Dáil debates

Tuesday, 18 October 2011

Ceisteanna - Questions (Resumed)

European Council Meetings

4:00 pm

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Question 8: To ask the Taoiseach if he will report on the agenda for the forthcoming European Council meeting on 23 October 2011; and if he will make a statement on the matter. [27357/11]

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Question 9: To ask the Taoiseach the issues he intends to raise at the next European Council meeting; and if he will make a statement on the matter. [27358/11]

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Question 10: To ask the Taoiseach if he will hold a bilateral meeting with the Greek Prime Minister at the forthcoming European Council meeting on 23 October 2011; and if he will make a statement on the matter. [27359/11]

Photo of Gerry AdamsGerry Adams (Louth, Sinn Fein)
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Question 11: To ask the Taoiseach the issues that he will prioritise at the European Council meeting on 23 October 2011. [27365/11]

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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Question 12: To ask the Taoiseach if he has tabled any items for inclusion on the agenda of the forthcoming EU Council meeting. [28454/11]

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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Question 13: To ask the Taoiseach if he will detail any discussions which he intends holding with EU leaders in advance of the next European Council meeting. [28455/11]

Photo of Gerry AdamsGerry Adams (Louth, Sinn Fein)
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Question 14: To ask the Taoiseach the bilateral meetings or contacts he plans to have with other EU leaders in advance of the next meeting of the European Council. [28548/11]

Photo of Gerry AdamsGerry Adams (Louth, Sinn Fein)
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Question 15: To ask the Taoiseach if the process of creating a new integrated European affairs division with his Department has been completed; and if he will make a statement on the matter. [29512/11]

Photo of Gerry AdamsGerry Adams (Louth, Sinn Fein)
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Question 16: To ask the Taoiseach if he will report on his recent meeting with the President of European Commission, Mr Jose Manuel Barroso. [29604/11]

Photo of Joe HigginsJoe Higgins (Dublin West, Socialist Party)
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Question 17: To ask the Taoiseach if he will report on his planned meeting with the President of the European Commission. [29813/11]

Photo of Joe HigginsJoe Higgins (Dublin West, Socialist Party)
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Question 18: To ask the Taoiseach if he will report on the postponement of the European Council summit originally scheduled for 17 and 18 October 2011. [29815/11]

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Question 19: To ask the Taoiseach if he will report on his meeting with Mr José Manuel Barroso in Brussels; and if he will make a statement on the matter. [29881/11]

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Question 20: To ask the Taoiseach if Mr José Manuel Barrose indicated the need to change the European treaties in relation to economic governance; if a referendum on these changes may be necessary; and if he will make a statement on the matter. [29882/11]

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Question 21: To ask the Taoiseach if he will report on the decision by European Council President, Mr Herman Van Rompuy, to postpone the EU summit on the debt crisis; and if he will make a statement on the matter. [29883/11]

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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I propose to take Questions Nos. 8 to 21, inclusive, together.

As I informed the House in my statement last week, the European Council meeting originally scheduled to meet on 17 October will now be held this Sunday, 23 October. This arrangement has provided extra time in which to finalise a comprehensive strategy on the economic crisis facing the euro area.

In practice, there will be two meetings on Sunday, a meeting of the European Council and, following that, a meeting of the Heads of State or Government of the euro area. The draft annotated agenda for the European Council includes discussions on economic policy, including external aspects; preparations for the G20 Summit in Cannes; and climate change ahead of the Durban conference.

On economic policy, I will emphasise growth and jobs and what the European Union, together with the member states, can do to stimulate these, including through implementation of the Europe 2020 strategy. We will seek to identify a number of priority areas that can be expected to boost sustainable growth in the short term. I will seek to make this aspect as specific as possible, with priority given to measures that can make the most significant impact. Completion of the Single Market, including the digital dimension, has great potential in this regard.

We need to ensure that, in its external relations, the EU focuses more on improving its trade performance and attracting inward investment as part of its drive to create new jobs. We need to attach renewed priority to bilateral and regional trade agreements, given that the prize of completing the Doha round remains elusive. As a small, open trading economy, this is critical for Ireland.

More broadly, I expect that we will take stock of progress made in strengthening economic governance, and of recent economic developments in the euro area. We have completed the first phase of the new "European semester" cycle and it is now for the member states to implement the country-specific recommendations made to them.

As already noted, I will also attend the meeting of the Heads of State or Government of the euro area. Between the two meetings, the expectation is that we will bring forward a comprehensive package to address five key areas: the situation in Greece, with particular focus on the sustainability of its debt; preventing contagion to other member states, especially those that are in a programme, including Ireland; addressing any weakness in Europe' banks, bearing in mind that Irish banks have already been tested to very high standards, as the House will be aware; ensuring that we create the right context for growth and job creation; and ensuring we have the right arrangements in place to enhance economic co-ordination, especially in the euro area.

Last week, the European Commission published its contribution to the debate and important contributions from President Van Rompuy and from other member states, including France and Germany, are awaited. I expect that, in his proposals, President Van Rompuy will focus on how to improve our working methods and enhance crisis management in the euro area. While we have yet to see his proposals, I anticipate they will focus on what can be achieved in the short term in addition to looking to possible action in the medium to longer term. These proposals will need to strike a delicate balance.

While I have no formal bilateral meeting planned with Prime Minister Papandreou, I will see him at the European Council. I met the President of the Commission, Mr. José Manuel Barroso, in Brussels last Thursday. Discussions focused on what needs to be done to address the economic crisis in a comprehensive, balanced and credible way, including in identifying means to generate jobs and growth. At the meeting I outlined Ireland's enduring support for the "Community method" and the special role of the European Commission, and also Ireland's strong support for measures that make a contribution to the growth and jobs agenda.

A new integrated European affairs division has been established within my Department. This involved the transfer on 3 October of 19 whole-time equivalent staff from the Department of Foreign Affairs and Trade who now work alongside existing staff from my Department in the new, integrated EU division. This new division supports me in my membership of the EU Council and supports the Tánaiste in his responsibility for overall co-ordination of European policy, including his membership of the General Affairs and External Relations Council. It secures more strategic, effective direction and co-ordination throughout Government in all matters related to the European Union.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Is the Taoiseach not going to tell our European partners that their strategy for dealing with the financial and economic crisis is in absolute tatters and that it is a disaster which is strangling economic growth as well as causing great suffering for people throughout Europe? Even on its own terms it is strangling economic growth and threatens to tip the European economy into recession. No matter how much they inflict the poison of austerity the situation gets worse, becomes deeper and spreads the contagion. Will the Taoiseach not tell them this? Will he not pose serious questions about what a disastrous failure the policy of bailing out the banks and imposing austerity has been for Greece and threatens to be for the rest of Europe? This has happened in a situation where Greek bondholders will be burnt to the tune of 50% now and, despite not imposing all the austerity demanded by the troika, the Greeks still got their €8 billion. Will the Taoiseach not question President Van Rompuy and the European authorities about their insistence that there should be no burning of Irish bondholders and that we should benefit in no way from the plans to burn bondholders in Greece? As a consequence, the Taoiseach's strategy of being the best boy in the class in Europe has failed disastrously.

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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Thank you Deputy. This is Question Time.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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We should have done what the Greeks did and resisted austerity because that way we might have got to burn the bondholders and we might have got the money without inflicting the brutal austerity the Taoiseach has been so enthusiastic to inflict.

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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That is complete rubbish. Deputy Boyd Barrett gets up here week after week and seems to assert that this country can be equated with the situation in Greece.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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The facts are coming in.

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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They are two different countries in two different places with two different levels of debt.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Our debt is larger in proportionate terms.

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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I pointed out to Deputy Boyd Barrett that the bailout situation the Government inherited has had to be renegotiated on a phased basis as stated in the programme for Government. The Minister for Finance will contribute to the ECOFIN meeting on Friday and Saturday and I will do the same at the leaders' meetings of the EU and the eurozone on Sunday. We will focus on explaining the progress made here in all these meetings and we will make every effort at every opportunity to take whatever opportunity will result in the level of debt burden on this country being reduced.

Europe is looking for some success and, as Deputy Boyd Barrett is aware, the ground has shifted on many occasions. This is the reason for the meetings on Friday and Saturday and the Heads of Government meeting on Sunday. I hope the issues I have outlined, the five major issues under discussion, will be prepared, debated and decided upon on Sunday and that this will bring about some sense of conclusion to the situation with some confidence.

It will not be easy. There are different opinions across the spectrum but we are in a situation where we are fully funded to the end of 2013. Deputy Boyd Barrett and the people here can be assured we will take every opportunity to explain the opportunities that exist for a lessening of the burden of debt on our people. At the same time we will explain that we want to pay our way and we will pay our way as we have always done. It is naïve in the extreme for Deputy Boyd Barrett to stand here and equate this country with Greece.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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They get to burn the bondholders; we do not. They stood up for themselves.

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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It smacks of Deputy Boyd Barrett seeking to go back to his old agenda of more and more protests.

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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Other Deputies wish to ask questions. I call Deputy McDonald to be followed by Deputy Martin.

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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The Taoiseach is being disingenuous because he knows full well the point made is that the issue of debt restructuring and write-down in respect of Greece has been conceded. In light of this how is it the Taoiseach does not pursue the matter of private bank debt and the huge burden it is inflicting on citizens? People have always paid their way and I and others do not appreciate the inference, made several times by the Taoiseach in the House, that there is some cheap skate mentality among the public. Why does the Taoiseach not put it on the agenda? The Taoiseach is proposing to hand over €700 million in non-guaranteed bonds to Anglo Irish Bank in 14 days time. Why is the Taoiseach doing this? Why is he not pursuing this argument at European level?

Last Sunday, Jean-Claude Trichet indicated that he favoured treaty change so the EU could impose its economic policies on member states. Will the Taoiseach tell the House and the meeting that Ireland does not favour this and that Ireland will resist it? Equally, will the Taoiseach tell the House whether he supports the moves to centralise fiscal powers at EU level?

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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Will the Taoiseach be specific in respect of the response to the questions I have put, especially the items he has tabled for inclusion in the agenda of the forthcoming EU Council meeting? Let us be clear: from the outset of the overall global crisis the Greek crisis has been the catalyst for changing the architecture for how Europe deals with countries in difficulty. It was largely responsible for the July deal and the reduction in interest rates. Now we have another opportunity because the Greek crisis is driving fundamental change again. We are facing a Greek default and significant bank recapitalisation throughout Europe. We were informed that if we went unilaterally and burned bank bondholders we would risk sovereign default and contagion. That is now removed and the road blocks will be removed next week.

Has the Taoiseach specifically put this item on the agenda of the summit to force bank bondholders to share the burden from an Irish perspective? Has the Taoiseach insisted that any deal must incorporate the concerns of Ireland in this regard and that our agreement to any deal must be on the basis of our getting an outcome on the burning of bondholders in the context of the Greek issue? Has the Taoiseach rung his close friend Chancellor Merkel about this and put it to her, given the profound nature of the debate to take place? I accept it will be a serious and grave meeting over the weekend but it is an opportunity for us. Will the Taoiseach answer the question of whether he has specifically put on the agenda that Ireland seeks such a deal?

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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One issue that has arisen at Heads of Government meetings and that is recognised by the President of the Commission is that the Ministers for Finance should be given the opportunity to carry through their responsibilities. I outline for Deputy Martin the five issues I have mentioned: the situation in Greece, preventing contagion, addressing weaknesses in Europe's banks, the opportunity for growth and jobs and the making of arrangements to enhance economic co-ordination in the eurozone. These five issues were tabled by the Minister for Finance at the ECOFIN meeting and made their way, although not exactly as he proposed them, onto the agenda for the Heads of Government meeting.

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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Those are the five issues.

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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It is not the first time that Ireland has had the agenda structured this way.

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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Is the Taoiseach saying we put Greece on the agenda?

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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I am not suggesting that Ireland-----

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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We are way over time. There is an answer to your question.

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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This is a serious matter. I do not suggest that Ireland was the only country to put Greece on the agenda when everyone else was discussing it. Contagion is on the agenda as a specific issue.

I did not ring Chancellor Merkel because I will go to Germany in November and I understand a date is fixed for the meeting.

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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The summit is on Sunday.

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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I understand that. Deputy Martin should know that the issue of contagion is there because the European Union and the eurozone want to prevent contagion spreading from Greece. Surrounding that element of the debate, all the issues the Deputy raises - debt write-downs, the sustainability of debt, restructuring and recapitalisation - come into the discussion. This is a central issue.

Deputy McDonald asked me about another element. As has been pointed out, we have consistently pushed the agenda of a reduction in the cost of the promissory note in respect of Anglo Irish Bank. If agreement could be reached on that issue, it would yield substantial savings to the taxpayer which would be far in excess of a write-down of debt for bondholders remaining in Anglo Irish Bank. As we pointed out, such a write-down would achieve savings in the order of €100 million, whereas many times that figure would be saved if agreement could be reached on a reduction in the cost of the promissory note. Central to this, the question of contagion has been raised by Ireland, with many other issues.

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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Will the Taoiseach ask for bondholders to be burned?

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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We will ask for every opportunity to reduce the debt burden on the people.

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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The Taoiseach did not answer my question.

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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I did not call Chancellor Merkel on this occasion to ask her that question.

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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Did the Taoiseach ask for the bondholders to be burned?

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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No, I have not asked that question specifically because the comprehensive discussion on the question of contagion will deal with it.

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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Will the Taoiseach ask the question?

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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I will ask for every opportunity to keep down the cost of our debt burden.

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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Please do not switch on the microphones unless I ask that they be switched on. The matter Deputy Martin raised was dealt with.

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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No, it was not.