bailout loans from the IMF and EU. [13981/11]

Photo of Lucinda CreightonLucinda Creighton (Dublin South East, Fine Gael)
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The Government is determined to restore Ireland's standing as a respected and influential member of the European Union. The diplomatic initiative announced by the Tánaiste has this as its overarching objective. It has also sought to ensure understanding of - and support for - Ireland's approach in respect of the EU and IMF programme.

To this end the Government is engaging at senior levels with fellow EU member states. We are making clear the economic and financial realities confronting us and the steps we have taken to get the public finances in order, to repair the banking sector and to restore growth. We are emphasising our determination to see this process through to a successful conclusion and we count on the continuing solidarity of partners. We seek to inform and to persuade, pointing to the benefit for the eurozone and EU as a whole of Irish success.

There are three tracks. First, members of the Government avail of every appropriate opportunity to meet their EU colleagues and representatives of the European institutions; second, there is our embassy network in EU capitals; and third, we look to keep EU diplomatic representatives in Dublin fully briefed.

The Deputy will be aware that a team from the ECB, European Commission and the IMF team completed in mid April the first quarterly review of progress in implementing the support package. This review endorsed the decisive actions by the Government to take control of our banking sector and to address our public finances. The Government has achieved its objective for this review and successfully negotiated the inclusion in the revised memorandum of understanding of a number of the programme for Government commitments, including the jobs initiative, the reversal in the reduction in the national minimum wage and the comprehensive spending review. We will continue work under the initiative and messaging will be adapted to take account of further developments in the eurozone.

Photo of Pádraig Mac LochlainnPádraig Mac Lochlainn (Donegal North East, Sinn Fein)
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I am sure the Tánaiste and the Ministers of State have read international reports on what has happened in Ireland by the likes of Mr. Joseph Stiglitz, Mr. Paul Krugman and Mr. Bill Black, who I have mentioned quite a bit recently. They are very well respected in America as having seen what was happening for what it was but there are others who have contributed reports. These people are clear in contending that the ECB and IMF package is an injustice. Core states such as Germany, France and others are punishing peripheral states-----

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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As we only have a short time I ask the Deputy to ask a question.

Photo of Pádraig Mac LochlainnPádraig Mac Lochlainn (Donegal North East, Sinn Fein)
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I will get straight to the issue. My interpretation of the diplomatic issue when it was announced saw it as countering the narrative sent out that Ireland was reckless, feckless and irresponsible and therefore we must now be prudent and have austerity to cleanse us of all that. It is critical that we lean on those esteemed international views to counter the narrative and tell the truth about what happened here. The vast majority of Irish people were failed by those in authority and those whom they trusted at the time. This Government has such a strong mandate because it promised to right all those wrongs. What are we doing strategically in terms of our European and international partners, including the other 186 members states of IMF? What have we done to engage with the IMF in terms of its regulatory role and what are the timeframes and objectives of this initiative?

Photo of Lucinda CreightonLucinda Creighton (Dublin South East, Fine Gael)
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While one can point to any number of economists who hold a certain opinion, it is equally possible to find a tranche of economists, both domestically and internationally, who will set out an entirely different view. It is prudent for the Government to assess the differing growth perspectives for the economy and make a judgment on that basis. We required the intervention of the EU and the IMF last November through no fault of the vast majority of citizens of this State. Everybody is paying a heavy price but we have no alternative. I am not aware that the Deputy's party is proposing any magical solution. In opposition, Fine Gael and the Labour Party made it clear that while the terms and conditions of the EU-IMF package may not be fully palatable, there was no alternative to it and on that basis we are determined that the State will rise to the challenge. Despite the scaremongering and views to the contrary, it is clear that we are on course to meet our objectives of making repayments.

The Deputy referred to the core countries. Clearly the various states are at different economic stages and some economies are doing better than others. While Ireland's economy was forging ahead, other member states were not doing as well. Solidarity is required but we must also understand the position of other member states. That is the basis for European partnership even if a considerable number of people would like to forget it. Our intention is to counter the negative perceptions held about Ireland but, by and large, the opinions across the European Union and beyond is that we are performing well in terms of meeting our targets.

Photo of Pádraig Mac LochlainnPádraig Mac Lochlainn (Donegal North East, Sinn Fein)
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We are unfortunately saddled with the need to rely on external support because of the reckless policies of the previous Government but the terms and conditions involved are going to make it difficult to grow the economy. The need for a better deal was clearly outlined in media reports when the Tánaiste launched this initiative. I would have thought the intention behind it was to secure a better deal for Ireland, but the Minister of State is arguing that we are doing well and should talk up Ireland.

The Tánaiste will be aware of certain media reports that have caused alarm. Wikileaks released information regarding his private comments to the US embassy on the Lisbon treaty which differed from his public approach at the time. It is important that he makes it clear to the Irish people that what is being stated in public in this diplomatic initiative is the same as what is being said in private to those in power.

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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I call the Minister of State, Deputy Creighton, for a brief reply.

Photo of Pádraig Mac LochlainnPádraig Mac Lochlainn (Donegal North East, Sinn Fein)
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Perhaps she can interpret the question on behalf of the Tánaiste.

Photo of Lucinda CreightonLucinda Creighton (Dublin South East, Fine Gael)
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I will try to respond to the reference to the objectives of the diplomatic initiative. We have already succeeded in meeting some of our objectives, as I pointed out in my initial response to the Deputy's question. There has been a significant change to the memorandum of understanding, which we were told last year was not possible. This shows that the Government can affect change through inventiveness and creativity even within the restraints and parameters of the IMF programme. There is scope for the Government to put its stamp on the programme by encouraging job creation and growth and 2011 will be the first year of growth in the past four years. That in itself is quite an achievement and, as the Deputy is aware, our exports are performing well and there is considerable positivity around.

In respect of the other terms and conditions of the package, we are actively seeking better pricing and a reduction in the interest rate. We want parity with the other two member states, Portugal and Greece, which are involved in EU-IMF programmes. This is a priority for the Government. The Tánaiste has engaged in a significant level of bilateral work. He visited Paris to meet counterpart, Alain Juppé, while the Minister for Finance met his counterpart, Christine Lagarde. I have met my French, Polish, Slovak and Greek counterparts and have visited Berlin. Ours is a very determined and proactive approach.